Keywords: consumption, economic growth, rebound effect, working time, divisor effect
Are we chasing our tail in the pursuit of sustainability?
People are urged to change their pattern of consumption and lifestyle in a more environment-friendly direction. More eco-efficient products and production are also developed. But when governments strive to promote economic growth, consumers may be urged to consume more to cure or prevent a stagnating economy. Here is an obvious contradiction. Gains in eco-efficiency are likely to be annihilated by greater consumption - the so-called rebound effect - resulting in an increased throughput in the economy. This paper takes a look at various means to handle the economic surplus in order to avoid or balance this effect. Environmental policies (including such measures as green taxes) may redirect consumption from one kind to another, but this demands that the alternative spending is less harmful than the one dissuaded. Other possibilities tested are to alter the sector mix of the economy and work-sharing to match the increasing efficiency.