So I recently got into paradoxes, and this particular one caught my eye.
It goes like this: gains in efficiency result in increased consumption.
This is Jevons paradox, named after the English economist William Stanley Jevons.
In 1865, he noted that the improved efficiency of steam engines didn't decrease the consumption
of coal.
Instead, coal was used in more industries, increasing total consumption, which made him
worry that England would run out of coal faster because it was used more efficiently.
A more modern example would be the fuel-efficiency of cars.
This has increased a lot in recent years, and yet the total consumption of fuel keeps
rising.
The same thing goes for electricity.
Appliances are getting more efficient, and yet, the total electricity consumption still
rises.
I was initially confused about this, but I made a mistake to think that the demand would
stay the same, which it doesn't!
When something becomes more efficient, it usually becomes cheaper, and we can afford
to use it more often.
Take our cars again as an example: they have gotten a lot more efficient, but it could
be that a 5% fuel efficiency gain only reduces consumption by 2%.
The missing 3% can be attributed to the fact that when driving gets cheaper, we can afford
to drive faster or further than before.
This difference between the theoretical efficiency gains and the actual consumption is called
the rebound effect.
In this example, the rebound effect is 60% (5-2/5).
We expected a reduction of 5% but instead only saw 2.
Now, Jevons paradox only applies when the rebound effect is higher than 100%, meaning
gains in efficiency have caused an overall increase in consumption.
A rebound effect between 0 and 100% is known as take-back, and this is the most occurring.
It means that actual consumption is reduced but not as much as expected.
A negative rebound effect is also possible.
That means that the savings were higher than expected.
When would that occur?
Well, imagine you bought a dishwasher that's 10% more efficient, and by doing that, you
realize how much energy it consumes, and you start washing less frequently or at lower
temperatures.
The Jevons Paradox and rebound effect can be found in a lot of different areas, not
just energy consumption.
It also plays a role in greenhouse gas emissions, environmental impact, and even water consumption.
Now, why make a video about this paradox?
Well, understanding the Jevons paradox allows us to question the policy of governments.
The EU, for instance, has adopted a lot of policies to improve energy efficiency, such
as the ManagEnergy initiative, which aims to increase energy efficiency.
But as I mentioned before, chasing efficiency can have the opposite effect on the total
consumption.
In fact, a 2007 study said that Jevons paradox likely exists in 18 European countries and
even suggested that the paradox isn't applicable to just a few sectors but to an economy as
a whole.
Now I'm not proposing that we should stop chasing efficiency, far from it.
But Jevons paradox is often ignored, and some people wonder if we should try to increase
efficiency while trying to reduce demand at the same time.
When cars get more efficient and cheaper to drive, a government could introduce a green
tax that matches the savings.
This will prevent people from driving further or faster.
This is proposed by ecological economists, and these taxes could be used to reinvest
in other measures.
Aside from politics, it's also worth pointing out that the strength of the rebound effect
depends on how mature a market is.
In developed countries, an increase in fuel efficiency won't cause a high rebound effect
because we already consume a lot of fuel, and we won't necessarily drive our cars more.
The University of California even found a link between the rebound effect and income:
higher income means a weaker rebound effect.
But that's enough about Jevons paradox.
Here is another cool one: the Downs-Thomson paradox, which says that increasing road capacity
can make traffic congestion worse.
Let that sink in while you hit the like button and get subscribed to my channel.
Thanks for watching.
See you next time!