Energy efficiency

The Paradox of Energy Efficiency

Why greener technology doesn't translate into reduced energy consumption

|

Automobile manufacturers have been working for decades on improving fuel efficiency. So why aren't the cars we drive today getting dramatically better gas mileage? Underlying that question is a fascinating paradox about energy consumption. 

A study by MIT economist Christopher Knittel in the December 2011 issue of the American Economic Review found that since 1980 the average fuel economy of American vehicles has increased only slightly, from 23 miles per gallon to 27. Yet Knittel found that fuel efficiency—the amount of power an engine produces per gallon of fuel burned—increased by 60 percent during that period. What's going on here? Cars and trucks have become bigger and more powerful: The average weight of passenger vehicles has increased 26 percent since 1980, while their horsepower has risen by 107 percent. Most of the gains in fuel efficiency have gone into compensating for the extra size and thrust. 

Automobiles are not the only category in which greater efficiency has failed to translate into reduced energy consumption. Lighting efficiency has improved during the last three centuries by many thousand-fold, from sputtering candles to modern LEDs, as Jeff Tsao and his colleagues from the Sandia National Laboratory note in the July 2012 issue of the journal Energy Policy. But the result "has been an increase in demand for energy used for lighting that nearly exactly offsets the efficiency gains." The authors note that "when lighting becomes cheaper, economic agents become very creative in devising new ways to use it," such as illuminating office ceilings with LED virtual skies. In coming decades, Tsao et al. predict, increased demand for lighting probably will again swallow up any new gains in energy efficiency.

In another recent study, reported in the July 2012 issue of the journal Sustainability, Graham Palmer, technical director of an Australian heating and cooling company, looked at trends in space heating efficiency during the last 50 years in Melbourne. Modern houses are up to 10 times more energy efficient, Palmer found, yet Australians are collectively using just as much energy to heat their homes as they did a half-century ago. Why? New houses are much bigger, people heat larger areas for longer, and fewer people live in each dwelling. Of course, modern Australians are much more comfortable in the winter than their grandparents were. 

Similarly, a 2006 study commissioned by the U.S. Environmental Protection Agency found that homes in Phoenix, Arizona, that qualify for the EPA's Energy Star designation use 12 percent more energy than homes that don't. Owners of Energy Star houses may use 16 percent less energy per square foot to keep their indoors livable, but they spend those gains on bigger houses. 

This energy "rebound effect" has important implications for efforts to restrain climate change through conservation. Various studies have suggested that improvements in efficiency could reduce energy consumption enough to cut global carbon dioxide emissions by as much as 25 percent during the next four decades. But this is a highly controversial area of scholarship.

In a 2007 Science article, Princeton University researchers Robert Socolow and Stephen Pacala calculated that seven "stabilization wedges" could prevent global carbon dioxide atmospheric concentration from rising to more than twice its pre-industrial level by 2050. "Improvements in efficiency and conservation probably offer the greatest potential to provide wedges," they argued. One wedge (equaling one-seventh of the necessary reduction) could be achieved either by doubling the miles-per-gallon performance of the planet's projected 2 billion automobiles or by cutting in half the distance they travel each year. Another wedge, they said, could be achieved by boosting the efficiency of coal-burning electricity plants from 40 percent to 60 percent.

California State University at Fullerton economist Robert Michaels tackles the thinking behind such conservation projections in a new report for the pro-market Institute for Energy Research (IER) titled "The Rebound Dilemma." Michaels' analysis divides rebound effects into four categories: direct, indirect, embedded-energy, and economy-wide. 

The Melbourne heating case illustrates the direct rebound effect: Better insulation and more-efficient heaters did not reduce energy use because people spent the gains on bigger, warmer houses. Another example: When cars get more mileage per gallon, driving becomes cheaper, so people tend to drive more. An indirect rebound occurs when efficiency improvements raise the productivity of other goods, thereby boosting the demand for energy. The demand for tires, for example, goes up as people wear out tires driving their energy-efficient cars more, so the tire industry uses more energy. Embedded energy is the extra power used to produce, distribute, and maintain energy-efficient goods such as high-efficiency insulation. And economy-wide rebounds, which include indirect and embedded rebounds, result from the ways in which people use their savings on energy to purchase other goods and services that also require energy to produce. 

