I came across this 150-year-old proposition in this recent New Yorker article, which is basically a love letter to the idea.  Basically, the Jevons paradox states that any increases in energy efficiency will result in increased demand, which will in turn erase any energy saved, and may actually increase energy use.  This is an easy thought experiment once you’ve thought of the idea, and it’s also easy to track through history.

For example, miles traveled via automobile have skyrocketed since the Model T in the 1920′s.  Also, air conditioning is much more common today than before.  Theoretically, these increases in consumption can be traced back to the fact that these items became more efficient.

My first issue with this theory is that this seems to only be true if the demand for an good can be substantially altered with its energy cost.  Think of air conditioning for example.  It stands to reason that if it cost you $2000 to cool your house in July, most people probably wouldn’t do it.  Alternatively, if it cost $200 dollars a lot of people would.  In other words, a large portion of the basis for demand of air conditioning is how much energy it uses.

As a counterpoint, how about a washing machine?  Is the demand for use of a washing machine correlate well to its energy efficiency?  I would say no.  I would think it would correlate better with how much dirty laundry you have.  There is an issue of scale here as well, which brings me to my next point of contention.

Surely this effect is must be an exponential decay.  In other words, as efficiencies continue to increase, or most importantly increase faster then demanded by the economy (*wink* government *wink*), this trend must slow down.

Let’s take the air conditioning example from above.  I gave some pretty extreme examples, but let’s look at the other end of the scale.  What’s the difference in demand between a $100 electric bill and a $50 one?  $50 and $25?  At what point do you stop caring about the cost?  It’s not like you’ll now want to cool your house to 50 degrees.  There is a boundary condition here.

This is similarly true for cars.  There’s a big difference between 15 MPG and 30 MPG, in terms of your wallet, but how about 30 MPG and 60 MPG?  Probably some behavior will change, but how about 60 MPG and 120 MPG?  At some point, the new limiter to how much you drive will be the time it takes you to get from A to B, not how much it will cost you in fuel.

These examples are all at the micro level, which there’s some debate as to whether this is even reliably detectable at the micro level.  But the problem with looking at the macro level is that it’s impossible to decouple this effect with general economic growth (chicken or egg?).

What does this mean for policy?  It certainly doesn’t mean we should stop pushing efficiency gains.  In my view, it means we should push them harder, until we can meet some of these boundary conditions.

In the mean time, what it really points to is the need for a price on carbon.  Most proponents of the Jevons paradox will agree that efficiency gains coupled with a carbon tax eliminates this effect.

We need a comprehensive carbon pricing scheme, and we needed it 10 years ago.

In the vein of keeping this discussion on technology going, I wanted to bring up an article I read in The New Yorker a few weeks back that raised some interesting questions about the limits of technology in solving certain global challenges.

(more…)

I was about to purchase 2 copies of The Complete New Yorker (one for myself, one for Steph for Valentine’s Day: 8 DVD’s for only 20$!), and I noticed this cover on display:

It’s by Bob Staake and I just think its downright awesome.