THE Jevons Paradox Thread (merged)

[mos6507]

If you're going to build something like this, it's a wise idea to pick ground zero of the housing crisis. That place is really close to where my mom's house is so I signed onto their mailing list. This is probably the last shot the US will have for a Masdar here before TSHTF.

[BackyardRambo]

Civilization (the establishment of communities of people whose demand for resources outstrips their ability to produce them locally) is completely, utterly unsustainable on any level.

Everyone dances around the topic, but this is it. Every human system breaks down in the end because it is contrary to nature, not in concert with it.

The current model of society is obsolete and utterly unsustainable, no argument there. But why is that? What is the underlying reason? I would argue that it's largely because of how money works, as Mike Ruppert often puts it.

All money is borrowed with interest, therefore there is always more debt than actual money. Compounding interest and new loans increase debt perpetually. For this debt and interest to be paid off, or more accurately shifted around (as it is never really paid off), the economy has to grow infinitely. Economic growth always increases the need for energy and resources. Unfortunately we live in a finite world.

In addition to that, there is a duality in this economic model. It operates under the assumption that there is an infinite amount of resources available, but at the same time there is an incentive to create scarcity, as something scarce is much more valuable than something abundant and easily accessible, like say air, or sun light. Basically if there ever was a magical perpetual motion machine that was cheap to manufacture, required no maintenance and produced an endless amount of free energy, it would not be as economically viable as oil, for example. No return customers. That being said, the fundamentals of how our whole world economy works, are seriously flawed, and until we change them, we change nothing. This can be said for most existing popular ideologies, including capitalism, socialism, communism, fascism etc. as they are all fundamentally very similar.

And whether there are enough resources in any given area or not, depends in large part on how efficiently those resources are used, recycled and renewed. But it also depends on the fundamentals of the local economy; if it's geared towards infinite growth and based on scarcity, it's ultimately unsustainable. However, if it's a resource based economy of sorts, that is geared towards using as little finite resources as possible the most efficient way possible while recycling them and using mostly renewable resources, it could be sustainable, in fact it probably would even produce abundance with the right kind of technology.

Some people would argue that the population of such a place would grow unsustainably, bla bla bla. Not necessarily, population growth in Italy for example, is negative; they are now "importing" people from Africa to join the work force. An economy that requires infinite growth, always requires more labor, which typically means more people. That's why population growth is largest in the third world; they might not have money or resources but if they get five kids they at least have a labor force, with which to obtain money and resources.

My 2 cents.

[rangerone314]

Hypothetically, imagine a society where there is no population increase, no energy growth, no economic growth. Bob wants to make shoes. His dad is too old to make shoes anymore and his equipment has worn down.

So Bob goes to a bank for 100 quatloos, and has to pay back 10 quatloos in principle and 5 quatloos in interest. He buys shoemaking tools and supplies, and starts selling shoes. He starts selling shoes and pays the bank 15 quatloos. Life goes on, bank still gets its interest.

What you probably don't see is the bank taking 15 quatloos to a casino and speculating to make extra.

[BackyardRambo]

Hypothetically, imagine a society where there is no population increase, no energy growth, no economic growth. Bob wants to make shoes. His dad is too old to make shoes anymore and his equipment has worn down.

So Bob goes to a bank for 100 quatloos, and has to pay back 10 quatloos in principle and 5 quatloos in interest. He buys shoemaking tools and supplies, and starts selling shoes. He starts selling shoes and pays the bank 15 quatloos. Life goes on, bank still gets its interest.

What you probably don't see is the bank taking 15 quatloos to a casino and speculating to make extra.

That's the old paradigm. The only sustainable model I can think of is one where there is no incentive to profit, and that would be one where all the necessities are so abundant and readily available that it's not possible to profit; selling electricity or food at that point would be like selling air or sun light today. Because there will always be some group of people who are greedy, ruthless, corrupted and will, given enough time, break or change any laws necessary to get ahead, and eventually they will start the whole banking ponzi scheme all over again.

Essentially the next civilization has to be completely rethought, from the bottom up, or else history will just keep repeating itself.

[Roderick Beck]

Aaron,

Economics has no difficulty explaining the Jevons paradox. In fact, it is only paradox only to those who didn't study economics.

The economic logic is straightforward:

Technical innovation that economizes on the use of energy > reduces the price of energy intensive goods and services > the quantity demanded of energy intensive goods and services increases > production and consumption goes up.

Economists would be shocked if inventions like the steam engine had not increased the demand for energy.

[davep]

Here's an interesting article on the historical perspective and current status of the Jevons Paradox, including the context of the paradox within his overall view.

