Energy efficiency doesn’t work

The word efficiency carries a meaning immersed in all things positive – you never hear that being more efficient could possibly be detrimental. In fact, if you can bear the evangelical fervour, you may have read about achieving ‘Factor Four’ or ‘Factor Five’ gains in energy efficiency, as part of a ‘Natural Capital’ revolution comprising a ‘decoupling’ economic growth from a growth in the consumption of exhaustible resources – also known as ‘sustainability’. You may even have heard about the equation I=PAT or I = P x A x T, where environmental impact (I) is a function of population (P), affluence (A) and technology (T), and that becoming more efficient will enable a desired level of affluence with far less environmental cost.

Historical experience shows that these claims are untrue.  While energy and resource efficiency does make us more productive, the facts suggest greater energy efficiency is counterproductive to the stated aims of curbing resource use and decreasing negative environmental externalities.

When it comes to natural resource use, and the externalities associated with resource extraction and production, efficiency alone is the enabler of greater consumption. William Stanley Jevons first noted that technological improvement, in terms of greater efficiency and therefore productivity, was the enabler of greater coal consumption in Britain back in 1865 in his book, The Coal Question: an Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of our Coal-mines. His observation was coined Jevons Paradox, even though the argument that technological improvements in resource efficiency (modes of economy) leads to greater resource use was already widely accepted in the labour market:

As a rule, new modes of economy will lead to an increase in consumption according to a principle recognised in many parallel instances. The economy of labor effected by the introduction of new machinery throws labourers out of employment for the moment. But such is the increased demand for the cheapened products, that eventually the sphere of employment is greatly widened.

One hundred and fifty years later, the modern debate is fuelled by economic ignorance, with many of the most influential economists and environmentalists remaining confused – failing to acknowledge the parallel effects of technology on the resource called ‘labour’ and other resource inputs to the economy.

More rigorous economists have reopened the debate, under the new term rebound effect, breaking down the transition mechanisms between greater efficiency and greater resource consumption.

  1. Direct rebound effect: Increased fuel efficiency lowers the cost of consumption, and hence increases the consumption of that good because of the substitution effect.
  2. Indirect rebound effect: Through the income effect, decreased cost of the good enables increased household consumption of other goods and services, increasing the consumption of the resource embodied in those goods and services.
  3. Economy wide effects: New technology creates new production possibilities and increases economic growth.

UCLA mathematics professor Terence Tao explains the direct effect as follows:

Suppose one has to decide whether to use one light bulb or two light bulbs to light a room. Ignoring energy costs (and the initial cost of purchasing the bulbs), let’s say that lighting a room with one light bulb will provide $10/month of utility to the room owner, whereas lighting with two light bulbs will provide $15/month of utility. (Like most goods, the utility from lighting tends to obey a law of diminishing returns.)

Let us first suppose that the energy cost of a light bulb is $6/month. Then the net utility per month becomes $4 for one light bulb and $3 for two light bulbs, so the rational choice would be to use one light bulb, for a net energy cost of $6/month.

Now suppose that, thanks to advances in energy efficiency, the energy cost of a light bulb drops to $4/month. Then the net utility becomes $6/month for one light bulb and $7/month for two light bulbs; so it is now rational to switch to two light bulbs. But by doing so, the net energy cost jumps up to $8/month.

So is a gain in energy efficiency good for the environment in this case? It depends on how one measures it. In the first scenario, there was less energy used (the equivalent of $6/month), but also there was less net utility obtained ($4/month in this case). In the second scenario, more energy was used ($8/month). But more net utility was obtained as a consequence ($7/month). As a consequence of energy efficiency gains, the energy cost per capita increased (from $6/month to $8/month); but the energy cost per unit of utility decreased (from 6/4 = 1.5 to 8/7 ~ 1.14).

The indirect effect is more subtle and it is the environmental cost of consumption of other goods due to costs saved on, for example, lighting. If, in the above example, lighting costs were reduced to $2 per bulb for the room, it would be rational to spend $4 on lighting (using two bulbs) and spend the $2 saved on lighting to consume other goods which themselves have energy use embodied in their production.

Finally, the economy wide effect occurs due to stimulated demand for other goods and efficiency gains being shared across other sectors (due to the principle of the indivisibility of economic productivity – the linked article is highly recommended).

