There is no need to lose our minds over the Jevons paradox

Tim Harford

A few years ago, two San Francisco doctors, Mary Mercer and Christopher Peabody, persuaded the busy hospital where they worked to conduct an experiment. They replaced their clunky and inflexible old pagers with a cheaper, more flexible and more powerful system. It’s called WhatsApp.

As the podcast Planet Money reported last year, the pilot was not a success. The chief reason? Messaging became too easy. To interrupt a busy consultant by paging them to demand a return phone call was a serious step, taken with care. But with WhatsApp, why not snap a photograph or even a video message and zip it over just to get a spot of advice? Doctors were soon swamped.

To students of energy economics, this story sounds awfully familiar. It’s the Jevons paradox. William Stanley Jevons was born in 1835 in Liverpool, in a country made rich by a coal-fuelled industrial revolution. He was about to turn 30 when he published the book that made his name as an economist, The Coal Question. Jevons warned that Britain’s coal would soon run out (an eye-catching warning that turned out to be wrong) but, more intriguingly, he warned that energy efficiency was no solution.

“It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption,” he explained. “The very contrary is the truth.”

Imagine developing a more efficient blast furnace, one that would produce more iron for less coal. These more economical furnaces would proliferate. Jevons argued that more iron would be produced, which was a good thing, but the consumption of coal itself would not decline.

Is this right? In a mild form, Jevons’ analysis is certainly correct. When an energy-consuming technology becomes more efficient, we’ll use more of it. Consider light. In the late 1700s, President George Washington calculated that burning a single candle for five hours a night all year would cost him £8. Relative to incomes of the time, that is about $1,000 in today’s money. These fine spermaceti candles were pricey enough to leave even a rich man such as Washington carefully conserving them.

Modern lighting is far more economical and therefore used with abandon. LEDs are many times brighter than candles, and we use much more light and save much less energy than we otherwise could have done.

The stronger form of Jevons’ warning

The full article is available here. This article was published at Tim Harford.