Efficiency Policy, Jevon’s Paradox, and the “Shadow” Rebound Effect

This is a guest post by Jeff Vail.

Is the push for greater energy efficiency a good policy choice to address energy scarcity after Peak Oil? Here’s a bold answer: NO, at least not in a vacuum. Efficiency is not a standalone solution, but part of the much more complex problem of reducing total energy consumption that must address Jevon’s Paradox and the Rebound Effect.

Jevon’s Paradox tells us that when we increase the efficiency of the use of a resource, we initially decrease the demand for that resource, but that ultimately this lower demand reduces price, which causes a “rebound” of increasing demand. When applied specifically to energy efficiency, this is commonly referred to as the “Rebound Effect.”

Here’s a real-world example. Let’s magically double the average fuel economy of America’s cars and trucks. Gasoline demand would drop immediately by 50%. This would affect the supply-demand equilibrium of gasoline, reducing its price significantly. However, with dramatically lower gas prices, many people would choose to drive more than they had in the past—this is the “rebound,” where some of the energy savings provided by gains in efficiency are negated by the corresponding effect on energy prices. Clearly, a 50% drop in gas prices won’t result in the average American doubling their driving, as would be required to completely negate the efficiency gains in this scenario. Even if gas was free, there would be some limit to how much we would drive. So this “rebound effect” doesn’t negate the entirety of energy savings due to efficiency. Studies suggest that it erases perhaps 10%-30% of the gains.

If Jevon’s Paradox, via the “rebound effect,” only negates 10%-30% of gains from improved efficiency, then efficiency appears to be a very viable policy option to reduce energy consumption, right? Not so fast. Jevon’s Paradox and the Rebound Effect are models that create snapshots in time of the operation of a highly complex system—it is important that we approach this problem with the entire system in mind. Consider the cascading effects in the energy-consumer system: when you save energy because of improved efficiency, you also save money. What do you do with that money? Chances are that most or all of it is spent on goods and services, and that these reflect energy consumption in some form. Whether you spend your savings on a trip to Hawaii, a new coffee table, or merely a plastic bauble, that expenditure reflects energy consumption. The exact form of energy consumed, as well as the relative quantity of energy consumed compared to energy initially saved via an improvement in efficiency is difficult to quantify, but in aggregate these two may be roughly equal. This is the “shadow” rebound effect. The “direct” rebound effect—that is, the increase in consumption of the same energy resource through the same process that experiences an improvement in efficiency—may be only 10%-30%, but it is possible that the true rebound effect approaches 100% when this “shadow” is accounted for.

Does this mean that efficiency is an invalid policy choice? No: true conservation, the goal of efficiency policy, can be achieved, but this represents a far more challenging policy dilemma. It is relatively simple, for example, to legislate higher CAFE standards. But what happens with the money saved on gasoline? It is quite a policy challenge to ensure that the energy saved by CAFE changes doesn’t simply go to another use of energy. One solution—the one that I am proposing—is that monetary savings from efficiency legislation is offset by an energy tax that is then invested in a manner that minimizes its energy consumption. Options for this offset fund reducing existing spending deficits, encouraging social pressure for absolute conservation, or my personal choice, funding efforts to design for quality of life using less energy—what I have called the Design Imperative. But selling this policy combination—CAFE increases paired with gas tax increases, for example—is a much more difficult task.

My intent is not to discourage the push for energy efficiency—quite the opposite: energy efficiency is a key part of addressing the challenges posed by Peak Oil, but ONLY if it is paired with measures to address both the direct and shadow rebound effects. There are valid arguments to focus on efficiency first, because it takes time to develop the technologies that create efficient energy use. However, we must be careful not to present efficiency as a standalone panacea, but rather to spur debate of systemic solutions of which efficiency is a key part.

**Thanks to Bart Anderson from EnergyBulletin for his critique of a draft of this essay.

I have spent 10 seconds considering the solution to the "rebound effect", so forgive me if there are multiple holes in my argument.

Increased efficiency can be driven by taxing consumption of the efficiency target, in this case energy. The tax should be rise year on year to sustain the efficiency drive, thus not adding to consumer spending liquidity

The tax should be hypothecated with yields being directly invested into sustainable renewable energy schemes (ie not ethanol).

