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Mar 20, 2012

Jevons Paradox: The Debate That Just Won't Die

This is a followup to the Spring 2011 Solutions Journal article, "The Rebound Effect: A Perennial Controversy Rises Again" by Michael Potts and Cameron Burns.


"Using energy more efficiently offers an economic bonanza - not because of the benefits of stopping global warming but because saving fossil fuel is a lot cheaper than buying it." - Amory Lovins

The Soft Path Graph 1976

In RMI Chief Scientist Amory Lovins' landmark piece, "Energy Strategy: the Road Not Taken," published in Foreign Affairs in 1976, he outlined his vision of a "soft energy path" which combines a prompt and serious committment to efficient use of energy (the 1976 graph featured on the right got the 2000 US energy demand right within a few percent). Since 1982, Rocky Mountain Institute has been committed to driving the efficient and restorative use of resources, working with for-profit businesses to lead the transition from coal and oil to efficiency and renewables.

The Importance of Efficiency 

Efficient use of energy is the most important, economical, prompt, underused, overlooked, and misunderstood way to provide future energy services. According to peer reviewed research and analysis in Reinventing Fire, the U.S. can deliver the same energy services and run the same economy with 40 percent less primary energy required in 2050 as compared to the business as usual case.

However, the issue is more complicated than it seems—see the debate sparked by David Owen in "The Efficiency Dilemma," published in The New Yorker in late December 2010 (Online subscribers can read the article here.), and perpetuated in his recent book, The Conundrum.

On the Web Recently

The Siren Song of Energy Efficiency (New York Times, March 19, 2012)

Whatever happened to “Use it up, wear it out, make it do or do without”? Now many civic-minded Americans ask themselves not how to avoid buying stuff, but rather what to buy: that shiny new hybrid in the driveway, the energy-efficient appliances in the kitchen, the right light bulb. Does this pay off for the planet, or does the quest for efficiency distract from more effective approaches to cutting carbon output? What can consumers do that would be more effective.

Lovins' Response

 As far as I know, David Owen and I have never met or spoken, although he has published two New Yorker articles, a book, and now this New York Times article directly attacking my work, with which he seems rather unfamiliar. This seems an odd way to do journalism, though it's not his style to let pesky facts get in the way of a good story. Even odder is that the Times now republishes his conclusions (plus an incomprehensible analogy about a village called Lovinsland) without seeming to realize they're thoroughly discredited and merit at least an opposing view.

Owen's counterfactual 2010 New Yorker article on energy "rebound" was demolished at the time by, among others, Dr. James Barrett of the Clean Economy Development CenterDr. Michael Levi of the Council on Foreign RelationsDr. David Goldstein of Natural Resources Defense Council, and myself
. Cameron Burns and Michael Potts nicely summarized the key arguments here—the #1 Google hit for searches like "AmoryLovins+Jevons"—and RMI pursues the diverse "Jevons paradox" conversation at on our blog.  A Times editor constructing a conversation on this theme could have easily found such references, leaving readers better-informed.

There is a very large professional literature on energy rebound, refreshed about every decade as someone rediscovers and popularizes this old canard. That literature supports neither Owen's view nor Prof. Matthew Kotchen's partial support that "rebound effects are potentially important." Real, yes; important, no. The price-elasticity and responding effects Owen cites, where measurable, are consistently minor—a theoretical nicety of little practical consequence.

James Watt's more-efficient steam engine did spark an industrial revolution that (as Stanley Jevons observed) created great wealth and burned more coal. But this is no proof that energy efficiency generally triggers economic growth that devours its savings (or more)—a "backfire" effect never yet observed. Rather, it shows that many disruptive technologies stimulate economic growth and wealth, sometimes sharply. Some disruptive technologies, like microchips and the Internet, incidentally save net energy even though they are not meant to be energy technologies; some disruptive energy technologies, like automobiles and jet airplanes, increase energy use, while others, like electric motors, probably decrease it, and still others, like electric lights, could do either depending on technology and metrics (which Owen's cited lighting analysis muddles); still other disruptive technologies that Owen doesn't criticize, like key advances in public health, mass education, and innovation, enormously increase wealth and have complex and indeterminate energy effects. Blaming wealth effects on energy efficiency has no basis in fact or logic.

To be sure, energy efficiency does modestly increase wealth, just as Owen's more efficient desk-lamp makes him slightly richer. I doubt this saving makes him use the lamp at least four times more (as would be needed to offset its energy savings), or that if it did, sitting longer at his desk would not displace other substantial energy-using activities. More likely his total energy use rose simply because he got richer: his writings and lectures have sold well to people who like his message, so he now has more stuff, uses it more, travels more, and probably doesn't reinvest much of his increased wealth in buying still more energy efficiency, which he thinks would frustrate his stated goal of environmental improvement.

