ConsumerismEconomicsGlobal Warming/Climate ChangePeak OilSociety

Why ‘Increased Energy Efficiency’ Won’t Save Us

There’s a lot of talk in political circles on how technology and ‘increased efficiency’ will save us from our socioeconomic and ecological woes. The U.S., for example, is finally getting a little more serious about vehicle fuel efficiency standards, and we’re sharpening our pencils in many other areas as well.

Saving energy is course a good thing – indeed, it should be seen as an imperative moral duty. I mean, on a cold, windy winter’s day, would you wander around the house in your underwear with the heaters wound to max and curtains flailing wildly through wide open windows? Most would consider this obscene. In the same way, producing vehicles that unashamedly consume vast amounts of ancient forest just for a race between the lights is the ultimate in stupidity.

But, having said all that, too few understand that just making something more efficient doesn’t necessarily translate into an energy saving. On the contrary, it has been repeatedly shown that greater efficiency translates easily into greater consumption.

Yes, read that last sentence again.

To demonstrate: Late last year the media was awash with news of Boeing’s latest flagship aircraft – the 787 Dreamliner. No 787s have been delivered as yet (expected 2010), but with 861 firm orders for the new aircraft to date, they’ll soon become a common sight in our CO2 rich skies.

The aircraft is billed, relatively speaking, as an ‘environmentally friendly’ aircraft (emphasis on the ‘relatively speaking’ part – as ‘less bad’ really doesn’t make a positive). Rather than typical aircraft aluminum, much of the aircraft’s fuselage is made of a plastic/carbon-fibre composite, making the aircraft significantly lighter – resulting in greater fuel efficiency.

The outcome?

“The aeroplane will use 20 per cent less fuel for comparable missions than today’s similarly sized airplane,” Boeing said in a statement. –

Many environmentalists are realists, however, and recognise that these relatively significant fuel efficiency savings may actually lead to increased energy consumption(!):

While even environmentalists welcome the attempts to make planes greener, they don’t think the 787 is going to do much to reduce the impact of aviation on climate change.

They believe that fuel-efficient planes are simply going to allow airlines to carry the same number of passengers, more cheaply. And that allows them to cut ticket prices – which in turn will encourage more of us to fly.

Result: the airlines buy more planes anyway. – BBC

Enter the ‘Jevons Paradox‘, otherwise known as the ‘Khazzoom-Brookes Postulate‘ (see also). The paradox/postulate is a generally acknowledged correlation between increased energy efficiency and increased energy consumption. In the example above, for instance, we have a new aircraft that is stated to be 20% more fuel efficient than a comparably sized competitor, but, as the BBC article suggests, this increased energy efficiency may lead to cheaper flights – ultimately resulting, in an unregulated market, in increased patronage; more customers, more flights, and thus more aircraft. It’s a paradoxical but very real absurdity of our competitive free market mechanisms.

This has proven, historically, to be the case in similar circumstances:

The introduction of wide bodied passenger aircraft, to replace smaller aircraft, was forecast to reduce the number of flights. In fact the resulting lower cost per passenger led, in a competitive market, to a large increase in air travel that more than offset the increased size of the aircraft. The raised productivity per aircraft called for more aircraft, not fewer…. – The Open University

Governments, seemingly frustrated with years of apparent energy efficiency measures not bringing expected results, are beginning to look at this issue closer:

The Government’s proposition that improvements in energy efficiency can lead to significant reductions in energy demand and hence in greenhouse gas emissions remains the subject of debate among economists. The “Khazzoom-Brookes postulate”, while not proven, offers at least a plausible explanation of why in recent years improvements in “energy intensity” at the macroeconomic level have stubbornly refused to be translated into reductions in overall energy demand. – ‘Energy Efficiency’ , a Government Response to the House of Lords Science and Technology Committee Report (PDF)

Although popularised in the 1990s, this is not a new theory. William Stanley Jevons in his 1865 book, ‘The Coal Question’, argued:

William Stanley Jevons

It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth’ …. ‘The reduction of the consumption of coal, per ton of iron, to less than one third of its former amount, was followed, in Scotland, by a ten fold increase in total consumption, between the years 1830 and 1863, not to speak of the indirect effect of cheap iron in accelerating other coal-consuming branches of industry’. In other words, an increase in the fuel efficiency of iron production led to increasing production of iron, and hence to a dramatic increase in the consumption of coal. – Cambridge Centre for Climate Change Mitigation Research (PDF)

Mr. Jevons’ 1865 observation was essentially that as James Watt’s steam engines were able to go further on a given amount of coal than earlier machines, more coal was mined to feed the increase in demand for the services these more energy-efficient engines provided.

The implications of this are huge. If these concepts are played out throughout our economies, a concerted drive for increased efficiency could, in our current competitive and unregulated markets, result in the ramping up of resource consumption and CO2 emissions. Consider this – it is roughly estimated that we’ve consumed 1 trillion barrels of oil since we started drilling 150 years ago. But, if supplies were to hold out, it’s projected we’ll use that much again in just the next 30 years. This exponential consumption curve is frightening to get the mind around, and the postulate we’re examining goes a long way to explaining the mechanics behind it.

In a bid to bring this whole concept down to tangible terms I can relate to, I tried to think of a personal situation where this theory could be played out. Perhaps I buy a more fuel efficient car, but then discover that with my fuel savings I can now afford to drive to the corner store, instead of walking. Or, for example, the BBC recently ran an article on the enormous amount of food wasted in the UK each year. An earlier article along the same lines stated that up to a third of the food grown for humans in the UK was discarded. Considering that about one fifth of greenhouse-gas emissions are a direct result of food production, to toss a third away is more than significant. Now, let’s say I fit within this category, and decide to become a lot more conscious about how I manage my kitchen’s inventory. Going by the BBC figures, after one year I could have saved a significant amount of money – up to a third of my grocery bill – and the associated CO2 emissions.

Now, the only question remains – what will I do with those savings? Hmm… perhaps I could eat out more, or maybe take a holiday in the tropics?

It quickly becomes obvious that efficiency cannot work without self-restraint, or – to use old fashioned, and currently unpopular words – without temperance and thrift.

Wendell Berry drives the point home well:

One possibility is just to tag along with the fantasists in government and industry who would have us believe that we can pursue our ideals of affluence, comfort, mobility, and leisure indefinitely. This curious faith is predicated on the notion that we will soon develop unlimited new sources of energy…. This is fantastical because the basic cause of the energy crisis is not scarcity; it is moral ignorance and weakness of character. We don’t know how to use energy, or what to use it for. And we cannot restrain ourselves. Our time is characterized as much by the abuse and waste of human energy as it is by the abuse and waste of fossil fuel energy. Nuclear power, if we are to believe its advocates, is presumably going to be well used by the same mentality that has egregiously devalued and misapplied man- and womanpower. If we had an unlimited supply of solar or wind power, we would use that destructively, too, for the same reason.

Perhaps all of those sources of energy are going to be developed. Perhaps all of them can sooner or later be developed without threatening our survival. But not all of them together can guarantee our survival, and they cannot define what is desirable. – Wendell Berry, The Agricultural Crisis, A Crisis of Culture. p. 16, 17

What does all of this mean to us as a society? It would seem that, in our current unregulated market, our contemporary tendency to ‘be all that we can be’, and to live up to the very edge of our incomes and ability, can translate to maximum levels of consumption – no matter how much efficiency we apply to our industrial world. At the worst extreme, we may become increasingly efficient at depleting our resources and hastening our own destruction. That is, in fact, exactly what we’re doing. At the same time as we’re creating more efficient electrical appliances and gadgets – we’re also plugging more and more of them into the wall.

In light of our dire need to scale back energy consumption and emissions, the logical conclusion to this is mandatory caps or a rationing system. Being a closet libertarian (see also), this is a situation I’m loathe to embrace, but sense is ultimately inevitable. Like a child that has abused his privileges, he inevitably loses his freedoms.