It's a non-starter in the US since not a single politician has the gumption to entertain such a tax, and would not be voted in if they did.

In my opinion, the only thing that GW Bush could do to somewhat alleviate his (non-negotiable) place in the Presidential Hall of Infamy would be to exercise his veto to implement a gasoline tax now.... it won't happen

I think you point to some very valid political difficulties in getting any kind of 'energy tax' passed by the US Congress--though I still think there may be enough support to make it happen. It IS, however, already happening, or quite likely to happen, in many individual states, Europe, etc. The real problem that I think the "shadow rebound effect" concept raises, however, is what to do with the the funds raised by that energy tax. If the goal of the energy tax is to subsidize one form of energy use over another, to redistribute income, or to fund some building project, then it seems valid to me. However, if the goal is to reduce overall energy use, then it must be spent with great care (or not spent at all--reduce deficit spending, for example).

The problem is essentially the problem of the velocity of money. When a government spends the tax revenue raised by an energy tax, they create (roughly) the equivalent velocity of money in the economy as would the consumer spending that money--either way it leads to energy consumption, regardless of whether one purchases products or services. The result is that it doesn't lead to energy conservation, just redistribution of energy consumption.

Spending money on a truly sustainable, renewable energy scheme will result in energy consumption (required to build the scheme, plus the resultant velocity of money bouncing through the broader economy), but it will lead to reduced non-renewable energy consumption in the long run (assuming the EROEI is actually greater then 1:1 after the bootstrap effect is taken into account). So this is probably a good solution, though perhaps politically impractical as you mentioned. Other notions, such as using the gas tax to fund road construction, only redistribute our energy consumption, and don't conserve it, due to the "shadow rebound effect."


You phrase the question... Is the push for greater energy efficiency a good policy choice to address energy scarcity AFTER Peak Oil?

The push for greater energy efficiency may have had a much more profound impact before PO, and much less of an effect after PO.
Consider some of the countries that end up in a bidding war for oil once shortages develop- Japan, China, U.S., and European countries.
Since the economies, agriculture, and stability of these countries depend on oil- they will use any advantage possible to obtain oil.
AFTER PO is widely recognized, it would be in the best interests of the other bidders for global oil, for the dollar to collapse in value. This could easily be accomplished by Asian countries selling bonds, and refusing to buy more.
The U.S. is so much more dependent on foreign financing, that in a Post PO (or PO aware) world, structural change will become tremendously more difficult as we can no longer borrow at reasonable interest rates to finance mega-projects.

Leaving aside the fact that a geologically-limited supply of a product cannot have the sort of rebound consumption effect you're thinking of (it's physically impossible; the only question is how much of what gets made from the fixed supply, and how much is investment vs. immediate consumption), you mistake the role of tax policy in shaping activity.

When a government spends the tax revenue raised by an energy tax, they create (roughly) the equivalent velocity of money in the economy as would the consumer spending that money--either way it leads to energy consumption, regardless of whether one purchases products or services. The result is that it doesn't lead to energy conservation, just redistribution of energy consumption.

Behind that claim is two faulty assumptions:

  1. You assume that every dollar of products or services embodies the same amount of energy.  This is so wrong, it's nearly risible.
  2. You assume that a redistribution of energy consumption is zero-sum.  It's not; a GJ invested in fuel for a ski boat is very different from a GJ invested in epoxy resins for a wind turbine blade.

The effect of a stiff fossil-energy (or carbon, or petroleum) tax would be to make the various alternatives (including efficiency) relatively cheaper.  People would invest accordingly.  Economies of scale would change the economic landscape further away from favoring the now-discouraged commodity.

The outcome of greater efficiency is to encourage two trends:

  • Greater production from the existing energy supply, perhaps keeping up with declining production.
  • Increasing competitiveness of renewables, as a given quantity of production yields more and more goods and services.

The whole collapse scenario is predicated upon an inability to maintain production of goods and services.  Postulating that greater efficiency in that production will also lead to collapse is just silly.

