The Rebound Effect and the Backfire Hypothesis

Energy writers who are in the green camp continue to tout their belief in energy efficiency as a major tool in the effort to mitigate global warming. Nuclear critics like Amory Lovins have argued that efficiency produced "negawatts" make nuclear-generated megawatts unneeded. Critics of the negawatts approach have noted that economists believe that energy efficiency actually increases energy use, and have done so since 1865. The classic formulation of this belief is found in William Stanley Jevons book on Coal, and is called Jevons paradox. In more recent research literature, observations of energy use increases following an improvement in energy efficiency is called the "rebound effect." Usually the observed "rebound effect" is less than the decrease in energy use caused by energy efficiency gains, but it appears to be quite a significant phenomena. UK Energy Research Centre has been researching this issue for some time, and two tears ago published a comprehensive report on the topic that reviewed over 500 studies of the rebound effect. The UK Energy Research Centre offered the following press release in connection with the publication of "The Rebound Effect".

Press Release: 01.11.07: 'Rebound Effects' Threaten Success of UK Climate Policy

A major new report from the UK Energy Research Centre uncovers the truth behind energy efficiency and carbon reductions

The UK Energy Research Centre (UKERC) today unveils a major new report on how 'Rebound Effects' can result in energy savings falling short of expectations, thereby threatening the success of UK climate policy.

An example of a rebound effect would be the driver who replaces a car with a fuel-efficient model, only to take advantage of its cheaper running costs to drive further and more often. Or a family that insulates their loft and puts the money saved on their heating bill towards an overseas holiday.

According to the report's chief author, Steve Sorrell, Senior Fellow at UKERC, "Rebound effects have been neglected by both experts and policymakers - for example, they do not feature in the recent Stern and IPCC reports or in the Government's Energy White Paper. This is a mistake. If we do not make sufficient allowance for rebound effects, we will overestimate the contribution that energy efficiency can make to reducing carbon emissions. This is especially important given that the Climate Change Bill proposes legally binding commitments to meet carbon emissions reduction targets. We need to get the sums right."

The difficulty of developing policy to take rebound effects into account is exacerbated by disagreement over the significance of rebound effects. Some believe that they are insignificant, while others argue that energy efficiency measures lead to increased energy consumption - an outcome that has been termed 'backfire'.

The report argues that rebound effects vary widely between different technologies, sectors and income groups so that general statements about the size of such effects can be misleading.

Steve Sorrell: "Rebound effects are notoriously complex. Generally speaking we expect rebounds will be large in energy intensive sectors and smaller for households or small businesses. This is important, since energy efficiency policy usually targets these smaller users."

Rebound effects can be both direct (e.g. driving further in a fuel-efficient car) and indirect (e.g. spending the money saved on heating on an overseas holiday). The evidence is that direct rebound effects are usually fairly small - less than 30% for households for example. Much less is known about indirect effects. However the study suggests that in some cases, particularly where energy efficiency significantly decreases the cost of production of energy intensive goods, rebounds may be larger.

To avoid energy efficiency gains from undermining the benefits to climate policy, the report's authors recommend building 'headroom' into policy targets to allow for rebound effects, raising energy prices in line with energy efficiency improvements or imposing absolute caps on emissions.

Main Report (5MB)

Launch Presentation

More information (technical papers, etc)

Notes to Editors

The report from UKERC is the most thorough and in-depth review of rebound effects ever undertaken, reviewing over 500 papers and reports. It analyses the nature, operation and importance of rebound effects and provides a comprehensive review of the available evidence on this topic, together with closely related issues, such as the link between energy consumption and economic growth.

The UKERC research was led by the Sussex Energy Group (University of Sussex), with contributions from the Surrey Energy Economics Centre (University of Surrey), the Department of Economics at the University of Strathclyde, and the Centre for Energy Policy and Technology at Imperial College.

About the UK Energy Research Centre


The UK Energy Research Centre's mission is to be the UK's pre-eminent centre of research, and source of authoritative information and leadership, on sustainable energy systems. The Centre takes a whole systems approach to energy research, incorporating economics, engineering and the physical, environmental and social sciences while developing and maintaining the means to enable cohesive research in energy. UKERC is funded by the UK Research Councils.