Capitalism and the Curse of Energy Efficiency

The curse of energy efficiency, better known as the Jevons Paradox—the idea that increased energy (and material-resource) efficiency leads not to conservation but increased use—was first raised by William Stanley Jevons in the nineteenth century. Although forgotten for most of the twentieth century, the Jevons Paradox has been rediscovered in recent decades and stands squarely at the center of today’s environmental dispute.

The nineteenth century was the century of coal. It was coal above all else that powered British industry, and thus the British Empire. But in 1863 the question was raised by industrialist Sir William George Armstrong, in his presidential address to the British Association for the Advancement of Science, as to whether Britain’s world supremacy in industrial production could be threatened in the long run by the exhaustion of readily available coal reserves.1 At that time, no extensive economic study had been conducted on coal consumption and its impact on industrial growth.

In response, William Stanley Jevons, who would become one of the founders of neoclassical economics, wrote, in only three months, a book entitled The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal-Mines (1865). Jevons argued that British industrial growth relied on cheap coal, and that the increasing cost of coal, as deeper seams were mined, would lead to the loss of “commercial and manufacturing supremacy,” possibly “within a lifetime,” and a check to economic growth, generating a “stationary condition” of industry “within a century.”2 Neither technology nor substitution of other energy sources for coal, he argued, could alter this.

Jevons’s book had an enormous impact. John Herschel, one of the great figures in British science, wrote in support of Jevons’s thesis that “we are using up our resources and expending our national life at an enormous and increasing rate and thus a very ugly day of reckoning is impending sooner or later.”3 In April 1866, John Stuart Mill praised The Coal Question in the House of Commons, arguing in support of Jevons’s proposal of compensating for the depletion of this critical natural resource by cutting the national debt. This cause was taken up by William Gladstone, Chancellor of the Exchequer, who urged Parliament to act on debt reduction, based on the uncertain prospects for national development in the future, due to the anticipated rapid exhaustion of coal reserves. As a result, Jevons’s book quickly became a bestseller.4

Yet Jevons was stunningly wrong in his calculations. It is true that British coal production, in response to increasing demand, more than doubled in the thirty years following the publication of his book. During the same period in the United States, coal production, starting from a much lower level, increased ten times, though still remaining below the British level.5 Yet no enduring “coal panic,” due to exhaustion of available coal supplies, ensued in the late nineteenth and early twentieth centuries. Jevons’s chief mistake had been to equate the energy for industry with coal itself, failing to foresee the later development of energy substitutes for coal, such as petroleum and hydroelectric power.6 In 1936, seventy years after the parliamentary furor generated by Jevons’s book, John Maynard Keynes commented on Jevons’s projection of a decline in the availability of coal, observing that it was “overstrained and exaggerated.” One might add that it was quite narrow in scope.7...

See full article for the rest. Thanks to Keith Addison's biofuels list for the link.

http://www.monthlyreview.org/101101foster-clark-york.php

[ralfy]

Very good share. Thanks!

[autonomous]

The 'rebound' effect of energy-efficient cars overplayed

The argument that those who have fuel-efficient cars drive them more and hence use more energy is overplayed and inaccurate, a University of California, Davis, economist and his co-authors say in a comment article published Wednesday in the journal Nature.

Critics of energy efficiency programs in public policy debates have cited the “rebound effect” as a reason that hybrid cars and plug-in electric vehicles, for example, don’t really save energy in the long run.

The “backfire” concept, a more extreme version of “rebound,” actually stems from a 19th century analysis in a book titled “The Coal Question,” by Stanley Jevons. The book hypothesized that energy use rises as industry becomes more efficient because people produce and consume more goods, according to the Nature article. But the article’s co-authors found that in the modern economy, the effect is not supported empirically.

“If a technology is cheaper to run, people may use it more. If they don’t, they can use their savings to buy other things that required energy to make. But evidence points to these effects being small — too small to erase energy savings from energy efficiency standards, for example,” said David S. Rapson, assistant professor of economics at UC Davis.

Rebound effects are therefore “no excuse for inaction,” the article states.

Energy efficiency standards will once again be a topic of debate — and a potential target for attack — with the renewed focus on climate change and the possibility of federal regulatory action, Rapson explained: “From an economic perspective, a carbon tax or well-functioning cap-and-trade market is still optimal. But if the political reality doesn’t allow these, efficiency standards should be evaluated based on the balance of costs and benefits. Rebounds are an important consideration, but are often overblown and misunderstood.

“Even though increased efficiency may prompt changes in behavior, energy is still saved overall,” said Rapson. “Energy efficiency policies should therefore continue to be considered as a way to address greenhouse gas emissions.”

http://www.news.ucdavis.edu/search/news_detail.lasso?id=10473
http://www.nature.com/nature/journal/v493/n7433/full/493475a.html