Conservation proponents say direct rebound effects are often much smaller than the energy saved by increased efficiency. A classic 1992 Energy Journal study by David Greene, an environmental engineer at the Oak Ridge National Laboratory, found that the direct rebound effect of increased automobile fuel efficiency raised energy consumption by only 5 percent to 15 percent because people drove that much more. The new MIT study, however, suggests that most of the improvement in fuel efficiency during the last few decades has been spent on bigger and more powerful cars, a phenomenon that Greene did not consider.

Robert Michaels' review of research on the rebound effect associated with increases in household energy efficiency turned up varying results, but a quick look at the numbers shows a direct rebound rate hovering around 30 percent. If an appliance that used 100 kilowatt-hours per month is replaced by one that uses just 50 kilowatt-hours, a 30 percent rebound implies that energy consumption would fall not to 50 kilowatt-hours but to 65 (i.e., 30 percent more than 50), for a total reduction of 35 kilowatt-hours. Still not bad, since the consumer gets equivalent (or more) benefits from the new appliance while saving on electricity. 

Economy-wide rebounds are much harder to calculate. The money saved from driving a fuel-efficient car, for example, may now be spent on flying to a Caribbean beach vacation. Compounding indirect rebounds throughout the economy can lead to so much additional energy use that the net result of improved efficiency is higher consumption.

In the IER study, Michaels cites 11 econometric analyses that found economy-wide rebounds ranging from 23 percent to 177 percent; five of the studies reported economy-wide rebounds of more than 100 percent. In other words, the long-run result is higher energy consumption.

The upshot of all these studies is that energy efficiency mandates probably will fall far short of expectations for mitigating man-made global warming. "Instead of imposing energy efficiency mandates," Michaels concludes, "energy policy should embrace market prices and disruptive innovations to guide energy to its most valuable uses." After all, the point of improved energy efficiency is not to forgo the use of power but to boost its productivity as a way to provide people with more of the goods and services they want.  

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

86 responses to “The Paradox of Energy Efficiency

  1. This is what happens when you give people freedom — Krugman

  2. Automobile manufacturers have been working for decades on improving fuel efficiency. So why aren’t the cars we drive today getting dramatically better gas mileage?

    The Geo Metros, the Suzuki Swifts, the Ford Festivas notwithstanding?

    There were cars with better milleage than even the Toyota Prius but government interference has made them scarce, especially with the “safety” mandates that just end up adding weight to the cars. Not that all people were rushing to buy one of those litle tin cans, but the idea that automakers have not been able to create cars with fabulous milleage is simply not true – as with almost everything (except asteroid collisions) we can blame the heavy hand of government.

    1. that reminds me of a review of the Mustang GT500 – the listed weight was some 3900pds, which is just about the same weight as the stripped down ’91 Chevy Caprice I used to drive.

      1. And its top speed is nearly 200 mph. How the hell do you get a production engine to propel 3900 lbs to 200 mph? Amazing.

        1. Weight doesn’t matter much when you are trying to achieve top speed, so long as it doesn’t increase frontal area or air drag — about all that weight does is increase tire drag a bit, and make it take longer to accelerate to a given speed.

          But aerodynamic drag goes up as the CUBE of speed, so that is essentially the limiting factor to how fast a car can go with a given amount of horsepower.

          1. Re: protefeed,

            But aerodynamic drag goes up as the CUBE of speed,

            It’s actually the square of speed, because pressure acts on surface and not on volume or mass, but your point is still valid.

            Force due to drag = 1/2Rho (fluid density) x A (frontal area) x u^2 (speed squared) x Cd (drag coeff)

            1. Correction noted. Thanks.

            2. It never surprises me that people who actually understand economics also happen to be pretty good with basic physics. Must be so crazy coincidence.

            3. Drag goes up as the square of the speed. Power required goes up as the cube.
              If you -say- double the speed then the
              drag is 4x but also the distance travelled is 2x. E=fxd and power = dE/dt.
              SO for double the speed you have 4xf and 2xd in a given time. Power needed then is proportional to the cube of the speed.

      2. 3900 pood? That’s like 140,000 lbs.

      3. That’s only about 300 lbs less than my ’00 F-150, IINM.

    2. “There were cars with better milleage than even the Toyota Prius”

      Maybe, but not any of the ones you listed.