"You assume that every dollar of products or services embodies the same amount of energy. This is so wrong, it's nearly risible."

I don't think this is wrong at all. It's commonly *assumed* to be wrong, but I have explained at length why I think it is this assumption that is wrong: http://www.jeffvail.net/2006/11/energy-payback-from-photovoltaics.html

I think think the actual mistake is in the two trends that you see as the outcome of greater efficiency:

1. Greater production (work, actually) from existing supply keeping up with declining production. This certainly seems valid for a while. However, there are fixed limits to how efficiently you can use a resource (100% efficiency, which won't be reached). In the end, this becomes an EROEI issue. Is the true, non-bootstrapped EROEI greater than 1? IF so, is it continually increasing? If not, it still runs into diminishing marginal returns and won't "cut it" for a hierarchal society based on growth.

2. More goods and services due to increasing competitiveness of renewables--this, too, runs into the "finite world" issue, and does nothing to address the diminishing marginal returns problem as the ultimate cause of collapse.

I'm not arguing that greater efficiency will lead to collapse per se. What I am arguing is that focusing on greater efficiency without considering the ramifications of efficiency-only policy within the greater system will distract us from addressing the fundamental causes of collapse.

If I hear you right,we need to put a cap on growth or nature will do it for us. We need to put a cap on all sorts of things, including energy use, greenhouse gas emissions, water use, other resource use, mineral use, and population. The economy needs to operate within those constraints.

Efficiency should just be one means to an end, not the objective itself. What has efficiency brought us in the automotive sector? Bigger and more powerful cars that are more efficient. Within the sector itself, I agree that the Paradox is operating quite nicely.

The problem is we always want more and just use efficiency as a way to help get us there. Once we set a goal for the same or less, solutions begin to present themselves.

I don't think this is wrong at all. It's commonly *assumed* to be wrong, but I have explained at length why I think it is this assumption that is wrong [linky]

You only analyzed photovoltaics, which have the lowest EROEI of all the options.  Among the flaws of your analysis:

  1. You ignore wind.  Wind has an estimated EROEI of up to 80:1 over a 20-year lifespan (payback time as little as 3 months).
  2. The world produces considerable biomass which is not used to its best effect.  This is already being produced, so new energy inputs would only be required for processing and shipping.  Given that some of the products (e.g. torrefied biomass) have an energy content similar to coal but would be produced closer to some markets, the energy devoted to shipping may go down.
  3. Even silicon PV is changing.  Historic energy balances have been for PV silicon produced as a byproduct of the semiconductor industry; we may soon see PV-grade silicon produced for $18/kg.

Forget PV for a moment.  If you can show serious problems with the proposition that a sustainable energy system is impossible in the USA (as an example), I'd like you to go over my "Sustainability" essay and show me exactly where I went wrong.  Do note that I assumed a lot less liquid-fuel production than the maximum possible (I devoted about 2/3 of the carbon for sequestration), and even if technologies like the DCFC turn out to be duds there are backup paths which will yield a European-level energy consumption.

Greater production (work, actually) from existing supply keeping up with declining production. This certainly seems valid for a while. However, there are fixed limits to how efficiently you can use a resource (100% efficiency, which won't be reached).

Let's suppose that I put a wind turbine on a 1/4 acre pad at the edge of a cornfield.  This is a 126 meter diameter rotor, spaced 4 diameters on-center crosswind and 10 diameters downwind to the next machine.  Total land area blanked by the turbine is 63.5 ha (157 acres).  Total blade weight is ~54 tonnes, of which perhaps half is derived from resins (the other half is glass fiber).  Assume fatigue lifetime of 20 years.

If 80% of that land is cropped in maize every other year at 150 bu/ac/yr grain and 2.5t/ac/yr stover, the land will produce 157 t/yr of stover.  If the stover can be converted to e.g. bio-oil at 70% mass-efficiency and the bio-oil to resins at 20% efficiency, each year's stover can make 22 tons of resin.  This compares favorably with the 27 tons of resin required to replace the rotor after 20 years (1.35 t/yr).

