The Fifth Fuel: energy efficiency

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The fifth fuel is energy efficiency—the cheapest of all.

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Published 9 Jul 2015

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Jevon’s Paradox

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Jevon's Paradox is the counterintuitive idea that improvements in fuel efficiency tend to increase, rather than decrease, overall fuel use. In 1865, William Stanley Jevons, a British economist, observed that despite significant improvements in coal efficiency in steam engines, total coal consumption actually rose. Rather than saving fuel, efficiency made coal-powered energy more economical, driving increased industrial use. This observation became known as Jevon's Paradox. Modern Examples of Jevon's Paradox Though first identified towards the end of the Industrial Revolution, Jevon's Paradox is still highly relevant today, particularly in discussions around energy efficiency, sustainability, and technology. Fuel-efficient cars – When vehicles become more fuel-efficient, the cost per mile driven decreases. As a result, people tend to drive more, offsetting the efficiency gains. AI and computing power – Advances in AI and computing efficiency reduce the cost of processing power, leading to increased overall usage of AI models and cloud computing. Battery technology – More efficient batteries lead to the proliferation of battery-powered devices rather than reducing energy consumption. Water-saving devices – Low-flow showerheads and toilets may save water per use, but in some cases, they lead to longer showers or more frequent flushing. Lighting — Though LED lights are vastly more efficient than their predecessors, we are continually finding new ways to use our low-wattage lights that we had never dreamed of before. Household appliances – In her book More Work for Mother, Ruth Cowan addresses the ironies of household appliances, such as washing machines and vacuum cleaners, and how improvements in efficiency often led to more work through more frequent washing, not less. This tendency is sometimes referred to as the rebound effect, where changes in behaviour partially or fully cancel out expected energy or resource savings. Jevon's Paradox and AI With the rise of AI and automation, Jevon's Paradox is playing out again in new ways: Computational efficiency – Though AI models are becoming more efficient—DeepSeek a case in point—the demand for AI-generated content, large language models, and deep learning applications is growing rapidly. Automated processes – Instead of reducing overall workloads, automation often leads to more tasks being completed rather than fewer tasks needing to be done. Cloud computing – More efficient data centres have not reduced overall energy use because the demand for cloud services and machine learning applications continues to skyrocket. Can Jevon's Paradox Be Overcome? Understanding Jevon's Paradox can help in designing better policies and strategies to ensure efficiency gains lead to real reductions in resource consumption. Some approaches include: Carbon pricing and regulation – Ensuring that energy efficiency is paired with policies that discourage excessive consumption. (see Goodhart's Law) Shifting behaviors – Encouraging individuals and businesses to actively reduce energy use, rather than simply taking advantage of efficiency improvements. Technology with constraints – Implementing smart grid systems, time-based energy pricing, and consumption limits to prevent unchecked increases in demand. Jevon's Paradox reminds us that efficiency alone is not a guaranteed solution for reducing resource consumption. Instead, it often requires complementary policies, incentives, and behavior changes to make efficiency gains truly effective. Read more about Jevon's in the NYT. I updated this sketch from the original for the podcast episode. Related Ideas to Jevon's Paradox Also see: The Fifth Fuel: energy efficiency The Automation Paradox – The better the machines get, the more we struggle when they fail Wishcycling — Hoping something can be recycled Save some landfill with reusable diapers/nappies Moore's Law Koomey's Law: "The energy efficiency of computers doubles roughly every 18 months."Jevon's Paradox is the counterintuitive idea that improvements in fuel efficiency tend to increase, rather than decrease, overall fuel use. In 1865, William Stanley Jevons, a British economist, observed that despite significant improvements in coal efficiency in steam engines, total coal consumption actually rose. Rather than saving fuel, efficiency made coal-powered energy more economical, driving increased industrial use. This observation became known as Jevon's Paradox. Modern Examples of Jevon's Paradox Though first identified towards the end of the Industrial Revolution, Jevon's Paradox is still highly relevant today, particularly in discussions around energy efficiency, sustainability, and technology. Fuel-efficient cars – When vehicles become more fuel-efficient, the cost per mile driven decreases. As a result, people tend to drive more, offsetting the efficiency gains. AI and computing power – Advances in AI and computing efficiency reduce the cost of processing power, leading to increased overall usage of AI models and cloud computing. Battery technology – More efficient batteries lead to the proliferation of battery-powered devices rather than reducing energy consumption. Water-saving devices – Low-flow showerheads and toilets may save water per use, but in some cases, they lead to longer showers or more frequent flushing. Lighting — Though LED lights are vastly more efficient than their predecessors, we are continually finding new ways to use our low-wattage lights that we had never dreamed of before. Household appliances – In her book More Work for Mother, Ruth Cowan addresses the ironies of household appliances, such as washing machines and vacuum cleaners, and how improvements in efficiency often led to more work through more frequent washing, not less. This tendency is sometimes referred to as the rebound effect, where changes in behaviour partially or fully cancel out expected energy or resource savings. Jevon's Paradox and AI With the rise of AI and automation, Jevon's Paradox is playing out again in new ways: Computational efficiency – Though AI models are becoming more efficient—DeepSeek a case in point—the demand for AI-generated content, large language models, and deep learning applications is growing rapidly. Automated processes – Instead of reducing overall workloads, automation often leads to more tasks being completed rather than fewer tasks needing to be done. Cloud computing – More efficient data centres have not reduced overall energy use because the demand for cloud services and machine learning applications continues to skyrocket. Can Jevon's Paradox Be Overcome? Understanding Jevon's Paradox can help in designing better policies and strategies to ensure efficiency gains lead to real reductions in resource consumption. Some approaches include: Carbon pricing and regulation – Ensuring that energy efficiency is paired with policies that discourage excessive consumption. (see Goodhart's Law) Shifting behaviors – Encouraging individuals and businesses to actively reduce energy use, rather than simply taking advantage of efficiency improvements. Technology with constraints – Implementing smart grid systems, time-based energy pricing, and consumption limits to prevent unchecked increases in demand. Jevon's Paradox reminds us that efficiency alone is not a guaranteed solution for reducing resource consumption. Instead, it often requires complementary policies, incentives, and behavior changes to make efficiency gains truly effective. Read more about Jevon's in the NYT. I updated this sketch from the original for the podcast episode. Related Ideas to Jevon's Paradox Also see: The Fifth Fuel: energy efficiency The Automation Paradox – The better the machines get, the more we struggle when they fail Wishcycling — Hoping something can be recycled Save some landfill with reusable diapers/nappies Moore's Law Koomey's Law: "The energy efficiency of computers doubles roughly every 18 months."

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