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Box 6.1 Managing the rebound effect and Javons paradox in water stress situations

Increasing the efficiency of production is a main goal of European policies, with the overall goal to decouple economic growth from resource use. However, improvements in the efficiency of resource use do not always translate into net savings because producers and consumers adapt their behaviour (Paul et al., 2019). The rebound effect refers to the situation where efficiency gains do not result in associated reduction in resource use. In some cases, the same chain of events results in higher net resource consumption, known as the Jevons’ paradox.

The rebound effect can occur when the efficiency improvements affect consumer’s positive perception of the final product, leading to less restrain in its consumption or in the consumption of other products. It can also occur when efficiency improvements affect economic performance by reducing production costs. This may lead to increased production, reduction in product prices, or when cost saving is used to expand production elsewhere. Psycho-social and economic rebound effects lead to increased demand (Paul et al., 2019).

The rebound effect is well documented on the consumption of a number of resources, such as energy use. In water management, substantial evidence exists in irrigation water use, where the adoption of more water efficient devices is not necessarily accompanied with a reduction in water abstraction (Ward and Pulido-Velazquez, 2008; Dumont et al., 2013; Gómez and Pérez-Blanco, 2014; Berbel et al., 2018). Instead, the saved water is redirected to other beneficial economic uses, for instance higher value but more water consuming crops or an expansion of irrigated land.

The rebound effect can be particularly damaging for groundwater and connected surface water bodies. This is because inefficient irrigation practices have sometimes raised groundwater levels. Investments in irrigation efficiency may lead to a reduction in field water losses, reduced infiltration and percolation and reduced groundwater recharge.

Investments in water efficiency programs should therefore be accompanied by a careful consideration of water balances at farm, aquifer and basin level, including consideration of surface-groundwater exchanges (EC, 2015d). Clear limits to resource use should be established at hydrologically-relevant spatial scale. Policies promoting more efficient use of natural resources should also have a realistic assessment of the possible savings, and the producer and consumer impact of the policy.