      LazyMexican at it again…

      http://www.fuelly.com/car/geo/metro
      http://www.fuelly.com/car/ford/festiva

        1. Ford’s 2009 Fiesta ECOnetic (not sold in the USA) got 65 mpg highway, I believe that beats the Prius rather soundly (somewhere around 50 mpg).

          http://www.businessweek.com/st…..-cant-have

          This is not terribly unusual for a European econo car. They been achieving these levels of mpg for many years.

          1. European compacts beat the tar out of our (US) “economy” cars.

      1. Re: Lazy Fuck,

        Ah, Mrs. Lazy! May I still call you Mrs? I can’t tell from here.

        Maybe you should take some grammar and reading comprehension lessons, Mrs. Lazy, because I never said that the LISTED cars were all capable of surpassing the Prius, only that there were cars that could.

        I guess Mr. Lazy hasn’t given you a good ride. You should pony up, Sea Biscuit.

        1. “Maybe you should take some grammar and reading comprehension lessons, Mrs. Lazy, because I never said that the LISTED cars were all capable of surpassing the Prius, ”

          Well, since I never said you did maybe you should take your own advice?

          Cry more now.

          1. Re: Mrs Lazy Fuck,

            Well, since I never said you did maybe you should take your own advice?

            Oh, shame on you, Mrs. Lazy! May I still call you Mrs. Lazy? I really can’t tell from here!

            Look at what you wrote:
            “Maybe, but not any of the ones you listed.”

            Again, I never say those did, so why bring it up? Is it the crimson tide? Hot flashes? Cramps? I have known that cramps can be a bitch – no pun intended, dear!

            Take an embroidery class and leave the boring conversation to us men, dear.

          2. “Again, I never say those did, so why bring it up?”

            Because they were the cars YOU listed.

            Cry more now.

            1. More Honest LazyMexican

              “WHY ARE YOU CHECKING THE MILEAGE OF THE CARS I LISTED, AND POINTING OUT THAT THEY DON’T BEAT A PRIUS!!! I MEANT TO LIST CARS THAT DO BUT RANDOMLY FOR NO REASON AT ALL CHOSE THREE THAT DIDN’T, AND EVEN THOUGH YOU NEVER CLAIMED I SAID THEY BEAT A PRIUS, I’M ACTING BUTTHURT!!!”

              Cry more chorizo tears.

            2. Watching you struggle so hard is awesome. It’s like you know you got caught saying something wrong and dumb, and simply don’t give a shit how stupid or assholish or dishonest you look in trying to avoid being wrong, as long as you’re not wrong.

            3. Take the embroidery class, Mrs. Lazy. It should move your attention away from those nasty cramps.

              The cars I listed were in reply to Bailey’s question, not to say that they were the cars with the better mileage than the Prius. By the way, the Prius is hardpressed to achieve the advertised mileage only on very good driving conditions, while the Geo Metro with the 3 cylinder engine and 5-speed manual shift, the Geo Metro can outperform the Prius in a MPG test.

              1. Yes, let the salty chorizo flavored tears flow!

                “Take the embroidery class,”

                Sure, as soon as you take the grammr and comprehension class for not realizing I neved said you claimed anything.

                “while the Geo Metro with the 3 cylinder engine and 5-speed manual shift, the Geo Metro can outperform the Prius in a MPG test.”

                Who cares? You never made that claim (until now I guess), and I never refuted it.

                Choke on that you pathetic Lazy fuck, and take the last word because I’m the bigger man.

              2. Who cares about a claim you never made that I never refuted?

                Cry more salty chorizo flavored tears!

                “By the way, the Prius is hardpressed to achieve the advertised mileage”

                By the way too stupid and lazy to fucking click a link, those were TESTED MPG’S I gave you, not ADVERTISED. ACTUALLY ACHIEVED BY REAL PEOPLE.

                AHAHAHA YOU DIDN’T EVEN BOTHER TRYING TO READ THE LINKS, HOW FUCKING LAZY ARE YOU!!!

                Cry more now.

              3. Who cares about a claim you never made that I never refuted?

                Cry more salty chorizo flavored tears!

