Efficiency is the watchword of progress. We have been taught to believe that an efficient process is better than an inefficient one. But does this hold in the real world?
In many cases, it doesn’t, and I’ll tell you why. But first, let’s remind ourselves of what efficiency is.
Efficiency is a measure of the amount of output relative to the amount of input.
Let’s take an engine as an example. A particular engine will only give so much work in return for burning so much fuel. If the engine is made more efficient, it can perform the same amount of work with less fuel. This is a good thing.
However, when economics is laid over this a peculiar problem arises. The amount of consumption of the fuel goes up as efficiency increases.
They call it the Jevons Paradox
This is something that actually happened in history. William Stanley Jevons wrote in the book “The Coal Question” back in 1865 about a change he saw in British coal consumption.
The Newcomen atmospheric engine, the first practicable steam engine had been replaced with the Watt steam engine. The Watt engine only required half of the fuel needed for the same amount of work the Newcomen engine did. It was a huge engineering revolution.
The argument at the time among thinkers was that this would cause the amount of coal harvested to drop significantly. This was important since Britain was going into a coal shortage. The new technological efficiency of the Watt engine was supposed to have slowed that down.
It makes sense. If you only need half the amount of coal for a given unit of work, why wouldn’t you use less fuel overall?
The problem comes in when the price of fuel drops. As the price of a fuel drops, the demand for the fuel increases. We see this all the time when gas prices drop. More people go out in their cars and do more things because they can afford to do so.
If the amount of increased fuel consumption from the decrease in price surpasses the efficiency gains made by better technology, then Jevons Paradox kicks in. Consumption rates will increase as the efficiency rises.
On a microeconomic level, the paradox can fail if the person is able to resist the urge to buy more fuel while the price is low. Most people don’t pocket the difference in price and use their cars the same amount they did when gas prices were higher, but some do.
However, on a macroeconomic scale, increased efficiency is thrown into making the economy grow larger, which requires more fuel consumption. Thus, improved efficiency will deplete resources faster on the whole.
Does this mean we should stop seeking fuel efficiency?
No. All Jevons Paradox shows on the individual level is that increasing energy efficiency alone as a conservation tactic is futile. It must be combined with other tactics to be truly “green”.
Unfortunately, the really effective way to do this, reduce personal energy consumption, is unpalatable to many.
Yet it is only through actively reducing personal energy consumption that true conservation gains can be found.
The benefits of reducing your energy consumption
Learning to live on less energy, and not just through technological efficiency, is a key step to becoming personally resilient.
If and when the energy grid goes down, you will be better able to ride things out if you are already used to living with a much lower energy level.
But for me, the main benefit of reducing my energy consumption is that, when you can live a good life on less energy, you don’t have to spend as much time working to pay for all that energy consumption. You free up time for the essential things in life.
By all means, buy LED lights or more fuel-efficient vehicles. Those can save you quite a bit of money in fuel costs. The trick is to not turn around and reinvest those fuel savings back into the energy industry by spending more on fuel and electricity.
That is something that future generations and ourselves must come to grips with.
However, reinvesting those energy savings into renewable energy systems such as geothermal heating or active / passive solar systems could make perfect sense.
Tips for avoiding the Jevons paradox
Jevons Paradox is an economic paradox. Here’s what you can do to keep this idea in mind as you make your purchasing decisions:
- Always consider whether the resources you’re buying are made with renewable resources or not. If not, is there another way to go about it?
- Does the thing you’re buying depend on an external fuel source, like electricity or gasoline, to function? Is it renewable? If not, can something else replace the item you’re thinking of buying that is less dependant on external energy input?
- Watch yourself when the price drops on fuel. See it as a way to save money (= time = life energy) rather than to use more fuel without worrying about the budget.
- Don’t be sold by a company’s claims for efficiency when marketing a green product. Less so if they bundle efficiency gains with production gains.