Is One More Powerful Than We Think?

The Power of One is an initiative by the Department of Communications, Energy and Natural Resources to promote energy efficiency in Ireland. One of their TV ads, centered around the Heffernan Family, appears to have the following logic:

• The Heffernans reduce their energy consumption by, for example, switching their thermostat setting from 23 to 21 degrees.
  
• Through these efforts they save €320 annually on their heating costs.
  
• They save this money in their "holiday fund" allowing the five of them, in the closing scene, to head off into the sun with their surfboards and bags packed.
  

Any problem here? Does saving €320 on annual heating costs, only to spend it on a foreign holiday (I presume that's what the sun represents), make sense? Suppose they travel by air? Technically, it promotes energy efficiency in Ireland, but does it increase energy use somewhere else?



Did I mention Jevons Paradox? As we increase the efficiency with which we use a resource (through technological progress), we increase (rather than decrease) the rate of consumption of that resource. We are dealing with something similar here. If the Heffernans improve the efficiency with which they can heat their home, they may actually use the savings to consume more energy elsewhere. What's worse, the ad appears to promote this.

I will say that the paradox is not universally accepted. The general argument against it is that, in a mature market, the savings made will be greater than the amount used due to the rebound effect. However, I think the ad's advice is counter to this argument.