What’s the alternative?

In the example above, instead of my taking a holiday with my food-waste savings, what if I use them to insulate my home instead, or to purchase a bicycle for commuting to work – or simply save it as part of a long-term land purchase goal, so I can live out my dreams of rural self-sufficiency? In addition to the CO2 emissions and resource savings I’ve made in not wasting food – I now have extra funds to invest in further savings.

This ‘sensible’, prudent scenario can be applied in the corporate and political arena just as easily as at the personal level. It’s simply all about priorities.

In an Earth Council study, Subsidising Unsustainable Development, our spending at a government level is examined – and found, like our personal spending, to be wanting in prudence.

There’s something unbelievable about the world spending hundreds of billions of dollars annually to subsidize its own destruction. It seems more the stuff of myths, like the North American Indian tales of the trickster coyote snatching fire from right under the noses of fierce guardians. To cite just one example: The heavily subsidized burning of fossil fuels spews more than six billion tonnes of carbon into the atmosphere each year; yet the globe’s oceans and forests can naturally absorb about a third that amount. Subsidising Unsustainable Development p. 35 (1.5mb PDF)

Many of today’s subsidies encourage practices that are economically perverse or trade-distorting or ecologically destructive or socially inequitable. Sometimes several of these harmful things at once. And most subsidies hinder progress towards sustainable development, the Brundtland Commission goal of meeting the needs of the present generation without compromising the needs of future generations.

… By the cautious calculations of this study, the world is spending at least $700 billion a year (and maybe $900 billion) on subsidies in just four economic sectors: water, agriculture, energy and road transportation. Since that amounts to somewhere between three and four per cent of Gross World Product — and close to current global spending on armaments — it seems worthy of attention from governments on the dollar value alone. Especially since the evidence indicates that a lot of those dollars are wasted because the subsidies no longer serve their original purposes. Subsidising Unsustainable Development p. 1 (1.5mb PDF)

If, at a personal level, a ceiling is to be placed on our lifestyles, then it only makes sense that our vastly misplaced government expenditure is also re-evaluated. In fact, the former cannot be justifiably imposed without the latter.

To summarise, is it necessary for our economies to run like a souped-up sports car, with a brick placed on the accelerator, finely tuned, but running at full throttle, or will we put a governor in place, and moderate our lifestyles according to the realities of living on a finite planet – a beautiful jewel of a world that cannot inflate to accommodate our current economy-must-grow-or-collapse economic philosophy?

Wouldn’t it be better if we could avoid both scenarios – environmental destruction or draconian controls – by doing instead by free will what we will otherwise eventually plead governments to force us to do?


  1. Rather than us begging them to “force us” to change in order to reduce and end ecological destruction, which is likely what some in government want, we must force them to incentivize positive change.

    Its the tax system that needs to be radically realigned to one that taxes based upon consumption and rewards conservation.

    Improvements to property that raise its value, but also the amount of biological diversity would not be taxed. Destruction of the ecology of forests for logging, mining or farming would appear as a tax and a cost of doing business. Personal income from salary would not be taxed.

    If legislation was brought in to force a rationing system in a time of increasing crisis and chaos, that’s likely not all it would contain. Who knows what type of freedoms could be suspended? This is why it is a very dangerous idea to go begging government to reduce personal freedoms.

    It must be demanded of government to simply level the playing field between individuals and also between the citizen and the corporation. So called “externalities” in economics must be factored in to the balance sheets of corporations. Including the amount of ecological destruction as a business cost, which is paid in the form of tax, would surely set things in a different direction.

    Consumption must be taxed in a non-subsidized way. This way increased efficiency wouldn’t lead to increased consumption because the economics still favor choosing to place our resources (money) into non-destructive things. For example, increased efficiency in a windmill may increase consumption of power from that windmill but it won’t be destructive. Of course, it could increase the demand for windmills, which may be made using destructive practices.

