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The Jevons Paradox

That increased energy efficiency will save us has become an article of faith. Last year, Congress passed “The Energy Independence and Security Act of 2007.” The text of the new law covers 310 pages. The word “efficiency” appears 331 times, and “efficient” appears 111 times. It mandates higher mileage standards for cars sold in the U.S., and will eventually outlaw the use of incandescent light bulbs in favor of more efficient compact fluorescent ones.

For years, promoters like Amory Lovins of the Rocky Mountain Institute have been claiming that efficiency will save energy, lower carbon dioxide emissions, save money, and provide all comers, according to Lovins, with a “lunch you get paid to eat.” But few of the faithful have acquainted themselves with William Stanley Jevons. In 1865, the British economist published a book called The Coal Question which contains what is now known as the Jevons Paradox: “It is wholly a confusion of ideas to suppose that the economical use of fuels is equivalent to a diminished consumption. The very contrary is the truth.”

Those two sentences contain what may be the most important yet least understood concept in the energy business: energy efficiency increases energy consumption. It’s counterintuitive, and precious few energy analysts have bothered to investigate it. That’s why a new book, The Jevons Paradox and the Myth of Resource Efficiency Improvements, by John M. Polimeni, Kozo Mayumi, Mario Giampetro, and Blake Alcott, should be welcomed and given wide attention. The authors waste little time in explaining their thesis. On page 3 they state, “We aim to show that increased energy efficiency leads to increased demand and consumption of energy.”

The book is one of several analyses that have been published in recent years that confirm Jevons’s findings. Horace Herring of Britain’s Open University is among the world’s leading experts on the paradox. In 1998 he concluded that energy efficiency measures will, “by lowering the implicit price, result in increased, not decreased, energy use.” In 2003, Vaclav Smil, a polymath, author and distinguished professor of geography at the University of Manitoba, corroborated Jevons’s work in his book, Energy at the Crossroads. Smil wrote that history is “replete with examples demonstrating that substantial gains in conversion (or material use) efficiencies stimulated increases of fuel and electricity (or additional material) use that were far higher than the savings brought by these innovations.”

In 2005, Peter Huber and Mark Mills, in their provocative book, The Bottomless Well, declared that “Efficiency fails to curb demand because it lets more people do more, and do it faster ­ and more/more/faster invariably swamps all the efficiency gains.” Last October, the U.K. Energy Research Centre published what it claims is one of the most comprehensive analyses of the paradox. After a review of over 500 studies, the London-based outfit confirmed the existence of the Jevons Paradox (which it calls the “rebound effect”) and concluded that the “potential contribution of energy efficiency policies needs to be reappraised.”

In the new book about the paradox, Polimeni, an assistant professor of economics at the Albany College of Pharmacy, writes the most compelling essay. He reviews numerous studies on the effects of energy efficiency, citing one Swedish study that found a 20 percent increase in efficiency would “increase carbon dioxide emissions by 5 percent.” The same study estimated that to keep carbon dioxide emissions at their original level would require a 130 percent increase in carbon dioxide taxes.

Polimeni looked at data from developed and underdeveloped countries. He notes that between 1960 and 2004, U.S. energy intensity decreased by 113 percent, but overall energy consumption increased by 100 percent. His conclusion: “Energy-efficient technology improvements are counterproductive, promoting energy consumption. Yet, energy efficiency improvements continue to be promoted as a panacea.”

So what is to be done? First, we must accept the fact that efficiency won’t reduce consumption, but it can help reduce the rate of consumption growth. And for that reason alone, it should be pursued.

Polimeni and his co-authors conclude that “consumers will need to change their behavior patterns.” But they don’t go much beyond that. In an e-mail, Polimeni told me that he doesn’t think energy taxes are feasible. And although he believes changes in consumer behavior are important, he acknowledges that “something needs to be done” with regard to increased energy production. Polimeni sees nuclear power as “a safe and good choice.” He also favors accelerating development of renewable power sources like solar and wind.

While nuclear power and renewables offer some promise, it’s also clear that given the soaring energy demand in the developing world ­ and China, India and Pakistan in particular — the only realistic response to the Jevons Paradox must be to work like hell to produce more energy, of every type. And like it or not, that includes using lots more fossil fuels.

As Huber and Mills make clear in The Bottomless Well: “Over the long term, societies that expand and improve their energy supplies overwhelm those that don’t.” Given the harsh realities of the Jevons Paradox, the U.S. (and the rest of the world) need to get busy expanding and improving those energy supplies.

ROBERT BRYCE will publish his third book, Gusher of Lies: The Dangerous Delusions of “Energy Independence,” on March 10. He can be reached at: Robert@robertbryce.com

 

 

 

 

 

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