I guess the only thing I want to raise is that Jevons observations were of rebound effects at their most broad economy wide level. And this is the only level which is important. The authors of the economist article mentioned that rebound effects off-set some of the saving – but the effects they are talking about (direct and indirect only) are only a small component of the total effect. And each of these component effect happens concurrently, so that knowing one component effect is of little use in estimating the scale of the total effect.

The real argument happening these days os about the causal relationship between energy and resource efficiency, and total energy and resource consumption. Jevons argument more specifically was that the improved productivity of a resource CAUSED the increase in consumption. The current limitations to rebound effect analysis is that not only in the economy wide effect difficult to measure, establishing causality in the models is near impossible.

If you are interested, there is a free excel workbook by energy economist Harry Saunders available online at http://www.bepress.com/bejeap/topics/vol5/iss1/art15/ which shows how in most cases, under the assumptions of neo-classical economic theory, efficiency gains lead to back-fires – they cause increased consumption.

Thanks for your comment on my post. I appreciate your observations.

I may not have been as clear as I should have been on my point. I do not think efficiency can “save” energy, as you point out. I believe I understand Jevons’ Paradox (I studied Economics in college).

However, it seems important to note that Jevons’ Paradox is only an extension of the rebound effect. The “paradox” occurs when the rebound effect is sufficiently large such that the reduction in price (from efficiency, which reduces demand) results in a net increase in consumption.

However the conclusion of The Economist story is that while the rebound effect is expected to mitigate the initial impact of consumption reduction, the numbers reported suggest that overall consumption would still decrease, significantly. Rebound, yes, paradox, not in this case.

Why is this?

Jevons’ observations were published in the early Industrial Revolution when very dramatic increases in efficiency (e.g. Watt’s redesign of the steam engine) resulted in increased consumption. The internal combustion engine (ICE) was another example … one that did result in a reduction in demand for coal and wood fuels because more efficient oil-based fuels were substituted.

(Note: the main issue in my view is not that we are using too much energy, rather that the kind of energy we are using is producing several very nasty side-effects, like global warming and war.)

In the early 1900’s, oil and the ICE seemed like a great thing for the environment. Almost off of Britain, and much of the eastern US had been denuded of trees. London and many industrial cities were covered and darkened by the filth of coal dust and smoke. (Notably, clean water powered mills in the Northeast US were viable largely because of these issues).

One would hope that we now more fully understand the consequences of our use of carbon-based fuels. With luck that the next inventions that alter the way we use energy will be ones that do so in a way less likely to cause the demise of the earth. If new methods of storing and releasing energy are as dramatic as the steam engine or internal combustion engine (or any other numerous technical innovations), the net demand for energy most certainly will increase.

But until this innovation, we have the opportunity to conserve, whether through increased efficiency of use, through education, or through the internalizing of the externality of carbon emissions, for example via a cap-and-trade system, or just a carbon tax.

So according to the article, even accounting for the rebound effect, this can result in large near-term net reductions in consumption.

Tom

If you think energy efficiency can save energy, you would also have to believe that improving labor productivity reduces demand for labor – the argument of Marx. Efficiency is the cause of more energy consumption.

I suggest reading the Encyclopedia of Earth article on the rebound effect, and reading up on the economics of Jevons. It will broaden your views on this topic.