Jevons Paradox

The Paradox

In the year 1865 Jevons published the book The Coal Question; An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal Mines (they went in for long book titles in those days).

 

The following is the take away quotation from Jevons’ paper.

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Coal in truth stands not beside but entirely above all other commodities. It is the material energy of the country — the universal aid — the factor in everything we do. With coal almost any feat is possible or easy; without it we are thrown back into the laborious poverty of early times. With such facts familiarly before us, it can be no matter of surprise that year by year we make larger draughts upon a material of such myriad qualities — of such miraculous powers.

 

. . . new applications of coal are of an unlimited character. In the command of force, molecular and mechanical, we have the key to all the infinite varieties of change in place or kind of which nature is capable. No chemical or mechanical operation, perhaps, is quite impossible to us, and invention consists in discovering those which are useful and commercially practicable . . .

 

I must point out the painful fact that such a rate of growth will before long render our consumption of coal comparable with the total supply. In the increasing depth and difficulty of coal mining we shall meet that vague, but inevitable boundary that will stop our progress.

 

Let us unpack the above three paragraphs.

 

The first paragraph states that coal was the über-commodity of the 19th century because it was the principle source of energy. Jevons understood that it was coal that put the ‘Great’ in ‘Great Britain’. Substitute the word ‘oil’ for ‘coal’ and his words apply equally well to our times. Without fossil fuels we are “thrown back into the laborious poverty of early times”.

 

The second paragraph shows that coal not only provided energy; it was also the basis of “molecular power” — the ability to create new products. In our time, we use oil to make an enormous range of products such as fertilizers, medications, pesticides and plastics.

 

But, and there’s always a ‘but’, in the third paragraph Jevons points out that the supply of coal is not infinite. Moreover, it will become ever more expensive to extract future supplies. He is actually describing, a hundred years ahead of his time, the problem of declining Energy Returned on Energy Invested(ERoEI), as described in Alice and the Red Queen. He has a premonition of what we now know as the Hubbert Curve.

 

His wonderful phrase, "that vague, but inevitable boundary that will stop our progress" became real for Great Britain around the year 1918 when coal production peaked. It was also about that time that the British Empire started to decline. And now, with regard to oil we are bumping into our own “vague but inevitable boundary”.

 

The following statement lies at the heart of his paradox.

 

It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth.

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Whatever, therefore, conduces to increase the efficiency of coal, and to diminish the cost of its use, directly tends to augment the value of the steam-engine, and to enlarge the field of its operations.

 

Translated into modern English, he is saying,

 

• Coal is being burned with greater efficiency. (There were two reasons for this. The first was technological innovation, the second the economies of scale that ensue when the number of customers and power plants is increased.)

• Hence more factories and power plants use coal since it is now more economical to do so.

• Hence the overall consumption of coal increases.

 

Apply the same thinking to our situation.

 

• People buy fuel-efficient cars.

• Because their cars are more efficient, they drive more miles.

• Also, because it is more economical to drive, more people buy cars.

• Hence the overall consumption of fuel increases.
   

The Katy Freeway

The idea of Jevons Paradox applies in many other types of human activity. The above picture is of the Katy Freeway (I-10 West) in Houston, Texas. In addition to being one of the nation’s more important interstate highways it is also a heavily-used commuter corridor. To reduce the congestion the freeway was expanded such that, at the intersection at Beltway 8, it is now 26 lanes across. (There used to be a two-track railroad on the corridor but they tore it up to make room for the additional traffic lanes).

 

Once construction was complete, travel was much faster and more convenient for just a few weeks. But now the traffic is as bad as ever. Why? Because more people chose to drive to work, and because real estate developers built more homes in suburban communities in that general area.

 

Another illustration of Jevons’ insight is to do with autonomous vehicles in a 2017 article entitled Not so Fast. Joan Walker, a transportation engineer at UC Berkeley, designed a clever experiment. Using an automated vehicle (AV) is like having your own chauffeur. So she gave 13 car owners in the San Francisco Bay area the use of a chauffeur-driven car for up to 60 hours over 1 week, and then tracked their travel habits. There were 4 millennials, 4 families, and 5 retirees. The driver was free. The study looked at how they drove their own cars for a week, and how that changed when they had a driver.

 

The upshot of this experiment was that people logged more miles. “There was a 94% increase in the number of trips over 20 miles and an 80% increase after 6 PM, with retirees increasing the most.”

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At first glance, Jevons Paradox creates a discouraging situation. It says that every action we take creates and equal or greater opposite action. So, for example, if a person chooses not to drive to work, then the gasoline that he or she saves will be used by someone else. The only way out of this trap is to ensure that we simultaneously reduce demand for the resource. Demand reduction is crucial.

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All attempts to address our predicaments through improved efficiency or consumption are likely not only to fail, they may actually make those predicaments worse unless demand elsewhere, all over the world, is reduced correspondingly.

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Compassion

Although his observations may seem cold and unforgiving, Jevons was far from being a cold-hearted economist who had no concern for the needs of those in trouble. Here is what he said (once more, using a quality of English that one can only envy).

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Reflection will show that we ought not to think of interfering with the free use of the material wealth which Providence has placed at our disposal, but that our duties wholly consist in the earnest and wise application of it. We may spend it on the one hand in increased luxury and ostentation and corruption, and we shall be blamed. We may spend it on the other hand in raising the social and moral condition of the people, and in reducing the burdens of future generations. Even if our successors be less happily placed than ourselves they will not then blame us.

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He is saying that we should spend our material wealth on raising the living conditions of those at the bottom of the economic ladder. Otherwise our children will blame us for our careless and selfish lifestyles. That is certainly a sentiment that applies to our times.