Does Increased Energy-Efficiency Just Spark Us to Use More?

Last year, the U.S. raised its fuel economy standards for cars and trucks for the first time in decades. By 2025, the fuel efficiency of vehicles will be required to double. As a result, oil consumption is predicted to fall and--given that the U.S. remains the world's largest consumer of oil--global crude prices might fall as well. That makes using oil cheap again, encouraging yet more consumption that ends up reducing the energy saving impact of the initial policy.That is the story of the so-called "rebound effect," more properly called Jevons paradox, after W. Stanley Jevons , the British economist who first proposed it in his 1865 book " The Coal Question ." Jevons paradox is undoubtedly real and has to be considered in any energy efficiency policy. After all, the last time the U.S. raised its fuel economy standards significantly in the late 1970s, global oil prices cratered not too long thereafter in the early 1980s. Or consider the refrigeration paradox: freezers have become better and better at using less energy to keep food cold. As a result, many Americans now have two: a modern, efficient one in the kitchen for comestibles and the old fridge in the garage or basement to keep the beer cold and freeze extra supplies. [More]