Jevons Paradox

After a lecture on sustainability, in which the lecturer spoke about the much greater energy efficiency of buildings and vehicles in recent decades, a student asked why we continue to consume energy at an ever-greater rate even as we have become more efficient in doing so and if that meant that energy efficiency worked against the goal of reducing energy consumption.

The British economist William Stanley Jevons observed, in the mid-19^th Century, that with the greater efficiency in the use of coal, the consumption of coal increased at a greater rate, leading to the paradox that efficiency can increase rather than decrease the use of a resource. We can easily see why Jevons paradox can occur. Greater efficiency in the use of a resource can reduce its price, which prompts more consumption, and it can also increase economic growth, which also fuels greater use as more people can afford to do so. Jevons argued that because of this paradox, we couldn’t rely only on improvements in efficiency to reduce consumption of a fuel source like coal.

This raises a fundamental ethical issue, as well as an environmental one. In an era in which designers have worked very hard to increase the efficiency of energy consuming entities like buildings and vehicles, with the goal of reducing the use of finite supplies of fossil fuel, Jevons paradox poses a particularly challenging problem. Jevons did not say that we should, as a result of his paradox, ignore efficiency. He simply said that we cannot depend upon it alone and that other non-technological changes need to happen as well if we want to reduce consumption.

Some have argued that public policies can counter the paradoxical effects of greater efficiency. We can add a tax on the resource, place quotas on its use, or regulate its availability to keep the price high, even as the efficiency of its use increases. Such tactics, though, have proven to be hard to sell politically, striking some as “social engineering” by tampering with the way in which the marketplace innovates to increase the efficiency and reduce the cost of things. That the marketplace is itself a kind of social engineering doesn’t get discussed often enough, but so be it. We seem driven, at least in modern, technological societies, to increase consumption of resources until they become scarce (or damaging) enough that we can no longer afford them or have them available in enough quantity.

Ethics, though, offers another way of looking at this paradox. One of the primary divisions between ancient and modern ethics has to do with being versus doing. The ancients focused on what it meant to be a good person or on the nature of a good society, while we moderns have tended to dwell, instead, on what it means to do the right thing regardless of or because of its consequences. Jevons paradox occurs when we only focus on “doing.” And Jevons seemed to acknowledge that when he said that making a process more efficient alone would not reduce consumption. Doing the right thing also depends upon our being a good person and our living in a good society.

The Stoic philosophers, for example, argued that our freedom and happiness comes not from how much we have, but rather from how much we can do without. This may sound at odds with our consumer-oriented culture, but it simply extends to human behavior the same ethic designers embrace when making things more efficient. The real paradox in Jevons observation has to do with the modern disconnect between what we do and who we are.