Reviewing Jevons' Paradox

Wired has a look at the accuracy of Jevons Paradox and the implications for energy efficiency strategy - Clive Thompson on Unsaving the Planet.

We put a lot of stock in energy efficiency. It is regarded as the quickest and easiest way to reduce carbon emissions. Al Gore even ended An Inconvenient Truth with a plea for everyone to install low-power lightbulbs and appliances.

But in 1865, British economist William Stanley Jevons offered a skeptical take on efficiency. In The Coal Question, he wrote that energy-efficiency technology has a backlash effect. By increasing efficiency we make energy cheaper, thus spurring people to use more of it. As Jevons pointed out, when steam engines became more efficient, the consumption of coal (for steam production) didn’t decrease—it expanded, because steam engines became cheaper to run and thus attractive for more and more things.

Adherents call this the Jevons paradox, or rebound effect. And the idea is at the heart of David Owen’s new book, The Conundrum, which argues that not only will efficiency fail to solve global warming—it’ll actually make things worse. The good news is that Owen’s analysis is likely off target. But it’s worth hearing him out.

Owen makes a number of grim observations that ring true. Automobile engines have become much more efficient, but we’ve responded by demanding larger cars loaded with more electrical gewgaws. Air-conditioning has become more efficient, but we’ve made it a cultural norm that every room and vehicle nationwide must be cooled in summer.

Or consider lighting. As a source of illumination, light from modern bulbs costs just 0.03 percent of what candles did in 1800. But a recent study funded by the US Department of Energy found that the amount of global GDP spent on lighting has remained at about 0.72 percent over the past three centuries. The astonishing increase in lighting efficiency merely drove an explosion in the number of things we light up—like kids’ sneakers. Efficient power usage has made it “so that there’s almost nothing you can do that doesn’t require power,” as Owen tells me.

But if efficiency will just make things worse, how can we avert climate disaster? Owen says we need to start living smaller, quickly and dramatically—by traveling less and consuming less and taxing energy much more. It is not, he admits, a pleasant message.

Assuming he’s correct. The Jevons paradox has long been controversial, with economists arguing that Jevons got it wrong. Rebound effects are real, they say, but much smaller than he believed.

That’s because we modern folk spend very little on energy—only around 9 percent of GDP in the US. Plus, if we save money through energy efficiency, we don’t immediately spend those savings solely on more energy. We spend it on more food or movies or clothes, where energy accounts for only a small part of creation cost. As a result, economist James Barrett calculates, rebound probably decreases the total amount of energy saved by at most 30 percent—hardly the catastrophe predicted by Jevons and Owen.

There’s also evidence that efficiency standards work. After California imposed them in 1974, per capita electricity consumption stopped growing, even as it rose throughout the rest of the nation. Yes, globally we chew through more power every year, but that’s due to economic growth, argues Amory Lovins, an environmental scientist with the Rocky Mountain Institute.

Owen and other rebound Cassandras “have a critique of growth, which they then blame on energy efficiency,” Lovins tells me. But perhaps we’re buying two air conditioners simply because we’re wealthier, not because air conditioners are more efficient.