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The Jevon's Paradox or the "rebound effect" suggests that moving toward more efficient uses of energy may have the effect of increasing the use of energy and emissions of greenhouse gases. The idea is that lowering the cost of energy use will increase demand for energy. The energy efficiency approach is contrasted with the carbon tax as a way of reducing GHG. It makes energy consumption more expensive which lowers demand for carbon emitting products. Politicians tend to favor the energy efficiency approach since raising taxes is taboo from a political standpoint. This may be a false choice problem. Why can't we take both approaches to GHG reduction?
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