The Problem With Energy Efficiency

[GliderGuider]

The Problem With Energy Efficiency

OAKLAND, Calif. — ON Tuesday, the Royal Swedish Academy of Sciences awarded the 2014 Nobel Prize in Physics to three researchers whose work contributed to the development of a radically more efficient form of lighting known as light-emitting diodes, or LEDs.

Energy-efficient lighting has been, without question, a boon for economic development. Over the past two centuries, the real cost of illumination in Britain has declined by a factor of 3,000, largely because of efficiency improvements, according to the researchers Roger Fouquet of the London School of Economics and Peter J. G. Pearson of Imperial College, London. This cheap lighting technology is used today not just to light our streets, workplaces and homes but for televisions, computers and cellphones.

But it would be a mistake to assume that LEDs will significantly reduce overall energy consumption.

The growing evidence that low-cost efficiency often leads to faster energy growth was recently considered by both the Intergovernmental Panel on Climate Change and the International Energy Agency. They concluded that energy savings associated with new, more energy efficient technologies were likely to result in significant “rebounds,” or increases, in energy consumption. This means that very significant percentages of energy savings will be lost to increased energy consumption.

The I.E.A. and I.P.C.C. estimate that the rebound could be over 50 percent globally. Recent estimates and case studies have suggested that in many energy-intensive sectors of developing economies, energy-saving technologies may backfire, meaning that increased energy consumption associated with lower energy costs because of higher efficiency may in fact result in higher energy consumption than there would have been without those technologies.

Someone must write the IPCC and the IEA immediately to remind them what a moron William Stanley Jevons was, lest they embarrass themselves further with such debunked 19th century ideas as rebound. What's next, phlogiston lamps?

[OKIsItJustMe]

1. Jevons was misguided, and his work is misapplied

Jevons drew unwarranted conclusions from his observations. i.e. It was not the efficiency of Watt’s steam engine which led to greater consumption of coal.

Watt’s steam engine caught on, because it was useful.

http://en.wikipedia.org/wiki/Steam_engine#Piston_steam_engines

Watt proceeded to develop his engine further, modifying it to provide a rotary motion suitable for driving factory machinery. This enabled factories to be sited away from rivers, and further accelerated the pace of the Industrial Revolution.

If steam engines were widely used in industry before Watt’s engine, and the introduction of his more efficient engine had increased coal use overall, then Jevons would be applicable in today’s world.

[GliderGuider]

2. So are you saying that rebound doesn't happen?

Especially when considered on a global, whole-economy scale?

[OKIsItJustMe]

4. “The rebound effect” exists

However, it does not negate the savings recognized by gains in efficiency.
http://thinkprogress.org/climate/2011/02/16/207532/debunking-jevons-paradox-jim-barrett/

[GliderGuider]

5. Savings get transferred to other parts of the economy which then grow, requiring more energy

The problem is that energy efficiency savings are monetized. The money is then moved to wherever it will facilitate further economic growth. Since the economy isn't decoupled from energy, economic growth always requires more energy.

That's what I meant by global, whole-economy considerations.

[OKIsItJustMe]

6. I’m guessing that you didn’t actually read the entire essay.

The part which addresses your concern comes near the end:

http://thinkprogress.org/climate/2011/02/16/207532/debunking-jevons-paradox-jim-barrett/

…

Some of the Whole and All of Its Parts

A final word about the macro question. There is nothing particularly magical about the macroeconomy, it is merely the sum of all the micro parts. If we can’t find a Jevons effect in all the individual places we look, it will continue to be absent if we sum them all up.

The one exception to this is the question of productivity. If energy efficiency increases overall productivity (it does), which in turn accelerates economic growth (it should), then there is a third source of rebound effect that won’t show up in the income or substitution effects I describe. A self-fulfilling income effect, perhaps.

This is tough to address in a few words (or even in many), because it links back to very technical questions of multifactor productivity and the like. But looking at past increases in gasoline prices, history shows that for every 1% increase in gasoline prices, GDP tends to decline about 0.05%, so that a doubling of gas prices might knock a half a point off of GDP. If we’re willing to assume that this is at least the right neighborhood for all energy types and that the response to a reduction in prices would be about as large as it is for an increase in prices (and there are good reasons to doubt this), then this productivity effect would still be pretty small. A 1% across the board increase in energy efficiency might produce an increase in GDP of 0.2% (not insignificant given historic annual growth rates in the 3% neighborhood). This, in turn, would lead to an increase in energy consumption of slightly less than the same relative magnitude, a rebound effect of less than 20%.

Putting all of these things together, the most you can reasonably expect is a total rebound effect of 30% under some pretty generous assumptions. Combine this with income growth caused by other things, population growth, and other factors, and the gains from efficiency can get buried in the weeds. All that’s really clear is that for significant periods, energy efficiency has not increased fast enough to cause energy use to go down.