For more information, please contact
Lex Waspe
UKERC Communications Manager
E: lex.waspe@ukerc.ac.uk
T: +44 (0)20 7594 1573
M: 07974 779 004

Within the last few weeks, the UK Energy Research Centre has offered some revision to "The Rebound Effect " and its supporting documents. The most important conclusion of this research has been that there is strong evidence for the existence of a rebound effect that is less than 100% of the energy savings from efficiency. Indeed researchers found that

There are very few quantitative estimates of economy-wide [rebound] effects, but several studies suggest that these may exceed 50% in some cases.

A 50% + rebound would be very worrisome, and would suggest that energy efficiency has only limited value as a global warming mitigation tool. In addition researchers looked at evidence that there was an "energy backfire", that is an absolute growth of energy demand as a consequence of energy efficiency. They concluded, based on existing studies:

* Empirical evidence is indirect, suggestive and in some cases flawed.
* Hence, the backfire ‘hypothesis’ is not verified
* Arguments and evidence should nevertheless be taken seriously
* Underlying theme is the disproportionate contribution of energy to economic growth

Thus the datum supporting the backfire hypothesis:

Are insufficient to demonstrate its validity, but nevertheless pose an important challenge to conventional wisdom.

Thus the notion that energy efficiency programs can backfire should be taken seriously, even if not proven, Clearly then the value of energy efficiency as a tool to fight global warming is open to rational questioning, and the case for moving forward with energy efficiency programs should be evaluated in light of the potential levels of low cost energy than might be derived from Generation IV nuclear technologies like the LFTR.

My major concern is that while anti-nuclear advocates like Amory Lovins have offered energy efficiency as a tool that renders advanced nuclear power as unneeded in mitigating global warming, yet scientific research raises serious doubt about the effectiveness of energy efficiency. In light of the fact that Lovins appears to withdrawn from the "energy efficiency" debate, energy efficiency advocates ought not use energy efficiency as an established substitute for advanced nuclear technology.

Amory Lovins in the Buff

In previous posts on David Bradish's debate with Amory Lovins, I noted that Bradish had posted a multi-part critique of Lovins online and that Lovins had responded to the first two parts of Bradish's critique. Lovins was unwilling to respond to criticisms of his defense by Bradish and others. When Loving failed to produce promised defenses of three further phases of Bradish's critique, he gave every appearance of abandoning the field to Bradish.

I wish to now consider the third part of Bradish's critique and the implications of Lovins failure to respond to it. Bradish pointed to a short essay titled "Forget Nuclear" in which Lovins and his associates had argued

An even cheaper competitor [to new nuclear plants] is end use efficiency (“negawatts”)—saving electricity by using it more efficiently or at smarter times.

There was nothing new in this statement. Lovins had repeated the same views on efficiency on numerous occasions for well over three decades. What was relatively new was the extent that scholars had attacked Lovins view on efficiency during the last decade. These attacks were summarized in the Energy Tribune by writer Robert Bryce in the fall of 2007. Bradish quoted Bryce:

The final – and most important – area in which Lovins has been consistently wrong is his claim that efficiency lowers energy consumption. And when it comes to arguing the merits of energy efficiency, Lovins’s prime nemesis is a dead guy – William Stanley Jevons – a British economist who in 1865 determined that increased efficiency won’t cut energy use, it will raise it. “It is wholly a confusion of ideas to suppose that the economical use of fuels is equivalent to a diminished consumption. The very contrary is the truth.” And in the 142 years since Jevons put forth that thesis, now commonly known as the Jevons Paradox, he’s yet to be proven wrong. . . .

But when it comes down to brass tacks, energy efficiency doesn’t necessarily mean less energy use, it usually means more energy use. And that usually means more carbon dioxide emissions. Thus, the idea of “saving the climate for fun and profit” may be just a bit more complicated than Lovins claims.

Bradish pointed out as evidence against Lovins views on efficiency:

Below is a chart that shows the electric intensity vs. electricity consumption per person for the U.S. The chart shows that the U.S. became more efficient with its electricity (electric intensity) starting in the 1970s but continued to consume more electricity per person. If efficiency supposedly curbs demand, then the chart should show the red line following the blue line after the 1970s (or at least some change in that direction). It does not.