These economy wide effects have gained recent attention in The Economist where it is estimated that energy efficient lighting will contribute to greater energy use in the long run. You will note from the comments, the cognitive dissonance of economists when referring to labour and other resource inputs remains.

Conservation, using less at a given level of technology by giving up some utility, is equally ineffective (also highly recommended). We still face the indirect effects from conservation as we spend elsewhere in the economy, and if you believe all consumption has equal environmental cost per dollar (due to indivisibility once more and conceptual boundary problems to traditional input-output analysis of embodied resources), then you are back to where you started.

Further, conservation, like waste, is a relative concept, and by definition we can’t all do it. And we wouldn’t do it either due to the tragedy of the commons problem, where it is in each person’s best interest to defect from a cooperative conservation strategy. Terence Tao once again explains:

However, if there are enough private citizens sharing the same resource, then the “tragedy of the commons” effect kicks in. Suppose for instance that there are 100 citizens sharing the same energy resource, which is worth $1200 x 100 = $120,000 units of energy. If all the citizens conserve, then the resource lasts for $120,000/$400 = 300 months and everyone obtains $1800 long-term utility. But then if one of the citizens “defects” by using two light bulbs, driving up the net monthly energy cost from $400 to $404, then the resource now only lasts for $120,000/$404 ~ 297 months; the defecting citizen now gains ~ $7 x 297 = $2079 utility, while the remaining conserving citizens’ utility drops from $1800 to $6 x 297 = $1782. Thus we see that it is in each citizen’s long-term interest (and not merely short-term interest) to defect; and indeed if one continues this process one can see that one ends up in the situation in which all citizens defect. Thus we see that the tragedy of the commons effectively replaces long-term incentives with short-term ones, and the effects of voluntary conservation are not equivalent to the compulsory effects caused by government policy. (Emphasis added)

If energy efficiency is a counterproductive action for our environment, and personal conservation is useless, what should be done? As renowned ecological economist Blake Alcott points out:

If Jevons is right, efficiency policies are counter-productive, and business-as-usual efficiency gains must be compensated for with physical caps like quotas or rationing.

It really is that easy. If you are concerned about greenhouse gases, a cap on greenhouse gases is what is required. If you are worried about deforestation, you create a cap by ‘fencing off’ areas that are not be touched. If you are worried about over-fishing, you create a cap. Whether these caps/quotas are tradeable is a secondary concern, but making the caps tradeable does enable the cap to be met most efficiently.

What about a tax instead?

Many commentators argue that taxing negative externalities (such as a carbon tax) would not only reduce greenhouse gas emissions, but would also provide a ‘double dividend’ of improved economic efficiency because taxes which create other economic distortions could be reduced. However, the very nature of reducing other taxes to ensure revenue neutrality would mean that other sectors of the economy with a reduced tax burden now have greater purchasing power to pay for those goods subject to the new tax. Thus the double dividend comes at a cost to the primary dividend of reducing externalities.

Politics and ideology probably explain why the most basic economics is tossed out the window when it comes to the environmental protection. Then again, maybe we just can’t acknowledge that such a thing of beauty – efficiency – could possibly have a downside.

I can’t recommended enough the book The Jevons Paradox and the Myth of Resource Efficiency Improvements for a more thorough discussion of the topic.

Tips, suggestions, comments and requests to [email protected] + follow me on Twitter @rumplestatskin


  1. Not sure why Terry Tao hasn’t been made Australian of the Year by now actually. His level of achievement dwarfs many previous recipients.

  2. For many resources, this is not necessarily true. That is, renewable ones like timber and food. We are in no danger of running out of sheep or cows or wheat or rice or sitka spruce trees or tea trees. What we end up debating, in such cases, is whether the “rebound effect” allowing many more of the humans that have been born, to survive to old ages in greater proportions than ever before, is a “good thing” or a “bad thing”.
    I think George Reisman’s “Environmentalism Refuted” is like a human intellectual-rational milestone on this issue. Reisman points out the following:

    We have actually barely begun to prospect the entire surface of the earth, and under the sea bed, for all known resources.

    As mankind becomes more technically advanced, he discovers uses for more and more resources. Many of the resources we use most today, we did not use at all until we discovered how to use them.

    There is no reason to believe that we have come to an end of that process. That is, we will yet discover resources that give us even more power over our well-being than the resources we currently make use of.

    The more capital accumulated by mankind, the more access we get to resources. We can drill deeper, extract elements more efficiently, access the resources under the sea bed, and so on.