This is a recipe for rapidly increasing production (80%/year growth potential) from renewable supplies.  It would be able to yield both food and energy with more than 90% of the non-food products (both energy and chemicals) available for other consumption.  In short, it grows like a plant.

Even 14% efficiency from biomass to a resin product seems to be no obstacle to rapid growth.  The key is that there is some efficiency level where the cost of renewable material and energy inputs stops being a limiting factor on system growth.

As for keeping up with declining production, let's assume a 2%/year compounded decline in fossil-fired electric generation (2005 figure:  ~2000 billion kWh/year) and a 40%/year compounded increased in wind generation (14.6 billion kWh/year in 2005).  The fossil-fired decline runs about 40 billion kWh/year/year, while the wind generation increases about 4 billion kWh/year in 2005, 8 billion kWh/year in 2007, and 32 billion kWh/year in 2011.  The increase in wind exceeds the decline in fossil in 2012, and then it's uphill until the inflection point of the logistic curve is reached — perhaps another decade.

Annual wind energy potential from the continental 48 states is estimated at about 1.2 terawatts average (~10,000 billion kWh/year) from the continent, and about 900 gigawatts (~7500 billion kWh/year) from the continental shelves.  This is sufficient to supply all current end-use energy consumption.

More goods and services due to increasing competitiveness of renewables--this, too, runs into the "finite world" issue, and does nothing to address the diminishing marginal returns problem as the ultimate cause of collapse.

Please show me where those limits are in a renewable-energy scenario (don't forget to assume 25%-efficient PV at $1/watt within the next 20 years), and why they'd lead to a collapse instead of a "climax forest" scenario.

Ris·i·ble /ˈrɪzəbəl/ Pronunciation[riz-uh-buhl]
1. causing or capable of causing laughter; laughable; ludicrous.
2. having the ability, disposition, or readiness to laugh.
3. pertaining to or connected with laughing.

4. cant of the orotund flatus

The world produces considerable biomass which is not used to its best effect.

Who are you to decide how this planet puts to best 'effect' it's biomass? Sorry poet, but I find that sort of thinking the reason we are in this sorry state. We tear up the floor boards of our house in order to heat it.

Who are you to decide how this planet puts to best 'effect' it's biomass?

When I said "the world", I meant the human portion thereof.  If we're producing stalks, leaves, trimmings, slash, pulp and other material that we essentially throw away, we might as well change our methods to get the most out of them.

While the analysis in the link was aimed at PV, the relevant point here is that it lays out a methodology for calculating EROEI--a "price-estimated EROEI." I state quite clearly that it is an imperfect methodology, just one that I think is better than current methodologies, which ignore a huge percentage of energy inputs to a given product.

The truly laughable notion is your assertion that wind has an EROEI of 80:1. That's greater than any other form of electricity generation--If there is so much wind potential, I wonder why we don't rely primarily on wind in this country? How much do you have personally invested in wind developments?

The bottom line is that, even if we accept your wildly optimistic projections for wind and other renewable energy production, this does nothing to address the fact that we have an economy predicated upon continual growth situated on a finite planet. But advocating wind energy is where you want to place your effort, more power to you...

The truly laughable notion is your assertion that wind has an EROEI of 80:1. That's greater than any other form of electricity generation--If there is so much wind potential, I wonder why we don't rely primarily on wind in this country?

Beyoned energy returns of 40 or 50 it just doesn't matter. First your analysis becomes sensitive to rather small things so you can start fudging the numbers without really lying, so either hydro or nuclear or wind have the highest energy return depending on which day of the week it is.

Second, and this has been hammered home many times, energy return isn't the sole determinant of economic competitiveness of electricity generation. For example, if wind had twice or three times the energy payback it would still require quite a bit of excess capital for dealing with intermittency, from HVDC lines routing between different generating regions to pumped hydro storage.

The bottom line is that, even if we accept your wildly optimistic projections for wind and other renewable energy production, this does nothing to address the fact that we have an economy predicated upon continual growth situated on a finite planet.

Sure this is something we'll have to deal with... in several centuries. We aren't close to tapping out the energy potential of the solar flux or the radiative capacity of earth of roughly 10^16 watts. One might reasonably surmise that we'll address this by moving a substantial amount of our industry off planet by then.

