Elevate Economics

Or in modern times ‘the Khazzoom-Brookes Postulate’

The observation that increased energy efficiency, paradoxically, tends to lead to increased energy use and extraction of natural resources. In the long term, an increase in efficiency in resource use will generate an increase in resource consumption rather than a decline.

The paradox is named after William Jevons who observed in the 19th century that an increase in the efficiency of using coal to produce energy (a rise in energy yield to unit) tended to increase consumption, rather than reduce it.

Modern day application: alternative sources of energy e.g renewable, enable us to consume more also as it is linked to less co2 emissions, leading to more consumption and thus more resource extraction: the physical infrastructure (turbines, panels, stations) for renewable energy also requiring more material inputs. It’s called the ‘rebound effect’.

Why? Because the greater energy savings from greater energy efficiency is reinvested in even higher levels of production, such that the scaling up of economic growth overrides the efficiency improvements. The cost savings from energy efficiency passed on to customers enable them to consume even more.

Efficiency is good but it’s not THE answer.

The reason: The incentive to innovate more efficient use of energy IS to enable more growth for profit. Essentially technological innovation is aimed at expanding and thuseven greater extraction from nature.

Broadly, other examples of the paradox may include lithium batteries or containerisation – standardised steel containers that could be stacked ,reducing need for package by package handling and enabled large volumes of cargo transport, significantly brought down freight transport costs, but lead to exponential increases in trade by air and sea. Lithium batteries have enabled reduction in fossil fuel use but have meant greater use of material inputs through extraction of the metals required.

Resource use in lithium batteries:

• Mining: Lithium is extracted from rocks and brines, which can lead to deforestation, soil erosion, and water contamination. 
• Copper: Copper is a significant contributor to the total material requirement (TMR) of lithium-ion batteries. 
• Water: Lithium production through evaporation ponds uses a lot of water. To extract one ton of lithium requires about 500,000 liters of water, and can result in the poisoning of reservoirs and related health problems.