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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 21-26 of 26 comments

June 9, 2011

Hello everybody,

Well, I do believe in Jevons Paradox Impacts.

For me it's quite simple. We are one more specie struggling for survive. And we'll keep reproducing ourselves, and world population will keep growing while we have an efficient environment to support us.

If nowadays the point is to eat meat, maybe in the more sustainable world of 2050 the point would be the Lettuce.

Maybe this can be related with this thought: http://www.economist.com/node/18741749?story_id=18741749

Just to say that all the problems we have are our problems. And the planet is not in risk, it won't explode. Humans are in risk as in any overpopulation.

Ray Anderson has said: The more sustainable energy that exists is that one you don`t use.

In portuguese we have an idiom that says: Less is more. I think is the same in english.

And please, I don't want to be listened as a misanthropic...

For me the concept of sustainability usually regards to utopian or distopian situations. So would be like sustainability concept being created by Timon (the super misanthrope).

I'm just trying to point out a side of the pyramid we don't like to touch. WE.

cheers


August 31, 2011

I have a question. The ‘Jevons paradox’, as I perhaps imperfectly and too simplistically understand it, seems to boil down to this: greater efficiencies in resource use should be seen as, in effect, increasing the supply of the resource; consequently this greater supply lowers cost and thereby increases demand. If that is the logic of the position, then it would seem that the entire ‘paradox’ presupposes the operation of a free market. Hence, to the extent that the ‘paradox’ may actually pose a problem to an energy efficient soft path (and I am agnostic on the question of how much, if any), the appropriate design of a policy response would (in principle) seem to be one that intervenes in the market to diminish or eliminate the problem. In his classic 1976 article, Amory Lovins said quite clearly that ‘there are things the market cannot do’ (p. 75). Does the ‘Jevons paradox’ perhaps provide a illustration of this? This is a real question, not a rhetorical one. I’m not sure. Perhaps I have missed the whole point of the ‘paradox’, and if so wouldn’t mind being corrected by others who know better. I would, in fact, appreciate hearing the views of others who are better informed on this issue than I am.


March 21, 2012

There's a false dilemma presented here: rebound is negligble vs. rebound has a large impact. What about the possibility that rebound has a moderate impact? It doesn't make for catchy headlines but is more in line with the findings of the professional research on rebound. Measurements of the rebound effect can lead to improved models of energy demand and better assessments of the net costs and benefits of energy efficiency programs.


March 22, 2012

Amory Lovins wrote:

"There is a very large professional literature on energy rebound, refreshed about every decade as someone rediscovers and popularizes this old canard."

Yes, but how much of this professional literature acknowledges that "this old canard" was based explicitly on an even older canard, the claim that labor-saving technology "creates more jobs than it destroys"? Here is what Jevons actually wrote:

"As a rule, new modes of economy will lead to an increase of consumption, according to a principle recognised in many parallel instances. The economy of labour effected by. the introduction of new machinery, for the moment, throws labourers out of employment. But such is the increased demand for the cheapened products, that eventually the sphere of employment is greatly widened. Often the very labourers whose labour is saved find their more efficient labour more demanded than before."
_________________

Amory Lovins also wrote:

"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. "

The energy intensity of GDP is only a superficial index. What really matters is the energy intensity of employment, not GDP. If GDP isn't growing fast enough to maintain full employment, there will either be continuing pressure to boost GDP, regardless of the environmental consequences or there will be social disintegration as a large segment of the population is excluded from economic flourishing.

The energy intensity of employment in the U.S. is 80% of what it was in 1975. Most of that improvement occurred before 1986. In 2007, before the recession hit, energy intensity of employment was about the same as it had been in 1986.

World-wide, energy intensity of labor force participation was about five percent higher in 2006 than it was in 1980 (I used World Bank LFP stats because comprehensive employment data going that far back isn't available).

So even though the Jevons paradox may indeed be a canard, it is inextricably associated with another canard, "the employment rebound myth," which makes the debunking of the two myths scarier than if the Jevons paradox were true.

Now economists may argue that the energy rebound and the employment rebound are "empirical matters" and they evidence about elasticities is different for the two cases. Sort of. That's because economists cite micro-level studies to debunk the energy rebound and rely on sweeping macro-level generalizations to uphold the employment rebound. These are different standards of evidence that are not comparable. by contrast, the energy intensity of employment index offers a direct comparison.


March 22, 2012

For further comment on "The Lovins Paradox: 'this old canard'," including a chart comparing energy intensity of GDP and energy intensity of employment, see: http://ecologicalheadstand.blogspot.com/2012/03/lovins-paradox-this-old-canard.html


November 26, 2012

Of the various rebuttals of Owen's thesis, only Goldstein's attempts to put the arguments on a factual basis. Unfortunately, Lovins does not make a convincing argument. Jevons was addressing a particular issue of his day, namely the question of whether the UK's coal resource consumption would level off (thereby extending the time duration to resource depletion) or continue to increase. Jevons's observations led him to the conclusion that the improvements in the technology of steel making would lead to a more rapid consumption of the resource and a shorter time duration to resource exhaustion. The parallel in our time is the increasing rate of petroleum resource exploitation which will inevitably lead to a shorter time period to its ultimate depletion, in the absence of improvements in final consumption efficiency or the improved technological efficiency of substitutes, e.g., hybrid electric/heat engine motors for heat engine motors in automobiles, and large scale wind turbines for the generation of electrical power for thermal power generation plants. In Jevons's day, it was technological advances in the production of steel that led to the improved energy efficiency (reduced hundredweight of coal per ton of metal produced) that led to the increased consumption of steel (as it substituted for inferior iron and non-ferrous metals and wood) which in turn led to the increased consumption of coal. Today a similar phenomenon is occuring in telecommunications which is leading to an increase in electrical power consumption in the form of data centers. The response to that increased consumption and projections of higher yet consumption in the future if 'something isn't done' is leading to technological improvements directed at energy efficiency. Another example is the recent spread of ''fracking'' to exploit previously unexploitable 'shale oil' and 'shale gas' petroleum resources in the USA. Technological improvement has lowered the cost of production (increased the process's energy efficiency) and lowered commodity prices amid increased output. The product, natural gas, is displacing coal as the fuel of choice for the generation of electricity, and imported oil for the heating of homes and commercial buildings.

In the case of irrigation systems, the construction of large hydro-electric generating capacity on the Columbia River reduced the cost of electricity in the NW and led to the widespread adoption of irrigation works to support and expand agriculture in Washington State. Technological improvement in the construction of large scale works, begat energy efficiencies in the production of electricity and in the provision of irrigating water, but led to the collapse of the Columbia River salmon runs.

Energy efficiency is a response to and at the same time the result of technological innovation. Does energy efficiency cause increased consumption? Yes, and no. In the case of air conditioning equipment, the answer is probably yes but not for the reasons commonly cited. Defining energy efficiency narrowly, e.g., by a 'SEER' or 'EER' efficacy metric, the improved efficiency per unit would not lead to increased consumption per se. But defining energy efficiency broadly, including the production process and the distribution system, along with the technological improvements in the refrigeration and heat transfer componentry, the answer must be that increased energy efficiency does lead to increased consumption of energy through increased use as more products are put into service, unless the improvement in energy consumption efficiency exceeds the increase in units placed into service (i.e., in the limit, neglecting higher order terms, dE/E = de/e - dv/v where e is the unit energy consumption and v is the unit volume, and a positive number for dE/E is a reduction in total energy consumption, E).

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