The Jevons Paradox

Phillip Stott has a nice post on the Jevons Paradox. Simply, making the use of a resource (anything. coal, oil, whatever) more efficient doesn't necessarily lead to a reduction in the use of that resource. So arguing that all cars should be more fuel efficient doesn't mean that we're going to use less oil, because using less oil as the first step will make oil cheaper which means that we can afford to drive more which we might do leading to more oil being used.

All of which is true but the important word is "necessarily": making some use of a resource more efficient might lead to a fall, rise or no change in the consumption of that resource. It depends (which is actually the correct answer to almost every question in economics).

So those insisting that large engined cars should be banned, or that mpg's must be improved, in order to conserve oil (or reduce emissions) might not get what they want.

However, we can go a stage further. More efficient use of a resource does indeed mean that we can do more with it: rising mpg rates would mean that we can indeed drive further, see more of our sceptered isle, for example, within the constraints of our budgets. And that would be a good thing in and of itself, we get to do more stuff with the stuff we have available. But not everyone actually wants to go to Wick in February: that's fine, what we do is leave everyone to make up their own minds about what they would like to do with this increased efficiency and lower oil prices.

Drive larger cars, drive further, drive the same and spend the money saved on other things, whatever. Which is, umm, pretty much the point of this freedom and liberty thing, that we each get to do as we wish within the constraints of the resources available to us.

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