Do energy-saving measures actually increase overall energy use?

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Posted Oct 18 2020 by Dave Darby of
Do energy-saving measures actually increase overall energy use?

Having worked in the environmental field for 30 years, I’ve watched the situation get worse every year, to the point that it might already be irreversible, and we don’t know what damage it’s going to do to us, exactly. That’s pretty insane, and so as the cause of the environmental damage is the human economy, I’ve been trying to connect the environmental world with the economic, to give an ecological rationale for building a new economy to replace this one. And I think this might be the way to do it. I’d like your opinion.

Why isn’t fuel consumption falling if technology is becoming more efficient?

I was recently writing our new ‘Low-impact transport’ topic introduction when I came across this graph:

Gasoline consumption graph

Fuel consumption has almost doubled in the US since 1970, despite fuel efficiency improvements. Source: US Energy Information Administration.

It shows that since 1970, the fuel efficiency of cars and vans in the US has gone from around 14 miles per gallon (apologies if those units are nonsensical to you) to 25, due to fuel-saving technology. Great – so that means they should be using less fuel then? Well, no – in the same time period, fuel consumption for cars and vans in the US has risen from around 230 million gallons per day to nearly 400 million gallons per day.

OK, the population of the US has risen from 203 million in 1970 to 331 million in 2020. That’s a rise of 63%. But fuel consumption has risen by 74% in the same period. So if the aim of all the fuel efficiency technology was to conserve fuel, they’ve completely failed. Why is that, and does the same thing happen with other energy-saving measures?

The Jevons Paradox

Turns out that it does. I remembered that somebody called William Jevons had something to say about this in the 19th century – the Jevons Paradox was named after him.

At the end of the 18th century, James Watt built a new steam engine that used far less coal for the same work as the old Newcomen engine. He promoted it as a coal-saving device, and actually asked for his payment to be the money they saved on coal. Did it work? Of course not – Watt’s engine was responsible for a massive hike in the use of coal. Why? Because it became relatively cheaper to use, so people used more of it, and it caused the economy to grow overall, so everyone had more spending power, so they bought more stuff, which required more fuel to produce and transport, and so on.

Even if people don’t use more of the resource because it’s relatively cheaper, they’ll spend the money saved on other things, that may actually require more energy than was saved; plus if people are getting more bang for their buck, it stimulates GDP growth, which means that consumption increases overall (it’s not possible to have GDP growth that doesn’t result in a growth in material consumption, because GDP growth also means an increase in overall spending power, which can’t be ring-fenced so that it’s not spent on material things).

Turns out that books have been written about this. John Polimeni, 2008 – The Jevons Paradox and the Myth of Resource Efficiency Improvements.

Mr. Jevons

Attempts to dismiss the Jevons Paradox

But some people disagree. This study seems to dismiss the Jevons Paradox, and this one says that it’s debatable – they insist that energy-saving measures can and do indeed reduce overall energy use. But – in the real world, technological efficiency is constantly improving, but fuel use and ecological destruction is still rising. They seem to be wrong in reality, rather than theory.

Some studies, like this one, admit that energy efficiency measures contribute to economic growth (and they see that as a good thing, of course), but without any discussion as to how we consume less energy or fewer materials in a bigger economy, which in the real world, doesn’t happen.

The UK Energy Research Centre produced a report in 2007 that was honest about the Jevons Paradox / rebound effect – they said that much of the data necessary for quantifying the rebound effect is difficult, if not impossible, to obtain. Too right – You’d have to follow the path of money spent around the economy, and include ever-more-complex knock-on effects that really have no end. So all we can do in those circumstances is to look at what happens in the real world – materials and energy use is constantly growing, when at the same time, the energy efficiency of our transport, electrical applicances and manufacturing processes is constantly improving. Something’s going wrong, and we can’t just keep assuming that something’s working, when in reality, it’s not.

Why attempts to dismiss the Jevons Paradox have failed

I believe that the reason that the above studies are wrong is that they only consider the initial spend of the money saved by increased energy efficiency. Their studies show that only 6-8% of money saved is spent on energy. But the other 92-94% is still sloshing about in the (growing) economy, and a) nothing it is ever spent on requires zero energy to provide, and b) even if it’s spent on storytelling or massage, those providers will then spend it on something else. It’s going to be spent on energy or something destructive at some point (like pesticides, or something that causes habitat removal).

These studies also claim things like: “Overall, energy efficiency moderated growth in energy use, which has resulted in energy in the U.S. growing slower (sic) than GDP since 1973”. Leaving aside the fact that growing energy use is the problem, regardless of whether it’s growing more slowly than GDP or not, the crucial part of this analysis is ‘in the US’, so what they leave out is:

  • energy required to manufacture their fridges, cookers and other goods made in factories on the other side of the world, and..
  • transporting those goods to the US.

Nature doesn’t care about your country’s per capita energy use, it cares about global energy consumption, which is rising relentlessly:

Graph charting global fossil fuel consumption: do energy-saving measures actually increase energy use?

… along with raw material use:

See Jason Hickel’s blog.

… because the global economy keeps getting bigger.

There have been other studies, like this one, that, in my opinion, are more comprehensive, in that they look more closely at the effects of overall economic growth, rather than just the immediate destination of the money saved by energy efficiency. They seem to confirm what I’m saying here.

Why energy-saving measures are still beneficial in the right circumstances

Now I’m not suggesting that energy-efficiency measures are a bad thing. If we can find a way to stabilise the economy (unlikely at the moment in the face of hostility from states and the business world), then energy-efficiency measures are exactly what we need. In that case, we’ll be able to get ‘as much’ from less, rather than ‘more’ from less. ‘More’ is not something we can keep having, if we want our planet to remain habitable for humans. Mathis Wackernagel and William Rees (the folks behind the ecological footprint concept) have suggested an energy tax that removes the monetary gain from energy-saving measures, and then removes this tax income from economic circulation, this preventing economic growth. It seems to me that that would work, but would be equally improbable because of state / corporate opposition.

What conclusions can we draw from all this?

Energy saving also saves money, and that money will be spent somewhere else, and re-spent, giving that tiny extra bit of spending power to the economy, so that it’s impossible to save energy overall, unless you don’t earn and don’t spend the money saved by the energy saving measures. In that case, the economy shrinks by a miniscule amount, and that’s what saves energy overall. In a growing economy, the energy becomes relatively cheaper, because people have more spending power, and so they use it more generously (cars are more fuel-efficient, so everybody drives everywhere; people switch to energy-saving LED lights, but have lots more of them), making the economy grow even more, and so on. It seems to me that Jevons was absolutely right.

Have I gone wrong somewhere? I’m not proselytising – I’m curious. This seems to be common sense, rather than ideology. So I don’t care if you’re right-wing or left-wing – where have I gone wrong?

If I haven’t, that has big implications for the economy. Global material resource use and energy use are constantly rising. It’s not possible to stop them rising in a growing economy, and so we have to build and shift to an economy that doesn’t need to constantly grow. That’s going to need a level of international co-operation that it’s very difficult to imagine happening, and so it’s probably be down to groups of pioneers in communities to kick-start it.

Dave DarbyAbout the author: Dave Darby lived at Redfield community from 1996 to 2009. Working on development projects in Romania, he realised they saw Western countries as role models, so decided to try to bring about change in the UK instead. He founded in 2001, spent 3 years on the board of the Ecological Land Co-op and was a founder of and the Open Credit Network.