A few weeks ago, I went to an interesting talk by Dr. Steve Hallett at Purdue’s Botany and Plant Pathology Department. It was about how efficiency wasn’t going to save the planet, and he referred to the Jevons paradox/effect. Basically, even though we would like to think that more efficient use always means decreased use, historically, increases in the efficiency of many technologies have actually increased consumption.
This has to do with something called the rebound effect: when new technologies allow us to use a resource more efficiently, it drives down prices and can lead to an increase in resource consumption. Granted, I’m not an economist, so at first I was like, “Wow, the Jevons effect makes total sense!” Then I read more about it and apparently things are a lot more complicated. (Aren’t they always?)
While the rebound effect is pretty uncontroversial and well-supported by theory, the Jevons effect is a specific case of the rebound effect where the decrease in resource use due to increased efficiency is smaller than the rebounding increase in resource consumption. This may happen when demand is elastic or very responsive to price, but when demand is inelastic, then we might not see the Jevons effect. So, there is still a lot of debate over the size of the rebound effect in real-world situations, and some people have been using the Jevons paradox to argue that there’s no point in improving energy efficiency. (Gasp!)
In some cases, I can kind of see their point. For example, I really don’t think a whole fleet of energy efficient cars is going to solve the world’s energy problems because of the potentially large rebound effect from people driving more. But weatherproofing a house seems like a pretty good idea, and the rebound effect is probably pretty small because I don’t see how that would make someone turn up their thermostat or air conditioner to heat/cool their home.
So in my non-economic opinion, I don’t think we should totally throw improvements in efficiency out the window, but Dr. Hallett does make a good point that we should stop and think about whether efficiency improvements are always the best solution because there are many ways to address large, global problems that don’t involve improvements in efficiency. Like better public transportation, for example, would probably help reduce the number of cars on the road and reduce energy consumption. Or policies that directly incentivize energy conservation. Or dare I say it, addressing the mother of all problems: population growth.