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What can Jevons' Paradox tell us about energy law?
- SixSigma 11y agoExcept it isn't counter-intuitive at all, even to undergraduate economists. All the interesting economic decision activity takes place at the margin, efficiency improvements move the margin and the unprofitable becomes profitable. It's not even paradoxical.
- SilasX 11y agoBut it's extremely counterintuitive to the general public, which favors energy efficiency mandates (even more than energy taxes or cap-and-trade) as a means to reduce energy usage, without realizing that such measures may actually increase energy consumed, while leaving you with worse products.
- nvader 11y agoOne positive way of looking at this is we can get Jevon's Law to work for us by applying it to renewable energy sources: something that we see right now. As the price of solar energy in the home falls, we'll see increasing adoption, and it will be put to more uses. At some point, it will fall to the point that it becomes attractive to commercial users. I'm not trying to imply that this will happen automatically, of course. However, there's ample opportunity to get a virtuous cycle of efficiency and increasing demand for renewable energy.