Another criticism on decoupling is Jevons’ Paradox, also called the rebound effect, which states that efficiency gains lead to lower costs and increased consumption, ultimately negating the environmental benefits of efficiency improvements. Sorrell (2009) revisited Jevons’ Paradox, presenting empirical evidence from various sectors showing how energy efficiency improvements often lead to increased energy consumption, particularly due to lower costs that stimulate greater usage. While Jevons’ Paradox presents a compelling argument, it’s crucial to consider the context and the broader system in which efficiency improvements occur. For instance, policy pathways can mitigate the rebound effect (Vivanco et al., 2016). Azevedo (2014) shows evidence from econometric studies examining price elasticity, income elasticity, and substitution elasticity that indicates rebound effects in developed economies. These effects tend to be moderate which suggests that well-designed energy efficiency policies can achieve energy savings, though the actual savings may be somewhat less than those predicted by straightforward engineering analyses. Even considering these criticisms, technology improvements does lead to partial decoupling. Innovation is seen as an important vehicle towards green growth. Andabaka et al. (2019) found a positive correlation between higher rates of economic growth and eco-innovation. Although innovation does not result in full decoupling, it does have a complementary relationship with reduction of consumption and is therefore as important as de-growth strategies in achieving consumption within the planetary boundaries. Not only are innovations in technical fields contributing to the reduction of resource use, but business model innovations, such as Product-Service Systems, are also positively impacting resource utilisation (Geissdoerfer et al., 2020). As highlighted above, the topic of decoupling is highly controversial. The discussion extends beyond the decoupling of resource use from economic growth, challenging the very assumption that economic growth is essential for improving quality of life. Opponents of green growth suggest that quality of live can be achieved independently from economic growth. Figure 3.4 illustrates the positions of both green growth as well as that of de-growth. Green growth promoters argue that strict environmental policies might lead to economic shrinkage which could lead to social unrest. True sustainability is not about choosing between green growth or de-growth; it’s about transcending these paradigms to innovate new pathways that restore balance. 14 3.2. Green Growth versus De-Growth
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