    Furthermore, that accumulation of capital underlies the research and technological progress that bring ever more resources within our purvey.

    Apart from what has been blasted into space, every molecule in every substance “used” by man, is still here and will be able to be re-used one day; a lot of it has merely been re-ordered to man’s advantage meanwhile. Every carbon molecule that has been burnt to extract energy, returns to the biosystem after a short time in the atmosphere, and will be able to be accessed again for the purpose of energy, by our descendants at some time in the future.

    It is actually more “moral” to continue to invent and innovate and adapt as rapidly as possible, and suffer possible “nature strikes back” consequences IF and when they occur (just as mankind has suffered for millennia), than it is to “play god” and do actual harm to humanity immediately, and worst of all, to reduce our ability to accumulate capital, invent, innovate, and adapt. In such cases, the “solution” is always at least as bad as the alleged “problem”, and entirely likely, going by historical example, to be far worse.
    Had our ancestors remained pagan tree worshippers, certainly the earth might be wonderfully forested and lightly populated – by primitive people living nasty, brutal, short lives; having never discovered fossil fuels or any other “modern energy”. We could replicate this scenario today, and never know what advances we DIDN’T make.
    These are actually issues of religion and ethics, not science or economics at all.

    • Apart from what has been blasted into space, every molecule in every substance “used” by man, is still here and will be able to be re-used one day; a lot of it has merely been re-ordered to man’s advantage meanwhile. Every carbon molecule that has been burnt to extract energy, returns to the biosystem after a short time in the atmosphere, and will be able to be accessed again for the purpose of energy, by our descendants at some time in the future.

      That is just wrong.

      When being used, molecules get “destroyed”, … or transformed if you prefer. They are not still there ready to be reused. Without wanting to be too pedantic the effects of an ongoing reference in the meedya to “carbon” rather than “carbon dioxide” seems to be showing through here. Carbon molecules don’t get burnt. Carbon molecules are e.g. diamond and graphite.

      Carbon containing molecules get burnt, or otherwise transformed, in order to release energy and in doing so carbon dioxide is emitted. So the combustion of petrol releases energy and produces carbon dioxide. The ingestion and subsequent breakdown of carbohydrates and fats in your body releases energy and produces carbon dioxide. etc.

      The only way carbon dioxide released from burning fossil fuels will be able to be accessed again after a short time for energy is if we revert to burning wood and/or oil seeds for energy (assuming sufficient arable land was available). Carbon dioxide in the air now won’t be transformed to oil and coal until (at least) when morlocks are ruling the world.

      • Isn’t the point of the above that the carbon dioxide molecules remain and that in the future some use may be found for carbon dioxide? I didn’t think Phil was proposing to wait for aeons until they re-pressurised back into hydrocarbons.

      • Yes he seemed to be talking about shorter time frames but nevertheless how do you interpret this:

        Every carbon molecule that has been burnt to extract energy, returns to the biosystem after a short time in the atmosphere, and will be able to be accessed again for the purpose of energy

        He is explicitly talking about carbon molecules (presumably this is carbon dioxide) being available for energy. The only way that will happen within human lifetimes is if trees consume the carbon dioxide and we burn the trees for energy (ditto oil seeds).

      • Algae + C02 is an attempt to produce the same old fuel in a different way – it’s essentially getting the algae to do the conversion from solar energy to liquid form usable in our existing devices. Far more interesting is bypassing these proxies and converting solar energy ourselves.

      • If we develop a viable biofuel, one that doesn’t use up valuable cropland – eg. oil from algae, that would be a closed loop re-using those carbon atoms. Not sure if it would actually lower CO2, but it at least wouldn’t add to it. Then there is the seemingly batshit insane idea of creating liquid fuels out of thin air powered by solar or nuclear energy.

        As far as energy efficiency not working, I’m not 100% convinced on that, as I’m sure I’ve seen projections of US energy consumption from the 70s, which are much higher than what actually has happened.

        I think taxes would work, provided we don’t get it handed back to us, just look at the difference between the US and European vehicle fleets to see the effect of low v high fuel prices.

      • Of course the molecules don’t get destroyed. But to argue that high quality fossil resources that came about over the last 200million years will suddenly recondense in the span of one human generation, let alone one human civilisation, is wrong, plain and simple.

      • So where exactly did I say that fossil fuel resources could suddenly recondense in the span of one generation.

