Backfire: A Case for Thoughtful Energy Consumption

Let me start by saying, the occurrence of the Jevons Paradox in our modern use of energy is difficult to prove outright. However, the more broadly defined big brother of the Jevons Paradox, known as the rebound effect, irrefutably occurs in a major may. The contents of this post are applicable even if we are only thinking about rebound.

The Jevons Paradox asserts that as technology allows us to more efficiently consume a given resource we tend to use more of that resource rather than less. If you’re a student of economics this relationship might not seem so paradoxical when viewed as a question of supply and demand. As efficiency increases, we can get more work done for less, lowering the price of work. This makes for an increase in the demand for work. If the relationship is elastic the increase in demand makes up for the decrease in price and the aggregate amount spent actually increases. In the world of energy efficiency, when the increased demand rebounds so far that the total increased usage of a resource outweighs the reduction from the efficiency, it’s called backfire. If I’ve lost you, don’t sweat it. The next part is the important stuff.

At the micro level, consider your electric bill. If you found a way to cut your electric bill in half, what would you do with the extra money in your checking account? If you spent it on buying a new big screen TV, your savings would be paying for the energy to build and operate that TV… new energy that would not have been expended if not for your reduced electric bill.

On the macro level increased energy efficiency can bring luxury items to more and more homes. So, things like hot tubs that used to be prohibitively expensive to operate find their way into thousands of homes. Yes, the new hot tubs are more efficient, but if that efficiency makes them super popular the net result could be more energy used. Let me be clear, I love hot tubs. I’m merely pointing out that more efficient hot tubs might result in a hot tub adoption craze that makes for more total energy use. I don’t love that.

The repercussions for the individual, the policy maker, and of course our precious resources are enormous. Here we are trying to live greener by reducing our energy use and the net effect can be an increase in energy use! What to do?

Micro strategy: If instead of buying another TV with the savings from your electric bill, you spend it on replacing old appliances with more efficient ones or your buy less energy intensive alternatives to the stuff you already purchase, like local groceries, your savings could actually further encourage resource conservation. Everybody wins.

Macro strategy: This is where policy might come in. Most of the efficiency wonks use rebound to justify things like a carbon tax that prevents resources from being deployed on more energy use. They claim that the only way to prevent rebound is to tax energy so that the perceived cost stays high. Keep in mind that this will only succeed if those tax dollars are intelligently deployed. I’m unconvinced that this is the only answer. Have ideas? Please share in the comments.

If you are really into this stuff and have a high tolerance for technical jargon and generally boring writing, pick up The Jevons Paradox and the Myth of Resource Efficiency from your local library. The book contains some great nuggets of insight and a pretty thorough examination of the magnitude / existence of the paradox around the world.