Bradish pointed out that Lovins had attempted a previous attempt to defend his views against Bryce and others, but had committed to what amounted to an Freshman level blunder in Economic theory:

RMI and Amory Lovins are well aware of the Jevons Paradox and the Energy Tribune article. They attempt to rebut the two by citing the improvements in refrigerators, the implementation of hybrids, and the reduced energy consumption per-capita in California and Vermont. The Paradox describes macro-level behavior. Micro-level data on refrigerators and hybrids do not refute it. For example, the energy savings from refrigerators could simply have gone to plasma-screen TVs, XBoxes, computers or other electrical equipment. The energy savings from hybrids could simply have gone to a new lawn-mower, boat or car

In addition to David Bradish, the blogger who goes by the title "the Sovietologist" focused on the problem which the Jevons paradox issue confronted Lovins:

Lovins isn't on very firm ground on this point. RMI's earlier attempts to rebut Bryce were unimpressive, to put it mildly. Indeed, the "Rebound Effect" is not something that can be debunked in the sense that Lovins is implying, as it derives directly from the basic economic principles accepted by free-market economists. In order for the "rebound effect" to be a myth, neoclassical economics must be fundamentally wrong.

The basic principle on which orthodox economic theory rests is the idea of utility. It is no coincidence that Jevons was an important figure in the development of the concept of marginal utility. Neoclassical economics, also known as the "marginalist" school, explains economic decision-making in terms of marginal utility. Utility is defined as "a measure of the relative satisfaction from or desirability of consumption of goods." Early concepts of utility, such as that of Jeremy Bentham, regarded utility as a concrete, quantifiable thing, but later economists moved away from this idea. Economists argue that people consume goods to the extent that gives them the most satisfaction for their expenditure.

What implication does this have for Lovins' efficiency theories? Far from having "no material effect," Lovins' arguments dating back to The Soft Energy Path are incompatible with neoclassical economics. Increased energy efficiency increases the marginal utility of consuming a particular amount of energy. If consumers are rational maximizers, the ability to produce a greater amount of satisfaction from consuming energy will, all other things remaining equal, increase energy use.

The Sovietologist's comment suggests why Lovins has never responded to Bradish. Simply put, Lovins, a college drop-out, is over his head in issues dealt with in Freshman economics.

Lovins failure to defend his view from criticisms by Bradish and numerous others should have destroyed Lovins' reputation, and it has among people who think seriously about energy. But it hasn't for the sort of "energy expert" who offers pat answers. Lovins is way too useful to far too many people. Lovins provides easy answers for politicians, and of course the energy foxes of the Energy Collective, many of whom make their living parroting Lovins discredited views. The Emperor may be unclothed , but lots of people would prefer to ignore that.

Required Reading for Steve Chu and Barack Obama

House of Lords,
Committee on Science and Technology - Second Report
July 5, 2005.

Chapter 3: Energy efficiency and energy demand

3.1. One of Government's fundamental goals is to promote economic growth and prosperity. For this to be combined with the reduction of greenhouse gas emissions there will have to be a "decoupling" of economic growth from its environmental impacts. Such decoupling was advanced as an objective by both British and Swedish Governments, in the joint letter sent by the Prime Minister and his Swedish counterpart, Mr Persson, to the European Commission in February 2003.[25] The object of this chapter is to analyse some of the arguments underpinning this objective.

3.2. Underpinning the discussion of "decoupling" is the progressive fall in the energy intensity (that is, energy use per unit of GDP) of developed countries. Data provided by the International Energy Agency (IEA), itself established in 1974 in the wake of the oil crisis, show that the ratio of total primary energy supply to GDP (or "energy intensity") in IEA members has fallen by more than a third since 1973.[26] This is presented by some as evidence that "partial decoupling" of energy use from environmental degradation has already occurred.[27] As Lord Whitty said, "we have decoupled in the relative sense quite dramatically on energy and I see no reason why we should not decouple in an absolute sense on energy as well" (Q 710). Figure 6, which derives from the DTI, illustrates the extent of such "partial decoupling" in the United Kingdom since 1970.