The truly laughable notion is your assertion that wind has an EROEI of 80:1.

If you can't tell me what's wrong with the source, what do you have to argue with?  I admit that 80:1 is extreme, but other sources claim EROI of 17-39.

That's greater than any other form of electricity generation

Why shouldn't it be?  It's got zero energy expenditure per unit of "fuel".

If there is so much wind potential, I wonder why we don't rely primarily on wind in this country?

Rural areas once did, until the REA brought grid power to most of the nation and destroyed the market for wind turbines.  Note that the wind industry was put out of business by a government-subsidized competitor.

How much do you have personally invested in wind developments?

I don't know.  Most of my money is in mutual funds, and I have no idea what their particular investments are.

The bottom line is ... we have an economy predicated upon continual growth situated on a finite planet.

Which means the oil situation (heck, everything about fossil fuels) is irrelevant to your thesis, so why do you bother to post on this site?

In closing, an analogy:  An individual shark lives based on continual growth in a finite ocean.  Sharks have been around for about 420 million years.

If energy production stays constant or even becommes larger but shifts from oil, natural gas and coal to nuclear power, biomass, hydro, wind power, etc we get a solution to the peak oil problem. Peak oil is not about absolute level of energy production, its about fossil fuel.

Combine that with savings and we get the best possible response.

And if the poorer regions in the world developes faster then the rich regions as is happening via globalisation we get a future that is very humane. Of course as long as we dont fuck up in the investments, savings and statemanship areas and get a fight over dwindling resources.

Localy I am advocating large investments in efficiency and production to get to live in a country that can outbid most other regions and export lots and lots of non oil based and CO2 neutral resources that the rest of the world needs.

Consider some semi-real life examples.

Let's assume a family of four with more money than brains, and they each have a H2 Hummer, driving 10,000 miles per year. Yahoo puts the total cost per mile at about $1.50/mile (inclusive of depreciation + maintenance + insurance + fuel). Total cost per year about $60,000.

Yahoo also puts the cost of driving a Civic at about 50 cents per mile, at 10,000 miles year year.

These cost estimates were probably made at about $2.50 per gallon.

Let's assume that gasoline goes to $5.00. The combination of vastly higher deprecation on the Hummers and higher fuel prices would probably push the cost per mile to somewhere north of $2.00/mile. The Civic would probably go to about 60 cents per mile.

Assuming that that our family of four magically got rid of the four Hummers and acquired four Civics, a big assumption, their total cost of driving 40,000 miles per year would go from $80,000 to $24,000 (all at $5 gasoline). Even if we compared the annual cost of four Hummers at $2.50 gasoline ($60,000) to the cost of four Civics at $5.00 gasoline ($24,000) they would be way ahead.

IMO, what we need are permanently higher energy consumption taxes, offset by cutting or eliminating the Payroll Tax.

Westexas: I agree with your recommendation to raise energy taxes and negate the impact on poor and middle class by using them to replace the regressive payroll tax. My point here is this: let's not justify this by arguing that it will save energy. That family of 4 will save $56,000 a year. My guess is that they won't stuff it in a mattress--they'll spend it at Wal-mart, or to go to Hawaii, or other things that will use an equivalent amount of energy when one accounts for the total effect of that spending rippling through the economy. This tax MAY redistribute some of that energy consumption away from liquid fuels and toward other (coal, nuclear) sources, temporarily alleviating the liquid fuels crunch, but the result may actually be greater GHG emissions. At the least, it will give us a false sense that we, as a nation, are really doing something to address our overal energy consumption, and that may prove to be the most damaging effect when it comes to a real, "total energy" crunch--the populace may see this as "the boy who cried wolf."

That's why I suggested hypthecation of the tax to be spend on sustainable renewable energy projects (wind, solar, pump storage, Engineer Poet schemes http://ergosphere.blogspot.com/2006/11/sustainability-energy-independenc..., etc)

My point here is this: let's not justify this by arguing that it will save energy.

I agree. I have forgotten the exact numbers, but as our fuel efficiency in the US has climbed, total miles driven have climbed even faster.