        The fact that they can’t was precisely my point!

      • No, and Reisman did not say this either. But the points made by others already here, are good – who knows that mankind will definitely never “speed up the process” by which those molecules can be “re-ordered” back into an energy fuel? But this is far from the only “possibility” that lies in the future. It is always interesting to pick up a latest “Popular Science” magazine and see what crazy ideas are coming to fruition.
        The whole Reisman essay is magnificent; as I said, a milestone of rational intellectual thinking.

        If we want to supplant religion with reason, we should supplant it with reason, not with even shonkier religion that calls itself “environmentalism”. This is one of the most distressing things to many of the anti-religion brigade today; G K Chesterton seems to have been proved right about what (most) people will start believing once they stop believing in God.

      • This is a business blog not a science blog so it is unfair to expect commenters to be science experts but I’d invite anyone with kids to talk to their kids high school science teachers about this stuff.

        The reason why thermodynamics is a law is because it is absolute. Synthetically converting carbon dioxide back to a fuel requires more energy than you get from the fuel. That is an absolute — there are no fudge factors or new discoveries that may eliminate that equation because it is based on the fundamental energy stored in the chemical bonds. In other words should some wacky austrian think tank decide to fund such research they would be funding a means to increase energy depletion.

        If you trawl through old literature to find crazy ideas that came true you won’t find any that contravene the laws of thermodynamics. This (thermodynamics) is the reason why perpetual motion machines and the like do not exist.

        So the point you made about carbon (dioxide) being able to be accessed again for the purpose of energy is limited to the products of photosynthesis (wood, oil seeds, algae etc.).

      • Carl, energy is not “used up” in any process man controls. It is just transformed from more useful forms for our purposes to less useful forms. For example, we burn coal, converting chemical energy into heat. The heat is partly wasted and partly used to create mechanical energy (the turbine going round). The mechanical energy in turn is partly wasted and partly turned into the form of energy we wanted in the first place – electricity. Then the electricity is again transformed into, for example, light, or heat, or mechanical energy to drive the heat pump in someone’s air conditioner. All the energy eventually gets converted into the least usable form of energy, diffused heat, which escapes to space at a rate approximately matching the incoming energy from the sun. None is lost along the way.

      • Apologies Carl I was agreeing with you, I think Reisman is a little misguided in his thinking.

        To assume the high quality, high reliability, good storage, good safety provided by fossil fuels can reaccumulate in the required time frame (eg one generation as opposed to millions of years during the initial accumulation) in time to prevent the rate of energy provided by these sources declining is utopian thinking.

        There are alternatives (such as nuclear and renewables) but IMO the rate that these can grow will not be sufficient to meet the rate that fossil fuel extraction will decline.

        In other words, if nuclear (most importantly thorium reactors), solar thermal, geothermal and wind were well on their way to replace the impending decline of fossil fuels, then I would agree with Reisman. But this doesn’t seem to be happening and due to the magnitude of effort required, I don’t think it will happen.

        The obvious alternative is a decline in our standards of living/population decline.

      • “….The obvious alternative is a decline in our standards of living/population decline…..”

        And Reisman would be fine with that. Just letting it happen VIA THE FREE MARKET will ALWAYS BE THE LESS DAMAGING course compared to politicians “playing god” and derailing the processes of the market.

    • “Apart from what has been blasted into space, every molecule in every substance “used” by man, is still here and will be able to be re-used one day; a lot of it has merely been re-ordered to man’s advantage meanwhile.”

      Re-ordered to our advantage, you say?

      Like the mercury diffused throughout the ocean and into most living things?

      How on earth does environmental degradation by bio-accumulative toxins (heavy metals, DDT, dioxins, etc. etc.) count as a plus going forwards?

      It doesn’t. It’s a hideous, ineffably massive expense placed on every following generation.

      “These are actually issues of religion and ethics, not science or economics at all.”

      Absolute rubbish. Utter contemptible nonsense. This is in fact the hardest and most concrete of science and (dare I say) economics. We are selling the farm to buy hookers and blow.

      End of story.

  3. Has Jevon’s Paradox been considered in the context of a limited resource where efficiency improvements at best keep the status quo rather than inducing oversupply and the corresponding drop in price?

