Jevons Paradox shows that saving a resource, or using it more efficiently, actually leads to a higher rate of consumption of that resource.

Jevons' Paradox

William Stanley Jevons

The 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.

William Stanley Jevons (1835-1882) lived at a time when Great Britain was rapidly industrializing. The energy resource of his time was coal. Improvements in the design of steam engines meant that the factories were using coal more efficiently, consequently the price of coal fell. Paradoxically, this improved efficiency led to an increase in overall coal consumption because the reduced costs encouraged industrialists to increase their use of coal. This phenomenon of increasing efficiency leading to higher demand is often referred to as Jevons’ Paradox. The paradox can be defined as follows.

 

Technological progress increases the efficiency with which a resource is used, hence the rate of consumption of that resource increases due to increased demand caused by lower prices.

Alternatively,

New technologies that can produce more goods from a given amount of resources allow the economy as a whole to produce more. The overall consumption of those resources goes up.

 

This phenomenon explains many of the apparent contradictions to do with today’s use of energy and alternative energy sources.  (A more detailed description of Jevons's work is provided at the end of this Article.)

Jevons Paradox the Coal Question applied to alternative fuels

More smoke than ever.

Credit: Wikimedia Commons

Jevons’ Paradox shows why systems thinking is required. For example, someone may purchase a fuel-efficient vehicle. Although he or she is using less fuel, the overall supply of that fuel remains the same. Therefore, someone else will take advantage of the increased fuel supply decide to purchase a car for the first time, or drive the car that they already have for longer distances. The upshot is that, looked at as an overall system, more gasoline is used than if the original driver had not been so environmentally conscious.

Not Just Coal

 

 

 

 

 

 

 

 

 

 

 

 

Let's move here. Credit: PublicDomainPictures.net

 

Although Jevons’ original work was to do with coal, we have already seen that it can be applied to other natural resources such as oil. In fact, the concept applies to a wide range of human activities. For example, the normal solution to traffic congestion on a freeway is to add more lanes to that freeway. Initially, the added capacity does reduce congestion. But other drivers quickly take advantage of the situation and they start to use the freeway. The upshot is that the congestion returns to its old level. Indeed, the congestion may become worse if real estate developers decide to build more homes to take advantage of the new freeway construction.

Freeway Not Congested  Jevons Paradox

The Alternative Energy Conundrum

As oil supplies become more limited and as the consequences of climate change become ever more severe, the normal response is to call for a switch to alternative, renewable, “green” sources of energy. Some of these alternatives use technology that is well-established — solar and wind power are examples. Other suggestions, such as nuclear fusion and ammonia fuel cells, are more futuristic. But they all face the same conundrum, as illustrated in the following chart, which is taken from BP’s Statistical Review of World Energy (2020).

  1. Alternative, renewable energy sources, particularly solar and wind, are growing faster than any other energy type.

  2. All other energy sources are also growing.

  3. Renewables are not replacing fossil fuels, they are merely contributing to the overall growth in energy consumption.

BP Statistical Review of Energy (2020) shows growth of alternative energy

John Michael Greer puts it this way,

 

What makes Jevons’ Paradox so deadly in the present situation is that adding new sources of supply to the energy mix has the same effect as making demand more efficient. That’s why it’s inaccurate to claim, as so many badly written histories do, that oil replaced coal.  More coal gets burnt each year now than was burnt each year at the peak of the coal era; petroleum, by taking some of the demand that would otherwise drive up the price of coal, kept coal cheap and made it economical to use coal even more freely than before.

Carbon Capture and Sequestration (CC&S)

If we are to have any chance of meeting goals such as ‘Net Zero by 2050’ it is becoming increasingly clear that we will need to remove CO2 that has already been added to the atmosphere. In other words, we will need to implement CC&S technology. This is a discouraging insight. If we, as a society, are not able to control the rate at which we add greenhouse gases to the atmosphere, what makes us think that we can responsibly manage the removal of those gases once added? 


But CCS also creates a concern that is related to Jevons’ Paradox. If we sequester one ton of CO2 then it will be tempting for another nation or company to use that newly created “parking space” to produce an incremental ton of CO2.

The Original Paradox

Jevons published his 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) in the year 1865. The following is the take away quotation from Jevons’ paper.

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.

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.

A final observation is to do with the quality of his writing. How did we let our own standards decline so precipitately?

Compassion

Although Jevons' observations may seem cold and unforgiving, he himself 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).

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.

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.

Book Hard Times Charles Dickens about bad working conditions in Victorian England