[MD]

Do a search for a Jevon's Paradox thread on the site. Aaron and I posted extensively on it years ago.

Yes Monte, and we all paid attention, and it is a valid dynamic.

Once the Peak Oil Dynamic gains traction, however, it loses influence.

Energy efficiency creates a stop-gap effect, because Jevon's by nature creates new energy load, and the planet is starved for new energies to feed the load.

Jevon's only works when there is plenty of fuel to feed the fire, in other words.

That defines peak oil today, as I see it.

[MonteQuest]

Jevon's only works when there is plenty of fuel to feed the fire, in other words.

Oh, I can agree that, with the changing dynamics, efficiency gains' end results may be mixed. But all gains will be used to try and grow GDP. The thing most of these Jevon debunkers fail to address is that when people find that they can save money by buying more efficient vehicles, insulating their homes, etc, they invariably spend the money they have saved on another product that also requires energy to make, or consumes even more energy to use. They also fail to address the initial investment involved to gain those efficiencies.

People will consume energy right up to the point they can afford to. Which is why the only time overall energy use goes down is during a recession or a depression.

[MonteQuest]

Between 2005 and 2010, 11 of the IEA member states made energy savings equal to $420 billion (€310bn), higher than from any other single fuel source. Without this, the countries would now be consuming about two-thirds more energy than at present.

2/3 more energy? Doesn't that tell us that energy demand is still growing through the roof? "Peak demand" is nonsense.

[MonteQuest]

I said at the first paragraph that I cannot offer a complete explanation. I know that there is other information about energy efficiency that I have missed but I do accept the conclusion of the IEA that energy efficiency is the "world's first fuel".

Graeme,

I don't question that observation. What I question, is whether efficiency gains will do much to mitigate peak oil. When the time arrives that the only fuel source left to be tapped is efficiency gains, I doubt it will make much difference. Same with conservation.

[Graeme]

Monte, I posted the debunked article because I knew there was something amiss. My next post provided some clarification but still I wasn't satisfied.

Last night I looked again. Here's what I found published in Nature 2011 (all comments are worth reading).

The rebound effects need to be considered, but they do not have to be viewed as paradoxical: they amount to economic expansion. Indeed, some researchers think that energy efficiency itself is a fundamental driver of economic growth, freeing up resources that can be used for other things, the deployment of low-carbon energy among them.

Despite its concerns about the rebound effect, the Breakthrough Institute argues that energy efficiency should nonetheless be pursued for exactly these reasons. Encouragingly, the discussion prompted by its report has led to plans from academics and industry experts on all sides of the debate to meet to wade through these issues.

The debate indicates that there must be deeper study of what energy efficiency could do if systematically deployed across an entire economy. The world cannot solve all of its energy and climate woes with energy efficiency alone; low-carbon energy technologies must be developed as well. But there seems to be no fundamental physical or economic reason that countries can't decrease their overall energy consumption while maintaining growth, and thus put the ghost of Jevons to rest.

The statement I made about JP being small is mostly true. Here is a good reference which quantifies rebound according to energy source (see Table 1):

In summary, the relevant research shows that benefits from energy efficiency policies and programs significantly outweigh any increased energy consumption from rebound effects. Energy efficiency rebound effects have contributed only marginally to energy consumption, while the primary drivers of increased saturation or utilization of energy consuming appliances are growth in income and reduced prices, especially for the energy consuming equipment, itself. Even in the presence of the rebound effect, energy efficiency policies remain strikingly successful in moderating growth in energy use, increasing productivity, providing more comfort, lowering energy costs, and improving overall social welfare.

Notice that appliances and lighting have almost no rebound whereas water heating and cooling have a rebound of up to 50%. Here is another study which concludes that the rebound on transport fuel is around 60%. And then there is this commentary on a Nature article published in HuffPost 2013.

Trying to put the rebound effect for energy efficiency in its rightful place is like playing a game of wack-a-mole. Predictably every couple of years, someone new discovers the counter-intuitive appeal of showing how more efficient energy policies may lead to more energy use. Wham! Told you there's something wrong with those clean-car standards. Well, not so fast.

Yes, the rebound effect is real. But it's also small. And what's there is actually positive! Why shouldn't people who can now afford to, due to more efficient energy technologies, be able to improve theirs lives?

