The Jevons Paradox: Why reliance on energy efficiency and waste reduction policies alone is a bad idea.

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Have you ever had that sinking feeling when a solution to a problem seems to emerge promising to save the day only to suddenly to turn into a bit of a dead duck? Over the years I\’ve begun to feel that way over our current approach to solving environmental problems, particularly climate change. Recently for example I was helping some friends in Glastonbury who regularly organise gigs in the town when one of them lent me a very interesting book, which I still have on my bookshelf. The subject matter is \’peak oil\’, or oil depletion and it\’s called The Last Oil Shock by David Strahan.

The reason I mention this is that although I have several other books on oil depletion (one of the best in my opinion is Half Gone by Jeremy Leggett)  this particular book makes a very salient point on page 223 which we as a society appear to be ignoring, at our peril I might add.

When reading the book you will find that having waded through numerous facts and figures about the oil industry and the state of reserves and so on, Strahan suddenly hits you with a particular philosophical theory called \’The Jevons Paradox\’. His introduction to this idea is a reference to a 2005 report released by the House of Lords Science and Technology Committee which explains that although Britain\’s energy efficiency has doubled since 1970 the UK\’s total energy consumption still continues to rise. This is actually quite concerning, it has the effect of making you ask what the devil we are doing faffing around with renewable tech and waste reduction policies if the overall levels of consumption continue to increase. I just sat bolt upright when I read this because it actually implies that our current thinking about how best to deal with climate change is deeply flawed.

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William Stanley Jevons was a 19th century engineer who observed that the counter-intuitive effect of Thomas Newcomen\’s steam engines, which he had made increasingly efficient with each engine manufactured, was to increase coal consumption rather than reduce it. Subsequently, two economists named Daniel Khazoom and Leonard Brookes, developed the idea, which is why the Jevons Paradox is also sometimes called the Khazoom-Brookes Postulate. In the 1970\’s the concept was revisited again by Professor Robert Ayres, who argued convincingly that efficiency gains actually cause economic growth rather than dampening it.

This is how it works: a \’rebound effect\’ appears as a result of increased efficiency as prices are reduced. Decreased price stimulates demand. Therefore, increased efficiency point blank stimulates growth thereby returning¬† the individual or society back to the point from which he/they/it/whatever started from. Any attempt to achieve efficiency gains therefore, must be based not only waste reduction and energy efficiency programmes but also hand in hand with direct government intervention in the form of policies aimed at reducing demand.

So having discovered this, I started to do a bit of ferreting around to see if I could find some more information and encountered a poster on the Treehugger forum who sums it up quite nicely. This person, known only as \’JPS\’ states within the context of individual consumption, people tend to spend savings made from using, for example, efficient refrigerators or cars, on other consumer goods, some of which may probably be, and usually are in my experience, even more damaging and/or energy intensive. A classic example is the phenomenon when people will think to themselves, \”oh goody we\’ve saved so much on our bills this year, hello Greek island\” and off they go to Gatwick for a trip aboard on a highly polluting jet plane. The second point that \’JPS\’ makes is that the Jevons Paradox is even stronger at the level of industrial production, which means that whatever applies to ordinary consumers will apply even more so to business and industry. This is because savings from efficiency gains are usually reinvested as capital which generates more profit and therefore more growth.

I had an argument recently with a former friend of mine on Facebook on this exact point. I felt, in my view quite legitimately, that she was seeking a way out, that the idea that waste reduction and energy efficiency wasn\’t a nice convenient middle-class solution to our environmental problems after all, didn\’t exactly sit well with her. In other words, I felt that she was looking for a way to continue with \’business-as-usual\’ lifestyle patterns, and the trouble is that to my mind the same thinking is prevalent with most fairly well off citizens in western society. I stand by that criticism. I strongly believe that if we are to prevent climate change becoming even worse than it is already turning out to be, and it is happening now, we need to switch rapidly from the idea that we can halt climate change while continuing to run our economy in the way in which it is being run at the moment. In short, that means that each of us have to change the way we lead our lives.

Painful as it is, the Jevons Paradox is a very real and viable idea which can in my view be demonstrated continuously merely by looking at how ordinary people organise their finances and even more so by taking a closer look at western economic behaviour. All of us must pay attention to this. If we don\’t, nature itself will deliver an even more painful lesson – and on that occasion it will be an experience from which we will not recover.