    • My thoughts exactly. Once we leave the “bumpy plateau” of peak oil and slide into a scenario of falling supply and inexorably rising prices, any improvements in the efficiency of how oil is used will only slow down the rising prices. And it is the rising prices (or more precisely, the realization that prices will continue to rise) that will drive behaviour and reshape the way that we organize our society.
      Jensen’s Paradox assumes that prices will fall as a result of higher efficiency – but efficiency is not the only factor driving prices. Of the top of my head, I can think of regulation, taxes, and resource constraints. So in an environment where prices are rising, efficiency may do no more than slow down the pace of the increases.
      Some might argue that in this case Jenson’s Paradox simply means that “consumption is higher than it would have been otherwise” – hence the conclusion in the title of this article “Energy efficiency doesn’t work”.
      However, the author (and some comments) have correctly pointed out that if you want to place limits on greenhouse gases, the best way to do so is to limit them. No earth-shattering revelations there, but at least this article does point out the folly of /relying/ on efficiency improvements to solve problems like global warming and peak resources.
      However, if we accept that we need to cap greenhouse gases or resource extraction (or anything else for that matter) then we soon faced with the question of how to divide up the shrinking pie. Leaving questions of equity aside for the moment, it is fairly obvious that efficiency enables us to get more utility out of the same pie.
      So.. will energy efficiency save us from global warming on its own? No.
      Will energy efficiency have an important role to play once we get serious about tackling global warming (ie, imposing binding limits on greenhouse gases)? Yes

      • John, you summed it up exactly –
        “So.. will energy efficiency save us from global warming on its own? No.
        Will energy efficiency have an important role to play once we get serious about tackling global warming (ie, imposing binding limits on greenhouse gases)? Yes”

  4. Yes efficiency and conservation will unfortunately never work, so long as (exponential) growth is continued.

    And there doesn’t seem to be any human ways of controlling exponential growth… the only proven ways are unfortunately starvation, death, wars etc. It is perhaps unfortunate that we forget our position as another dumb animal.

  5. Here’s hoping that Tuesdays topic will be “R&D grants don’t work” and Wednesdays “Project management with bad metrics doesn’t work”.

    That would just about explain our current environmental policy situation.

  6. So why don’t we simply cap production of pollutants? The point is to reduce them. So reduce them.

    To me, a tax seems like the most ineffectual and benign way to stop pollution, but has the greatest potential to spin some easy money for the government.

    Human nature means that most businesses will simply pay the tax and pass it on instead of actually changing the way they do things. There is no incentive to change.

    And, if competition was such that consumers could actually choose to do business with businesses that are changing – implementing expensive green tech to reduce carbon dioxide – then human nature also dictates that most of these companies saving some money on taxes will continue charging the new market price including tax, and pocket the difference.

    But, we will see.

    It is a shame that nobody can actually be held accountable for failure.

    • “So why don’t we simply cap production of pollutants?”

      We do. The best example of worldwide action to do so is, of course, CFCs. The difference between the current situation vis a vis CO2 and that action is that a readily available substitute for CFCs that was obtainable at a reasonable price had already been developed. This made action to limit CFCs much easier.

      Similarly with other, national limits on pollutants such as sulphides. SO2 scrubbers could be fitted to coal burning power plants at relatively low cost, so legislation was passed and it happened.

      The problem at the moment is twofold: (1) the cost of the alternatives to fossil fuels is quite high when all costs are properly accounted for (despite what many would like to believe) and (2) there is a lot of money invested over the last 90 years or so in existing infrastructure. Changing that is a multi-generational project. At the moment there is not the political will to inflict high costs on the population (except in the UK, where the government will live to regret it, IMHO). Gas may fill the breach, if the amounts being talked about are actually there. Combined cycle gas turbine economics stack up pretty well if the gas is cheap enough. That will buy time to (1) find out more about the role of CO2 in climate change and (2) make successors to fossil fuels more efficient.

  7. My main concern with this post is the apparent assumption that consumption is bad. I’m with Phil Best here – nothing we have “consumed” has left the planet. The exception is the energy that we had the benefit of turning to our advantage along the way in its passage between being received from the sun and emitted to space.

    • Fossil fuels that have been consumed have most definitely “left the planet”. Those molecules, once combusted, no longer exist. You guys fail to distinguish between one chemical and another. The number of carbon atoms hasn’t changed. Maybe that is where your confusion comes from. But a carbon dioxide molecule is different to a hydrocarbon molecule. When a chemical reaction occurs the reactants have “left the building” and been replaced by the products.