                “By the way, the Prius is hardpressed to achieve the advertised mileage”

                By the way too stupid and lazy to fucking click a link, those were TESTED MPG’S I gave you, not ADVERTISED. ACTUALLY ACHIEVED BY REAL PEOPLE.

                AHAHAHA YOU DIDN’T EVEN BOTHER TRYING TO READ THE LINKS, HOW FUCKING LAZY ARE YOU!!!

                Cry more now.

    3. My ’78 diesel rabbit got 52 highway mpg til the day it died at 250K miles — because the axles rusted out of the frame, the engine was still going strong well 48 hp is not strong in anyone’s book but going at least.

  3. The paradox isn’t really all that fascinating. Those of us who reload our own ammo have joked for decades that any money we save by doing our own reloading is compensated by more frequent shooting.

    The only thing marginally ‘fascinating’ is how the college educated among us are so often flummoxed by basic human nature (and why we keep throwing money at endless ‘studies’ confirming the same).

    1. Kind of like how history has proven time and time again that true Libertarianism does not work but people keep believing it.

      1. Yeah, history sure has shown that, except that it hasn’t, prog.

        History most assuredly HAS shown us that progressivism fails fucking miserably though.

  4. A new nature center opened at a nearby metro park last weekend. First time I have seen parking spaces up front designated for “energy efficient automobiles”. Just what people who can afford these cars need, more perks. Also, there were far more of these spaces than I can I can ever imagine them needing. Especially on the the west end of Columbus. If this is a trend I wonder if I can just stick a “runs on recycled grease” sticker on my bumper and get a good spot.

    1. At Dulles the plug-in cars get not only preferred parking in the daily garage but free charging, too.

    2. I’ve always been especially offended by HOV lanes that allow a hybrid SUV or full-sized sedan that gets worse gasoline mileage than my non-hybrid honda civic.

    3. I snap those babies up. What’s the cutoff for towing me? 30mpg? 25mpg? Is a hybrid SUV compliant even if it gets worse milage than my non-hybrid sedan?

      I’ve only seen them in private lots (grocery stores), so it’s even easier to set my mind at ease by thinking: which of their customers are they going to tow based on an unwritten breakpoint?

    4. it is now a building code item in California. If you make parking space for energy efficient cars you can have fewer parking spots, which are expensive land, or use less insulation on your building. My biggest complaint about this issue is that building departments were designed to insure “life safety” requirements of a building and not to inforce a socialized agendas

      1. Yep, building codes, another “good idea” meant to protect the chillens from evil billion-dollar construction lobby thieves who would build homes out of poop and razor blades that turned out to be used by invested interests (namely, the billion-dollar construction lobby) to prevent people from building their own homes or keep poor people from being able to afford homes.

        It didn’t take the progs long at all to figure out that building codes and zoning laws were great ways to social engineer society writ large.

  5. It is not a paradox Ron. It is perfectly rational when you relize that people make decisions based on the “marginal cost versus” the “marginal value”. Or to put it another way, if a jule of energy gives your more value than it did before, it will be more attractive to buy and you will buy more of them.

  6. The Bozeman Public Library, which is itself a shining monument to misspent public funds, designates its front-row parking spaces as “Hybrid Only”.

    1. Makes you wonder if you couldn’t head down to the local salvage yard and pick up some hybrid badging to put on your car.

      I can just see my jacked up FJ Cruiser (with massive deer-killer bumper and modded with performance exhaust, air intake, and chipped, thankee) sporting a “hybrid” badge acquired from a Prius.

  7. I read a scientific article that suggests that the best mileage a car will ever get, using space-aged technology, super-light materials and flux capacitors is around 65mpg. Have to look for that.

    1. Depends on how you define “car”. Take a motorcycle, add two wheels, put an lightweigt aerodynamic shell around it, put the driver in a prone position to lower frontal area, use a 100cc engine, and voila, 100 MPG.

  8. Automobile manufacturers have been working for decades on improving fuel efficiency.

    I have to quibble. It’s “engine efficiency” and it can manifest itself either as improved fuel mileage, or increased power.

  9. The new MIT study, however, suggests that most of the improvement in fuel efficiency during the last few decades has been spent on bigger and more powerful cars, a phenomenon that Greene did not consider.

    You mean people would rather have a 300 horsepower V6 that gets good gas miliage than a four cylinder eco penality box that gets 50? You mean there are values besides money spent on gas? Well knock me over with a feather.

