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Does technological innovation to improve the efficiency of energyusing products and systems lead to lower energy consumption and hence reduced environmental impacts? The answer given by economists since the mid nineteenth century is 'no'. This is because there are direct 'rebound' or 'takeback' effects caused by energy efficiency improvements that lower the implicit price of energy, often leading to greater consumption. Also there are secondary or indirect effects of reducing energy costs through efficiency in that consumers may buy more products and/or choose, larger, more powerful, more feature laden models. Thus just promoting technical innovation to increase energy efficiency is unlikely to lead to reduced energy consumption and emissions. Other policies such as taxation or regulation are required.As well as setting the theoretical arguments concerning innovation and energy efficiency the paper outlines results from an empirical research project, 'Peoplecentred ecodesign', which seeks to identify the key influencing factors on consumer adoption and effective use of energy efficient products and systems. In particular it aims to identify how consumers may avoid (or mitigate) rebound effects and how manufacturers, service providers and government might design and promote such products to achieve their optimal environmental benefits.

This paper presents results from a UK Open University project which surveyed consumers' reasons for adoption, and non-adoption, of energy efficiency measures and renewable energy systems -collectively called low and zero carbon technologies -and their experiences of using these technologies. Data was gathered during 2006 via an online questionnaire with nearly 400 responses, plus 111 in-depth telephone interviews. The respondents were mainly environmentally-concerned, 'green' consumers and therefore these are purposive rather than representative surveys. The paper outlines results, for four energy efficiency measures (loft insulation, condensing boilers, heating controls, and energy-efficient lighting) and four household renewables (solar thermal water heating, solar photovoltaics, micro-wind turbines and wood-burning stoves). These green consumers typically adopted these technologies to save energy, money and/or the environment, which many considered they achieved despite rebound effects. The reasons for considering but rejecting these technologies include the familiar price barriers, but there were also other obstacles that varied according to the technology concerned. Nearly a third of the surveyed consumers had adopted household renewables, over half of which were wood stoves and 10% solar thermal water heating systems. Most adopters of renewables had previously installed several energy efficiency measures, but only a fifth of those who seriously considered renewables actually installed a system. This suggests sell energy efficiency first, then renewables. There seems to be considerable interest in household renewables in the UK, especially among older, middle-class green consumers, but so far only relatively few pioneers have managed to overcome the barriers to adoption.

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This paper challenges the view that improving the efficiency of energy use will lead to a reduction in national energy consumption, and hence is an effective policy for reducing CO 2 emissions. It argues that improving energy efficiency lowers the implicit price of energy and hence make its use more affordable, thus leading to greater use. The paper presents the views of economists, as well as green critics of 'efficiency' and the 'dematerialization' thesis. The paper argues that a more effective CO 2 policy is to concentrate on shifting to non-fossil fuel fuels, like renewables, subsidized through a carbon tax. Ultimately what is needed, to limit energy consumption, is energy conservation not energy efficiency.