      To argue that the reactants can be reformed from the products — if that is what you are suggesting — is true but ignores the energy required to make that happen. For example to reform hydrocarbons from carbon dioxide requires more energy than you get from subsequently burning the hydrocarbon. If the amount of energy required to drive these reactions didn’t matter then we’d all be making diamonds from carbon.

      • Quite right. I agree with all you have said. Clearly this is a semantic issue about what is meant by “consumed”.

      • In this case the semantics are important.

        You wouldn’t pass chem 101 suggesting e.g. molecules are “conserved” (or similar, i.e. still exist) despite being “consumed.” Likewise if you were to patent an invention in this sort of field inexact semantics will bite you hard.

      • I wasn’t intending to be rude. Sorry if you took it that way.

        As to my inexact language I’ve heard discussions about energy depletion for years without anyone thinking it meant energy was destroyed.

    • Alex the rate that we can channel energy can definitely change, especially when our primary energy sources for industrialisation have been dense, easily stored, easily controlled and easily extracted. Converting carbon dioxide into these high quality resources happened over millions of years. Now we can obviously speed up the process of reconverting the carbon dioxide into new fuels, however it is the RATE that we do this that is all important.

      Similarly there is plenty more solar, wind and nuclear resources out there. But that is inconsequential if we don’t have the systems to capture that energy and make it do useful work for us.

      I think there needs to be a distinction between non-renewable and renewable consumption.

      Increasing non-renewable consumption of a resource in a finite system HAS to lead to an eventual decline in the consumption of the resource. And this can happen very quickly thanks to exponential growth. Hence as Rumplestatskin has said, increasing efficiency in the consumption of a non-renewable resource may simply result in using that resource quicker, rather than extending its lifetime.

      Conversely if the resource is sustainable then it may be possible to increase consumption by better efficiency. If we were strictly using renewable resources (renewable in terms of days not millions of years), then efficiency could only increase consumption up to the rate of production of the renewable resource. Each improvement of efficiency would create a step response to the next sustainable level of consumption rather than a positive feedback loop of exponentially increasing consumption.

      • Yup. The only quibble I would have is that between renewable and non-renewable resources, when what you are really getting at is renewable over very long time frames and renewable over short time frames. I think it is useful to separately distinguish resources that are truly non-renewable, such as uranium. Eventually all the uranium will be lead, if we wait long enough (may take longer than the solar system exists, though). Coal, oil and gas are all renewable, it just takes a very long time (and conditions on earth that do not prevail at the moment).

        My point about consumption is that material consumption is good, in the sense that it is what gives us the comfortable, healthy and fulfilling lives we live – far better than 99% of all humans who have ever lived. The problem is not consumption per se, it is our need to find cheap energy substitutes for fossil fuels. As I pointed out in my response to Barry Goat above, my view is that gas will buy us sufficient time to get other energy sources more efficient.

      • EXCELLENT discussion of these issues, DaveBD and Alex Hayworth. I almost never find this sort of intelligence on other blogs I visit.

    • Alex, the short answer is that there is a significant difference between molecules that are on our planet and molecules that are on our planet AND in a form that is realistically exploitable.

      For a simple lesson: seawater is full of oxygen. Try breathing it.

  8. Alex: “You used the phrase “energy depletion”. Not sure what you mean by that now.

    The context of the discussion is primarily fossil fuels. In that context energy is taken to mean useful energy that we “tap” to do work. I do not mean the total energy balance of the universe.

    Lets imagine we have a fuel that provides us 10 units of energy (which we can use to e.g. drive cars, make electricity…). Now suppose we don’t have anymore of that fuel left but we can make it from other chemicals. But further suppose that to make this fuel we have to “spend” 12 units of energy.

    If we were to consume 12 units of energy in order to create a fuel that will enable us to use 10 units of energy then we are clearly heading on a path of depleting our energy resources. The total energy of the universe remains unchanged but the “useful” energy that we can use to do work is what we need to focus on.

    Thus when we try to make hydrocarbons out of carbon dioxide we consume more energy than we will eventually be able to use (to do useful work) once the hydrocarbon is made. It is therefore a fruitless, not to mention loopy, scenario that offers no possibility that it could be a wacky idea that could some day come true (i.e. it can be done but not in a thermodynamically useful way).