You can see it with the example I cited. For the $60,000 that the family was spending on four Hummers driven 10,000 miles per year per vehicle (at $2.50 per gallon), they could pay for 10 Civics driving 10,000 miles per year per car, even at $5 gasoline.

I've put it this way: "We have to kill consumption before consumption kills us."

So at the end of the day with our current economic system your only going to really save energy when its not increasing.

This makes sense. My opinion is our current economic system cannot be retrofitted to work in a energy constrained world since the whole system is designed to optimize consumption.

I don't see band aids regardless of their nature is effective.
The only way out is to make holding money more valuable then spending it which mean relentless real monetary deflation and resource price inflation. The price of finished goods and services would be balanced on the two apposing trends.

This means going back to a world with little credit available. If you don't deflate in a resource constrained world you tend towards hyperinflation and currency collapse.

Resource price inflation tends to make holding the resource more valuable while monetary deflation causes the opposite.
The outcome of the two conditions is that efficiency is the real wealth. Since using less resources saves money and monetary deflation makes saving this money a good bet.
The real economy (physical goods) will shrink to probably a tenth of what we have today if that excluding base food production. Food would make a large part of the total economy at that point say 50%. Services based on renewable resources or knowledge would be the growth area along with recycling and production of longer lasting repairable goods.

This is not the world we live in now. My guess is hyperinflation before we flip to a sustainable economic model but we won't be able to transition our current one.

Sure what you say is true about a gasoline/diesel tax, but if you want to reduce GHG emissions you might as well just tax GHG emissions. Since TOD is focussed on a looming liquid fuel crisis, we're talking about a liquid fuel tax. (Personally, I'd rather tax liquid fuel use via a GHG emission tax.)

I used to be big on Jevon's Paradox, but then I tried to apply it to a reduction in tobacco use via a tobacco tax.

As the price of energy increases along with the cost of all goods and services, the amount of disposable income will decrease. The Hummer family may spend the savings at Wal-Mart, but the average family will consume less energy because they can't afford anything but the necessities.

And if that (I'm assuming lower working class family of four) in the civic can't pony up that extra 10 cents then they will have the opportunity to do that part of the ride on shanks mare and enjoy that added benefit: robust peasant vigor and thereby reduced health costs. Of course they will likely lose their jobs for tardiness and as well lose those fantastically reduced payroll taxes which I imagine would be a lot along the lines of the last tax 'cuts' for the insolvent. %;-) = 0

LESS - that's the answer.

Fat chance.

cfm in Gray, ME

'Efficiency is not a standalone solution, but part of the much more complex problem of reducing total energy consumption' -

This was also written in 30 seconds, but efficiency leading to the reduction of consumption is a standalone solution, when so defined.

The problem is the difference between absolute values, like the energy needed for industrial processes such as melting metal or silica, advances in technology like food preservation such as freezing or canning, and the energy we consume for our own comfort - whether heated/cooled houses, or entertainment.

I don't think the problem is as much Jevon's Paradow, as something else - what is the minimal amount of energy required to keep an industrial society functional? The amount required for agricultural societies can be quantified in a number of ways (sunlight for crops, workers required for harvesting, energy required in building storage for surpluses, etc.) based on historical and ongoing experience - the minimum standards for industrial society are still unknown.


The minimums I get from this limited definition are:
1. mass production
2. minimal population involved in agriculture

1 might possibly be preserved (after all, the English had to shut down the Indian cloth manufactures to protect their own factories), but 2 is largely linked with the fossil free lunch of which we are nearing the dessert.

I think it is possible to have sustainable agriculture that requires 1/2 or 1/3 of the population, using todays knowledge and a carte blanche to set up social experiments. If the climate doesn't go haywire..

Ridiculous. Agricultural production will simply outbid synthetic oil for production; Even at $10.00 per gallon its cheaper than people.

Even if magic space bats make oil burning impossible, technology is whats advanced, not mere advent of fossil fuel... You'll have beasts of burden pulling modern machines in the fields before you have people reduced to pre-industrial working conditions full circle.

