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The Paradox of Efficiency

In Monday's New York Times, columnist John Tierney adds a thoughtful piece to the many articles and blog posts written about the paradox of efficiency as energy policy panacea. Mr. Tierney discusses several aspects of energy efficiency, including the "rebound effect" (also known as the Jevons Paradox, about which my colleague David Bradish has written several blog posts).

For us, the bottom line of the article is a recognition that efficiency improvements are unlikely to reduce carbon emissions and may, in fact, increase them as consumer savings on energy are spent on more carbon-intensive products and services elsewhere in the economy. We believe Mr. Tierney gets it right when he says:
"But if your immediate goal is to reduce greenhouse emissions, then it seems risky to count on reaching it by improving energy efficiency. To economists worried about rebound effects, it makes more sense to look for new carbon-free sources of energy, or to impose a direct penalty for emissions, like a tax on energy generated from fossil fuels.[emphasis added]"
The Times article is a quick, insightful read and we commend it to you.


Jeff Schmidt said…
In addition to 'rebound' effects, there's also an effect, I don't know if it has a name or not, but I hope economists take this into account:

If efficiency comes at the cost of efficacy (that is, how well the product works), then efficiency might actually cause *more waste*. The article in the nytimes opened with an example of clothes washers that don't get your clothes clean. If that happens, people might run their clothes through two cycles to get them clean. If those two cycles in the 'efficient' machine use more energy/water than a single cycle of the 'less efficient' model that was highly effective, then you'd be better off running the clothes once in the 'less efficient' machine.

The article also talked about a comment from efficiency advocates that "you won't vacuum more just because you have a more efficient vacuum". Well, if the vacuum doesn't get the floor clean in one or two passes, so I have to run the vacuum longer to get the floor just as clean, then yes, I will vacuum more just because I have a more efficient vacuum.

One other issue the article completely leaves out: When is it worthwhile, efficiency-wise, to replace something?

Let's use the 'cash for clunkers' program which made so much news a couple years ago, which gave people an incentive to trade in old, low-mpg cars and trucks. They would get a government subsidy to buy a new, more fuel efficient vehicle.

One of the 'features' of that program was that the car had to be destroyed. The engine had to be rendered inoperable, so that the car would not be resold as a used vehicle and continue to operate.

I have a big problem with that, depending on just how old and 'clunkery' the vehicle might have been: It takes a lot of energy to make a new car or truck. The energy saved by fuel efficiency is very likely not going to be sufficient to reclaim the energy required to manufacture a new vehicle.

The only time it makes sense to improve efficiency, in such cases, is at the 'natural' time when the vehicle would be retired and a new vehicle is *required* anyhow - e.g. the energy to manufacture the vehicle must be spent anyhow, but you can choose to manufacture/buy a more efficient vehicle instead of a less efficient vehicle.

Same principle would apply to almost any manufactured good (home furnaces, appliances, TVs, computers, etc) - the energy required to replace the item may possibly be greater than the savings which would accrue to the new item vs just continuing to use the old item.
Finrod said…
Implicit in the policy of fighting carbon emissions by 'energy efficiency' is the assumption that the energy production system will continue to be CO2-rich.
By the time most Americans are driving plug-in-hybrids 20 or 30 years from now, they might also be using more expensive synthetic gasoline derived from a variety of carbon neutral resources. So the beauty of efficiency is that it makes the expense of transitioning to costlier but cleaner fuels much more tolerable to the consumer.
SteveK9 said…
Marcel: They might also be charging their all-electric cars with cheap electricity from nuclear power plants. I think you will see that happen in India and China in even less than 20 years.
Anonymous said…
"Implicit in the policy of fighting carbon emissions by 'energy efficiency' is the assumption that the energy production system will continue to be CO2-rich."

Not even close to true. That wedge report and most every other analysis says efficiency AND non- or low-carbon energy sources will be needed to mitigate climate change.
Finrod said…
Yes Anonymous, I know the reports SAY that, but I contend that the implication is nonetheless there. Anti-nukes insist that energy efficiency is a necessity because they explicitly rule out the great abundance which nuclear power can provide. They do not wish for attention to be drawn to this, of course.

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