    • But might we not find a way to turn green plant matter that has absorbed the CO2, into an energy fuel? I think that was more what Reisman had in mind. Not that that is the ONLY possibility for the future, far from it.
      One thing I love about Macrobusiness compared to certain other blogs I participate in, is the intelligent and non-ideological discussions of things like this. Mindless Malhusian trolls are always the ruin of a site.

      • Don’t take this the wrong way but we already know how to “turn green plant matter that has absorbed the CO2, into an energy fuel”

        1. wood.

        2. oil seeds from which e.g. biodiesel is made.

        3. certain algae (and you have genetically engineered algae these days that produce shiploads of oil).

        … and so on. There are probably others but these are the ones that stand out like dogs ears.

        Where I am taking issue with you is firstly the idea that stuff is conserved because indicates a misunderstanding of what molecules are; and an implied belief that energy can be produced from CO2 via these photosynthetic methods at a rate to match the rate at which it is consumed.

      • We understand each other. Of course I knew about existing “biomass” and “biofuel” limitations.
        Reisman as I understand him, did not at all say that we are “conserving” molecules (or atoms) in the global ecosystem for further use after having used them once already; I think the term “conserve” means “not using” or “using less of”.
        He was certainly combating a widespread belief that these molecules (or atoms) are “annihilated”; environmentalists do not usually cause people to think any other way than this.
        I think we are not entitled to say that humanity will never find a way to use photosynthesized CO2 that matches energy use and creation of new fuel. But this is not the only possible “solution” for humanity. There is plenty of cause to be an optimist rather than a pessimist (EXCEPT, as Matt Ridley says at the end of his book “The Rational Optimist”, humanity might succumb to a totally unreasonable political system that is a self fulfilling prophecy).
        There has been more than one prominent environmentalist who has suggested that it would be a “disaster” if humanity DID discover lower and lower cost, more and more “sustainable” sources of energy, because of all the rampant “materialism” and “consumerism” it would enable…..! This is “religion”, not science or economics or even politics….! I don’t believe you are coming from that angle.

    • OK. So what you meant was that useful energy sources (hydrocarbons in this context) were being depleted. No argument there.

  9. “Like most goods, the utility from lighting tends to obey a law of diminishing returns.”
    Actually, like a lot of goods, the utility from lighting peaks and then declines. One light bulb is fine, two is better, three and your eyes start to water, and then four light bulbs and you start having nightmares about working in a convenience store.
    In a lot of cases, this negative utility from excess consumption will impose a natural cap on the level of consumption, even if the price does in fact fall as a result of better efficiency, and consumption does in fact increase up to the level of this cap.
    This observation is probably more relevant to end consumers than to producers, and it doesn’t avoid the argument that the lower energy prices from better light bulbs will result in more energy consumption elsewhere, possibly in contexts where there is no natural cap. (Assuming energy prices do actually fall – as I pointed out earlier this is not predetermined given that there are other price drivers). But it does make the original argument that much more complicated. And if total energy (or more importantly, the total greenhouse gases generated by producing the energy) is capped artificially through regulation, then “more energy consumption elsewhere” is not necessarily a bad thing, particularly in a world that is energy-constrained because of a regulatory cap on greenhouse gases.
    Of course, such a regulatory cap would have to be global in scope, and many people find that inconceivable given the recent political climate, but with the recent pace of global changes, that view may soon need to be reassessed.

  10. I commend Cameron Murray for noting the strict parallel, explicitly mentioned by Jevons, between the way economists traditionally view the labor market and Jevons’s views on energy efficiency and resource consumption. I have raised the issue several times.

    But surely there is another possible interpretation of the parallel: that if the Jevons paradox doesn’t hold then neither does the traditional economists’ argument about technology and employment. In short the technology/employment paradox and the efficiency/consumption paradox are inseparably joined at the hip. They stand or fall together.

    Now here is the ray of hope. The principle Jevons based his paradox on is from popular classical political economy. It’s basically a variation on the wage-fund doctrine (AKA, the lump-of-labor fallacy). Is the wage-fund doctrine true (in spite of Mill’s recantation)? Is the fallacy claim itself a fallacy (as Pigou and Dobb explained)?

    It’s a metaphysical merry-go-round. But what it comes down to is this: to the extent that our current political and economic institutions are founded on the same metaphysics as the technology/employment paradox and the efficiency/consumption paradox, we’re fucked. In that metaphysical world you can ONLY decrease energy consumption at the expense of employment and can ONLY increase employment by consuming more energy.

    The alternative?