UKERC Review of Evidence for the Rebound Effect Supplementary Note: Graphical illustrations of rebound effects

The aim of this Supplementary Note is to provide a graphical analysis of rebound effects and in particular to clarify the distinction between income and substitution effects for consumers and output and substitution effects for producers. This permits a clearer understanding of how rebound effects operate. The analysis draws upon standard neoclassical theory and is informed in particular by the insightful discussions of the rebound effect by Berkhout et al (2000) and Binswanger (2001).