Thrifty Gluttons
Energy efficiency is often said to be the key to curbing our carbon output, but there's a problem with that assumption: it ignores what economists call the "efficiency paradox," according to which the more we save on energy, the more energy we tend to consume. As a quick and dirty illustration: Airplanes get more fuel-efficient, ticket prices go down. What happens? You fly more.
This holds true on a macro-scale, too. President Bush likes to tout the fact that the country's energy intensity (expressed as unit of energy per unit of GDP), and by extension, its carbon intensity, has fallen significantly over the last decades. And that sure sounds like a good thing until you consider that our energy consumption -- and therefore our real emissions -- have steadily increased over the same time period.
Economist Jeff Rubin, who has studied the paradox, says efficiency is still important, just not as an end in itself. "In order for efficiency to actually curb energy usage, as opposed to energy intensity, consumers must be kept from reaping the benefits of those initiatives in ever-greater energy consumption." But that introduces another paradox, doesn't it? Where's the incentive to buy that compact fluorescent light bulb if it won't ultimately save you any money?
Anyone have any insight?
This holds true on a macro-scale, too. President Bush likes to tout the fact that the country's energy intensity (expressed as unit of energy per unit of GDP), and by extension, its carbon intensity, has fallen significantly over the last decades. And that sure sounds like a good thing until you consider that our energy consumption -- and therefore our real emissions -- have steadily increased over the same time period.
Economist Jeff Rubin, who has studied the paradox, says efficiency is still important, just not as an end in itself. "In order for efficiency to actually curb energy usage, as opposed to energy intensity, consumers must be kept from reaping the benefits of those initiatives in ever-greater energy consumption." But that introduces another paradox, doesn't it? Where's the incentive to buy that compact fluorescent light bulb if it won't ultimately save you any money?
Anyone have any insight?
4 Comments:
Efficiency itself may not be the only goal to pursue, but it's a biggie, and it's worthwhile.
For example: if I can save money on gas by driving a hybrid or otherwise more-efficient car, I will still drive the same route to work - I won't drive circles around the county just because it's cheaper. If I can light my home more cheaply, I won't begin leaving all the lights on because I can afford it.
Thanks Tom. I definitely agree that efficiency is a worthwhile goal, but I'm still puzzling over this paradox. To take your car example, is it fair to say you might be more inclined to take your more efficient car on longer road trips than you would your gas hog? Or not give the trip to the store for a gallon of milk a second thought? Just wondering. (And by 'you' I don't necessarily mean you personally, but rather anyone).
The other thing is simply this: money saved tends to be money spent, right? So while less expensive lighting may not translate to leaving the lights on, the savings could easily go to some other energy-consuming indulgence. No?
The main thing to contend with, it seems to me, is that whatever personal choices are at work, the paradox exists. That is, unless the premise is simply wrong and the two things -- increased efficiency and increased consumption -- are not actually related.
I believe the key is to make people aware of the effect their actions have on their overall carbon footprint. In the case of home energy use, the benefits are not just limited to cost savings...CO2 emissions are reduced as well. By informing the consumer of that reduction, and making carbon impact information available at the "time of purchase", most consumers won't revert back to bad behavior when prices go down.
For the car example, if people were made aware of the amount they are adding in absolute terms, they would still think twice about driving even if the cost per mile were less.
On the macro level, one key is clearly de-coupling. If utility profits are de-coupled from how much power is used, the utility can focus on investing in efficiency as a way to free power for customer's rather than building new generation.
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