The Jevons Paradox

Environmentalism, the social movement that is concerned with the well-fair and longevity of our wold, is a powerful movement across the world. This spread of environmental consciousness has affected many things, but the main way the average person can contribute to the cause is through change in consumption. Everywhere people trying to cut their carbon footprint, consume less resources and create less waste, in big ways and in little ways. One way to go about this is the purchase of efficient products, like light bulbs and energy efficient cars.

One economic quirk of environmentalism is called the Jevons Paradox. An economist named William Stanley Jevons observed that the great increase in steam engine efficiency had actually led to an increase in the amount of coal consumed. Although (and because) the steam engine could travel much further with less coal, the amount of boats and the amount of use increased enough because of the new efficiency that it actually increased consumption. As Jevons himself put it, “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.” 

The theory does stand on some very shaky ground however. The rebound effect, or the fact that people will increase consumption when the price of a good decreases, is certainly real. But in the end, the argument is over the extent of the effect of the rebound. It is likely that the rebound effect is not so massive that the search for efficiency is always in vain. Consumption also increases with income, so, as James Barrett put it-The even more interesting question is whether efficiency growth can ever overpower the effect of income growth and start reducing energy consumption in absolute terms.

Still, the Jevons Effect is interesting to think about, and in some cases it makes sense to apply it. In the case of the steam engine, for example, the model makes some sense. Another such example is the case of the Nobel prize for blue LEDs, which were invented last year and crucial for the LED to take over as a light source. It is marketed an environmentally friendly change, LEDs use much less energy than its alternatives. In fact, LEDs could reduce the amount of power used by light sources from 20% of the worlds electricity usage to 4%. But in reality the LED, instead of just replacing light sources, has been put to use in ways never seen before. There are LED displays in the place of billboards, on the sides of trucks, and on menus all over.

Another application of the Jevons Paradox is to the realm of the automobile. Edward Glaeser, a Harvard economist, fears that the rising affordability of electric cars could possibly cause a increase in cars on the road. The price of electricity is so much lower than the price of gas, so once the starting price for electric cars is low enough, the incentive to own an electric car will be very high. The price per mile is so much lower on an electric car than on a standard car, and so the amount of miles people drive could see a huge increase.

Whether or not it is completely valid, the Jevons Paradox and the idea that there could be some side effects that come along with increasing efficiency is an interesting issue to discuss.

Advertisements

One thought on “The Jevons Paradox

  1. This is a really interesting topic to look at. I wonder if the only reason that electric cars are not becoming widespread is in fact the fear that there will be more and more cars on the road. I also find it interesting that LED lights have such an advantage and a larger benefit, yet we still don’t use LED lights for everything. This might’ve been covered in the blog, but I am a little confused as to why we are not switching to use more LED lights.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s