Jevons Paradox

In economics, the Jevons paradox (/ˈdʒɛvənz paɹədɒks/; sometimes Jevons effect) is the proposition that technological progress that increases the efficiency with which a resource is used tends to increase (rather than decrease) the rate of consumption of that resource. In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal use led to increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological improvements could not be relied upon to reduce fuel consumption.

The issue has been re-examined by modern economists studying consumption rebound effects from improved energy efficiency. In addition to reducing the amount needed for a given use, improved efficiency lowers the relative cost of using a resource, which tends to increase the quantity of the resource demanded, potentially counteracting any savings from increased efficiency. Additionally, increased efficiency accelerates economic growth, further increasing the demand for resources. The Jevons paradox occurs when the effect from increased demand predominates, causing resource use to increase.

The Jevons paradox has been used to argue that energy conservation is futile, as increased efficiency may increase fuel use. Nevertheless, increased efficiency can improve material living standards. Further, fuel use declines if increased efficiency is coupled with a green tax or other conservation policies that keep the cost of use the same (or higher). As the Jevons paradox applies only to technological improvements that increase fuel efficiency, policies that impose conservation standards and increase costs do not display the paradox.

Read more about Jevons ParadoxHistory, Energy Conservation Policy

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Famous quotes containing the word paradox:

    The conclusion suggested by these arguments might be called the paradox of theorizing. It asserts that if the terms and the general principles of a scientific theory serve their purpose, i. e., if they establish the definite connections among observable phenomena, then they can be dispensed with since any chain of laws and interpretive statements establishing such a connection should then be replaceable by a law which directly links observational antecedents to observational consequents.
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