Friday, February 26, 2010

Behavioural Responses to Efficiency: The Piggy Principle

Efficiency and Resilience: After Jevons Paradox, the Piggy Principle

This is a guest post by Marco Bertoli. Mr. Bertoli has an economics degree from Bocconi University in Milano and a master degree in renewable energy from the Milano Politechnical University.

Energy efficiency is one of the themes most discussed by those who are interested in issues regarding energy and the environment. The key question is how effective these proposed solutions will be. Will these technological solutions labeled as ‘energy efficiency’ (i.e. an increase in power plants generation efficiency, cogeneration, home insulation, more efficient electric motors, cars, light bulbs, etc.) really lead to a decrease in the global demand for energy?

Read the rest of the article at The Oil Drum.

NOTE: In the rest of the article, the economist argues that producer efficiency is affected by Jevons Paradox, while consumer efficiency is affected by the Marginal Utility principle, or the Piggy Principle. The economist argues that we need to lower the point at which people feel satisfied with what they have, in the way that bariatric surgery lowers the point at which an obese person feels full. Ultimately, he argues for taxes that discourage any kind of excess consumption, rather than promoting "efficient" consumption.

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