    1. I had an old subaru wagon back when I lived in Phoenix (the late 80’s). It had about a 2 liter engine that put out maybe 90 horse power. It got around 25 mpg. I used to haul myself and three boy scouts all over the arizona wilderness on camping trips.

      I now have a three year old forester with a 2.5 liter engine that gets around 170 horse power and gets about 25 mpg. It’s way bigger (it will hold 5 adults with ease) and heavier that the the late 70’s wagon that I used to drive. And it will blow through almost all the snow storms we get here in Iowa.

      So after 30 years or so, the engine puts out about twice the horse power per liter of engine size. If we put that in the same body that I drove way back when the gas mileage would be somewhere up around 50 mpg.

      1. Computerized ignition control finally allowed engines to produce power and still meet emission standards. The catalytic converter destroyed engine power and efficiency for about 30 years.

        1. Right. The reason for the change isn’t so important. The issue is that subaru went from making mini-box wagons to “Motortrend SUV of the Year” cross-overs instead of producing 50 mpg mini-boxes.

          People bought econoboxes when then had to. They buy comfort and performance when then can.

  10. Obviously the car companies are in the thrall of the gas companies, man. You know that despite the fact that the market desperately craves cars with better mileage the car companies have developed 100-mpg cars but put them on the shelf because of profits, man.

  11. Cadillac FORCES people to buy the CTS with the Corvette motor. They defy the market and spit on the customer, like all kkkorporations.

    1. There is huge demand out there for a luxury coupe with a 90 horsepower hybrid motor.

    2. Well they dangle those ~$40K versions to lure you in and then make you pay 30K more for worse gas mileage and the capability to go 3 times faster than you’ll ever drive the car.

      It’s a government mandate so that GM can pay us back.

  12. Mustang GT500 – the listed weight was some 3900pds

    That seems absurdly heavy to me.

    1. Naah … a 4 cylinder Camry weighs 3240 lbs. My V6 Avalon (basically a stretched Camry with all the options) weighs 3600 lbs.

      Drop a heavy V8 in either of those and 3900 sounds about right.

      Modern cars with all the government mandated safety features are HEAVY.

    2. It is absurd, my 1972 Ford Ranchero weighs almost the exact same weight. It is as long as an f150 king cab or a ford excursion and gets about 16 mpg on the highway. It takes about 9 seconds to get to 60 mph (3x longer than the Shelby) and probably tops out at 120 (you’d have to be clinically insane to try and confirm). The brakes suck and when it rains my lap gets wet.

      On the plus side, I paid $1200 for it, so I could buy about 50 of them for the price of the Shelby.

    3. It’s purely about the safety standards

      My forrester weighes almost as much as my exterra. (both between 3500 lbs and 4000 lbs)

      1. Actually, according to the manufacturer’s sites, the lightest (2wd) xterra weighs 4143lbs, while the heaviest, turbo AWD Forester weighs 3460 lbs, a difference of almost 700 lbs.

  13. Mustang GT500 – 3850LBS
    Camaro ZL1 – 4120LBS
    Challenger SRT8 – 4170LBS

    Yes, the Mustang is too heavy, but fairly significantly lighter than its direct competition.

  14. Some day I should run my 914 across a set of scales. I doubt it weighs much more than a ton. I left a lot of stuff off.

  15. Weight is your enemy.

    1. For gas mileage, wind resistance is actually the biggest enemy, followed by weight.

      1. Re: Bobarian,

        For gas mileage, wind resistance is actually the biggest enemy, followed by weight.

        Especially if you’re driving with your doors wide open… while giving a lift to the hippo you call your mother-in-law.

      2. For stop and go city driving, weight and engine size matter the most, since you have to accelerate and then waste that energy via braking at each stoplight (weight), and then burn gas while idling at a stoplight (engine size).

        For highway driving, wind resistance becomes much more important.

  16. Its called Jevon’s Paradox and its been known since 1865.

    http://en.wikipedia.org/wiki/Jevons_paradox

    If a given society wishes to get ahead of the curve the only way to do so is rather illiberal. Rationing , either by direct means (you get x amount of Y commodity at most) which isn’t perfect (black markets spring up) or indirect market means with heavy fees and taxes for overuse. We do this now with electricity tiers .