3.3. However, while Figure 6 illustrates the changing relationship between GDP and energy use, it does not in itself demonstrate any reduction in environmental degradation. When emissions are added to the equation, the picture becomes more complicated. Figure 7 illustrates the relationship between per capita GDP, energy use and emissions in four countries—the United Kingdom, United States, Australia and Sweden. It reveals significant differences in the relationship between GDP and energy use—indeed, the United Kingdom has the lowest energy intensity of the four. However, there are much more dramatic differences in emissions. Australia and Sweden, for instance, have almost identical per capita energy consumption, but Australia's per capita emissions are almost three times Sweden's. Thus while energy intensity may play a part in "decoupling", the most dramatic gains are likely to be made in addressing the carbon intensity of the fuel mix.

3.4. Moreover, the nature of the link between energy consumption and GDP is in fact the subject of considerable debate among economists.[28] In particular, there is a school of thought, deriving from the work of the nineteenth century economist Stanley Jevons, which argues that while increased energy efficiency at the microeconomic level may lead to a reduction in energy use, at the macroeconomic level it in fact leads to an increase in overall energy use. This proposition is known as the "Khazzoom-Brookes postulate", after the economists Daniel Khazzoom and Leonard Brookes, who independently published papers putting forward this argument in 1979-80. We received evidence on this debate from a number of sources, including the Institution of Electrical Engineers and A Power for Good Ltd, as well as from Dr Brookes himself.

3.5. Dr Brookes' argument is that for any resource, including energy, "to offer greater utility per unit is for it to enjoy a reduction in its implicit price". Cheaper energy has two effects: the substitution of energy for other factors of production, which are now relatively more expensive, and the release of income which can then be reinvested in new production capacity, and so on. As a result, Dr Brookes argues, developed countries have, since the Industrial Revolution, seen "rising energy productivity outstripped by rising total factor productivity, hence rising energy consumption alongside rising energy productivity".

3.6. A further consequence of this argument is that while rises in the price of energy may stimulate improvements in energy efficiency, such improvements, rather than leading to a lasting fall in energy use, may serve to accommodate the price rise, with the result that energy consumption stabilises at a higher level than it otherwise would.

3.7. The "Khazzoom-Brookes postulate", though it has not been proven empirically, is consistent with classical economic theory, and offers a plausible explanation of patterns of energy use in developed economies. As Professor Paul Ekins, head of the Environment Group at the Policies Studies Institute and co-Director of the new United Kingdom Energy Research Centre (UKERC), told us, "In the economics literature it is … well known that increased efficiency in the use of a resource leads over time to greater use of that resource and not less use of it" (Q 261).[29] This might explain, for instance, why there appears to be no example of a developed society that has succeeded in combining sustained reductions in energy consumption with economic growth. Mr Alan Meier, of the IEA, referred to "several countries that, for brief periods, reduced their electricity consumption or their energy consumption"—often in response to short-term supply crises—but such reductions in demand have never been sustained. This does not mean that sustained reductions in energy consumption are impossible—simply that it is yet to be demonstrated that they are possible. (Q 424)

3.8. We pressed a number of witnesses on the macroeconomic effects of energy efficiency, but did not receive convincing answers. Mr Meier openly admitted that "I always have to retreat to a micro analysis here" (Q 416). Lord Whitty also argued at the microeconomic level, as did his officials, though without Mr Meier's acknowledgement that there might be difficulties in so doing (QQ 717, 9-15). At this microeconomic level, for instance in the case of an individual household, savings that are made through, for instance, improved insulation, release money that will be spent on other goods. These will entail some energy consumption, creating a "rebound effect", but in practice the money that has been released, which was previously being spent essentially on either primary fuel (e.g. gas or oil) or on electricity, is unlikely to be spent on anything equally energy intensive.[30] Absolute reductions in energy consumption are thus possible at the microeconomic level.

3.9. However, this does not mean that an analogy can be made with macroeconomic effects. Apart from anything else, the substitution effects observable at the macroeconomic level cannot be replicated by households, where demand for a range of goods is relatively inelastic. If energy becomes, in effect, cheaper, there is very limited scope for the individual simply to divert money, say from food to energy. A business, on the other hand, could respond to cheaper energy by deliberately increasing consumption—using a more energy intensive process, which would allow savings to be made elsewhere, for instance in manpower.

