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Jevons Paradox: The Debate That Just Won’t Die

By  Kelly Vaughn

“Using energy more efficiently offers an economic bonanza – not because of the benefits of stopping global warming but because saving fossil fuel is a lot cheaper than buying it.” – Amory Lovins

In RMI Chief Scientist Amory Lovins’ landmark piece, “Energy Strategy: the Road Not Taken,” published in Foreign Affairs in 1976, he outlined his vision of a “soft energy path” which combines a prompt and serious committment to efficient use of energy (the 1976 graph featured on the right got the 2000 US energy demand right within a few percent). Since 1982, Rocky Mountain Institute has been committed to driving the efficient and restorative use of resources, working with for-profit businesses to lead the transition from coal and oil to efficiency and renewables.

The Importance of Efficiency

Efficient use of energy is the most important, economical, prompt, underused, overlooked, and misunderstood way to provide future energy services. According to peer reviewed research and analysis in Reinventing Fire, the U.S. can deliver the same energy services and run the same economy with 40 percent less primary energy required in 2050 as compared to the business as usual case.

However, the issue is more complicated than it seems—see the debate sparked by David Owen in “The Efficiency Dilemma,” published in The New Yorker in late December 2010 (Online subscribers can read the article here.), and perpetuated in his recent book, The Conundrum.

On the Web Recently

The Siren Song of Energy Efficiency (New York Times, March 19, 2012). Whatever happened to “Use it up, wear it out, make it do or do without”? Now many civic-minded Americans ask themselves not how to avoid buying stuff, but rather what to buy: that shiny new hybrid in the driveway, the energy-efficient appliances in the kitchen, the right light bulb. Does this pay off for the planet, or does the quest for efficiency distract from more effective approaches to cutting carbon output? What can consumers do that would be more effective.

Lovins’ Response

As far as I know, David Owen and I have never met or spoken, although he has published two New Yorker articles, a book, and now this New York Times article directly attacking my work, with which he seems rather unfamiliar. This seems an odd way to do journalism, though it’s not his style to let pesky facts get in the way of a good story. Even odder is that the Times now republishes his conclusions (plus an incomprehensible analogy about a village called Lovinsland) without seeming to realize they’re thoroughly discredited and merit at least an opposing view.

Owen’s counterfactual 2010 New Yorker article on energy “rebound” was demolished at the time by, among others, Dr. James Barrett of the Clean Economy Development Center, Dr. Michael Levi of the Council on Foreign Relations, Dr. David Goldstein of Natural Resources Defense Council, and myself . Cameron Burns and Michael Potts nicely summarized the key arguments here—the #1 Google hit for searches like “AmoryLovins+Jevons”—and RMI pursues the diverse “Jevons paradox” conversation at on our blog.  A Times editor constructing a conversation on this theme could have easily found such references, leaving readers better-informed.

There is a very large professional literature on energy rebound, refreshed about every decade as someone rediscovers and popularizes this old canard. That literature supports neither Owen’s view nor Prof. Matthew Kotchen’s partial support that “rebound effects are potentially important.” Real, yes; important, no. The price-elasticity and responding effects Owen cites, where measurable, are consistently minor—a theoretical nicety of little practical consequence.

James Watt’s more-efficient steam engine did spark an industrial revolution that (as Stanley Jevons observed) created great wealth and burned more coal. But this is no proof that energy efficiency generally triggers economic growth that devours its savings (or more) — a “backfire” effect never yet observed. Rather, it shows that many disruptive technologies stimulate economic growth and wealth, sometimes sharply.

Some disruptive technologies, like microchips and the Internet, incidentally save net energy even though they are not meant to be energy technologies; some disruptive energy technologies, like automobiles and jet airplanes, increase energy use, while others, like electric motors, probably decrease it, and still others, like electric lights, could do either depending on technology and metrics (which Owen’s cited lighting analysis muddles); still other disruptive technologies that Owen doesn’t criticize, like key advances in public health, mass education, and innovation, enormously increase wealth and have complex and indeterminate energy effects. Blaming wealth effects on energy efficiency has no basis in fact or logic.

To be sure, energy efficiency does modestly increase wealth, just as Owen’s more efficient desk-lamp makes him slightly richer. I doubt this saving makes him use the lamp at least four times more (as would be needed to offset its energy savings), or that if it did, sitting longer at his desk would not displace other substantial energy-using activities. More likely his total energy use rose simply because he got richer: his writings and lectures have sold well to people who like his message, so he now has more stuff, uses it more, travels more, and probably doesn’t reinvest much of his increased wealth in buying still more energy efficiency, which he thinks would frustrate his stated goal of environmental improvement.

That U.S. energy productivity has grown faster than GDP in only nine of the past 35 years doesn’t prove it can’t, nor make it less valuable; the U.S. now uses half the total energy it would have used at its 1975 energy intensity. (I’m one of two analysts who called this correctly back then.) Energy efficiency’s speed and depth of adoption depend on many things—frugal technologies’ price and easy availability, delivery channels’ maturity and trustworthiness, citizens’ attitudes and behaviors, and (most of all) barrier-busting so people can make smarter choices. Some places do this well. California, for example, has held per-capita electricity use flat for 30 years while per-capita real income rose by four-fifths. 

Nor does continuing, though slackening, energy growth mean energy productivity can’t accelerate to outpace economic growth consistently, as U.S. oil productivity did during 1977–85, when GDP grew 27 percent while oil use fell 17 percent Indeed, Rocky Mountain Institute’s new synthesis Reinventing Fire (which properly counts rebound effects to the minor extent they’ve been established in the professional literature) explores what would happen if the United States achieved over decades the rates of efficiency improvement that some states have already sustained. The result: a 158 percent-bigger 2050 U.S. economy could use 24 percent less energy, need no oil or coal or nuclear energy, emit 82–86 percent less fossil carbon, and cost $5 trillion less (in net present value, ignoring all externalities)—the transition needing no new inventions nor Acts of Congress, and led by business for profit.

Owen’s call to reject such practical and profitable transformation reminds me of the economic theorist who lay awake all night wondering whether what works in practice can possibly work in theory. Fortunately, his sophistry will not deter readers who understand energy and economics.

Is there an “efficiency dilemma”? Or, will efficiency help us jump-start the journey toward a fossil-fuel-free economy? We want to hear from you.

Other Articles
  • In response published on January 17, 2011 in The New Yorker, Lovins responded to Owen’s claim that energy efficiency can lead to greater energy use: “David Owen argues that energy efficiency can lead to greater energy use, but actual “take-backs” of energy savings are usually between zero and a few per cent, rarely ten to thirty per cent, and never more than a hundred per cent…” Read Amory’s Full Response
  • In addition, an article published on February 28, 2012 in WIRED, Amory argues that there’s evidence that efficiency standards work. For example, After California imposed them in 1974, per capita electricity consumption stopped growing, even as it rose throughout the rest of the nation. Read  the full article
  • Numerous responses, both in print and online, have perpetuated a lively conversation about Jevons paradox, a proposition that technological progress that increases the efficiency with which a resource is used tends to increase, rather than decrease, the rate of consumption of that resource. Most recently, David Roberts featured a four-part series in Grist, and a March 19, 2012 debate featured by New York Times posed the question, “does this pay off for the planet, or does the quest for efficiency distract from more effective approaches to cutting carbon output?”
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