Jevons paradox

by Sam Bliss

The Jevons paradox is that efficiency enables growth. New technologies that can produce more goods from a given amount of resources allow the economy as a whole to produce more. More resources get used overall.

This is the magic of industrial capitalism and the secret of growth. Economists have known it for a long time. So why is it called a paradox?

A question of scale

The paradox is that we tend to assume that the more efficiently we use a resource the less of it we will use.

This is the case in our personal lives. If you buy a more fuel-efficient car, you might drive a little bit more but overall you will likely burn less gasoline. Switching to a low-flow showerhead typically saves water at home.

This efficiency-for-conservation logic appears correct for most subsets of the economy. When a business switches to energy-efficient light bulbs, its electricity bills go down. Municipalities that require new buildings to meet energy efficiency standards might see energy use decrease within city limits. 

But at the level of the whole economy, the reverse is true. These efficiency gains contribute to increasing production and consumption, which increases the extraction of resources and the generation of wastes.

Energy-efficient technologies do not reduce carbon emissions.

This suggests that energy-efficient technologies do not reduce carbon emissions, that fertilizer-saving precision farming techniques do not decrease fertilizer applications overall, and that increasing agricultural yields does not spare land for nature. Real-world evidence supports these claims.

Environmental policy focused on efficiency gains does not by itself benefit the environment. Economies grow by developing and deploying increasingly efficient technologies. 

How growth happens

Consider a hypothetical example. If the owner of a tea kettle factory installs a new machine that can make one kettle from less raw copper than before, he might continue to produce the same amount of kettles at a lower cost, or he might choose to make more kettles overall from the same amount of copper. 

Either way, profits will go up. The factory owner can buy more machines to make even more kettles from even more copper. Or he can invest those profits elsewhere, increasing production in another sector of the economy and thus increasing the use of copper and other materials. 

As more tea kettle factories adopt the copper-saving technology, they might start selling kettles at lower prices to compete for customers. As tea kettles get cheaper, people will be able to buy more of them. Since more kettles can be sold, factories will make more—using more copper. 

Copper’s price might increase as factories increase their demand for it. When the price goes up, more potential copper mining sites become profitable, which further raises supply.

Or, even if all tea kettle factories end up using less copper with the new, copper-saving machines, copper’s price will fall and other sectors will be able to afford more copper and therefore demand more. 

Cheaper copper could make all copper-containing things cheaper, not just tea kettles, leaving people with more money to spend. They can demand more of the products of all economic sectors, further increasing the use of many materials, including copper. 

Cheaper copper might increase industrial profits, too, which capitalists either reinvest to increase production or spend on luxury things. 

Even if the initial factory owner decides to give his workers a raise rather than keeping the profit or increasing production, then the workers will have more money to spend on tea kettles and everything else. Even if they decide to save all that additional income, the banking sector will direct it toward investing in more new machinery to produce more things from more materials.

No matter what, it seems, copper consumption rises in the end, because efficiency increases kickstart the growth machine.

The more efficiently society can use copper, the more of it will generally be used. Unless, that is, society intentionally limits its use of copper. 

The same goes for just about any resource.

150 years of more

English economist William Stanley Jevons gets credit for being the first to point all this out. In 1865, Jevons found that as each new steam engine design made the use of coal more efficient, Britain used more coal overall, not less. 

In 1865, Jevons found that as each new steam engine design made the use of coal more efficient, Britain used more coal overall, not less. 

These efficiency improvements made coal cheaper, because steam engines, including the ones used to pump water out of coal mines, required less coal to produce a given amount of useful energy. Yet increasingly efficient steam engines made coal more valuable too, since so much useful energy could be produced from a given amount of coal. 

That might be the real paradox: the ability to use a resource more efficiently makes it both cheaper and more valuable at the same time.

In Jevons’ time, more and more coal became profitable to extract as more and more uses of coal became profitable. Incomes increased as coal-fired industrial capitalism took off, and profits were continually invested to expand production further. 