3.10. We have recently learnt that the UKERC is proposing to commission work on the both the "rebound effect" and the Khazzoom-Brookes postulate under its programme of technology and policy assessments. Results should be available in 2006. While this is welcome, pending the outcome of this work the possibility remains that many of the arguments about the extent of "decoupling" may, at least so far as business and industry are concerned, be fundamentally misplaced. Many improvements in energy efficiency, particularly within industry, are simply products of technical and economic development—investment in new machinery, for example, that optimises productivity across the spectrum, including energy consumption. What the Minister described as the "relative decoupling" of energy use from economic growth may thus simply reflect the fact that greater efficiency in the use of energy is one of the drivers of that growth. We have already noted, with regard to the evidence from Defra, regarding "real relative savings", that savings against a "what might have been" scenario are not real savings at all.

3.11. The Government's proposition that improvements in energy efficiency can lead to significant reductions in energy demand and hence in greenhouse gas emissions remains the subject of debate among economists. The "Khazzoom-Brookes postulate", while not proven, offers at least a plausible explanation of why in recent years improvements in "energy intensity" at the macroeconomic level have stubbornly refused to be translated into reductions in overall energy demand. The Government have so far failed to engage with this fundamental issue, appearing to rely instead on an analogy between micro- and macroeconomic effects.

3.12. We welcome the UKERC project to investigate the "rebound effect" and the empirical basis for the "Khazzoom-Brookes postulate", and recommend that the Government, in parallel with the establishment of a more robust measure for energy efficiency, take full account of the project's progress and results in developing future policies in this area.

Cost-effectiveness

3.13. A related issue is the Government's use of the term "cost-effective". The meaning of the term is of course dependent on circumstances, time horizons, and so on, but few of these subtleties are reflected in the Government's use of the term. We are all, as individuals and businesses, free to choose where to invest our resources. In the case of a business, for any action to be "cost-effective", it is not enough that it is cheap, or even that it pays for itself over an arbitrary period—one year, say, or five years. Rather, it must represent the optimal use of resources at that moment. This point was forcefully made to us by Dr Brookes:

"Fuel or any other source of energy—and indeed any other economic resource—cannot be used with greater economic efficiency than in a system in which all the resources involved are used with maximum economic efficiency" (p 181).

3.14. It follows that if a business can, by investing a sum of money in energy efficiency, achieve a return on its investment within three years, but by investing the same sum of money in new plant or processes can achieve that return within two years, investment in energy efficiency is not in itself "cost-effective". As Mr Matthew Farrow, of the Confederation of British Industry, said, "it is a competitive world out there", and any proposal for investment "has to be compared against whatever else it can be used for in the business" (Q 572). It is notable that the only period in recent time in which significant reductions in energy use were achieved was the late 1970s, when the economic imperative was enormously strengthened by the oil crises. Significant rises in energy prices today might similarly encourage investment in energy efficiency—but at serious cost to the economy as a whole, and, in the absence of effective measures to reduce the cost to low-income households, to the Government's legally binding commitment to reducing fuel poverty.

3.15. This confusion over cost-effectiveness is typified by the widely reported statement that there is an overall cost-effective potential to reduce energy use by 30 percent. This derives from the 2002 Energy Review[31] by the Performance and Innovation Unit (now the Prime Minister's Strategy Unit), and is repeated in the Action Plan and in the Government's written evidence to this inquiry (p 11). But as Professor Ian Fells pointed out, these savings are simply not being achieved—because, he argued, "they are the technical potential for saving rather than the economic". Savings that are not "economic" cannot be regarded as "cost-effective".

