Renewable rebound: Empirical evidence from household electricity tariff switching
Potential environmental benefits of green tariffs may be mitigated if households increase electricity consumption after they subscribe to green tariffs. Using metered data of household electricity consumption from a large provider of green electricity in Germany, our quasi-experimental analysis finds that household switching to a green tariff leads to a non-monetary renewable rebound effect of around 8.5 %. Further, our findings imply that this renewable rebound effect is persistent over at least four years. These findings may be explained by moral licensing effects which induce households to permanently change their habitual behaviours and/or to acquire additional electricity-consuming technologies. Thus, failure to account for a renewable rebound in policy evaluation may lead to systematically underestimate the costs of achieving energy and climate targets.