By Inhaber, Herbert
Consumers' Research Magazine , Vol. 80, No. 10
Although debate rages on many contemporary scientific and technological issues, there seems to be virtual unanimity that the United States, for various reasons, should take steps to conserve energy so that we can reduce our usage of fossil fuels.
In recent years especially, energy conservation--in the form of energy-efficiency regulations--has been widely viewed as the way to reduce our dependence on foreign oil or to stave off the build-up of greenhouse gases in the atmosphere. Such efforts hit close to home. Conservation policies affect the fuel economy of cars, the efficiency of refrigerators, even computer video monitors, to name a few. Hundreds of millions of tax dollars are spent annually in pursuit of the next generation of super-efficient cars. Local utility companies spend millions more pushing home insulation and energy-efficient light bulbs on their customers through incentive programs to "conserve" on electricity use.
The broad concept of conservation has emerged as a kind of received wisdom. It resonates with what seems to be unimpeachable logic, a mind-set that many people never question from the time they are taught that "a penny saved is a penny earned." But do policies pursuing this "urge to conserve" really save, in the sense of reducing total energy use? Do government energy conservation programs work? Surprisingly, billions of dollars have been spent on these programs without giving them a searching look.
Now, there is nothing wrong with saving energy. Indeed, efficiency gains do much, both for individual consumers and society as a whole, by enhancing productivity and freeing up resources for other uses. We wouldn't be enjoying the conveniences and wealth of modern life if it weren't for the successful pursuit of energy-efficiency gains in manufacture and transportation. Rather, the issue concerns the effort to conserve, that is, to reduce total energy use by a region or nation.
The goals of energy conservation programs often are not achieved. Despite ever tougher rules and regulations, the nation's overall energy consumption refuses to drop. This results from a fundamental misunderstanding of what transpires with increasing efficiency and energy savings. To put it in brief and seemingly paradoxical terms, the drive for efficiency actually destroys conservation.
Consider a familiar scene. A nation seems to be running out of its major energy source. Lawmakers worry about the wheels of industry halting. Cries of Efficiency! Greater efficiency! are heard. Only the government can deal with the problem, so it seems.
This happened not only here in the 1970s over petroleum, but in England more than a century before, when the coal mines apparently were being depleted. Then the father of quantitative economics, Stanley Jevons, found a rule that is often forgotten, but nonetheless true. Greater efficiency produces more energy use, not less.
Consider what took place, as Jevons observed, after James Watt's steam engine, which replaced the hugely inefficient Newcomen engine, was put into wide service in the late 18th century. In Watt's native Scotland, Jevons found that coal consumption was initially reduced by one-third. But that trend was followed, between the years 1830 and 1863, by a tenfold increase in consumption. Far greater efficiency made the engines much cheaper to run than their predecessors, which led to an extraordinary increase in the use of coal.
Efficiencies gained in steel production in that era provide another example. As Nathan Rosenberg of Stanford explains: "The Bessemer process (for producing steel) was one of the greatest fuel-saving innovations in the history of metallurgy.... Its ultimate effect was to increase, and not to reduce, the demand for fuel." When the world is producing only a few hundred tons of steel annually, as it did before Bessemer came along, not much coal is needed, regardless of how inefficient the process is. …