That U.S. energy productivity has grown faster than GDP in only nine of the past 35 years doesn't prove it can't, nor make it less valuable; the U.S. now uses half the total energy it would have used at its 1975 energy intensity. (I'm one of two analysts who called this correctly back then.) Energy efficiency's speed and depth of adoption depend on many things—frugal technologies' price and easy availability, delivery channels' maturity and trustworthiness, citizens' attitudes and behaviors, and (most of all) barrier-busting so people can make smarter choices. Some places do this well. California, for example, has held per-capita electricity use flat for 30 years while per-capita real income rose by four-fifths.

Nor does continuing, though slackening, energy growth mean energy productivity can't accelerate to outpace economic growth consistently, as U.S. oil productivity did during 1977–85, when GDP grew 27 percent while oil use fell 17 percent Indeed, Rocky Mountain Institute's new synthesis Reinventing Fire (which properly counts rebound effects to the minor extent they've been established in the professional literature) explores what would happen if the United States achieved over decades the rates of efficiency improvement that some states have already sustained. The result: a 158 percent-bigger 2050 U.S. economy could use 24 percent less energy, need no oil or coal or nuclear energy, emit 82–86 percent less fossil carbon, and cost $5 trillion less (in net present value, ignoring all externalities)—the transition needing no new inventions nor Acts of Congress, and led by business for profit.

Owen's call to reject such practical and profitable transformation reminds me of the economic theorist who lay awake all night wondering whether what works in practice can possibly work in theory. Fortunately, his sophistry will not deter readers who understand energy and economics.

Join the Conversation

Is there indeed an "efficiency dilemma"? Or, will efficiency help us jump-start the journey toward a fossil-fuel-free economy?

We want to hear from you.

Other Articles

In response published on January 17, 2011 in The New Yorker, Lovins responded to Owen's claim that energy efficiency can lead to greater energy use. 

"David Owen argues that energy efficiency can lead to greater energy use, but actual “take-backs” of energy savings are usually between zero and a few per cent, rarely ten to thirty per cent, and never more than a hundred per cent..." 

Read Amory's Full Response

In addition, an article published on February 28, 2012 in WIRED, Amory argues that there's evidence that efficiency standards work. For example, After California imposed them in 1974, per capita electricity consumption stopped growing, even as it rose throughout the rest of the nation.

Read  the full article

Other Voices in the Discussion

Numerous responses, both in print and online, have perpetuated a lively conversation about Jevons paradox, a proposition that technological progress that increases the efficiency with which a resource is used tends to increase, rather than decrease, the rate of consumption of that resource. Most recently, David Roberts featured a four-part series in Grist, and a March 19, 2012 debate featured byNew York Times posed the question, "does this pay off for the planet, or does the quest for efficiency distract from more effective approaches to cutting carbon output?"

Below is a sample of articles stating Jevons paradox has a negligible effect.

Rebounds Gone Wild
realclimateeconomics.org, January 10, 2011

Do Green Cars Just Make People Drive More?
Motherjones.com, March 7, 2011

Rebounds and Jevons: Nobody Goes There Anymore. It's Too Crowded.
realclimateeconomics.org, January 18, 2011

Some Dilemma: Efficient Appliances Use Less Energy, Produce the Same Level of Service with Less Pollution and Provide Consumers with Greater Savings. What's Not to Like?
switchboard.nrdc.org, December 17, 2010

Mangling Energy Efficiency Economics
blogs.cfr.org, December 14, 2010

Rebounds Gone Wild
greatenergychallengeblog.com, December 20, 2010

Energy Efficiency: Paid Lunch or False Shortcut?
Huffingtonpost.com, December 31, 2010

Does Improving Efficiency Do Any Good?
theenergycollective.com, January 3, 2011

Energy Efficiency on the Rebound
Huffingtonpost.com, March 3, 2011

A fascinating encounter with advocates of large rebound effects
Koomey.com, Feb 13, 2011

These articles claim that Jevons paradox has a large impact.

When Energy Efficiency Sullies the Environment
nytimes.com, March 7, 2011

If you think efficiency reduces our energy use, think again
thenational.ae, January 4, 2011

If efficiency hasn't cut energy use, then what?
grist.org, December 16, 2010

Brother, can you spare a fridge?
grist.org, December 23, 2010

"Energy Emergence: Rebound and Backfire as Emergent Phenomena" - Report Overview
thebreakthrough.org, February 17, 2011

Efficiency Promise: Too Good to Be True
New York Times, March 19, 2012




Join the Discussion

Showing 11-20 of 26 comments

February 10, 2011

@sciam Is this an indication that China is moving from the heavy machinery model of advancing civilization? http://bit.ly/ijtZlN Where intelligence is evolution on steroids, high-speed featherweight development with amplifiers like story, education, and ICTs (information & communications technologies) seem directly causal to positive disruptions and advances -- via convolutions of human capital, mental and physical self-propulsion -- at minimal environmental cost. Forget about Jevons.