A century and a half later, researchers from the Massachusetts Institute of Technology found that as industrial processes have gotten more efficient at using dozens of different materials and energy sources, the overall use of these materials and energy sources has grown in nearly every case. The few exceptions are almost all materials whose use has been limited or banned for reasons of toxicity, like asbestos and mercury. 

In an economy designed to grow, the Jevons paradox is all but inevitable. Some call it the Jevons phenomenon because of its ubiquity. Purposefully limiting ourselves might provide a way out.

Fighting growth with collective self-limitation

To prevent catastrophic climate change, humanity must rapidly reduce the combustion of fossil fuels. But despite decades of policy efforts and international negotiations, emissions continue to rise every year.

The focus on making energy use more efficient is paradoxically worsening the problem, as efficiency gains facilitate increasing, not decreasing, carbon burning. And renewable energy sources are adding to fossil fuels, not replacing them. Earth’s limited sources of coal, oil, and gas will not run out in time to save the stable climate.

But what if governments around the world treated coal like they do asbestos? What if petroleum extraction and uses were subject to strict limits like those of mercury?

To limit the use of fossil fuels, or anything else, society must impose limits on itself, preferably democratically.

To limit the use of fossil fuels, or anything else, society must impose limits on itself, preferably democratically. We must set limits on our own activity.  

Once binding limits are in place, efficiency gains become one of several tools for staying within them. With a hard cap on the total amount of oil that can be burned, adopting increasingly fuel-efficient machinery cannot backfire and spark growth of oil-burning economic activity. Instead, fuel efficiency would allow more useful work to be done with the limited amount of oil that society permits itself to combust. 

Of course, we must also be skeptical of the maximizing mentality that considers efficiency and more to be good things as such. Collectively limiting ourselves offers not just an escape from capitalism’s endless loops of efficiency and growth; it also provides the constraints necessary to imagine and act out new ideas about what makes the good life, as well as revive and protect traditional lifeways. 

For many communities around the world, a global project to limit resource use could bring liberation from pollution, exploitation, and the one-way path toward Western-style development. To them, limits do not mean reductions or sacrifice but an opportunity to pursue goals other than growth.

Efficiency makes growth. But limits make creativity.

Once free from the efficiency mindset, we see that setting legal limits is not the only solution to the Jevons phenomenon. Society can also purposefully choose less-efficient production processes, setting the paradox in reverse by constraining the potential scale of the economy. If efficiency makes growth, maybe inefficiency makes degrowth.

Further reading suggestions:

David Owen. “The Efficiency Dilemma.The New Yorker, December 12, 2010. 
This
New Yorker piece captivatingly chronicles the history of the Jevons paradox as an idea and as a real material force

Christopher L. Magee and Tessaleno C. Devezas, “A Simple Extension of Dematerialization Theory: Incorporation of Technical Progress and the Rebound Effect,” Technological Forecasting and Social Change 117, no. Supplement C (April 1, 2017): 196–205.
This is the article in which MIT researchers show that the Jevons paradox applies to pretty much every material, energy source, and industrial process for which data exists.

Salvador Pueyo. 2020. “Jevons’ Paradox and a Tax on Aviation to Prevent the next Pandemic.” Preprint. SocArXiv. https://doi.org/10.31235/osf.io/vb5q3.
The Jevons paradox holds that using a resource more efficiently leads to economic growth and thus more of that resource is used overall. In this article, Salvador Pueyo shows that, similarly, advances in disease control have enabled humans and livestock to live at higher densities, eventually bringing about more ferocious outbreaks. He argues that the aviation industry shifts costs onto society by spreading diseases around the world, and should thus be taxed.

Sam Bliss, “Why growth and the environment can’t coexist.Grist. 
This video explains degrowth in 4 minutes, starting from a Jevons-inspired explanation of how increasing efficiency in orange juice production leads to more oranges consumed, not less.

