The Jevons Paradox
In a recent conversation with Stuart Orr, a friend from WWF International, the topic of water management and the value of water footprinting came up. In particular we talked about the localised impacts of basin and watershed management and the indicators, incentives, sanctions and technologies that could and are being employed to effect positive changes (more about this in a forthcoming post). As an aside Stuart mentioned that improved irrigation technology and incentives to encourage its use may in fact have negative impacts on water availability at basin scale. This is because greater use efficiency combined with a low (subsidised) opportunity costs lead to reduced return flow, reduced aquifer recharge and, often, an increase in absolute water abstraction. Stuart’s point was that there isn’t a stand-alone technical, institutional or economic answer and it reminded me of the Jevons Paradox.
William Stanley Jevons (left) was a leading 19th Century economist, as well as being a chemist, botanist, urban geographer and pioneering photographer. Jevons was central to the marginalist revolution in economic theory and perhaps his most important contribution was the eponymous paradox. In 1865 Jevons described how, in relation to coal, increased efficiencies of use lead to an increase rather than decrease in the use of that resource. At the time this was very much contrary to the prevailing wisdom, but it has since been identified in many situations – particularly in relation to fossil fuels and energy use but also, as we have seen, in the case of water use.
The Paradox has been used to argue that resource use efficiency – particularly energy conservation, is a waste of time. But this is to miss the point: Jevons was writing very specifically about technological improvements that improve efficiency. If those improvements are coupled with institutional changes – for example progressive taxation to increase fuel cost (this canceling the economic benefits associated with greater use efficiency), effective policies (that encourage the adoption of more efficient technologies) and campaigns to effect behavioral change then the Jevons Paradox will not manifest itself. In addition it’s important to consider where marginal utility in any goods or services reside. For example, in the case of low energy light bulbs it is the light emitted not the energy required that is ultimately of interest to consumers so their adoption is unlikely to lead to increased energy demands.
At Provenance, when we’re devising sustainability plans for clients, we endeavour to consider the perverse consequences that arise when too much emphasis is placed on any one aspect or outcome of a business or organisation’s activities. This isn’t always easy, particularly as the evidence base is continually growing and shifting, but we’ve got no intention of slipping into the trap of becoming too attached to a single indicator, such as carbon, or a single methodological approach, such as life cycle analysis (LCA) rather a suite of indicators and measures.
Earlier this year an excellent and timely book about the Jevons Paradox and its implications was published by EarthScan. Called Jevons’ Paradox and the Myth of Resource Efficiency Improvements