Jevons Paradox

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Jevons' Paradox
Introduction
Use of non renewable resources has been a point of discussion for several centuries, starting from coal during the industrial revolution and the invention of the steam engine, to oil and the invention of the internal combustion engine in modern times. With the inevitable depletion of the resources, humans have always found ways to better utilize these resources and thus stretch out their existence over time. The question that then arises, from ecologists, economists, and the society at large is whether or not such improved efficiencies are desirable or not, and what would be the extent of such desirability given that comparing the consumption of resource utilization in the presence of, and in the absence of efficiencies is almost impossible.
Jevons' Paradox
Englishman Stanley Jevons was concerned about the longevity of the coal in Britain which had shot the European nation to economic dominance of the world. Coal was the major source of Britain's industrial success and hence economic superiority. Like all other non renewable resources, coal was bound to run out of supply hence raising the fears of Jevons. With increased technological advancement, the machines and industries using coal were improved and made more efficient with the foregoing assumption that such improvements would cause a reduction in the level of consumption of coal. This assumption was premised on the belief that improving the efficiency of the machines and industries using coal would lead to an increase in the output per unit of coal input, thereby reducing the coal used to produce the same output as before the introduction of efficiencies or producing more output than before using the same input of coal. Jevons instead noted that the introduction of efficiencies in coal use did not reduce the consumption and neither did the consumption stay as before nor increase in the proportions it did before. Instead, the consumption of coal increased. As such, Jevons' paradox was concerned with why the increase in efficiencies of coal use which was meant to reduce consumption actually led to increased coal consumption. As Alcott (9) succinctly puts it, "it is a confusion of ideas to suppose that economical use of coal is equivalent to diminished consumption."
Graphical Depictions
In the view of Jevons, improving efficiencies of coal consumption would lead to lower consumption in the immediate future. Since efficiency in this case denotes physical input to physical output ratios (Alcott 9), the increase in such a ratio leads to reduced costs of production which necessitates higher production levels (as depicted in Fig 1.1 below) shown by the green arrows representing increased supply from S0 to S1.

P S0 S1


P



Q0 Q1 Q
Fig 1.1: The Effect of Technology Change (Improved Efficiency) on Supply of Commodities


P
D
P0

P1


Q0 Q1 Q
Fig 1.2: The Effect of Price Reduction (due to Improved Efficiency) on demand
The high levels of output achieved using the same or less input of coal has the effect of lowering the costs of commodities from P0 to P1. With the lowered prices comes higher consumption of commodities from Q0 to Q1 (as indicated in Fig 1.2 above) made using coal. In turn, the firms would opt to produce more in order to meet the excess demand and to earn more revenue hence more profits. With this decision, the firms would embark on a process that would see them using up more coal than they would have under lower efficiency. This is proven by Alcott (9) who notes that "technological efficiency gains increased the overall consumption of resources, rather than saving them." He further takes Domar's view that resource use and sales rise hand in hand with efficiency of resource use.
In the short run, the improved efficiencies will lead to a reduction in the consumption of coal but see an increase in the output. In the long run however, being a free market, more firms may enter the industry to produce the same commodities due to the appeal of high profits. The entry of more firms will then lead to increased consumption of coal, to levels that would not have been witnessed had the efficiencies not been introduced. The owners of old firms may also feel the need to establish more plants to produce the commodities due to low costs of production hence increasing the number of firms in the market and subsequently the number of users of coal. Overall, as Jevons posited, increased efficiency in the use of coal leads to lower costs on the consumers; meaning they tend to have more disposable income as they spend less on commodities where they previously spent more. With this extra "balance" comes the need to spend more (and hence the increase in demand), necessitating higher production by firms and hence more use of the resources, the process that Motesharrei, Rivas & Kalnay (91) refer to as the rebound effect of increased efficiency in resource usage. Overall, the argument of efficiency and consumption in the eyes of Jevons, argues both Alcott (11) and Figge, Young & Barkemeyer (218), was based on nothing more than just the concept of profitability,.
Environmental Legislation
Certain quarters, including economists with an ecological orientation, governments, green civil movements and environmental conservation enthusiasts believe that efficiency gains tend to lower consumption of non renewable fuels such as coal and therefore reduce the negative environmental impacts of using such fuels. For environmental legislation, especially in areas such as global warming and consumption of non renewable energy sources therefore, the Jevons paradox might prove to be problematic. For one, such legislations are aimed at reducing the consumption of energy from non renewable sources but they do not foresee the effect of such actions. It is possible for legislation s requiring efficiencies in machines using non-renewable energy to actually increase rather than reduce the consumption of such fuels. As Polimeni (28) observes of the Jevons paradox and the improvement of resource efficiency, it is almost certain that legislations calling for greater technological efficiency related to the use of non renewable energy sources would lead to lower use of such fuels in the short run and therefore might be friendly to the environment. This would help the legislations achieve their goals of curbing global warming; but only in the short run. In the long run however, the efficiencies achieved as a result of the legislations will lead to higher usage of the non renewable energy sources and therefore cause undesirable effects on the environment. This is the problem that the Jevons paradox poses for environmental legislations.
While there is no doubt that the increased use of non renewable energy sources would have been lower in the case of inefficiencies, it would not be easy to prove that consumption of such fuels would not have increased in the end. It is therefore difficult to pinpoint whether or not the legislations would protect the environment by increasing efficiencies or not. What is clear is that the legislations will often have desirable side effects such as improved quality of life which would not have been enjoyed without the efficiencies that such laws introduce or advocate for.
Possible Remedies
In order to ensure that the efficiencies gained from technological advancement actually lead to the desirable effects they are intended for, it is important to impose restrictions on consumption of such resources. This end could be achieved through such means as taxation or reward schemes like carbon credits, as Gillingham, Rapson & Wagner (69) observe. To further offset such undesirable effects, the policies guiding efficiency of use of non renewable energy should be accompanied by deliberate efforts to desist from the use of such energy sources and the emphasis on the use of cleaner, greener energy such as solar power, hydrogen or electricity. By stressing on the newer sources of energy through such means as subsidization of their development program, the authorities concerned would be able to prevent the paradox. Additionally such authorities should move to increase the efficiency of machines using non renewable energy. The stress on greener energy would be sure to offset the paradox while the concerted efforts such as subsidization of the greener energy would help achieve the policy goals.
Conclusion
In Jevons view, and proven by further evidence, the efficiency gains on non renewable energy use from technological advancement tends to rebound or even backfire in pursuing the very goal that they are intended for. In the paradox, the very economy of use of non renewable energy sources often leads to their extensive consumption. The paradox is also problematic in so far as legislation on areas such as global warming and consumption of non renewable fuel is concerned.














Works Cited
Alcott, Blake. "Jevons' Paradox." Ecological Economics 54 (2005): 9-21
Figge, Frank, William Young, & Ralf Barkemeyer. "Sufficiency or Efficiency to Achieve Lower Resource Consumption and Emissions? The Role of the Rebound Effect." Journal of Cleaner Production 69(2014): 216-224
Gillingham, Kenneth, David Rapson, & Gernot Wagner. "The Rebound Effect and Energy Efficiency Policy." Review of Environmental Economics Policy 10.1 (2016): 68-88
Motesharrei, Safa, Jorge Rivas, and Eugenia Kalnay. "Human and Nature Dynamics (Handy): Modelling Inequality and Use of Resources in the Collapse or Sustainability of Societies." Ecological Economics 101 (2014): 90-102.
Polimeni, John M. The Jevons Paradox and Myth of Resource Efficiency Improvements. Earthscan, 2012: 25-34.


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