Editing Jevons paradox (section)

{{Short description|Efficiency leads to increased demand}}
{{Use British English|date=November 2016}}
{{Good article}}
[[File:CottonopolisCropped.jpg|right|300px|thumb|upright=1.7|alt=Engraving of a view of Manchester from a distance, showing factories, smokestacks, and smoke.|Coal-burning factories in [[Cottonopolis|19th-century Manchester]], England. Improved technology allowed coal to fuel the [[Industrial Revolution]], greatly increasing the consumption of coal.]]

In economics, the '''Jevons paradox''' ({{IPAc-en|ˈ|dʒ|ɛ|v|ə|n|z}}; sometimes '''Jevons effect''') occurs when [[technological change|technological advancements]] make a [[resource (economics)|resource]] more [[efficiency|efficient]] to use (thereby reducing the amount needed for a single application); however, as the cost of using the resource drops, if the price is highly [[price elasticity of demand|elastic]], this results in overall [[Induced demand|demand increasing]], causing total resource consumption to rise.<ref>{{cite book |last1=Sorrell |first1=Steve |title=Energy Efficiency and Sustainable Consumption: The Rebound Effect |date=2009 |publisher=Palgrave Macmillan |location=London |isbn=978-0-230-58310-8 |pages=136–164 |url=https://link.springer.com/chapter/10.1057/9780230583108_7 |language=en |chapter=Exploring Jevons' Paradox}}</ref><ref>{{cite journal|last1=Bauer |first1=Diana |last2=Papp |first2=Kathryn |title=Book Review Perspectives: The Jevons Paradox and the Myth of Resource Efficiency Improvements |journal=Sustainability: Science, Practice, & Policy |date=18 March 2009 |volume=5 |issue=1 |doi=10.1080/15487733.2009.11908028 |doi-access=free }}</ref><ref>{{cite journal |last1=York |first1=Richard |last2=McGee |first2=Julius Alexander |title=Understanding the Jevons paradox |url=https://www.tandfonline.com/doi/full/10.1080/23251042.2015.1106060 |journal=Environmental Sociology |date=2 January 2016 |volume=2 |issue=1 |pages=77–87 |doi=10.1080/23251042.2015.1106060|bibcode=2016EnvSo...2...77Y |s2cid=156762601 |url-access=subscription }}</ref><ref name="York">{{cite journal|last=York |first=Richard |title=Ecological paradoxes: William Stanley Jevons and the paperless office |journal=Human Ecology Review |year=2006 |volume=13 |issue=2 |pages=143–147 |url=http://www.humanecologyreview.org/pastissues/her132/york.pdf |access-date=5 May 2015}}</ref> Governments have typically expected efficiency gains to lower [[resource consumption]], rather than anticipating possible increases due to the Jevons paradox.<ref name=Alcott1>{{cite journal|doi=10.1016/j.ecolecon.2005.03.020|hdl=1942/22574 |last=Alcott |first=Blake |title=Jevons' paradox |journal=[[Ecological Economics (journal)|Ecological Economics]] |date=July 2005 |volume=54 |issue=1 |pages=9–21 |bibcode=2005EcoEc..54....9A |hdl-access=free }}</ref>

In 1865, the English economist [[William Stanley Jevons]] observed that technological improvements that increased the efficiency of coal use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological progress could not be relied upon to reduce fuel consumption.<ref name="Coal Question">{{cite book |last=Jevons |first=William Stanley |title=The Coal Question |publisher=[[Macmillan and Company]] |location=London |year=1866 |edition=2nd |chapter=VII |isbn=978-1-78987-646-8 |oclc=464772008 |chapter-url=https://books.google.com/books?id=gAAKAAAAIAAJ&q=editions:AAotKDT6KKcC&pg=PR3 |access-date=21 July 2008}}</ref><ref name="Alcott2">{{cite book |last=Alcott |first=Blake |title=The Jevons Paradox and the Myth of Resource Efficiency Improvements |url=https://archive.org/details/jevonsparadoxmyt00poli |url-access=limited |year=2008 |publisher=Earthscan |pages=[https://archive.org/details/jevonsparadoxmyt00poli/page/n23 7]–78 | editor=JM Polimeni |editor2=K Mayumi |editor3=M Giampietro |chapter=Historical Overview of the Jevons paradox in the Literature |isbn=978-1-84407-462-4 }}</ref>

The issue has been re-examined by modern economists studying consumption [[rebound effect (conservation)|rebound effects]] from improved [[Efficient energy use|energy efficiency]]. In addition to reducing the amount needed for a given use, improved efficiency also lowers the relative cost of using a resource, which increases the quantity demanded. This may counteract (to some extent) the reduction in use from improved efficiency. Additionally, improved efficiency increases real incomes and accelerates [[economic growth]], further increasing the demand for resources.  The Jevons paradox occurs when the effect from increased demand predominates, and the improved efficiency results in a faster rate of resource utilization.<ref name="Alcott2"/>

Considerable debate exists about the size of the rebound in energy efficiency and the relevance of the Jevons paradox to [[energy conservation]]. Some dismiss the effect, while others worry that it may be self-defeating to pursue [[sustainability]] by increasing energy efficiency.<ref name=Alcott1/> Some environmental economists have proposed that efficiency gains be coupled with conservation policies that keep the cost of use the same (or higher) to avoid the Jevons paradox.<ref name="Wackernagel">{{cite journal |last1=Wackernagel |first1=Mathis |first2=William |last2=Rees |year=1997 |title=Perceptual and structural barriers to investing in natural capital: Economics from an ecological footprint perspective |journal=Ecological Economics |volume=20 |issue=3 |pages=3–24 |doi=10.1016/S0921-8009(96)00077-8  |bibcode=1997EcoEc..20....3W }}</ref> Conservation policies that increase cost of use (such as [[cap and trade]] or [[green taxes]]) can be used to control the rebound effect.<ref name="Energy Efficiency Policies">{{cite journal|last1=Freire-González|first1=Jaume|last2=Puig-Ventosa|first2=Ignasi|title=Energy Efficiency Policies and the Jevons Paradox |journal=International Journal of Energy Economics and Policy |date=2015 |volume=5 |issue=1 |pages=69–79 |url=https://ideas.repec.org/a/eco/journ2/2015-01-06.html |access-date=29 May 2015}}</ref>