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.

New Book: William Catton Returns with "Bottleneck"

George Mobus, Assoc. Prof. of Computing Software Systems at the Univ. of Washington Tacoma does a lengthy review of William R. Catton's Bottleneck: Humanity's Impending Impasse. The book is posed as a sequel to Catton's 1983 book, Overshoot, which has become a classic of literature in environmental sociology. The review is posted at The Oil Drum.

Warning: this book does not have a happy ending.

"In the sequel, Bottleneck: Humanity's Impending Impasse, Xlibris Corporation, he drops the part about we can evade the worst. The subtitle says it all. Now he concludes that it is already too late to mend our ways and somehow avoid the collapse of civilization. Indeed the main title refers to an impending collapse of the human population. An ecological bottleneck (also called a population bottleneck) is where radical changes in the environment of a species causes a die-off of all but the most hardy of the population; hardy, that is, in terms of the selection pressures arising from the change. Of course there may be no sufficiently hardy individuals left or the ones that manage to survive cannot reproduce sufficiently to produce a new population. In that case the species goes extinct.

Catton's arguments for why this is the most likely outcome for humanity boil down to something I have written about in my blog for several years now. It is the rate of change that matters as much as the degree or magnitude of change when it comes to shocking a population. If we look at the rate of climate change due to anthropogenic forcing, or the rate at which our fossil fuel energy sources are depleting, or the rate of aquifer depletion, or the rate of population increase, or the rate of consumption increase per captia in the developed and developing worlds, or... You get the picture. We are changing the world in ways unfavorable to human survivability more rapidly than we can either adapt or mitigate. And we have already passed the point of no return."

Biophysical Economics

The second conference of Biophysical Economics was held in Syracuse, NY at the SUNY College of Environmental Science and Forestry.

"Real economics is the study of how people transform nature to meet their needs," said Charles Hall, professor of systems ecology at SUNY-ESF and organizer of both gatherings in Syracuse. "Neoclassical economics is inconsistent with the laws of thermodynamics."

"The financial crisis and subsequent global recession have led to much soul-searching among economists, the vast majority of whom never saw it coming. But were their assumptions and models wrong only because of minor errors or because today's dominant economic thinking violates the laws of physics?

A small but growing group of academics believe the latter is true, and they are out to prove it. These thinkers say that the neoclassical mantra of constant economic growth is ignoring the world's diminishing supply of energy at humanity's peril, failing to take account of the principle of net energy return on investment. They hope that a set of theories they call "biophysical economics" will improve upon neoclassical theory, or even replace it altogether."

What interests me as a sociologist is the idea that "biophysical" concepts are being encoded into many different branches of knowledge. Does this signal a major paradigm shift, or in biophysical terms, a non-linear phase transition of the system into a new state? Are we entering a new phase of human civilization?

Gadgets and the Jevons Paradox

The NYTimes has a nice article describing how increases in the electrical efficiency of consumer electronics is actually leading to an increase in electrical consumption (because the number of gadgets we have is increasing). This trend will only get worse as we move toward the world of ubiquitous computing described in Adam Greenfield's book Everyware.








This same process occurred with automobiles, increases in fuel efficiency and emissions reduction from catalytic converters were offset by increases in the amount driven and, as a result, auto emissions were not reduced. The phenomena is so well know that economists have a name for it, the Jevons Paradox, referring to the tendency for technological increases in the efficiency with which a resource is used to increase, rather than decrease, the rate of consumption of that resource.

The folks over at Workers of the World Relax have put together a video about the paradox, suggesting that the solution is for North Americans to follow the European model and use productivity gains to increase the amount of leisure time rather than to increase production and consumption.