“netem rate” network emulator is not limiting network bandwith as expected

I am using netem to simulate a low-bandwidth connection, to check that an application handles this properly. For example:

sudo tc qdisc replace dev eth0 root netem rate 2kbps

But there seems to be very little effect, even at rates as low as 2 kilobits per second, where I would expect to see substantial performance degradation compared to the unlimited LAN.

What’s going on?