The rebound effect is where the some gains from increased energy efficiency are wiped out because users consume more as the cost of energy declines. This means that a 10 percent increase in fuel efficiency doesn't directly translate into a 10 percent decrease in consumption. The increased efficiency lowers the cost of driving, providing an incentive to drive more. Such effects have been looked at in the literature with regard to income and fuel costs.
A new study by Quality Planning, an insurance consultant firm, estimates that owners of hybrid cars actually drive about 25 percent more discretionary miles than non-hybrid owners. These extra miles diminish some of the gains from having fuel efficient engines. Perhaps even more worrying is that hybrid owners tend to live in urban areas (such as Berkeley), where alternatives to driving are more likely to be present.
Since at this point hybrid owners tend to be 'greens' who are environmentally conscious, we should wonder why they are driving so much. We should also use evidence like this as a basis for user fees that directly price driving to reduce the total amount of miles traveled.