…

See also: http://thinkprogress.org/romm/2010/09/13/206715/efficiency-lives-the-rebound-effect-not-so-much/

[GliderGuider]

7. Is there a missing piece of information?

I think there is some crucial piece of information that's missing from these sorts of analyses, because it just doesn't make sense that we could "save" our way out of this mess through efficiency in one aspect of the economy, while both population and per-capita consumption keep growing. Perhaps there's a clue in here:

What Is Real? And What Is Not?

In a post called Slow Steaming and the Supposed Limits to Growth, Paul Krugman doubled down on the delusional optimism he recently expressed in Could Fighting Climate Change be Cheap and Free? The Conscience of a Liberal was responding to a Bloomberg View piece by Mark Buchanan, who is an actual physicist. Buchanan's editorial was called Economists Are Blind to the Limits To Growth.

The second link in the text above goes to a paper called Energetic Limits To Economic Growth. (Bioscience, January, 2011). That paper is an empirical study which captures the observation Buchanan uses—across 200 nations in the period 1980-200, on average, energy use increases about 70 percent every time economic output doubles. That paper suggests that the Laws of Thermodynamics apply to global civilization and its energy consumption.

...to my knowledge, only one person on Earth has actually modeled global civilization as a thermodynamic system. That person is Tim Garrett ... Garrett found that there is a constant relationship between additions to our cumulative wealth and energy consumption. Garrett calls this constant "lambda" and the discovery of such a constant puts global civilization on a thermodynamic footing. λ = 9.7 ± 0.3 milliwatts per 1990 US dollar.

Everything else humans say about economic growth, energy consumption, mitigating climate change, etc. is, to some extent or another, bullshit unless it takes Garrett's model into account. That's where any real discussion must begin. See Adventures In Flatland — Part II, and follow the links therein.

[OKIsItJustMe]

8. The problem is your invoking of Jevons

Increased consumption is not caused by increased efficiency as Jevons claimed.

Increased consumption occurs in spite of increased efficiency (due to other factors.)

[GliderGuider]

9. Good point.

Looking for "causes" in situations like this ignores the whole issue of positive feedback loops in a cybernetic complex system.

That was the missing piece I couldn't put my finger on. Thanks!

[OKIsItJustMe]

10. I believe it’s an important one.

Increasing efficiency lowers energy use from what it might have been otherwise.

Looking back to the 19th century… I believe you would agree with me that if Watt’s engine had been less efficient but equally useful, that the industrialists would have used it just as much (leading them to burn even more coal than they did with Watt’s engine.)

[GliderGuider]

11. Yes, I get the point now.

I've been looking for causes for so long it has gotten to be a habit. I'm just starting to re-work my thinking to look for multi-factor feedback loops.

Debt creation, for example, is another factor in growth, along with the emergence of new technologies, new uses for existing ones and new resource discoveries. Energy efficiency is simply one more growth enabler. As the system grows overall, it requires more energy, more energy efficiency,more resources, more debt, more new technologies and more innovative uses of existing technology. It's a positive feedback loop, at the bottom of which is our apparent inability to put the brakes on growth.

It takes a while to start thinking in complex/cybernetic systems terms.

[The2ndWheel]

12. That's a pretty big if there

If X is as useful as a more efficient X, why waste the time and energy in making X more efficient? To simply use less of something? When has that ever happened? If we wanted to use less of something, we could just use less of something.

Increasing efficiency lowers energy use from what it might have been otherwise.

If increased consumption happens in spite of increased efficiency, how is that true? It doesn't lower energy use, it just extends it. We can use it longer, and in more different ways, but whatever we can get our hands on still gets used.

[GliderGuider]

13. So you can do more with the resource whose use was made more efficient.

Last edited Thu Oct 9, 2014, 06:45 PM - Edit history (1)

Step 1. Assume the system "wants" to grow...

Resources spared by efficiency are applied at other points in the system where they are needed. It doesn't matter if a resource is material, energy or labour. More resources and more efficient use of resources enable system growth; system growth in turn causes a search for both more resources and more efficient use of available resources. It's a positive feedback loop, all driven by the fact that the system "wants" to grow. At least that's my takeaway.

[OKIsItJustMe]

14. So far that appears to be a working theory

Currently, one big problem we have is that "developing countries” want to develop. (“Developed” countries seem to have been moderately successful in their conservation efforts.) Once more countries are “Developed” resource depletion may (at least) plateau.

[OKIsItJustMe]

15. Jevons’s claim was/is that greater use of coal was caused by a more efficient use of coal

This is the argument put forward nowadays against efforts to increase efficiency. (i.e. increasing efficiency is worse than pointless, since it actually leads to greater consumption.)