Jevons’ Paradox – Or should it be called Jevons’ Justification

Or maybe even Jevons’ Excuse. See if the Industrialists and the Elite can say, “Look it doesn’t matter whether we save energy or not. Someone else will just use it”. Kind of like Marx’s army of the unemployed. The is the army of the underenergized. As we pointed out last time this is called a rebound theory because after the efficiencies are introduced the consumption never quite makes it back to the same level. That is because once people see that they can save a lot of money by paying less, their ways stay changed so to speak. Much of that rebound can also be explained by human kinds relentless population growth. But he also assumes the total fluidity of the market. Not everyone can access a nuke in Savannah like if they are in Nigeria.

Jevons paradox

Contributing Author: Richard York (other articles)
Article Topic: Energy
This article has been reviewed and approved by the following Topic Editor: Cutler J. Cleveland (other articles)
Last Updated: October 8, 2006

Jevons paradox (also known as the rebound effect) is the observation that greater energy efficiency, while in the short-run producing energy savings, may in the long-run result in higher energy use. It was first noted by the British economist W. Stanley Jevons, in his book The Coal Question published in 1865, where he argued that “it is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth.” The Jevons paradox is an observation based on economic theory and long-term historical studies, and its magnitude is a matter of considerable dispute: if it is small (i.e., the expansion of fuel using activities is less than 100% of the improvement in efficiency) then energy efficiency improvements will lead to lower energy consumption, if it is large (i.e., the expansion of fuel using activities is greater than 100% of the improvement in efficiency) then energy consumption will be higher. A key problem in resolving the two positions is that it is not possible to run ‘control’ experiments to see whether energy use is higher or lower than if there had been no efficiency improvements—there is, after all, only one future. A further problem is that the rebound effect has differing impacts at all levels of the economy, from the micro-economic (the consumer) to the macro-economic (the national economy), and its magnitude at all levels of the economy has not yet been determined. Nonetheless, there is mounting evidence that at the national level it is not uncommon for total resource consumption to grow even while efficiency improves, suggesting at least that improvements in efficiency are not necessarily sufficient for curtailing consumption (although, once again, this does not necessarily demonstrate that resource consumption grows because of improvements in efficiency).


Then there is this:

Efficiency Policy, Jevon’s Paradox, and the “Shadow” Rebound Effect

Posted by Prof. Goose on April 26, 2007 – 10:36am
Topic: Demand/Consumption
Tags: efficiency, jevons paradox, rebound effect [list all tags]

This is a guest post by Jeff Vail.

Is the push for greater energy efficiency a good policy choice to address energy scarcity after Peak Oil? Here’s a bold answer: NO, at least not in a vacuum. Efficiency is not a standalone solution, but part of the much more complex problem of reducing total energy consumption that must address Jevon’s Paradox and the Rebound Effect.

Jevon’s Paradox tells us that when we increase the efficiency of the use of a resource, we initially decrease the demand for that resource, but that ultimately this lower demand reduces price, which causes a “rebound” of increasing demand. When applied specifically to energy efficiency, this is commonly referred to as the “Rebound Effect.”

Here’s a real-world example. Let’s magically double the average fuel economy of America’s cars and trucks. Gasoline demand would drop immediately by 50%. This would affect the supply-demand equilibrium of gasoline, reducing its price significantly. However, with dramatically lower gas prices, many people would choose to drive more than they had in the past—this is the “rebound,” where some of the energy savings provided by gains in efficiency are negated by the corresponding effect on energy prices. Clearly, a 50% drop in gas prices won’t result in the average American doubling their driving, as would be required to completely negate the efficiency gains in this scenario. Even if gas was free, there would be some limit to how much we would drive. So this “rebound effect” doesn’t negate the entirety of energy savings due to efficiency. Studies suggest that it erases perhaps 10%-30% of the gains.


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