Together with three co-authors (Ken Gillingham at Yale, Dave Rapson at University of California, Davis, and Matt Kotchen, currently on leave from Yale to serve as Deputy Assistant Secretary for Environment and Energy at the U.S. Treasury), I surveyed a bajillion+1 energy efficiency rebound studies. Nature then made us cut down those references to six. We settled at nine.

We couldn't find a single study that has the rebound above 100 percent or anything close to it, what's necessary to nix energy efficiency savings. The maximum number you can get is 60 percent, and that's already quite a stretch. Think 30 percent as the upper bound for actual behavioral responses. Yes, we are more efficient today than we were a hundred years ago, and we also use more energy today. But that's far from talking about the rebound effect. It's simply economic growth.


When designing energy efficiency policies like clean-car standards, consider the rebound effect, much like the government already does. The Department of Energy's model uses a highly appropriate 10 percent rebound figure for the car standards. And that's about it. Not much else to see here.

[Quinny]

In my experience it seems JP is situational,

[MonteQuest]

The rebound effects need to be considered, but they do not have to be viewed as paradoxical: they amount to economic expansion. Indeed, some researchers think that energy efficiency itself is a fundamental driver of economic growth, freeing up resources that can be used for other things, the deployment of low-carbon energy among them.

Ok, then this:

Yes, we are more efficient today than we were a hundred years ago, and we also use more energy today. But that's far from talking about the rebound effect. It's simply economic growth.

So, on one hand efficiency gains are a major driver of economic growth, but if energy use increases, it isn't because of any efficiency gains, it's simply economic growth?

And you notice the "freeing up resources that can be used for other things, the deployment of low-carbon energy among them". If efficiency gains are used elsewhere they increase energy use. I see no mention of the big picture (macroeconomics). Saved money and energy cannot be spent on something else.

We covered this ad naseum 10 years ago.

[Graeme]

Now your talking about the benefits (or otherwise) of economic growth linked to increased energy use (even that is debatable because there is evidence of decoupling) not rebound. That's the topic of another thread(s).

[MonteQuest]

Now your talking about the benefits (or otherwise) of economic growth linked to increased energy use (even that is debatable because there is evidence of decoupling) not rebound. That's the topic of another thread(s).

Oops! Left out a question mark. Read it again.

[Graeme]

I think what the IEA is saying that we are using less energy (i.e. we're using it more efficiently) to drive economic growth. They are not linked. The economy is growing faster than energy growth. How long can economic growth continue? That's another debate.

[MonteQuest]

I think what the IEA is saying that we are using less energy (i.e. we're using it more efficiently) to drive economic growth. They are not linked.

My point was that the two quotes I posted from your post are contradictions. You can't use freed-up resources from efficiency gains to do other things, claiming on one hand efficiency gains are drivers of economic growth, and then on the other hand, claim that increases in energy use are just economic growth and not a rebound from using the freed-up resources via those same gains.

Hope that makes sense.

[Graeme]

The key word is driver. We use efficiency gains from non-renewable energy sources to grow renewable energy sources. Both are required.

In short, energy efficiency -- combined with other clean, safe, renewable resources like wind and solar -- represent the best solution for eliminating the fossil fuel-fired power generation harming our planet. 

[MonteQuest]

In short, energy efficiency -- combined with other clean, safe, renewable resources like wind and solar -- represent the best solution for eliminating the fossil fuel-fired power generation harming our planet. 

If that is the best solution, then we are truly fucked.

Watch for a new thread by me called, A Critical Discussion on the Limits of Renewable Energy.

[MonteQuest]

Hopefully, to lay my take on this to rest, as I did 10 years ago the first time. Jevons' Paradox is a macroeconomic effect, which takes the economy as a whole into account rather than just one end use. It also examines outcomes over time, not just the immediate response. Also, the savings from increased efficiency may be spent elsewhere yet still increase consumption, sometimes even greater comsumption, depending on what it's spent on.

That is my main critique of the so-called debunking of Jevons' Paradox. They don't take into account the long view or the big view, only the microeconomic effect.

[Graeme]

Jevons does not have much effect on the macroeconomy. Also there will be increases in efficiency across the board in RE sector too.

[ralfy]

Also, the money saved is invested in banks, etc., which means those who borrow money will have to generate more sales in their businesses to pay back the loan plus interest and to profit.

