The Jevons Paradox and Tidy Street experiment

A colleague brought to my attention the Jevons Paradox. Named after English economist William Jevons who in the mid-19th century noticed that improved steam engine efficiency resulted in higher coal consumption rather than conservation. He argued that as the efficiency of steam engines increased, their usage expanded, offsetting any gains made in energy conservation. What examples are there today?

Vehicle transport – as the cost of driving per km decreases it makes driving more affordable and therefore increasing kms travelled. This offsets the energy conservation benefit of improved efficiency. According to Nissan EV drivers are yearly traveling over 370 miles further than petrol/diesel car users with 70% acknowledging EV range autonomy is better than expected. LED lights – energy efficient lighting has led to greater demand for LED bulbs. Because of the reduced cost per light consumers have installed more lights hence the increase in outdoor lighting products. Data centres – the benefits of the internet and electronic communication has led to the increasing demand for energy to power the server farms / data centres like those used for the Bitcoin market.

Tidy Street experiment An experiment by Jon Bird looked at people’s behaviour regarding energy consumption on Tidy Street in Brighton, UK. 17 of the street’s 52 residents signed up and each household’s power bill was graphically represented on the street (see photos) and published through the media. Over the three weeks of the project average energy use dropped by 15% with some cutting usage by 30%.

“Each time their performance improved, they felt a little community pride. When they slipped back, the giant public display gave them a variation on the magic buzzer treatment.”

When the experiment ended Bird asked the households to individually continue. Without the public attention keeping them in check, participation dropped to 50% and then six months later to only 3 households, which only 2 keep their energy below city average.

“If you give people feedback on energy use, it does have the effect of reducing energy usage in the short-term,” Bird says. “What is trickier is, how do you get sustained sustainable behaviour? …There’s a difference between awareness and behaviour,” he continues “We’ve got the awareness, but haven’t quite got the motivation … Why is it that gyms have more membership than capacity? Most people don’t go. That’s human beings.”

Policy measures Governments need to think long-term about efficiency and take into consideration the sustainability of resources. This can include carbon pricing, regulations enforcing energy standards and subsidies to encourage the use of sustainable / renewable energy resources. Furthermore consumption trends must also be considered so that particular resources can be allocated in sustainable ways.

Only by addressing the complex dynamics between efficiency and consumption can we effectively navigate the challenges of resource depletion and climate change in the years to come. It underscores the importance of considering the broader socio-economic factors influencing resource use and the need for comprehensive strategies to achieve sustainability goals. Jon Bird

Source: Didactic Discourse blog

For more on Market Failure view the key notes (accompanied by fully coloured diagrams/models) on elearneconomics that will assist students to understand concepts and terms for external examinations, assignments or topic tests.