The limits to energy efficiency under capitalism

By Simon Butler

October 9, 2010 – Green Left Weekly – It is close to an article of faith among environmentalists that using less energy is a big part of the solution to climate change. Energy efficiency is often said to be the “low hanging fruit” of climate policy. On face value, the benefits seem obvious.

The knowledge needed to make big gains in efficiency already exists. Using less energy will save consumers and industry money, whereas other policies will be costly. And most importantly, lower energy use could make a big dent in global greenhouse gas emissions.

The UN Intergovernmental Panel on Climate Change and the International Energy Agency both promote energy efficiency as an important climate measure.

However, strong evidence has emerged that new energy efficient technologies alone won’t do much to cut emissions. Indeed, in a capitalist economy, it’s very likely that energy efficiency gains will lead to higher energy use, not less.

A recent study into the impact of energy-efficient light bulbs gave fresh weight to this conclusion. A team of five US-based scientists, led by Sandia National Laboratories’ Jeff Tsao, conducted the study. It was published in the August Journal of Physics.

The team looked at historical evidence to show that as lighting has become more energy efficient, it has also become cheaper. In turn, the cheaper lighting has led to higher overall energy use.

They concluded that a rollout of very efficient “solid-state lighting”, similar to that already used in microwave displays and digital clocks, will not lead to lower energy use. Rather, the study said “there is a massive potential for growth in the consumption of light if new lighting technologies […] lower the cost of light”.

Many other experts have noted this phenomenon, known as the energy rebound effect. Energy historian Vaclav Smil gave another example in his 2003 book Energy at the Crossroads.

Street lighting in Britain had become 20 times more efficient since the 1920s, he said. But, “in the same period electricity consumption per average kilometre … increased twenty-fivefold, entirely negating the enormous advances in efficiency.”

Smil concluded: “Historical evidence shows unequivocally that … advances in energy efficiency have not led to any declines of aggregate energy consumption.”

That a more efficient use of a resource will increase demand for it may appear to be surprising. But in a capitalist economy — where endless growth is needed for profits to be made — it makes perfect sense.

For example, a more efficient coal-fired power station produces cheaper energy. This saving can allow the power station to increase its profits, as it can sell more energy with the same inputs. But it also lowers the cost of products and services throughout the economy in which this energy is embedded.

This sparks the energy rebound effect. The lower costs of production spur economic growth to new highs. The higher energy use that results tends to outstrip the original efficiency gains.

The 19th century British economist William Jevons is credited with being the first to recognise this trend, often called the “Jevons Paradox”, as a law of capitalist economics.

In 1865 he said: “It is wholly a confusion of ideas to suppose that the economic use of fuel is equivalent to a diminished consumption. The very contrary is the truth … It is the very economy of its use which leads to its extensive consumption.”

Jevons was no environmentalist. Unable to find an answer to his own paradox, Jevons embraced unsustainable capitalist growth in what could be called a "live fast, die young" theory of economics.

He said England should use its coal resources quickly, choosing a “brief but true greatness” instead of a “longer continued mediocrity”. But despite this, his insight remains relevant to climate campaigners today.

So if energy efficiency can be counter-productive, should we all drive gas-guzzling 4WDs and screw the old incandescent light bulbs back in the socket? An August 26 Economist article about the article in the Journal of Physics said incandescent lighting should perhaps be made “compulsory” in light of the study’s findings.

The study’s authors replied in a September 9 letter to clarify that this was not their view at all. They said the Economist’s “amusing but hopefully tongue-in-cheek conclusions about the ‘greenness’ of incandescent lighting would be, if serious, off-base and in our view potentially harmful”.

Cutting global energy use is a vital part of the answer to climate change. Overall energy use must shrink if there is a chance of replacing fossil fuel power with renewable sources. Energy efficient technologies will make this task far easier.

But the bottom line is that useful technologies alone won’t come close to dealing with the climate crisis. If the capitalist growth machine is left untouched, energy efficiency gains will simply lay the basis for higher energy use and could even make the climate crisis worse.

Energy efficiency, as part of a wider energy revolution, is a must if we are to get to a safe climate. But the framework has to be sustaining the Earth’s damaged ecosystems, not capitalist economic growth.

For this, a real ecological revolution that completely reshapes humanity’s relationship with nature and society is needed.

[This article first appeared in Australia's leading socialist newspaper, Green Left Weekly. Simon Bulter is a climate change activists and a member of the Socialist Alliance.]