THE ‘JEVONS PARADOX’ AND THE ENERGY TRANSITION


I have in previous articles explored some of the challenges to the Energy Transition in terms of financing, access to resources, establishing a robust regulatory framework, and indeed standardizing emission measurement.


But perhaps one of the most under- discussed elements is the issue of improving efficiency, which is generally seen through the lens of how technology can, indeed will, help to achieve emissions reduction goals. But what does history tell us about our behavioural reaction function to greater efficiency?


In the mid-19th century, UK economist


William Stanley Jevons observed that as steam engine efficiency improved, the initial reduction in coal consumption proved to be short- lived, as the resultant reduction in costs lead to increased usage, i.e. consumption, which more than offset energy conservation – this ‘rebound effect’ is the ‘Jevons Paradox’. Modern day examples of this also abound. For instance, a study by Japanese auto manufacturer Nissan found that EV (electric vehicle) drivers on average drive 370 miles more per annum than typical petrol or diesel vehicle drivers. While the energy required to power an LED light bulb is around 75% less than an incandescent bulb, lighting energy consumption has barely changed, even if growing populations and rising living standards in the developing world have clearly provided an offset. Last but eminently not least, the exponential increase of mass consumption digital and so-called ‘intelligent’ devices along with associated data centres has also prompted a very substantial increase in energy consumption, even if these have improved efficiency.


HEDONIC ADJUSTMENTS TO INFLATION DATA In passing, this also raises a very justifiable objection to hedonic adjustments to inflation data, which are applied to discount a price increase to account for quality improvements or technological innovation. While there


William Stanley Jevons. Source: By Unknown (via University of Manchester Libraries) - This file has been extracted from another file, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=141730235


is some logic to this process, ultimately this does not change the fact that in practice the product price has risen by more than aggregated consumer price data suggest, and in principle and being brutally honest, this is little more than another example of financial repression.


Be that as it may, it also highlights that this ‘reductionist’ approach to sustainability (i.e. interpreting a complex system as the sum of its ‘simple’ or


‘fundamental’ parts) effectively rides roughshod over adaptive evolution. This is in so far as it adopts a ‘ceteris paribus’ (all things being equal) approach that assumes (as most models do) that the simple parts will largely remain constant in the future, rather than adapt and diversify in both functional and structural terms. While the desire to quantify results scientifically and in terms of what ‘we know now’ is understandable, this ignores the fact that functions and


16 | ADMISI - The Ghost In The Machine | Q1 Edition 2024


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