Jevon’s Paradox

Energy efficiency is not so simple.

2 minute read

created: 2017-10-30, updated: 2022-09-04

It’s intuitive that improving energy efficiency will reduce energy use. Unfortunately, it’s not that simple.

The Coal Question

In the 1865 book The Coal Question W. Stanley Jevons points out that efficiency improvements in the production of iron occurred at the same time as increases in the total amount of coal used to produce iron.

The improved efficiency of coal production did not reduce coal consumption - instead coal consumption increased. LED lighting is a modern example of Jevons Paradox, with high efficiency LED lights covering the planet.

This is Jevons Paradox - that improving efficiency of resource production leads to increases in resource consumption. This is an inconvenient truth for energy efficiency.

Thinking In Second & Third Order Effects

It’s not that efficiency doesn’t work - improving efficiency means there will be less primary energy per unit of utility.

It’s what happens after that is the problem - the efficiency gains are cancelled out by second and third order effects. Let’s look at some of the effects of improving the efficiency of gas-fired heating:

  • first order effect - less gas is required to supply the same amount of heat. This effect is positive - we don’t burn as much gas to provide the same amount of energy.
  • second order effect - we now get more heat for the same amount of money. We spend the same amount, we get more heat - but no carbon saving. We can afford to heat bigger homes for the same amount of gas.
  • third order effect - increased efficiency leads to less money paid by consumers) for gas - meaning this money can be spent elsewhere.  What does the economy do with this saved money?

If the efficiency saving is spent on taking a long haul holiday, we could actually see an increase in global carbon emissions. We improve the efficiency of supplying heat but overall as a civilization we burn more carbon. Alternatively if the saving is spent on building cleaner energy generation then even increases in utility could lead to a carbon saving.

It’s very difficult to understand what effect Jevons Paradox has across different consumers, economies and technologies. Measuring the first order effects of energy efficiency projects is notoriously difficult - let alone any second or third order effects.

Is Energy Efficiency Still Worthwhile?

Energy efficiency drives economic progress - this makes it worth doing. Yet for those concerned with decarbonization, energy efficiency may not be as effective as expected.

Jevons Paradox does not only apply - negative second or third order effects of energy efficiency can be smaller or larger than the efficiency saving. There is also huge value from increasing adoption of advanced technology, such as the additional light from we get from LED lights.

In some cases however, focusing on making sure energy comes from clean primary sources is a safer bet than trying to use dirty energy more efficiently - you may just end up using more dirty energy as a result.

Further Reading

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