Four years ago, in the Four Horsemen of the Rebound, I lampooned what is known as Jevon’s Paradox. A paradox is a statement of contradiction or puzzle. For example, I remember Zeno’s Paradox from my goofy philosophy professor in college. Our class discussed Zeno’s Paradox and that you can never get through a doorway because to get to the doorway, you must first reach the halfway point, and the next halfway point, and so on, and so forth, until the measurements get to be infinitesimally small – and you never get there. Beyond that, we learned that objects are all a function of our minds – a collection of senses. You may imagine that this philosophy is closely tied to religion.
Jevon’s Paradox
Jevon’s Paradox posits that energy efficiency results in greater energy consumption, a parallel to Ihnen’s Paradox: the more you spend, the more you save, circa 2009. Jevon says saving energy and money reallocates capital (money) to buy or build more stuff, requiring greater energy production to manufacture, purchase, transport, build, store, sell, and consume.
For example, a LIHEAP program may save an impoverished family enough money to buy an automobile to enjoy the freedoms and autonomy those of us reading this blog take for granted. Is that a bad thing? Not in my worldview.
Carbon Paradox
The subject of this Rant was triggered by an article in The Wall Street Journal, which, via Jevon, postulates that “strategies that rely heavily on energy efficiency to reduce emissions are bad bets.” The author, a research scientist and assistant director at the Energy Institute at the University of Texas at Austin, wrote, ”Historical data show that increased energy efficiency has gone hand-in-hand with more energy consumption over the long term, not less, and I would argue that any decarbonization approach that fails to take this into account runs the risk of backfiring.”
The Jevon Paradox factor is one reason Michaels’ purpose for existence is “minimizing waste and maximizing value.” Efficiency can be a transformatively nebulous term that means many different things to many different people – but reducing waste is straightforward and includes everything from wasted energy, labor, time, materials, and landfill tonnage. Maximizing value includes efficiency and the utilization of assets in buildings and on the grid.
Jevon’s critics focus on behavior. For example, if car owners can suddenly get 50% more miles from a gallon of gas, they will not drive 50% more, but they may drive a smidge more. Electric vehicle buyers will assuredly not drive more miles. 😂🤣 That’s part of the deal.
Efficiency, A Chameleonic Word
Efficient enterprises generate more profit, grow, and expand. However, definitions of efficiency change, like the colors of chameleons to be vaguely camouflaged. In some circles, efficiency means greater productivity via process changes that may or may not reduce energy consumption.
Efficiency also expands capabilities to extract energy, such as with hydraulic fracturing (increased productivity) or adding wind turbines to more areas, along with their massive lust for land and gigatons of required carbon-emission-intensive concrete and steel.
Efficiency in the Automotive Sector
Consider automobiles and the internal combustion (IC) engine from another perspective. The efficiency and reliability of IC engines have asymptotically approached (i.e., gotten very close to) perfection over the last 40 years. Dirty and inefficient but lightweight and powerful, two-cycle engines have been displaced by four-cycle engines with turbochargers in recreational vehicles, and I don’t mean the “camper” type. I mean snowmobiles, outboard motorboat engines, and ATVs. But what has happened with the “efficiency” in automobiles? More power, faster, and bigger vehicles.
In the 1980s, efficiency meant a crappy tiny engine with horrible performance. General Motors has an infinite list of bad decisions dating to the 1960s, but one of their worst was taking a gasoline engine and converting it to diesel, as they did in the late 1970s. As I would learn a decade later in an IC Engines class in college, I would ask, how could that possibly work? It didn’t. It didn’t even improve efficiency, but it required longer onramps to reach freeway speed: 0 to 55 mph in 36 minutes and 17 seconds.
Will Electrification Reduce Net CO2 Emissions?
Will electrification reduce CO2? In the make-believe la la land of 100% renewable, yes. Here on earth, it’s hard to say, although hyperscale AI investors, including Bill Gates, are scuttling decarbonization plans (hot off the press) like willy and nilly. I enjoy roasting virtuous but clueless wealthy people, elites, executives, billionaire hedge fund investors, and corporate boardrooms when they show their true green colors – and I am not referring to the recent St. Patrick’s Day commemoration or general sustainability. I mean their lust for profit and cash.
The Bright Side
I choose to look on the bright side. Energy efficiency is good for the economy. The WSJ author cites his own work showing energy efficiency as the primary driver of economic productivity.
Throughout my 29-year career in this industry, I’ve heard the question, “Why would utilities want their customers to use less of their product?”
Wrong question!
Why do utilities want their customers to use their product more efficiently? Smart utilities understand efficiency is load and sales growth. Then why do some utilities fight the policy? You have to ask them.
Parting Thought
Readers have likely seen this: “What if we spend all that money to train our staff and they leave?” Retort: “What if we don’t and they stay?”
Utility: “What if we spend all that money to help our customers succeed, and then they expand in a different utility’s service territory?” Retort, “What if we don’t and they go out of business?”
