It is more than 25 years since the 1973 OPEC oil-embargo thrust policies to reduce national energy-use to the forefront of public attention. At first, policies on energy conservation were promoted in order to reduce dependence on oil imports, and in Britain to counteract the effects of electricity shortages in the winter of 1973–74. The campaign for energy conservation, with the catchy slogan “Save It” and the memorable advice like “have a bath with a friend”, quickly caught the public imagination. It also spurred the emerging environment movement, led by Friends of the Earth, to question the conventional wisdom of expanding energy supply, chiefly through nuclear power.

These nuclear-power critics instead advocated a policy of energy conservation, based on improving the efficiency of energy use through technical means. This they maintained would cut energy-growth rates, or even reduce energy use absolutely. Since then, it has become an article of faith amongst environmentalists that improving the efficiency of energy use will lead to a reduction in energy consumption. This proposition has even been adopted by the UK government, which is now promoting energy efficiency as the most cost-effective solution to global warming.

However, in the USA, there has been a back-lash against energy efficiency as an instrument of energy policy. This has been stimulated partly by disillusionment with the ability of utilities to deliver successful energy-conservation programmes, and partly by the growing influence of the ‘contrarians’ — those hostile to government mandated environmental programmes.

The debate as to whether energy efficiency is effective (that is reduces energy consumption) has spread from the pages of obscure energy-economics journals in the early 1990s to the pages of newspapers, such as The New York Times in the mid 1990s. It has now spread to Britain, with a critical article in the UK’s leading science magazine New Scientist, followed by much correspondence in the Letters column, stimulated by a paper by Herring.

A recent paper which gives a good, and highly readable, review of this debate is by Richard Howarth. This debate has also promoted discussion among US energy analysts and the climate-change community over the extent of the ‘rebound’ or ‘take-back’ effect. That is how much of the energy saving produced by an efficiency investment is taken back by consumers in the form of higher consumption.

This paper aims to move beyond my earlier paper, which stimulated debate, in the UK in late 1998, concerning the role of energy efficiency in reducing energy consumption. That paper referred to the views of a wide variety of economists, and to the historical evidence on the effect of improving energy efficiency on energy consumption. It posed the question “does the promotion of energy efficiency (at the microlevel) reduce energy consumption (at the macrolevel)?”

This paper gives some results of the responses to that paper, both ‘popular’ and ‘academic’. Firstly, there is a deep hostility to economists and to economics by some ‘green’ activists. Secondly widespread agreement exists on the need for energy/carbon taxes. Thirdly is the argument that energy consumption would decline anyway because of ‘dematerialization’. Finally, there is the call (from energy analysts) for quantification (and explanation of the mechanism) of the (claimed) increase in consumption due to improved energy-efficiency.

This paper concentrates on the views of two economists, Len Brookes and William Rees. While both agree that improved efficiency does lead to increased consumption — each echoing the views of Jevons — they disagree on the role of government in tackling the threat of global warming.

Brookes takes the neoclassical economist view of the superiority of free markets, and (as expected of a former Chief Economist for the UK Atomic Energy Authority) is strongly in favour of nuclear power. Rees, as an ecological economist, is critical of neoclassic economics, and sees “no basis for confidence in the marketplace as the wellspring of sustainability”. His solution is ecological tax reform and investment in natural capital.

There is to my knowledge no recent work on long-term trends in energy efficiency and consumption in the UK by end use. As a preliminary step, I present some results on trends in energy consumption and energy efficiency in public lighting for Great Britain. This, together with some comments from researcher’s findings on energy use and efficiency in fluorescent lighting and vehicles, shows that historically improvements in energy efficiency have been taken in the form of higher levels of service rather than reductions in energy consumption. The reasons for this are undoubtedly complex, ranging from technical to institutional, and are perhaps a field more for sociologists of technology than energy analysts.

There is a long standing antipathy by certain sections of environmental opinion to economists and their views. For instance, Richard Douthwaite, in his book Short Circuit, which attracted serious reviews in the environmental press, disputed the central tenets of economics: he also accused economists of being selfish individuals who “deliberately exclude morality and social and physiological factors from its scheme of thought”.

Dave Toke, the author of Green Energy, in his comments on my paper said that I gave too much credence to the views of: “…a determinist economic priesthood who aim to preserve the decision making status quo by mystification and the elevation of their own brand of mumbo jumbo to the status of science”.

More measured is the criticism by William Rees, who contrasts the views of mainsteam with ecological economists. Rees writes: “It is a near-doctrinaire belief among mainstream economists that human ingenuity and technology (human and manufactured capital) serve as near perfect substitutes for natural capital…

By contrast, ecological economists argue that many of the assumptions and beliefs of conventional economics are responsible for the ecological crisis”.

Rees argues that the important flows in the economy are not the circular flows of money, but rather the unidirectional and irreversible flows of matter and energy from the ecosphere through the economic subsystem and back to the ecosphere in degraded forms. Thus, to Rees, ecological economics is fundamentally concerned with “…whether total remaining stocks of capital are capable of sustaining the anticipated demands of the global economy into the next century. Neoclassic economics cannot even ask the question”.

Thus Rees is strongly critical of free-market approaches, and he believes that “efforts to expand our way to sustainability through deregulation and trade can only accelerate global decline”.

Many energy analysts agree on the need for higher energy prices, both to send price signals to consumers on the need for energy efficiency and to raise revenue for investment in efficiency and renewable projects. So far the only action in the UK, has been the government’s plan to introduce their Climate Change Levy, which is a tax on all energy use outside the domestic and transport sectors from April 2001, with rebates for energy-intensive users.