3.16. On the other hand, there are circumstances in which "cost-effectiveness" may not by itself be an optimal test of investment decisions. In the building sector, for instance, the assessment of cost-effectiveness is distorted by the predominance in this country of "build for sale" development, as distinct from the "build and manage" approach which dominates elsewhere in Europe. This leads the developer to minimise capital expenditure, even where this increases the cost of subsequent occupation of the building. For example, at the point of installation electrical resistive heating is the cheapest form of heating. However, it is associated with both the highest carbon emissions and the highest running-costs, which makes it a significant contributor both to climate change and fuel poverty.[32] The division between the interests of the builder, and the ongoing interests of the subsequent occupants and society at large, means that merely commercial decisions on "cost-effectiveness" are unlikely to be optimal, and Government may have to intervene by means of regulation. Similar issues arise in the rented housing sector, where the economic interest of a landlord is to minimise expenditure on capital and maintenance.

3.17. There are also circumstances in which longer time-horizons are appropriate in making investment decisions. The public sector is subject to rules set out in the Treasury's Green Book, which is based on a 25-year horizon to compare all discounted costs, incomes and benefits. This is intended to avoid perverse decisions based solely on first cost without considering lifetime costs.

3.18. We recommend that the Government exercise caution in using the potentially misleading term "cost-effective" to describe investment in energy efficiency. They should seek to demonstrate realism as to what is economically achievable by means of private sector investment in energy efficiency.

3.19. We further recommend that the Government promote the application of the Green Book guidelines, encouraging decision-makers at all levels, including local authorities, housing associations, PFI projects and other private sector providers to the public sector, to consider lifetime costs in committing expenditure to long-term capital projects.

Counterknowledge, Google, and Amory Lovins

Damian Thompson coined the term Counterknowledge, but did not invent the concept. "Counterknowledge," according to Damian Thompson is that which "purports to be knowledge, but is not knowledge". Counterknowledge refers to knowledge claims that can be easily contradicted. An examples of countraknowledge include the notion that the United States Government, with or without Israeli help, was responsible for the 9/11 attacks.

An example of Thompson's style will be sufficient:

It will come as no surprise to long-time readers of this blog that the culprit is our old friend(s) Harun Yahya, whose lavish (but bollocks) “Atlas of Creation” - aptly branded a “glossy tome of lies” by one recent Amazon.co.uk reviewer - was sent out to schools all over the world in 2007.

Thompson has his set of pet peeves, and he knows what to do with them all. Unfortunately Thompson is British, and the work of Amory Lovins has yet to enter his awareness. This is most unfortunate because Amory Lovins is not an ordinary run of the mill crackpot. e is a crackpot who has managed to capture the ear of some very rich and powerful people, and whose ideas win far to ready acceptance in the current energy debate.

In a famous speech which Lovins delivered in 1989, Lovins argued:

I think we have even better methods now, which don't just market negawatts, but create a market in negawatts. . . .

I think the only real choice that electric utilities face is between participation in the efficiency revolution, or obsolescence. A minority of U.S. utilities now understand this. They're trying to sell less electricity and more efficiency. . . .

There are three main things we need to do to abate global warming. One of them -- and this will handle over half the problem -- is energy efficiency. But it costs less to save fuel than to burn it, so the cost of this abatement measure is strongly negative.

Lovins does sound very reasonable, doesn't he?  And in the case of a household economy he is.  During the Mid 1990's I noticed that the incandescent bulbs in my Dallas home, put out far more heat than light. In the summer, we were using electrical power to run the air conditioner in order to remove the heat caused by incandescent lighting. I began experimenting with compact fluorescent bulbs, and eventually switched the entire house to fluorescent lighting. These measures did save on our electrical bill, thus my experience would seem to confirm Lovins' account at least on a household level.

We did other things to save electricity, installing a more efficient air conditioner compressor, and purchasing over time more energy efficient appliances.

This would have been the end of the story except other things started happening. My wife and I began to notice how dark the house was, This was not the fault of the Fluorescent lighting. We had the same light output. But the house had been poorly lit all along. All of the money we were saving on electricity, now went into home improvement, and of course one of the things we improved was our lighting. Lighting improvement meant that were were using more electricity although not as much as we did before. But we began to use electricity in other ways. We each had computers, and computers are power hungry. Finally my wife switched from using the solar clothes dryer - called a clothes line - to our electrical dryer. We had always had the electrical dryer, but the electrical savings from the lighting and air conditioner meant that my wife felt she could afford to use the electrical clothes dryer. As a consequence we had a rebound in our electrical bill. This is what happens on a micro economic level.

