Thursday, December 16, 2010

"Energy efficiency" again

David Owen writes about "The Efficiency Dilemma: What's the best way to use less energy?" (only abstract is not gated) in the current New Yorker. He notes that Stanley Jevons figured out many years ago that commodity-specific "efficiency" gains result in lower prices which prompt increased consumption. Many people simply call it the Law of Demand.

This suggests once more that "energy efficiency" is a dumb idea. It may make sense to engineers and even have some intuitive appeal, but all resources are scarce and markets are there to mediate the uncountable trade-offs that are prompted. Sounds simple, but it isn't.

There are enough problems when we discuss plain old efficiency (as in Pareto), but it gets crazy when we focus on efficiency with respect to just one commodity.

As long as we are unable or unwilling to price a commodity with substantial unpriced attributes, we will face the conundrum. But the climate change discussion involves a global commons. Serious global agreements re carbon taxes or cap-and-trade are unlikely. Local efforts (by individual states or cities) are mainly feel-good and (as Jevons reminded his readers) not likely to amount to anything.

The Owen piece is worth reading because he recounts how much extra energy his family has consumed over the years in the way of how many refrigerators and air conditioners they acquired over the years -- as energy (and other) prices fell. He also takes a stab at a verbal explanation of the general equilibrium effects.

Put "energy efficiency" into Google scholar and over 400,000 citations pop up. My own small sample showed that most of them take it seriously. "Sex" has only just over four times as many searches (in Google scholar).