20 September 2009

Jevons Paradox Illustrated

Today's New York Times has a nice article on energy efficiency and the proliferation of electronic gadgets. The article has a nice graphic (above) that clearly illustrates Jevons Paradox (compare the left-most panel to the right-most panel), which was described in 1865 by William Stanley Jevons as follows:
It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth.
VII.4
As a rule, new modes of economy will lead to an increase of consumption according to a principle recognised in many parallel instances. . .

Now the same principles apply, with even greater force and distinctness, to the use of such a general agent as coal. It is the very economy of its use which leads to its extensive consumption. It has been so in the past, and it will be so in the future. Nor is it difficult to see how this paradox arises. . .

And if economy in the past has been the main source of our progress and growing consumption of coal, the same effect will follow from the same cause in the future. Economy multiplies the value and efficiency of our chief material; it indefinitely increases our wealth and means of subsistence, and leads to an extension of our population, works, and commerce, which is gratifying in the present, but must lead to an earlier end. Economical inventions are what I should look forward to as likely to continue our rate of increasing consumption.
Some people have suggested that Jevons Paradox means that efforts to become more efficient are misguided. Others, seeing such arguments being made have tried to claim that Jevons Paradox actually does not exist. Both lines of argument are badly misguided.

Jevons Paradox is very real. It tells us that increasing efficiency is necessary if we are to met energy needs, because those energy needs will continue to grow even in the face of rapid growth in efficiency. Thus, the practical consequences of the paradox are that we need to become more efficient and we need more energy, all at once. How efficient we can become will of course influence the amount of energy that we need, so improving efficiency is a worthy goal. But no one should imagine that efficiency gains alone can eliminate the need for more energy -- they can't and they won't. Policy needs to be able to focus on advancing efficiencies and creating ever greater sources of energy.

2 comments:

charlesahart said...

Roger,

I think it is pretty well accepted that price drives consumption levels. High prices discourage consumption and low prices encourage consumption. Efficiency gains lower prices thus encourage more consumption.

If one wants lower emissions then efficiency gains will not get us there and are in fact counter productive. The only way to do it is to raise the cost of energy or reduce the emissions of energy sources.

One has to cap and/or tax energy to raise the cost (which will drive efficiency gains) or invest in energy source with lower emissions.

Cap and/or tax is difficult politically. However, direct government investment in clean energy is relatively easy politically and will cost the economy very little.

The ultimate goal is to get clean energy cost below that of coal. My favorite is advanced nuclear technology (e.g. LFTR) thorium molten salt technology that was demonstrated in the 60's. LFTR is so much greener than current nuclear that is can attract support from the environmental left (e.g. Dr. James Hansen). Of course, the political right is already a proponent of nuclear as a solution to the AGW issue.

Tom said...

Hi all,

Roger, this dynamic does not seem to operate similarly for water, if I understand correctly. There seems to be a usage ceiling (that varies by population segment according to income and what type of home people live in) and this upper bound is relatively solid. Why would water as a utility that is metered and priced in much the same way as electricity behave so differently?

My optimistic hope is that the concept of 'enough' is real in some sense, and that efficiency gains would eventually begin to actually lower consumption. Did I smoke too much crack this morning?

Post a Comment

Note: Only a member of this blog may post a comment.