    Alternately population management measures (i.e no immigration or child transfers except for birth control) will also work especially if combined with the above.

    All of these ideas are the antithesis of Libertarianism of course but they work at some cost.

    1. Sorry, have to pick a nit…

      *Forced* rationing is illiberal. But all advancement by means of capital improvement presupposes rationing aka, deferred consumption.

  17. My 99 3.0l inline six 3-series still gets 31mpg on the freeway. 93 octane is the sweetest stuff, everything else has Dole Corn.

    1. *I drive a manual, but the automatics (slushy boxes) are not far behind.

  18. Well then, the answer is not conservation but increased energy, but not through hydrocarbons, especially coal and gasoline. Thorium Energy is the future. Ask China. They want to provide electricity to the entire nation as do third world countries without power today. That should tell us something. Why does every one make this so complicated?

  19. Shocking news about the Chevy Volt – http://modeltstocktrends.blogs…..-volt.html

  20. I’m not sure the point of this article? Is it that because gains will be used by other factors we shouldn’t bother to advance or demand more from our technology? Cause I don’t agree with that. Even if its only a tiny bit of increase in mpg any improvements should be heralded because otherwise we are just sitting still.

  21. This is not new information, but seems to be news to many, just the same.

  22. So the only way to get us to use less energy is higher energy prices. Glad to see Reason coming out in favor of higher energy taxes 🙂

  23. “when lighting becomes cheaper, economic agents become very creative in devising new ways to use it,”

    Or, alternatively, there were urgent but economically unrealized needs for light which were subsequently met by the energy efficiencies gained through technological innovation and production efficiecy. New demand resulted from new production.

    Just trying out my new Say’s Law thingie.

  24. Story about attendance may cause curiosity. But he is the most http://www.cheapfootballcleatsmall.com/ important issue, or that mouth filled coffin fox. In any event, the facts can not be implemented in the case, he must find a way to get rid of that coffin. But for some reason, it is http://www.cheapuggsbootsforwomen.org/ difficult to think of a way.

  25. This energy “rebound effect” has important implications for efforts to restrain climate change through conservation. Various studies have suggested that improvements in efficiency could reduce energy consumption enough to cut global carbon dioxide emissions by as much as 25 percent during the http://www.drdrebeatsbydreau.com/ next four decades. But this is a highly controversial area of scholarship.

  26. Elections actually turn out to be difficult to buy, as the many candidates who outspent their opponents but lost anyway?Meg Whitman is a good recent example?can attest. But if anyone wants to try, better they do http://www.cheapfootballcleatspro.com/ it with their own money than with money taken in taxes using the force of law.

  27. Underlying that question is a fascinating paradox about energy consumption. SohbetChat

  28. If an appliance that used 100 kilowatt-hours per month is replaced by one that uses just 50 kilowatt-hours. SohbetSohbet Odalar?

  29. Most of the gains in fuel efficiency have gone into compensating for the extra size and thrust. Sohbet SiteleriChat Siteleri

  30. a 30 percent rebound implies that energy consumption would fall not to 50 kilowatt-hours but to 65G?zel S?zler?ark? S?zleri

  31. The authors note that “when lighting becomes cheaper. SohbetChat

  32. analysis divides rebound effects into four categories: Mynet SohbetSohbet

  33. Not that all people were rushing to buy one of those litle tin cans. Film izleDizi izle

  34. Improvements in efficiency and conservation probably offer the greatest potential to provide wedges. SohbetSohbet Odalar?

  35. those were TESTED MPG’S I gave you, not ADVERTISED. ACTUALLY ACHIEVED BY REAL PEOPLE.OyunMirc indir

  36. I have known that cramps can be a bitch – no pun intended, dear! R?ya TabirleriYemek Tarifleri

  37. There were cars with better milleage than even the Toyota Prius but government interference has made them scarce, ???? ????? ??? especially with the “safety” mandates that just end up adding weight to the cars.????? ??? ???????? ??????? Not that all people were rushing to buy one of those litle tin cans, but the idea that automakers have not been able to create cars with fabulous milleage is simply not true – as with almost everything (except asteroid collisions) we can blame the heavy hand of government.

Please to post comments

Comments are closed.