Beating the Energy Efficiency Paradox (Part I)


Photograph:- The Daybreak Residential/Commercial Community in South Jordan, Utah features Energy Star homes.

Energy efficiency has been a consistent part of America's energy security policies and increasingly become an essential framework for abating carbon emissions. In fact, the federal government now offers several tax credits for everything from green home improvements to fuel cells.

But the effectiveness of energy efficiency does not go undisputed.

Skeptics such as the Energy Tribune's Robert Bryce point out that total energy use in the United States continues to rise, despite efficiency gains. Per capita, we're using more energy even as sales of hybrid cars increase and more green buildings get erected.

The argument hinges on an economic theory called Jevons' Paradox.In 1865, the English economist William Stanley Jevons wrote a book called The Coal Question. In it, he observed that the consumption of coal had gone up in England even after more efficient technologies, like an improved steam engine, had been introduced.

Later economic theory moderated Jevons' observation to say that a more efficient technology could create a rebound effect: Some of the efficiency gains are wiped out by greater demand for the resource.

Today's popularity of more efficient vehicles and green home retrofits means it is worth seriously considering if there is evidence for Jevons' Paradox -- or even a significant rebound effect -- that could dampen some of the enthusiasm for these technologies.

Luckily, we are observing only very small rebound effects (if any at all) in the United States. For example, we can look at household driving patterns: While total vehicle miles traveled have increased 16 percent between 1991 and 2001, there is no evidence that owners of hybrid vehicles drove twice as much just because their cars were twice as efficient.

For green buildings the evidence is very similar. From many case studies related to RMI's Built Environment work, we have not seen evidence that radically more efficient commercial buildings cause people to leave the lights on all night and set their office thermostats five degrees lower. In fact, energy savings in everything from office towers to schools have often been higher than projected. People do not seem to change their behaviors simply because they have a more efficient building.

Household appliances provide the best example that efficiency gains really do stick. Take refrigerators (which can use as much as 14 percent of a household's total energy). Until the late 1970s, the average size of our refrigerators increased steadily and then began leveling off. But, during the same period, the energy those refrigerators used started to decline rapidly. Today's Energy Star refrigerators are 40 percent more efficient than those sold even seven years ago. After all, there is a maximum size to the refrigerator you can easily put in a kitchen and a limit to the number of refrigerators you need in your house. In short, improvements in efficiency have greatly outpaced our need for more and larger storage spaces.

So far, the evidence from the field of more efficient technologies is good. In the United States, energy efficiency actually works when it's allowed to compete fairly in the market.

On a more macro-level, some states have posted impressive efficiency gains by paying attention to their use and investing to decrease consumption. According to RMI co-founder and Chief Scientist Amory Lovins, Vermont has reduced energy use per household in recent years. And California, he adds, "has held per-capita electricity use flat for 30 years -- saving 65 peak GW and more than $100 billion of power-system investment -- while per-capita real income rose 79 percent."

But Jevons' Paradox cannot be so easily put to rest. There are further implications for sustainable development on a global scale, and how efficient technologies play into it, that must also be considered.


Graph credit::California Energy Comission, David Goldstien.

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