Thus, efficiency in capitalist systems does not lead to conservation but to more production and consumption. Put simply, what is saved is sold for more profits, especially given competition. In fact, competition is one of the factors that encourages efficiency, as the payback involves more profits.

It is for that reason that JP has had a massive effect on various economies. In fact, the development of the global economy itself, which is heavily dependent on oil and other material resources, attest to that.

[MonteQuest]

Jevons does not have much effect on the macroeconomy.

That's exactly where it does have the greatest effect. Google Jevons macroeconomics.

Like conservation efforts, efficiency gains need to be taken away from economics, either through a tax that goes only to reduce consumption, or a price increase in energy use above a set cap, as efficiency gains are made.

[MD]

Watch for a new thread by me called, A Critical Discussion on the Limits of Renewable Energy.

Good topic.

[Graeme]

Is Energy Efficiency a Good Thing Even with Rebound?

The evidence we have is quite clear. Shellenberger and Nordhaus say “The I.E.A. and I.P.C.C. estimate that the rebound could be over 50 percent globally,” and they then proceed to talk about “backfire,” a rebound effect of over 100 percent. That’s quite a jump from 50 to 100. What’s missing here is that most studies, including the IEA’s and their own(!), take 60% as an upper bound. The IPCC summarizes the evidence as thus:

“A comprehensive review of 500 studies suggests that direct rebounds are likely to be over 10% and could be considerably higher (i.e., 10% less savings than the projected saving from engineering principles). Other reviews have shown larger ranges with Thomas and Azevedo (Thomas and Azevedo, 2013) suggesting between 0 and 60%. For household‐efficiency measures, the majority of studies show rebounds in developed countries in the region of 20-45% (the sum of direct and indirect rebound effects), meaning that efficiency measures achieve 65-80% of their original purposes.”

We have each performed our own detailed surveys of the literature (Azevedo 2014; Thomas & Azevedo, 2013; Gillingham et al. 2013;Gillingham et al. 2014) and largely agree with these statements from the I.P.C.C. The bottom-line: the evidence for a “backfire” is weak. The rebound effect is clearly there, but first it’s generally relatively small—especially in developed countries. Perhaps most importantly, where it does exist—and it does—it’s good.

theenergycollective

[Graeme]

Energy Efficiency May Be the Key to Saving Trillions

Compared with eye-catching renewable power technologies like wind turbines and solar panels, energy efficiency is nearly invisible. But advocates say doing more with less power may be an even more critical weapon in the fight against climate change and offers big economic benefits, too.

Worldwide, governments, companies and families could be saving trillions of dollars by improving efficiency with cars that go farther on less fuel and improved appliances, light bulbs and factories, experts say.

“It’s logical, because we simply waste so much,” said Harry Verhaar, head of global and public affairs at Philips Lighting and chairman of the European Alliance to Save Energy. “Some people call energy efficiency low-hanging fruit. I would even say energy efficiency is fruit lying on the ground. We only need to bend over and pick it up.”

Realizing those energy savings would be a huge boon to the climate, ease illness-causing air pollution, reduce many nations’ reliance on fuel imports and increase competitiveness by lowering costs, the advocates say. It creates jobs in fields like upgrading buildings, and is generally cheaper than the alternative of constructing new power plants and buying more energy, they argue.

But increasing efficiency is logistically complicated, requiring many individuals and organizations to take a tremendous number of small steps, and most nations have failed to aggressively pursue the potential savings.

Even Germany, which topped the American Council for an Energy-Efficient Economy’s rankings as the most efficient of the world’s 16 biggest economies, scored only 65 of a possible 100 points, noted Rachel Young, the lead author. Denmark and Switzerland, too small to be included in the survey, are doing more, she said.

“Energy efficiency is everywhere and nowhere at the same time,” said Jonathan Sinton, senior energy specialist at the World Bank. “Power generation happens in a place, in a piece of equipment that you can see and touch. But energy efficiency happens everyplace energy is, and that pervasiveness makes it really, really hard to deal with.”

Some also argue that making energy cheaper by reducing demand just leads consumers to use more, a phenomenon called the rebound effect. Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, said the effect was real but relatively modest, with about 20 percent of saved energy in developed countries being used as a result.

The countries that have made the most progress on efficiency are those whose governments have prioritized it, Mr. Nadel said. Many are in Europe, where Germany, for example, requires regular efficiency audits of manufacturers and has stringent building codes, Ms. Young said.

nytimes