William Stanley Jevons, a 195y century English Economist, made the first serious study of the effects of energy efficiency on energy consumption. Jevons had historical records of English coal consumption going back to the dawn of the Industrial revolution. Jevons was also well informed on the history of British technological efficiency. Jevons noted a startling fact when he compared the two histories. As coal use efficiency improved, demand for coal increased on a macro-economic level.

Now Jevons findings directly contradicted Lovins contentions. Jevons stated, "It is wholly a confusion of ideas to suppose that the economical use of fuels is equivalent to a diminished consumption. The very contrary is the truth." Jevons and Lovins cannot both be right, and Jevon's conclusions are backed up by research, while Lovins is not. Furthermore, Jevons conclusions have been supported by other researchers.

Robert Bryce reports the following:

John M. Polimeni, Kozo Mayumi, Mario Giampetro, and Blake Alcott, state "increased energy efficiency leads to increased demand and consumption of energy."

Horace Herring states, "by lowering the implicit price, result in increased, not decreased, energy use."

Vaclav Smil states that history is "replete with examples demonstrating that substantial gains in conversion (or material use) efficiencies stimulated increases of fuel and electricity (or additional material) use that were far higher than the savings brought by these innovations."

Peter Huber and Mark Mills state, "Efficiency fails to curb demand because it lets more people do more, and do it faster and more/more/faster invariably swamps all the efficiency gains."

John M. Polimeni, who reviewed numerous studies on energy efficiency, reported that a 20 percent increase in efficiency would "increase carbon dioxide emissions by 5 percent."

Lovins simply committed intellectual murder against Jevons by ignoring Jevons' findings, as well as the finding of numerous other scholars. As far as Lovins was concerned, Jovons book on energy efficiency, "The Coal Question," and every other piece of economic research that contradicts Lovins beliefs, has to be made yp disappear. They simply do not exist in Lovins universe. How could this happen, how could a genius like Lovins not know about Jevons? Could it be that Lovins, the great prophet of energy efficiency, did not know about Jevons, the greatest researcher on energy efficiency. Could it be that Lovins, confident in his own genius, spoke out of ignorance, and said the sorts of stupid things an ignorant person is likely to say when he shoots off his mouth about energy efficiency?

It is most unfortunate that Lovins has forced William Stanley Jevons to sleep with the fish. Jevons should be into the energy debate, if not given the last word. Jevon's view was that energy efficiency was not the solution, and indeed that resources will be consumed until consumption will bring them to an end. This is a view often encountered on The Oil Drum. And while this view is certainly true of some resources, including coal and other fossil fuels, it is not true of the resources civilization truly needs in order to survive. It is well beyond human capacity to consume all of the Uranium and Thorium that could be extracted for energy purposes. Alvin Weinberg envisioned 50 years ago that civilization could survive by burning the rocks, and that vision still holds the same promise today as it did 50 years ago.

In a comment on H.G. Wells' 1914 book, "The World Set Free: A Story of Mankind". Weinberg stated:

The world would become a much more stable place if energy, ubiquitous and cheap, could replace other raw materials: if, say, natural hydrocarbons were replaced by hydrocarbons derived from limestone, water and energy; or if unfertile deserts were rendered fertile by huge desalting complexes driven with the new energy source. Nuclear energy was, to use the current phrase, the ultimate "technological fix": by its exploitation, man could satisfy all of his material wants. And if man's material wants were satisfied, then it seemed to Wells that the world would become a more stable place, especially if the big bomb were there to enforce the peace.

To present-day "realists" all this is merely the dream of a mystic. Yet it is my contention that in the long run H. G. Wells-not the cynical realists- will be proved the better prophet. Despite skepticism with which one now views nuclear energy as an instrument of international understanding, or as a promoter of world stability, the final returns are far from in. The promise is there, and it will eventually be turned into reality.

Weinberg's belief in the technological fix ought to be part of the energy discussion, but it is completely ignored by the Google energy plan.

