Bold ideas about the world’s energy needs.
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Jevons' Paradox
"The Coal Question" and the Efficiency Dilemma
"The Coal Question" and the Efficiency Dilemma
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Energy efficiency has been called “the fifth fuel” (after coal, petroleum, nuclear power, and renewables); it is seen as a cost-free tool for accelerating the transition to a green-energy economy. In 2007, the United Nations Foundation said that efficiency improvements constituted “the largest, the most evenly geographically distributed, and least expensive energy resource.” Last year, the management-consulting firm McKinsey & Company concluded that a national efficiency program could eliminate “up to 1.1 gigatons of greenhouse gases annually.” The environmentalist Amory Lovins, whose thinking has influenced Chu’s, has referred to the replacement of incandescent light bulbs with compact fluorescents as “not a free lunch, but a lunch you’re paid to eat,” since a fluorescent bulb will usually save enough electricity to more than offset its higher purchase price. Tantalizingly, much of the technology required to increase efficiency is well understood. The World Economic Forum, in a report called “Towards a More Energy Efficient World,” observed that “the average refrigerator sold in the United States today uses three-quarters less energy than the 1975 average, even though it is 20% larger and costs 60% less."
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William Stanley Jevons (1835-1881)
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But the issue may be less straightforward than it seems. The thirty-five-year period during which new refrigerators have plunged in electricity use is also a period during which the global market for refrigeration has burgeoned and the world’s total energy consumption and carbon output, including the parts directly attributable to keeping things cold, have climbed. Similarly, the first fuel-economy regulations for U.S. cars—which were enacted in 1975, in response to the Arab oil embargo—were followed not by a steady decline in total U.S. motor-fuel consumption but by a long-term rise, as well as by increases in horsepower, curb weight, vehicle miles travelled (up a hundred per cent since 1980), and car ownership (America has about fifty million more registered vehicles than licensed drivers). A growing group of economists and others have argued that such correlations aren’t coincidental. Instead, they have said, efforts to improve energy efficiency can more than negate any environmental gains—an idea that was first proposed a hundred and fifty years ago, and which came to be known as the Jevons paradox.
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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. -William Jevons |
Great 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, 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.”
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He offered the example of the British iron industry. If some technological advance made it possible for a blast furnace to produce iron with less coal, he wrote, then profits would rise, new investment in iron production would be attracted, and the price of iron would fall, thereby stimulating additional demand. Eventually, he concluded, “the greater number of furnaces will more than make up for the diminished consumption of each.” Other examples of this effect abound. In a paper published in 1998, the Yale economist William D. Nordhaus estimated the cost of lighting throughout human history. An ancient Babylonian, he calculated, needed to work more than forty-one hours to acquire enough lamp oil to provide a thousand lumen-hours of light—the equivalent of a seventy-five-watt incandescent bulb burning for about an hour. Thirty-five hundred years later, a contemporary of Thomas Jefferson’s could buy the same amount of illumination, in the form of tallow candles, by working for about five hours and twenty minutes. By 1992, an average American, with access to compact fluorescents, could do the same in less than half a second. Increasing the energy efficiency of illumination is nothing new; improved lighting has been “a lunch you’re paid to eat” ever since humans upgraded from cave fires (fifty-eight hours of labor for our early Stone Age ancestors). Yet our efficiency gains haven’t reduced the energy we expend on illumination or shrunk our energy consumption over all. On the contrary, we now generate light so extravagantly that darkness itself is spoken of as an endangered natural resource.
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Jevons was born in Liverpool in 1835. He spent two years at University College, in London, then went to Australia, where he had been offered a job as an assayer at a new mint, in Sydney. He left after five years, completed his education in England, became a part-time college instructor, and published a well-received book on gold markets. “The Coal Question” made him a minor celebrity; it was admired by John Stuart Mill and William Gladstone, and it inspired the government to investigate his findings. In 1871, he published “The Theory of Political Economy,” a book that’s still considered one of the founding texts of mathematical economics. He drowned a decade later, at the age of forty-six, while swimming in the English Channel. In 1905, John Maynard Keynes, who was then twenty-two and a graduate student at Cambridge University, wrote to Lytton Strachey that he had discovered a “thrilling” book: Jevons’s “Investigations in Currency and Finance.” Keynes wrote of Jevons, “I am convinced that he was one of the minds of the century.”
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Original source: The Coal Question: An Inquiry Concerning the Progress of the Nation and the Probable Exhaustion of Our Coal-Mines, by W. Stanley Jevons
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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: “Jevons is very simple. When we talk about increasing energy efficiency, what we’re really talking about is increasing the productivity of energy. And, if you increase the productivity of anything, you have the effect of reducing its implicit price, because you get more return for the same money—which means the demand goes up.”
On the other hand...
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From heating and cooling to electronics and appliances, it takes a lot of energy to power our daily lives. Our homes use 37% more energy today than they did in 1980. But without energy efficiency — through technology innovation and federal energy conservation standards — this number would be a lot higher. In fact, even though our total energy use has grown, our energy use per household is down about 10%, despite that our homes are larger and contain more devices.
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