Jevons Paradox and Energy Efficiency


William Stanley Jevons noted in 1885 that when coal burning got more efficient, people burned more coal.

"If the quantity of coal used in a blast-furnace, for instance, be diminished in comparison with the yield, the profits of the trade will increase, new capital will be attracted, the price of pig-iron will fall, but the demand for it increase; and eventually the greater number of furnaces will more than make up for the diminished consumption of each."

Or today, one can build bigger monster homes because they cost less to heat, like this ridiculous second home built out of "green" insulated concrete forms.

Martin Holladay at Green Building Advisor reviews a new book, The Myth of Resource Efficiency, which suggests that increasing energy efficiency won't save much energy at all. The authors write: "The idea that 'an increase in energy efficiency always promotes sustainability' is very simplistic."

Holladay describes some of the forms that Jevons' Paradox takes:

  • Because of improvements in refrigerator efficiency, consumers can afford more and larger refrigerators.
  • Because of improvements in vehicle efficiency, car owners can afford to drive more miles per year.
  • Because of improvements in airtightness, window performance, and insulation techniques, homeowners can afford to build larger houses.
  • Savings resulting from energy-efficiency improvements -- or even savings resulting from giving up meat in one's diet -- allow consumers to take more vacations, resulting in greater energy use.

The Rocky Mountain Institute looked at this issue in TreeHugger and didn't think that efficiency would lead to more consumption, and in particular the cars and fridges:

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.

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.

One problem in applying Jevons' Paradox to today is the fact that back in 1885, coal was getting cheaper every day. The authors

"suggest that taxes could make up for any savings introduced by efficiency improvements, thereby avoiding the paradox. In the United States, at least, this approach is politically infeasible, but the general principle is sound."

Holladay suggests an alternative: voluntary simplicity.

I'm calling instead for the voluntary adoption of a simpler lifestyle: one with less work, fewer possessions, and more leisure time. A graceful transition to such a lifestyle would be the greatest possible gift to our children and grandchildren.

Certainly TreeHugger territory, but not an easy sell. However we are in a very temporary bubble of reduced consumption; many are living lives of involuntary simplicity now and when oil prices come back, will have an even harder time. It is a smackdown between Adam Smith and William Jevons; when stuff is expensive, people use less of it. And prices are going to rise, whether we tax them or not.

More at Green Building Advisor

More on Jevons Paradox in TreeHugger:
Beating the Energy Efficiency Paradox (Part I)
Beating the Energy Efficiency Paradox (Part II)
Survey Indicates Americans Deluded On Energy Conservation. Are They Really?

Tags: Economics | Energy Efficiency

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