February 11, 2011

There's that old Groucho Marx joke in one of those films, "Any club that has me as a member can't be that good," which kind of speaks to the restriction of narrow machine-like perspectives and the naive way that most people -- including scientists, engineers, technologists, and even economists -- often misunderstand their limits. Efficiencies seem to be measured as averages during periods of providing certain inputs and getting certain outputs. For cars it is the number of miles per gallon of gasoline. The question is what happens to the average efficiency when gasoline no longer exists; and or the environment no longer exists to support them such as that newly formed lake in Australia; and or people no longer exist to use them since the environmental services no longer exist to support them which may have been caused by the very machines we are discussing. Averaging or even just including concepts like zero and infinity or even very large numbers in machine-like ideas does seem to change the real nature of things quite dramatically.

February 23, 2011

Much more fun would be ongoing discussions and case studies of the virtuous cycles of disruptive highly-efficient machines and processes, for example, optimized by intelligence amplifying information and communications technologies or ICTs, which in the earliest stages, replaced such things as the pony express overnight, while rapidly increasing and more fully using the value and capabilities of human capital continuing to this day. In a sense, even the notion of society run as a more efficient machine manifest in the rule of law fits this schema; perhaps considered by some as having saved something like one billion lives in the 20th Century despite two world wars.

February 24, 2011

Thought you might be interested in the following SSPP Blog post "The Jevons Paradox and Energy Efficiency" http://ssppjournal.blogspot.com/2011/02/jevons-paradox-and-energy-efficiency.html

February 24, 2011

Let's cut to the chase.

In New York City in a small transit-poor neighborhood by the water a community framework is caused to evolve that facilitates many socially and technically innovative and entrepreneurial challenges:

1. Poor people first

2. Low-cost minimal emission healthy food

3. Net-zero mobility

4. Net-zero housing and infrastructure

5. Zero waste

6. Clean, no-emission renewable energy

7. Prosperity without growth and high-material throughputs

8. (More to be determined)

This is all achievable in this small neighborhood replicable to the rest of the city.

Containing about 16 million people and central to the world's third largest economy, the New York Metropolitan region can be repurposed to lead the way in the necessary socio-economic transition, accelerating to many tens of millions of people at a time.

March 11, 2011

It's not quite so easy. The rebound effect was linked by Jevons to a standard argument in economics about the employment effects of machinery. Labor saving devices may eliminate work in the short term, the argument goes, but in the long run, lower prices increase demand and lead to even higher employment. Jevons asserted that the energy rebound was even stronger than the employment rebound.

So the question is not just about the intensity of the rebound effect but about its intensity in relation to the intensity of the employment rebound effect.

It would be rather myopic to discuss the Jevons Paradox without at least considering Marx's contemporary views on the periodicity of economic expansion and contraction and the consequent necessity for capitalist accumulation of relative surplus population -- the "industrial reserve army".

As long as the debate about rebound excludes the question of unemployment it is an "academic" exercise, in the worst sense of that term.


March 12, 2011

Silly, much too complicated . . . What about the periodicity of sailboats?

To repeat:

Profound integration with natural capital where human capital is the most important component . . .

is a design philosophy that likely removes any relevence of Jevons' considerations.

March 30, 2011

Paradox? What paradox?
I can take the best case for Jevons and still show no paradox exists. Jevons makes no allowance for "quality of life". Technology improves our lives. Why else would we choose to use it? Some may make mistakes and decrease their quality but we can assume the vast majority, given the freedom to act, will act in their best interest. Isn't this the principle behind the market? This can only be changed by gov intervention, e.g., energy regulations and subsidies. Remove them and the market (billions of people making Trillions daily choices) will solve the energy crisis. Liberty works.

April 4, 2011

I believe that Jevons Paradox is a real, albeit simplistic, representation of a counter intuitive response in a complex model. If you really want to impart change (in this case change energy consumption habits) you need to understand the SYSTEM and what the best way to change it is. For a facinating discussion of a systems approach to producing change, refer to "Leverage Points - Places to Intervene in a System" by Donella Meadows. As Ms. Meadows points out it is leverage points in a system are rarely intuitive - often producing the opposite result than what is intended. Negative and positive feedback loops (taxes and credits) are fairly low level leverage points and will not solve the energy issues facing this world - and in some cases may make them worse. Real change will be made by changing the highest level leverage points, namely paradigms and goals.
" Every Nation and every man instantly surrounds themself with apparatus which exactly cooresponds to their state of thought" R.W.Emerson. People like Al Gore and Amory have done one thing extremely well. They have begun to change many peoples paradigm about our "right" to use energy. Until we convince the majority that SUSTAINIBILIY is the definition of success and not material wealth, I am afraid we will never win this battle

May 3, 2011

I think what we need to appreciate with Jervons is the following: we're looking at interacting drivers of behaviour so teasing out the role of any one can be difficult. Logic would however suggest that where price influences behaviour, Jervons paradox is likely to reinforce increased resource use simply because efficiency allows for more bang for the buck. Where price is not a driver then efficiency is unlikely to influence behaviour. If I can afford to spend $100 on my fridge bill and an inefficient fridge might chew up my total budget - but I could possibly afford an efficient fridge and a bar fridge for the same budget.

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