The Jevons Paradox and the importance of energy productivity

As soon as there is discussion of energy efficiency and the potential for improving energy efficiency, someone counters with the argument that reducing energy use per unit of output only leads to more energy use as people and firms spend some (or all) of the money saved by greater efficiency on more consumption, resulting in more energy use. This is the Jevons Paradox – first put forward by William Stanley Jevons in 1865 in his book, ‘The Coal Question’. Jevons pointed out that coal consumption in England soared after James Watt introduced his steam engine which greatly improved on the energy efficiency of existing steam engines which used Thomas Newcomen’s technology.

Numerous referred papers, articles, blog posts and even whole books have been dedicated to the Jevons paradox and some people have used it without really understanding it to rubbish energy efficiency. I don’t want to start any more debates but I would say that that we don’t say the same things about the use of other resources e.g. metals – you do not hear the argument that we shouldn’t improve productivity of metal use as it will only result in more metals use. It may be equally true in metals as it is in energy but the argument isn’t made nearly so often.

Fundamentally improving the productivity of resource use, whether it be metals or energy or land, is one of the basic drivers of increasing wealth. Another driver is our ability to create resources out of ‘thin air’ by creative thinking, for example, turning something that has no value or is currently thought of as waste into a productive resource.

There is an interesting area for research, as yet under-researched, on the importance of improving energy efficiency in driving economic growth. Some recent research from the American Council for an Energy Efficient Economy suggest that it may be more important than we generally think. For some more information see the work of Skip Laitner and the ACEEE here and here.