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Human Consumption Patterns and the “Rebound” Effect

Module by: Tom Theis. E-mail the author

In 1865 William Jevons (1835-1882), a British economist, wrote a book entitled “The Coal Question,” in which he presented data on the depletion of coal reserves yet, seemingly paradoxically, an increase in the consumption of coal in England throughout most of the 19th century. He theorized that significant improvements in the efficiency of the steam engine had increased the utility of energy from coal and, in effect, lowered the price of energy, thereby increasing consumption. This is known as the Jevons paradox, the principle that as technological progress increases the efficiency of resource utilization, consumption of that resource will increase. Increased consumption that negates part of the efficiency gains is referred to as “rebound,” while overconsumption is called “backfire.” Such a counter-intuitive theory has not been met with universal acceptance, even among economists (see, for example, “The Efficiency Dilemma”). Many environmentalists, who see improvements in efficiency as a cornerstone of sustainability, openly question the validity of this theory. After all, is it sensible to suggest that we not improve technological efficiency?

Whether or not the paradox is correct, the fact that it has been postulated gives us pause to examine in somewhat greater depth consumption patterns of society. If we let Q be the quantity of goods and services delivered (within a given time period) to people, and R be the quantity of resources consumed in order to deliver those goods and services, then the IPAT equation can be rewritten in a slightly different way as:

I = P × GDP P × Q GDP × R Q × I R I = P × GDP P × Q GDP × R Q × I R size 12{I=P times left [ { { ital "GDP"} over {P} } right ] times left [ { {Q} over { ital "GDP"} } right ] times left [ { {R} over {Q} } right ] times left [ { {I} over {R} } right ]} {}
(1)

where RQRQ size 12{ left [ { {Q} over {R} } right ]} {} represents the “resource intensity,” and IRIR size 12{ left [ { {Q} over {R} } right ]} {} is the impact created per unit of resources consumed. Rearranging this version of the equation gives:

R = Q × R Q R = Q × R Q size 12{R=Q times left [ { {R} over {Q} } right ]} {}
(2)

which says simply that resources consumed are equal to the quantity of goods and services delivered times the resource intensity. The inverse of resource intensity QRQR size 12{ left [ { {Q} over {R} } right ]} {} is called the resource use efficiency, also known as “resource productivity” or “eco-efficiency,” an approach that seeks to minimize environmental impacts by maximizing material and energy efficiencies of production. Thus we can say:

R = Q × 1 Eco efficiency R = Q × 1 Eco efficiency size 12{R=Q times left [ { {1} over { ital "Eco" - ital "efficiency"} } right ]} {}
(3)

that is, resources consumed are equal to goods and services delivered divided by eco-efficiency. Whether or not gains in eco-efficiency yield genuine savings in resources and lower environmental impacts depends on how much, over time, society consumes of a given product or service (i.e. the relative efficiency gain, ΔeeΔee size 12{ { {Δe} over {e} } } {}) must outpace the quantity of goods and services delivered ΔQQΔQQ size 12{ { {ΔQ} over {Q} } } {} . In the terms of Jevons paradox, if ΔQQΔeeΔQQΔee size 12{ { {ΔQ} over {Q} } >= { {Δe} over {e} } } {} then the system is experiencing “backfire.”

Part of the problem in analyzing data pertaining to whether or not such “overconsumption” is happening depends on the specific good or service in question, the degree to which the data truly represent that good or service, and the level of detail that the data measure. Table Historical Efficiency and Consumption Trends in the United States summarizes some recent findings from the literature on the comparative efficiency and consumption for several activities over extended periods of observation. Taken collectively these activities capture several basic enabling aspects of modern society: major materials, transportation, energy generation, and food production. In all cases the data show that over the long term, consumption outpaces gains in efficiency by wide margins, (i.e., ΔQQΔeeΔQQΔee size 12{ { {ΔQ} over {Q} } >= { {Δe} over {e} } } {}). It should also be noted that in all cases, the increases in consumption are significantly greater than increases in population. The data of Table Historical Efficiency and Consumption Trends in the United States do not verify Jevons paradox; we would need to know something about the prices of these goods and services over time, and examine the degree to which substitution might have occurred (for instance aluminum for iron, air travel for automobile travel). To see if such large increases in consumption have translated into comparable decreases in environmental quality, or declines in social equity, other information must be examined. Despite this, the information presented does show a series of patterns that broadly reflect human consumption of goods and services that we consider essential for modern living and for which efficiency gains have not kept pace; in a world of finite resources such consumption patterns cannot continue indefinitely.

Table 1: Historical Efficiency and Consumption Trends in the United States Source: Dahmus and Gutowski, 2011
Activity Time Period Avg Annual Efficiency Improvement (%) Avg Annual Increase in Consumption (%) Ratio: Consumption/Efficiency
Pig Iron 1800-1990 1.4 4.1 3.0
Aluminum 1900-2005 1.2 9.8 7.9
Fertilizer 1920-2000 1.0 8.8 8.9
Electricity-Coal 1920-2007 1.3 5.7 4.5
Electricity-Oil 1920-2007 1.5 6.2 4.2
Electricity-Nat Gas 1920-2007 1.8 9.6 5.5
Freight Rail Travel 1960-2006 2.0 2.5 1.2
Air Passenger Travel 1960-2007 1.3 6.3 4.9
Motor Vehicle Travel 1940-2006 0.3 3.8 11.0

Our consumption of goods and services creates a viable economy, and also reflects our social needs. For example, most of us consider it a social good that we can travel large distances rather quickly, safely, and more or less whenever we feel the need. Similarly, we realize social value in having aluminum (lightweight, strong, and ductile) available, in spite of its energy costs, because it makes so many conveniences, from air travel to beverage cans, possible. This is at the center of the sustainability paradigm: human behavior is a social and ethical phenomenon, not a technological one. Whether or not we must “overconsume” to realize social benefits is at the core of sustainable solutions to problems.

Resources

For more information about eco-efficiency, see the World Business Council for Sustainable Development report titled "Eco-Efficiency: Creating more value with less impact"

References

Dahmus, J. B., and T. G. Gutowski (2011) “Can Efficiency Improvements Reduce Resource Consumption? A Historical Analysis of Ten Activities” Journal of Industrial Ecology (accepted for publication).

Glossary

eco-efficiency:
An approach that seeks to minimize environmental impacts by maximizing material and energy efficiencies of production.
Jevons paradox:
The principle that as technological progress increases the efficiency of resource utilization, consumption of that resource will increase.
overconsumption:
A long-term result in which the increase in consumption is greater than the efficiency improvement

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