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Posted Mon Jun 1 2009: from Times Online (UK):
Rebound effect will raise fossil fuel use
Improvements in energy efficiency will lead to greater use of fossil fuels, according to research published this week.... He argues that what he calls a "rebound effect" has been seriously underestimated by policymakers, who will have to impose drastic measures such as high petrol taxes to tackle the problem.... The rebound effect works in several ways. Industry, for example, will save on fuel costs by taking measures such as insulating buildings or switching to hybrid cars. It can then pass the savings to customers through lower prices, leaving them with more cash to spend. Production will rise to meet the demand created by the extra spending. Barker said the effect will be much stronger in the developing world, where large populations are about to join the fossil-fuel economy and small improvements in disposable income can lead to big changes in consumption.
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