Quote of the Day: Economy-wide Efficiency

There's some conventional wisdom out there that the US economy has gotten considerably more energy efficient as a whole over the last few decades, with real GDP (US$) growing, while total energy consumption (quadrillion BTUs) fell. This story is often used as evidence against the prevalence of rebound, or the phenomenon through which consumption of a particular energy service increases as technology enables more efficient delivery of said service. If rebound is such a significant effect, skeptics refute, then why do we observe economic growth with decreasing energy consumption at the economy-wide level? Solar Feeds has one particularly strong explanation:

Now, there is a popular myth that has grown up in the past two decades the the US economy already transformed itself. This received wisdom holds that GDP rose while energy consumption per unit of GDP fell. That is certainly true in the narrow sense. But, not true in the broader sense. Here’s why: US domestic energy consumption which at one time was devoted to industrial production here in the US, is now simply offshored to Asia. The US economy still demands large units of energy which we simply import through manufactured goods. Worse, US GDP accounting still overweights consumption. This makes for a perverse, energy-accounting outcome: the more we offshore energy-consuming manufacturing to other countries, the more distorted our energy efficiency claims become, against GDP.

For more on the rebound effect, check out "Energy Emergence: Rebound and Backfire as Emergent Phenomena," (PDF), a report on the subject published by the Breakthrough Institute.