Why Israelis don’t necessarily save energy when buying greener cars
When consumers buy energy-efficient cars, they tend to drive more, according to a top research team at Ben-Gurion University of the Negev (BGU).
A team of researchers from the school have shown in their recent research that some government incentives meant to promote energy savings may actually increase the “rebound-effect” in years following their implementation - so that not only do the incentives not achieve maximum effectiveness, in some cases the benefits can be lost.
“Consumers have their own needs and wants,” explained Dr. Stav Rosenzweig of BGU’s Department of Management in the Guilford Glazer Faculty of Business and Management, “When we are faced with a regulation, we might not do what the policy maker intended us to do.”
Rosenzweig is also a researcher in BGU’s new School for Sustainability and Climate Change.
The rebound effect is defined as “the difference between the expected and the actual environmental savings from efficiency improvements once a number of economic mechanisms have been considered, that is, the savings that are taken back,” according to the website Science Direct. Rosenzweig said that international economic literature estimates that 20% to 40% of the potential fuel savings associated with cars’ improved energy-efficiency are lost to increased driving.
To determine whether the rebound is constant over time, Rosenzweig, Dr. Ofir Rubin and doctoral candidate Aviv Steren of the Guilford Glazer Faculty of Business and Management and the School of Sustainability and Climate Change, have examined in various studies the presence, or lack thereof, of a long-term rebound in Israel after it implemented certain incentives in 2009 to encourage citizens to buy energy efficient cars. They specifically looked at whether consumers increased or decreased their car usage in the longterm, thereby contributing to a larger or smaller rebound.
“Our findings indicate a reboundeffect of 62% a year after the introduction of the policy,” Rosenzweig and her team explained. “Whereas it remains relatively steady in subsequent periods, it later gradually intensifies until it reaches more than 100%. This unique finding suggests that virtually all the potential energy savings due to energy-efficiency improvements were lost to increased driving.”
Rosenzweig and her team believe that the reason for this is that consumers become increasingly aware of usage costs over time and “this increased awareness may encourage energy-efficient car owners to drive more, thereby saving considerably less energy.”
“Let’s say you usually commute to work, that’s it,” she continued. “If the government incentivizes you to buy an energy efficient car, then it costs less to commute.”
Instead of NIS 5, for example, it only costs 2.5 to commute each day. The consumer realizes that he or she saved money and believes that since the car he or she is driving is energy efficient, it’s also not that bad for the environment.
“The person might decide to travel more by car, or even move to the suburbs so that she now has a longer commute,” Rosenzweig suggested.
The rebound effect is not limited to driving. It has been seen in other research of energy efficient products, such as light bulbs or even refrigerators. People who buy energy-efficient light bulbs keep the lights on longer, she said. Some people buy bigger refrigerators just because the fridge is now cheaper to maintain.
“There is a psychological phenomenon going on here,” she said. “I feel I have saved money and I also feel I did something positive for the world, so I license myself to do something that is not as good in other areas that I would never consider doing otherwise.”
Would the world still be in a better position if everyone bought energy efficient cars?
Rosenzweig has a solution: She and her team advocate for using subsidization of energy-efficient cars and taxing by kilometers traveled as complementary components in a policy aimed at decreasing energy consumption. She said the distance traveled tax would offset the tendency for individuals who drive energy-efficient cars to increase the number of kilometers they drive. Such a solution, however, should be adjusted for residents in the periphery with no proper access to public transportation.
What’s next for her?
Israel has made a decision that beginning in 2030, only non-fossil fuels vehicles will be permitted to be imported into the country. Now, she and her team are looking at what incentives the government might need to offer to get citizens to expedite the switch to electric cars so that by then car manufacturers will not flood the Israel car market with polluting vehicles.