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Sam Bliss is a wildly inefficient researcher, writer, gardener, and warehouse manager of Food Not Bombs Burlington. He participates in and studies non-market food systems in Vermont.

Could Energy East become just?

Source: Flickr Leadnow https://www.flickr.com/photos/leadnow/10896436383
Source: Flickr Leadnow
https://www.flickr.com/photos/leadnow/10896436383

TransCanada’ Energy East is a proposed pipeline for Alberta diluted bitumen that would be the biggest such pipeline on the continent, bigger than Keystone XL. Today, October 30th, 2014, TransCanada submits the Energy East proposal to the National Energy Board of Canada.

In Part 1 of this essay, the answer to the question “Is Energy East just?” was found to be no, not as currently proposed. In Part 2 of 2, David Gray-Donald explores the question, “could it become just?”

 

For TransCanada’s proposed Energy East pipeline project to be considered just it would have to:

1. Decolonize relations with indigenous peoples and First Nations

2. Be part of a climate change plan (mitigation and adaptation) that is comprehensive and mutually agreed to around the planet

3. Share wealth to undo the continuing unfair burdens and benefits

These steps are difficult but necesssary. The players pushing for Energy East –TransCanada, Irving, the Canadian Association of Petroleum Producers (CAPP), Steven Harper – are powerful and could affect change in this direction.

These steps are necessary but not sufficient to to balance the scales of justice. Seeing as it is hard to imagine these basic necessary steps will be taken in the current political climate, one must conclude that the chances the Energy East project will be just are nearly nil.

The rest of this text expands on the three basic conditions and concludes with a discussion about how energy projects can be designed with justice front of mind.

 

1. Decolonize relations with indigenous peoples and First Nations

Background

Canada, and the corporations that operate with its permission like TransCanada, do not respect the treaties that exist with First Nations groups. Not in spirit nor by what was written in English words. Many treaties call for non-interference between the parties but Canada and its corporations continue to violate this basic agreement. This is unjust.

To start moving to justice

TransCanada must push for indigenous societies to be allowed to form their own governments, reversing the Government of Canada imposition of band council elections. This basic sovereignty is in the spirit of the treaties. While communities could choose to alter their governance from that of traditional ways (eg. Longhouse), it is unjust for Canada to impose a governance system on people where it has no such legitimate jurisdiction. TransCanada must work to undo this colonial interference before claiming it has free, prior, and informed consent of indigenous communities.

When speaking of indigenous communities it is necessary to speak of Indian Status. This sexist and racist Canadian legislation must be changed in order for First Nations communities to form as per the spirit of the treaties and in cases where no treaties exist. TransCanada must work to this end before it can claim Energy East is being agreed to in a just fashion.

Energy East, proposed to be the biggest such pipeline on the continent and designed primarily to allow bitumen extraction to expand greatly, directly affects peoples in nine provinces (mega-tankers will be travelling along the maritime coasts). Governance of land and waters in Canada is, as per the spirit of the treaties, to be a matter of shared responsibility between indigenous and settler communities. TransCanada would need to insist on this basic change in governance being made.

If the spirit of the treaties has changed for either side, they can be renegotiated in good faith.

Breaking treaties and using violence to control people is war. That is what has been happening across Canada for hundreds of years. Continuing this long war of broken promises and physical force in order to build a pipeline puts TransCanada on the wrong side of justice. To work toward peace, TransCanada must insist on Canada honouring its treaties or renegotiating them in good faith.

 

2. Be part of a climate change plan (mitigation and adaptation) that is comprehensive and mutually agreed to around the planet

Background

The current plan of TransCanada, CAPP, and the Canadian government is to get bitumen dug up, sold, and consumed as quickly as possible on the free capital market. This is a disaster for the planet’s climate.

To start moving to justice

TransCanada and CAPP would need to make a compelling and binding case that Energy East is part of the transition off of fossil fuels. As it is an expansion of fossil fuel infrastructure designed to expand the tar sands, this is a difficult case to make (expanded in step 3).

