Energy efficiency fails to cut consumption --study

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TORONTO, Nov 28 (Reuters) American consumers are driving bigger gas-guzzling cars and buying more air conditioners and refrigerators as the overall energy efficiency of such products improves, a report released found.

In what the study calls ''the efficiency paradox,'' consumers have taken money saved from greater energy efficiency and spent it on more and bigger appliances and vehicles, consuming even more energy in the process.

''While seemingly perverse, improvements in energy efficiency result in more of the good being consumed -- not less,'' said Jeff Rubin, chief economist and chief strategist at CIBC World Markets, which conducted the study.

The study, release yesterday, concludes that stricter energy efficiency regulations aren't the answer to concerns over climate change and the depletion of oil supplies.

''The problem is, energy efficiency is not the final objective,'' Rubin said. ''Reducing energy consumption must be the final objective to both the challenges of conventional oil depletion and to greenhouse gas emissions.'' The study found that energy use increased by 40 per cent from 1975 to 2005 while energy efficiency improved in the same period. The sectors with the greatest increases in energy use -- transportation and residential -- are also the areas where the US government is promoting energy efficiency the most.

The average mileage per gallon of gasoline has increased since 1980, but Americans have responded by driving larger vehicles and further. The average American drove 9,500 miles annually in 1970. These days he or she drives more than 12,000 miles.

The energy used to heat and cool homes is also rising as homes become larger. The study notes the area of the average home has increased from 1,000 square feet in the 1950s to the current 2,500 square feet. More households are also buying air conditioners.

Rubin believes energy efficiency is needed more than ever, but that government's current initiatives won't help.

''In order for efficiency to actually curb energy usage, as opposed to energy intensity, consumers must be kept from reaping the benefits of those initiatives in ever-greater energy consumption,'' he said.

REUTERS SW KP0937

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