    Possibly its not the act of consumption, its the purpose and method to which it is carried out. Where the energy comes from and goes. Thriftiness can become how little destruction our actions cause. Wealth can become how much we have conserved and improved.

  2. i think this article is a little wrong-headed.

    For luxurious things like air travel that people constrain themselves from doing because of the price, this concept works, but for other things it does not. For example, no matter how cheap marshmallows are, I will not increase my consumption because price is not the constraint, my desire for marshmallows is.

    I suspect most people do not wish they could drive more, or if they do it would be constrained to holidays. Also this concept ignores other effects like awareness of the problem of global warming. Even though gas prices have come down after the peak last year, people are still driving substantially less than they were before the price spike. That is probably due to several causes, but it does illustrate that lower prices does not necessarily mean increased consumption.

  3. Hi Michael. Thanks for your comment. The marshmellow example can be carried over to flights as well. There are some people that will never fly coz they’re just plain scared to – so no matter how cheap they get, they’ll stay on terra firma. Same for marshmellows – I will never buy them either, just coz I don’t like them, and don’t consider them as food. But, there are a great many people who currently don’t buy marshmellows simply because they regard them as an unnecessary luxury, but if the price got slashed by, say, 50%, then there is a whole social segment who may now throw a pack into their trolley.

    The Jevon’s Paradox is well documented. There’s not really any substantial argument against it, as the mechanics of this postulate have proven themselves over and over.

    Another example – last year when oil prices skyrocketed, sales in SUVs in the U.S. dropped substantially, and sales of smaller cars went up. People got priced out of buying SUVs. But, despite Peak Oil becoming less of a ‘theory’ and more of a fact, when the economic crisis hit (reducing demand for fuel as economies slowed down) and the price of fuel dropped, consumers once again, stupidly, started buying SUVs once more… As a rule, as efficiency translates to lower costs, it allows a greater segment of society to make use of that service/product.

  4. If the efficiency is being gained in a non-destructive and beneficial technology, then how is more consumption of said technology a bad thing?

    Or is it the spin off effects of say, a cheap home energy system, which is a good thing, that is the worry?

    It seems that this article and discussion have been concentrated on fuel, fossil fuels specifically, whose effects are well known to be negative. What if the efficiency is gained in solar tech for example?

  5. Hi Isaac – I wouldn’t describe solar tech as ‘positive’. That may seem strange to say, but think about it. Solar tech is simply ‘less bad’. It takes a lot of energy to produce, and the chemical by products can be terrible. There have been reports of the chemical runoff in places like China from large solar production regions as being highly toxic to water and people.

    The reason it’s super-important to consider if something really is positive or not, is that in order to get ourselves out of the ecological disaster we’ve got ourselves into, we need to actually start becoming a positive element on this planet – we need to be actively healing the earth, not just being a little less destructive. The latter just slightly delays catastrophe, but doesn’t stop us arriving to that destination.

  6. I do tend to agree with much of what was written in the article and I only find one more example that came into my mind that bound technology, fuels and the destructive power that we have. So for the beginning we had a simple man with a saw or an ax witch took him a lot of time to cut a tree (probably a couple of hours if the tree was thick), some brilliant engineer invented the chainsaw witch cut the time to about couple of minutes and there some other engineer had seen even more potential and invented one big mean machine that cuts a tree in under 10 seconds. I do believe that this kind of ingenuity combined with some form of energy is applied in most of the industries having big repercussions on the environment. The problem is obvious for me and I do think that overpopulation is one of them combined with uses of energy… I believe that maybe if we would be organize different as a society we my be able to live 7 billion morons on this planet, but I’m afraid that we won’t do it anyway even if we all have the knowledge somehow overnight!

    I hope that we won’t come up with some other form of energy that will be able to supply us to keep doing what we’re doing. I hope!

  7. Many years ago I came to the conclusion that if a clean, plentiful and inexhaustible source of energy was found, the earth resources would be exhausted in ten years or less, leaving only the skeleton of the life we know today.

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