That being the case, TransCanada would need to hold off on the infrastructure expansion until a binding international plan is in place. TransCanada and CAPP are already lobbying governments around the world for specific goals. It is the nature of the goals that need to change. TransCanada and CAPP are in well-connected positions of authority to call for a just global climate plan. This may involve becoming B Corps or other types of organization where duty is to stakeholders, the citizens of the world, and not to a small number of shareholders.

This binding international plan may call for profits made on greenhouse gas-emitting activities to be used for mitigation and adaptation strategies.

Mitigation, reducing the impacts of climate change by reducing emissions, could involve dispersed efforts of a Manhattan Project scale. The Manhattan Project used public resources during Word War Two to put minds together with the goal of making major technological breakthroughs. What is needed now are many concerted efforts around the planet to reduce emissions (not make bombs). Support is needed to make major changes in energy efficiency, energy reduction through lifestyle change, new energy technologies, stopping release of non-combustion gases (eg. methane in agriculture), etc. Proposals in this vein are numerous. If CAPP sincerely focused on these solution strategies they could be a force for climate justice.

Adaptation would require supporting massive projects as well. TransCanada, CAPP, and Canada have the ability to make such supports available. These may include ensuring communities around the world are prepared for flooding, storms and drought (including good public facilities and services for during crises), and are resilient in terms of soil health and other ecosystem services.

TransCanada would need to demand that most of the profit from Energy East, and among CAPP members, are used to build this transition away from an increasingly high-carbon economy. Currently, without any hint of such a plan, TransCanada cannot move forward with a just Energy East project.

 

3. Share wealth to undo the continuing unfair burdens and benefits

Background

Those with least access to money and oil who benefit least from the project are often those most affected by climate change. Those who will make money from Energy East are those who already have wealth and use disproportionately more oil than the rest of the world.

To start moving to justice

Energy in the bitumen moved through Energy East could be for use by those who have traditionally benefited least from use of refined petroleum products. This would require a large shift in who has access to wealth and where it becomes concentrated. It is not as if the shipping of bitumen to India will mean quality of life improvements for India’s poorest. (Clean-oil rich Saudi Arabia does not see its poorest benefitting from major extractive projects, and neither does Canada.) TransCanada and CAPP can be a force for demanding that those who have the most to gain from access to oil get that access. They have the power to fight to ensure it is not used unjustly to uphold lifestyles of the rich around the world.

To break apart extreme wealth concentrations, profits from Energy East could be used to support dispersed mitigation and adaptation strategies. Step 2 describes some such efforts. These would need to not be led only by the elites of communities around the world, but ensure that the people are empowered everywhere. CAPP has the political energy and chemical energy to contribute to this massive transition.

 

 

Putting justice at the forefront of energy projects

Energy projects usually play with fire. Literally. Fire can inflict damage in many ways, and it is therefore a force with which we need to be very careful. As with fires in a community, it is impossible to know how damaging climate catastrophes will be.The earth’s reactions to change are unpredictable. Fire departments demand strong plans for preventing and putting out fires. In the same way, we need to collectively build strategies to get away from our current planet-disrupting ways of burning fossil energies. We need to talk about what is socially acceptable to do on – and to – this planet. Instead, a group of people who organize themselves under the name TransCanada Corporation have 26 lobbyists registered in the province of Quebec alone, many of them working on convincing people of the social acceptability of their project. In place of honest conversations as a human community, we hear from those paid to manufacture consent by whatever means necessary.

Energy projects can be designed with justice as their guiding principle. But TransCanada has not embraced that thinking with Energy East. It is indistinguishable from older energy projects, remarkable only in its size. The basics of justice are not to be found.

 

David Gray-Donald studied Environment & Biology at McGill University then worked there facilitating community sustainability projects. He is actively part of the struggle to undo our reliance on fossil fuels and is trying to educate himself on how to be a responsible adult male. He lives in Montreal and Toronto.