Jevons Paradox

I recently read a thought-provoking article in the New Yorker: "The Efficiency Dilemma" by David Owen. The main gist of the article is that as our machines use less energy, we use them more, thus negating any environmental benefit we hope to achieve. This is known as "Jevons Paradox". You can read the abstract and article here, but you have to be a subscriber for the full article. You can read a commentary, with excerpts, here.

Please discuss...

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CrLz6 years ago
The "Paradox" highlights some important issues that could be naively overlooked, confusing and leading to incorrect assumptions such as "energy conservation is futile"wiki.
  1. Efficiency in this sense is economic efficency, (~ usefulness / cost).  This is not cleaner or less-polluting efficiency.  Most environmental and societal impacts are not captured in "cost", for better or worse.
    • More "efficient" is not necessarily better for the environment, that is confusing the issue.
    • Additionally, "efficient" does not mean less-quantity for same output (that's only one possibility).  Simply dropping taxes on gasoline would make the cost less, thus encourage more use, resulting in Jevons paradox.
  2. This is a paradox only in the sense of a limited field of view of supply and demand.  The S-D curves of all substitute goods need to be considered for a correct analysis of impact.  More efficient coal will result in more coal purchase, at the same time reducing the purchase of oil.  (Does that help the environment?)
  3. Finally, the paradox implicitly assumes scarcity.  This is fairly correct, but in the mathematical limit, could be wrong.   If the amount needed to perform work (physical efficiency) was << unit of cost, the good would no longer be scarce and consumers would have more than they need, essentially no longer consuming more at better prices.
The paradox is useful to highlight / avoid naive conclusions. 

Making gasoline engines more physically-efficient, thus more $-efficient, is not, perhaps, the best policy to lower combustion emissions.  A better RD investment would be increasing the physical-efficiency of solar powered engines, and thus the $-efficiency.  This would encourage more solar-energy use (per Jevons Paradox) which would create less combustion emissions.  A more realistic economic policy for reducing combustion emissions.

The Wiki article also mentions

However, ... 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).

Which I suggest is also naive.  Again, rather invest in substitute goods that have the environmental benefits you want.  Taxing away savings is not a good way to encourage development (but does expand the budget...)

kelseymh CrLz6 years ago
Excellent analysis and summary! Thank you very much, and thank you especially for pointing out what I had overlooked, that "efficiency" is used in the economic sense, not the physics sense.
CrLz kelseymh6 years ago
De nada.

It's interesting how economics is rather sloppy with definitions, particularly compared to physics or mathematics.

I lived in NYC during the boom of quants and I always feel they are a great example of how business moves faster than precision. The field suffers, from that point of view.

Not acceptable situation in science, but of course the problem there is the budget constraints!

I guess the worst of both would be Government...
llmadigan7 years ago
ok, here's my 2 cents -

it sounds to me (also not a scientist, so please be gentle with me) that the article is pointing out the possibility that increased efficiency is counterproductive. and i can understand the idea of consumption going up when costs go down. but i feel like "increased efficiency" is being painted as the bad guy and i have to jump to his defense and point an accusatory finger at the religion of unlimited growth.

my hybrid car does not get any more miles than its predecessor and i do not do more laundry than i used to because i have an HE washer and dryer. i totally recognize the larger scale version that results in "more population, developing countries becoming more ubanized and industrialized, and so on" but i think that's because the idea of unlimited growth is treated like an untouchable religion that's protected from any and all criticism. it is not ok to waste food, just because you can afford to buy more. it is not ok to run the air conditioner all summer long because you can afford it - even if you live in the desert. in fact, i'll even argue that it's not ok to live in the desert. but i've been told a number of times that it's not ok to express these opinions, because people should be able to do what ever they want. if they have money to make an otherwise uninhabitable place inhabitable (and then build a golf course there!), i have no right to stop them - regardless of how wasteful i think it is. i have no right to judge families with children in the double digits. and i must be a communist if i think it's ok to talk about population control. [shrug]

just saying - i think that if we could paint "unlimited growth" as the bad guy, we could let "increased efficiency" off the hook.
You are exactly right! See my quantitative description much farther down. Jevons' paradox basically boils down to the observation that, using my own notation, N*(1-E) is an increasing function of time.

Even if the "efficiency" E (whatever you're measuring as an improvement) gets closer to one, so that the "inefficiency" (environment cost or whatever) goes down, the "unlimited growth" pressure of society increases N (the amount used, measured however is appropriate for the problem) to more than compensate.

I think you're exactly right that "increased efficiency" is not, and should not be, considered the villain. Decreasing the per-unit cost to the environment, or to society, is always useful and productive. Even displacing those costs, say from population centers or agricultural land, out to desers, or the abyssal ocean, or space, is still beneficial to society.

What Jervons' observed, and what seems to be a general aspect of human societies, is that we still manage, over time, to take advantage of improvements, rather than having those improvements stabilize.
"What Jervons' observed, and what seems to be a general aspect of human societies, is that we still manage, over time, to take advantage of improvements, rather than having those improvements stabilize."

that sounds much more accurate than my assumption (about efficiency being vilified). thanks! :)
You may not be wrong about the tone of the New Yorker article, however. I've noticed a number of authors being fairly negative about new, "environmentally friendly" technologies, and using the argument of Jevons' paradox as their basis. I believe that is short-sighted, and more of an argument to maintain the status quo (with it's concomittant effects due to growth), than to attempt to improve matters.
oh, ok! so i wasn't just being hyper-sensitive :) also good to know.

so how do we redirect human nature from over-consumption?
crapflinger7 years ago
hehe i call that revelation a "duh" event.

it sort of follows the same principle of hard drive storage (i can't remember the "law" name off hand) hard drive storage space increases, our ability to fill them does as well.

i would imagine though, that at some point the efficiency gains would negate this principle eventually
Except they don't. The reason this is not trivial is because it is backed up by evidence, and in particular by evidence that your naive image is wrong. Here are some academic publications and peer-reviewed research articles on the subject.
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