Jevons Paradox: Finding a solution

Sustainability, like everything else in life, is more than meets the eye. One of the strongest word connections with sustainability is efficiency. If I had a car where I could drive 100 miles at 50mpg as opposed to 25mpg then I would be more sustainable. That makes sense, right? But of course, there’s more to it.

There’s this idea of Jevons Paradox that when prices decrease, consumption increases. William Jevons observed this way back in 1865 when using coal was becoming more efficient and now this idea is associated with the “rebound effect”. So then, with my more fuel-efficient cars, I would be spending less money on gas and therefore would have all this extra money. According to Jevons and the rebound effect, I would utilize my extra cash by consuming more. I would make more trips home or take more weekend vacations, because well, it’s just so gosh darn cheap. While this may not hold true to every individual, when you apply it to millions of people the extra consumption may level out the efficiency benefits, and may even outweigh them.

Rob McDonald writes about his experience having to defend the idea of energy efficiency from Jevons Paradox. The problem is some people think advancing energy efficiency is pointless and we may be better off staying how we are, and others dismiss the idea as “blasphemy.” To this I say, “Why can’t we all just get along?!” Since when has anything in life been an easy black and white situation without any exceptions or gray area?”

I’m not an economist, but the rebound effect is real. For example, a couple of months ago a high fashion designer released a line through Target, which meant Target prices for this fancy designer’s goods. (There are more legit examples with graphs and fancy numbers but I like to keep it simple).  What happened you ask? Well, people went bat shit crazy and everything was sold out. Did they need all that stuff? Probably not, but who can pass up a good deal? In terms of energy though, I doubt anyone thinks “Well now that my energy bill is cheaper I think I’ll watch a couple extra hours of TV.” But, the driving scenario mentioned earlier is more probable, mainly because that situation actually runs through my head. “Cheaper gas? I think I’ll drive from Houston to San Antonio. 8 times. For fun.”

With this issue we have two solutions, stop the energy efficiency nonsense or ignore Jevons Paradox. If we can conclude that energy efficiency is in the right direction for sustainability, then we have to solve the issues of Jevons Paradox, consumption behavior. Jon Bird has been doing some very interesting research with adjusting behavior, like learning to play the violin.

One experiment monitored a neighborhood street’s (17 households) energy consumption. Their consumption was compared to city’s average and was graphically represented down the street. Their progress was also publicized through the media. “Each time their performance improved, they felt a little community pride. When they slipped back, the giant public display gave them a variation on the magic buzzer treatment.” When the experiment ended Bird asked the households to individually continue. Without the public attention keeping them in check, participation dropped to 50% and then six months later to only 3 households, which only 2 keep their energy below city average.

“If you give people feedback on energy use, it does have the effect of reducing energy usage in the short-term,” Bird says. “What is trickier is, how do you get sustained sustainable behavior? …There’s a difference between awareness and behavior,” he continues “We’ve got the awareness, but haven’t quite got the motivation … Why is it that gyms have more membership than capacity? Most people don’t go. That’s human beings.”

Another experiment involved a small island of people, who every two months would get their electric bill. Except for the control group, the bill would show how they compared to their neighbors with a smiley face for above average and a sad face for below. The experiment lowered electricity use by 3 percent.

This idea, “social norms marketing,” allows people to compare themselves to their neighbors, and in turn inspires change. (Tyler recently posted an article  about an app that essentially is the same concept).

Sustainability requires both energy efficiency AND a change in consumption behavior. The question is will the change happen as a grassroots movement or will it come from the top down (like how some countries require mandatory recycling and issue fines when you don’t)?

Update:

Since this topic is a little complex I’ve added a graphic to help clarify and summarize. Because we currently are impacting the environment negatively, our first solution was to create more efficient products to become more sustainable. But, according to Jevons Paradox and the idea of “rebound,” more efficient products have an adverse affect on our consumption behavior and therefore the environmental impact outcome doesn’t change. There are three options to solve the issue: 1.Close your eyes and pretend “rebound” and Jevons Paradox isn’t real; 2. Don’t even bother creating more sustainable products since it doesn’t affect the outcome; or 3. Find away to affect our consumption behavior. This is where Bird’s research and ‘social norms marketing’ comes in as subtle solutions.

Sources:

Jevons Paradox: When Doing more with less isn’t enough

Change Hurts: Influencing our energy

The Jevons Paradox

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2 comments

  1. I don’t think there is enough support for a top down regulation or reward system on a grand scale. Especially in the tight economic times.

    i see the value in the idea of keeping the price of a commodity high in order to restrict the use. BUT, we through our tax dollar give subsidies , as well as tax breaks, to big oil, and then in turn we pay top dollar for gas. the result is big oil making millions in profit.

    I think the price should be maintained, BUT through taxes on OIL, NOT the people, then the govt could put that money into infrastructure, school, greener energy. Instead of the oil companies CEO next Porsche or yacht!!!!

  2. Product price isn’t really the focus of ‘social norms marketing.’ It’s more like peer pressure and bringing consumption levels to people’s attention to get rid of the “our of sight out of mind” idea.

    ‘Top down,’ it isn’t limited to taxation (since that’s such a tuchy topic anyways). For example, in South Korea (and many other countries) recycling has been made mandatory. It didn’t have support from the majority of the public and if you weren’t for it, then it was kind of forced. But it has more to do with people not liking change. This was a change for the good and after a while it becomes less of a burden and more part of daily life.

    In relation to ‘social norms marketing’ a top down idea could be to require that all energy bills show whether a household is below or above average in their city. Or, as far as taxation, you could tax oil companies to maintain a price level, but it could also be like the new tax on tanning (because it’s not healthy), or people could get tax breaks for using sustainable options. This is done but could be implemented in a more marketable way so people are more aware.

    I just wanted to emphasize the point that consumption rates are part of the equation and we have to develop solutions for that in addition to creating efficient products.

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