In 1776, engineer James Watt introduced a new type of steam engine so much more efficient in its coal usage that it immediately rendered its predecessor obsolete. Goods and services which used a steam engine could approximately double their output for the same amount of fuel. One would have expected that at this point in history, coal consumption would have decreased and the human species would from then on have lived in ecological harmony with nature. And yet coal consumption grew furiously,[i] and with every passing day, our utility-driven approach to resource consumption increases our planet’s environmental woes. Although the ratio of coal to output had fallen, the expansion of the production possibility frontier increased the absolute value of coal consumed. English economist William Stanley Jevons discussed this in his 1865 book The Coal Question, and this phenomenon was dubbed the ‘Jevons paradox’.[ii]
Born during the height of the industrial revolution, this counter-intuitive notion has grown and expanded to sit in the centre of environmental economics. Modern economists have now refined this idea, and call it the ‘rebound effect’. This broadly describes a variety of theoretical and observed scenarios where behavioural changes lessen the benefits of more efficient resource use. Examples include owners of fuel-efficient cars travelling much more, or workplaces using more paper during the advent of computers because documents were more accessible and printable.[iii] Today, the rebound effect is primarily framed in the context of energy efficiency and carbon emissions, and debate continues as to the significance of the Jevons Paradox and the rebound effect in modern climate policy. While the rebound effect arising from increased energy efficiency is widely acknowledged, the dispute is whether more efficient resource use should actually be discouraged in light of the rebound effect.
Many argue that dismissing energy efficiency improvements outright due to the rebound effect is overly simplistic and defeatist. Climate and energy economist Michael Grubb suggests that the macroeconomic analysis describes scenarios where energy improvements occur naturally by means of innovation, as opposed through targeted policy measures designed to save energy. While behavioural changes based on price and supply constraints might lessen efficiency benefits, the use of targeted policy could be crafted to avoid these changes and mitigate the rebound effect.[iv] Similarly, Santarius, Walnum and All suggest that the traditional economic perspective, while mathematically sound, does not reflect the many complicated factors which are responsible for behavioural changes. They argue that, to fully understand the rebound effect, many different disciplines must be studied alongside economics, including psychology and industrial ecology. A multi-disciplinary approach would then be capable of supporting both energy efficiency and reduced energy consumption.[v]
In conclusion, the rebound effect adds another shade of intrigue to the role of energy-efficiency in increasing sustainability. Whether or not the rebound effect can be mitigated sufficiently remains a point of dispute, with over 50 journal articles published annually on the topic in the past 5 years.[vi] With environmental issues becoming more and more pressing, this dispute is certain to only expand in the future.
[i] Bbc.co.uk. 2014. BBC – History – James Watt. [online] Available at: <http://www.bbc.co.uk/history/historic_figures/watt_james.shtml> [Accessed 19 April 2020].
[ii] Giampietro, M. and Mayumi, K., 2018. Unraveling the Complexity of the Jevons Paradox: The Link Between Innovation, Efficiency, and Sustainability. Frontiers in Energy Research, [online] 6(26). Available at: <https://www.frontiersin.org/articles/10.3389/fenrg.2018.00026/full> [Accessed 19 April 2020].
[iii] York, R., 2020. Ecological Paradoxes: William Stanley Jevons and the Paperless Office. Human Ecology Review, [online] Vol. 13(No. 2), pp.143-146. Available at: <http://www.humanecologyreview.org/pastissues/her132/york.pdf> [Accessed 19 April 2020].
[iv] Grubb, M., 1990. Communication Energy efficiency and economic fallacies. Energy Policy, [online] 18(8), pp.783-785. Available at: <https://www.sciencedirect.com/science/article/pii/030142159090031X?via%3Dihub> [Accessed 19 April 2020].
[v] Santarius, T., Walnum, H. and Aall, C., 2018. From Unidisciplinary to Multidisciplinary Rebound Research: Lessons Learned for Comprehensive Climate and Energy Policies. Frontiers in Energy Research, [online] 6. Available at: <https://www.frontiersin.org/articles/10.3389/fenrg.2018.00104/full> [Accessed 19 April 2020].
[vi] Ruzzenenti, F., Font Vivanco, D., Galvin, R., Sorrell, S., Wagner, A. and Walnum, H., 2019. Editorial: The Rebound Effect and the Jevons’ Paradox: Beyond the Conventional Wisdom. Frontiers in Energy Research, [online] 7(90). Available at: <https://www.frontiersin.org/articles/10.3389/fenrg.2019.00090/full> [Accessed 19 April 2020].