Jevons Paradox applied to Energy Conservation

ABSTRACT: ANNALS OF ENVIRONMENTALISM about energy efficiency and the Jevons Paradox. Britain in the middle of the nineteenth century was the world’s leading military, industrial, and mercantile power. In 1865, a twenty-nine-year-old Englishman named William Stanley Jevons published a book, “The Coal Question,” in which he argued that the bonanza couldn’t last. Britain’s affluence and global hegemony, he wrote, depended on its endowment of coal, which the country was rapidly depleting. He added that such an outcome could not be delayed through increased “economy” in the use of coal—what we refer to today as energy efficiency. He concluded, in italics,“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.” Jevons might be little discussed today, except by historians of economics, if it weren’t for the scholarship of another English economist, Len Brookes. During the nineteen-seventies oil crisis, Brookes argued that devising ways to produce goods with less oil—an obvious response to higher prices—would merely accommodate the new prices, causing energy consumption to be higher than it would have been if no effort to increase efficiency had been made; only later did he discover that Jevons had anticipated him by more than a century. Nowadays, this effect is usually referred to as “rebound”—or, in cases where increased consumption more than cancels out any energy savings, as “backfire.” In 2000, the journal Energy Policy devoted an entire issue to rebound. It was edited by Lee Schipper. Schipper believes that the Jevons paradox has limited applicability today. Jevons wasn’t wrong about nineteenth-century Britain, he said; but the young and rapidly growing industrial world that Jevons lived in no longer exists. Most economists and efficiency experts, after studying modern energy use, have come to similar conclusions. But troublesome questions have lingered, and the existence of large-scale rebound effects is not so easy to dismiss. Discusses the history of refrigeration in relation to the Jevons Paradox. The steadily declining cost of refrigeration has made almost all elements of food production more cost-effective and energy-efficient. But there are environmental downsides. Most of the electricity that powers the world’s refrigerators is generated by burning fossil fuel. Since the mid-nineteen-seventies, per-capita food waste in the United States has increased by half, so that we now throw away forty per cent of all the edible food we produce. According to a 2009 study, more than a quarter of U.S. freshwater use goes into producing food that is later discarded. Also discusses the improved efficiency of air-conditioners. In the United States, we now use roughly as much electricity to cool buildings as we did for all purposes in 1955. The problem with efficiency gains is that we inevitably reinvest them in additional consumption. Paving roads reduces rolling friction, thereby boosting miles per gallon, but it also makes distant destinations seem closer, thereby enabling people to live in sprawling, energy-gobbling subdivisions far from where they work and shop.

Read more http://www.newyorker.com/reporting/2010/12/20/101220fa_fact_owen#ixzz1BGA4me74

Partial explanation at:http://en.wikipedia.org/wiki/Jevons_paradox

The Jevons paradox warns that improvements in fuel efficiency will not reduce the rate at which fuel is used. This does not imply that increased fuel efficiency is worthless. Increased fuel efficiency enables greater production and a higher quality of material life. For example, a more efficient steam engine allowed the cheaper transport of goods and people that contributed to the Industrial Revolution.

However, if the Khazzoom-Brookes postulate is correct, in order to increase energy conservation, fuel efficiency gains must be paired with some government intervention that reduces demand (e.g., cap and trade,fuel tax or carbon tax). The ecological economists Mathis Wackernagel and William Rees suggest that cost savings from efficiency gains be "taxed away or otherwise removed from further economic circulation. Preferably they should be captured for reinvestment in natural capital rehabilitation."^[3]

The Jevons paradox is sometimes used to argue that energy conservation is futile. For example, that more efficient use of oil will lead to increased demand, and will not slow the arrival or the effects of peak oil. This argument is usually presented as a reason not to impose environmental policies, or to increase fuel efficiency (e.g. if cars are more efficient, it will simply lead to more driving).^[7][8]

Several points have been raised against the argument that energy conservation policies are futile. First, in the context of a mature market such as for oil, the direct rebound effect is usually small, and so increased fuel efficiency usually reduces resource use, all other conditions remaining constant.^[6][9][10] (However, fuel use may still increase because of faster economic growth.) Second, even if increased efficiency does not reduce the total amount of fuel used, there remain other benefits associated with improved efficiency. For example, increased fuel efficiency may mitigate the price increases, shortages and disruptions in the global economy associated with peak oil. Third, environmental economists have pointed out that fuel use will unambiguously decrease if increased efficiency is coupled with an intervention (e.g. a green tax, cap and trade, or license fees) that keeps the cost of fuel use the same or higher.^[3]

The Jevons effect indicates that increased efficiency, by itself, is unlikely to reduce fuel use, and that sustainable energy policy must rely on other types of government interventions.^[11] By mitigating the economic effects of government interventions designed to promote ecologically sustainable activities, efficiency-improving technological progress may make the imposition of these interventions more palatable, and more likely to be implemented.^[12] As the Jevons paradox only applies to technological improvements that increase fuel efficiency, the imposition of conservation standards that simultaneously increase costs do not cause a paradoxical increase in fuel use.