What can we say of the Google Energy Plan? The Google plan assumes that by 2030 American energy use can be reduced by 33% through energy efficiency, The only authority which Google has to back this assumption is Amory Lovins. At the very least the authors of the Google plan should have looked at Jevons and the numerous other economists who have demonstrated that Lovins assumptions about efficiency are false. Lovins theory of energy efficiency is in fact counterknowledge, which the Google.org people would have discovered, had they Googled the topic. What is wrong with Google then? Don't they know how to google?

The Folly of Efficiency

Amory Lovins has been preaching the gospel of energy efficiency since the 1970's. He has been heard. Almost every electronic gadget in my apartment is energy efficient, from refrigerator, to my Mac Mini that is chewing on 25 Watts of power at any given time. Of course I still need my energy efficient air conditioning, and I watch TV on my energy efficient 26 inch LCD TV, which doubles as the Mac Mini's monitor.

I saved so much on electricity by using my Mac Mini, that I went out and bought another computer, an energy efficient iMac. I don't think this is what Amory Lovins had in mind when he told us about the virtues of energy efficiency.

I would love to own a plug-in hybrid car. Not a Prius, but one of those Volts EVs that GM says they are going to build in 2010. The things come equipped with a little 300 cc gas engine for recharging the battery in addition to the plug in recharger. I wonder, will I remember to plug it in for the night. Knowing myself, as I do, I can see the process of plugging it in every night getting old real fast. I hate to do unnecessary things. There is cute little engine sitting in the Volt, all hooked up to the battery. Why should I plug the Volt in at night, as long as there is enough juice left in the battery to start it in the morning?

You see how I think? No doubt Mr. Lovins would like to sit people like us down, and lecture us about commitment to energy efficiency. But I would tell him that my Volt still gets better gas milage than my old Honda Accord. I am doing my part in the fight CO2. In fact I am so pleased with my new Volt's gas millage, and it utter quiet, that I drive it everywhere, and every chance that I get. In fact I have started taking long distance driving trips again, because my gas milage is so good. You see how I think?

Economists tell us that increases in efficiency lead to increases in demand. This was discovered by William Stanley Jevons over 150 years ago. Professor Jevons looked at the history of the coal industry in the UK. He found that increases in the efficiency of burning coal, paradoxically lead to an increase in the demands for coal. This lead to what is known as Jevons' paradox. Efficiency increases demand. My dream Volt is going to put me in the drivers seat again, because the gas I pay for will go further, and I can forget about post-peak demand gas prices. Economists have repeatedly demonstrated that Jevon's paradox hods in numerous circumstances.

So if we want to control CO2 emissions, we are going to have to contend with Jevons' paradox. That means that we are going to have to find a way to motivate me to plug in my new Volt every night.

One scheme would be to tax my gas use. Just slap a hefty tax on me for every gallon of gas I pump. That might well alter my behavior. I might start looking for a car which generates electricity with an energy efficient Stirling engine! That will show them. They can't stop me from driving by raising my gas tax! You see how my thinking works?

There are several potential solutions to Jevon's paradox. One is a sort of cap and trade. We could ration gas. Every driver would be allotted an equal ration. Say we each can use 4 gallons a week. It sounds drastic. I know it does. I picked the 4 gallon figure for a reason. During World War II, Every American family was allotted just 4 gallons of gas a week. They had to make do the best they could. Now the rules would be that drivers can either use their gas ration or sell it. That's right, create a legal black market for gas rations. I know this sounds crazy, but it benefits the poor, and give wealthy people to gasoline for their Hummers, while limiting CO2 emissions. What are the poor going to do for transportation, if they sell their gas ration? Why take the electrical bus.

Now what I would do in that situation is plug my volt in every night, and sell most of my gas ration on the legal black market. I can get by very nicely with a 40 mile a day driving limit. In fact, with the money I make selling my gas ration, I can afford to purchase a PV roof rack for my Volt, and extend my driving range, by adding Solar generated electricity to my battery. You see how I think?

Those rich folks who bought my gas ration for their Hummer, what happened to them? Well I saw them the other day standing beside the road, next to their Hummer. I stopped to see if I could help. "We ran out of gas," the man said. He pointed to my Volt. "Get good milage?" he asked.

"I never use gas anymore."

"Hhhhhmmmm," he said.