Thursday, April 16, 2009

Jevons - Khazzoom

We are in the midst of seriously improving energy efficiency in the hopes that it will reduce energy consumption. However, there is an economic theory (about coal consumption no less) known since 1865 that says that increasing efficiency will increase overall energy consumption even if the amount used for a given task is reduced.

In economics, the Jevons Paradox (sometimes called the Jevons effect) is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase (rather than decrease) the rate of consumption of that resource. It is historically called the Jevons Paradox as it ran counter to popular intuition. However, the situation is well understood in modern economics. In addition to reducing the amount needed for a given output, improved efficiency lowers the relative cost of using a resource – which increases demand. Overall resource use increases or decreases depending on which effect predominates.
William Stanley Jevons

The proposition was first put forward by William Stanley Jevons in his 1865 book The Coal Question. In it, Jevons observed that England's consumption of coal soared after James Watt introduced his coal-fired steam engine, which greatly improved the efficiency of Thomas Newcomen's earlier design. Watt's innovations made coal a more cost effective power source, leading to the increased use of the steam engine in a wide range of industries. This in turn increased total coal consumption, even as the amount of coal required for any particular application fell. Jevons argued that increased efficiency in the use of coal would tend to increase the use of coal, and would not reduce the rate at which England's deposits of coal were being depleted.
It all depends on whether the demand for energy is elastic or inelastic. And that is where Kahazoom comes in.
In the 1980s, the economists Daniel Khazzoom and Leonard Brookes revisited the Jevons paradox for the case of a society's energy use. Brookes, then chief economist at the UK Atomic Energy Authority, argued that attempts to reduce energy consumption by increasing energy efficiency would simply raise demand for energy in the economy as a whole. Khazzoom focused on the narrower point that the potential for rebound was ignored in mandatory performance standards for domestic appliances being set by the California Energy Commission.

In 1992, the economist Harry Saunders dubbed the hypothesis – that improvements in energy efficiency work to increase, rather than decrease, energy consumption – the Khazzoom-Brookes Postulate, and showed that it was consistent with neo-classical growth theory under a wide range of assumptions.
What to do? Well government could tax energy so that consumers and produces do not reap the benefit of energy efficiency. Another way to get such results is for the government to promote high cost energy sources such as wind and solar.

In other words Obama's energy policies are well grounded in economics. And most importantly they are good for government. We can be thankful we have the Smartest President Ever™.

So now you know why Polywell Fusion hasn't been fully funded by the Obama administration. If it works and is low cost, energy use will skyrocket. And the wise one is against that.

Fortunately Mr. Obama responds well to political pressure. So keep the heat on. Contact info for your government and a simple explanation of Polywell Fusion and its benefits can be found at:

Bussard's IEC Fusion Technology (Polywell Fusion) Explained

Note that Amazon has a lot of books on Energy Efficiency and none on Polywell. I'm looking forward to some one writing a book.

Cross Posted at Classical Values

8 comments:

snakeoilbaron said...

The Next Big Future has a new post saying that the DOE has penciled in $2 million for it. I would link to it but I am commenting from an iPod touch and I don't think you can cut and paste anything.

I don't know how much "full funding" is but $2 million is probably better than a kick in the teeth. I doubt Obama had much to do with it but he can have the credit if he wants it. There are already enough reasons to feel "antagonistic" towards the administration - as the DHS phrases it.

snakeoilbaron said...

Oops! You already posted about that. Ha.

Richard Sharpe said...

So now you know why Polywell Fusion hasn't been fully funded by the Obama administration. If it works and is low cost, energy use will skyrocket. And the wise one is against that.
There are a number of problems with something like the Polywell Fusion from a government and taxation perspective.

Gasoline is taxed per gallon. Every mile we drive is taxed. Electricity is similarly taxed.

However, you can really only tax the fusion unit once, and perhaps at refill time if it needs to be refilled. This would probably tax it out of existence.

I imagine that those who are in the business of extracting, distributing and selling coal and oil would not be happy with Polywell fusion.

Neil said...

It's absolutely true that the alternative energy economy, if we get one, will be an abundant energy economy. Conversely, if Washington succeeds in limiting our energy usage, there will be no alternative energy economy, and we will drown in our own industrial excrement.

I don't know why this should seem a paradox to anyone, but apparently this is counter-intuitive.

M. Simon said...

Abundant energy means low prices.

Wind and solar are a long ways away from that.

Neil said...

"Wind and solar" energy is a subset of alternative energy.

My statement stands, but another way of stating it is to say "if alternative energy doesn't become low-cost energy, then we will drown in our own industrial excrement".

M. Simon said...

we will drown in our own industrial excrementAu contraire. Waste is an unexploited economic resource.

Neil said...

Waste is an unexploited economic resource.Only if we have the energy to exploit it. We need lots more energy, and current energy sources are too expensive given the existing methods of converting them to useful work. We need both new sources of energy and better ways of utilizing the energy sources we have.