Put the rest of the pieces together, Dezakin. Who is going to buy this expensive food? How are they going to pay for it? What about those that cannot afford this food? Are they supposed to just crawl off in a corner and quietly die to appease you?

Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett

Put the rest of the pieces together, Dezakin. Who is going to buy this expensive food? How are they going to pay for it?

People, as they allways have. They'll pay for it with labor only people can do, which isn't agricultural farming. It might be working on machines that assemble sneakers, answering telephones, or performing menial labor for the landowners. But they wont have any value as farm labor just because they wont be nearly as productive as machines and will be much more expensive.

What about those that cannot afford this food?

In this century, the only reason why people cant afford food is politics.

Are they supposed to just crawl off in a corner and quietly die to appease you?

Build the strawman, twit.

Ah, the ever faithful ad hominem attack. Got anything more constructure to say?

In a world of reduced petroleum flows, what energy source is going to keep all these people working to produce widgets (that strain other resources) to be consumed so that they can buy this more expensive food, Dezakin? I am really interested in an answer, if you have one.

Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett

Ah, the ever faithful ad hominem attack. Got anything more constructure to say?

If you're building strawmen, its just about as constructive. In your protests you're not only being a twit but a hypocrit.

In a world of reduced petroleum flows, what energy source is going to keep all these people working to produce widgets (that strain other resources) to be consumed so that they can buy this more expensive food, Dezakin? I am really interested in an answer, if you have one.

No you aren't. They've been discussed at length many times. In the short run there's tar sands, heavy oils and the other unconventionals. In the medium term theres coal liquefaction and the like. In the long run theres nuclear power, wind, and solar. When you need liquid fuel its only a matter of chemistry and energy, and for the processes that absolutely need it the premium wont be excessive.

Ah, the ever faithful ad hominem attack.

There are indeed some impolite people here at TOD - but thankfully not many.

It's a shame that those who get a thrill from being abusive don't stay over at peakoil.com

Dezakin, While visiting a friend in the Dominican Republic I noticed he had 10 Haitian workers clearing land with machetes. I asked why didn't he get a small tractor and reduce his labor cost. He told me to do the math. The total cost of all his workers was $60 per day. I ran the numbers and there was no way he would be better off with a machine. Labor is cheap and machines there are expensive to buy operate and maintain.. In my opinion there are two errors in the assumptions you make dismissing agricultural manual labor after peak oil. The cost to manufacture, maintain, and operate those machines will rise dramatically. The cost of manual labor will drop dramatically.
Just look to the third world to get a preview of a post peak world. You will not make accurate prognostications relating to the present.

Hi Dez,

Love your opinion, I live on a large city lot 10,000 sq ft. and on that lot produce almost all of three adults green groceries (fruit and vegetables)in my spare moments. If you count my labour at a current subsistence level of 12 to 15 dollars I break even. I do it mainly for the organic benefit presently. Anyway love your opinion but don't think too highly of how you arrived at it ....by airplane I would assume.

Anyone want to talk about rerouting the energy flow via a horribly oppressive luxury tax along with a subsidy for progressive forms of transportation?

You're comparing your cost of production against a mechanized producer? No.


Apologies, that reply directed to you was meant for treeman.

Your probably right short term but I think longer term the shift will be away from manual labor.

First the farmer in your story is considering buying a tractor the American way instead if he joined a co-op that had one or two tractors he could easily schedule the time to use it and come out ahead of using manual labor. Or higher a private tractor owner who could come in cheaper.

Next consider the tractor itself they should be maintenance free and practically bullet proof its a failure of engineering that they are not. Tractors are primarily designed for the wealthy markets and maintenance is a big part of the revenue flow so their is a definite balance between costs/parts etc thats maintained post peak I'm sure the momentum would move towards equipment that never breaks down and if it does it can be repaired.

So I think looking at how the third world does things today with considering the fact that they are not actually supported in their use of technology is not a correct approach either. Once you consider post peak the only market for technology will be the third world (All countries will be significantly third world) then we will see engineering begin to address their needs.

My idea of a post peak tractor is one with the following parts.

1.) Wheels can be rebuilt like advanced retreads.
2.) Engine is a solid oxide fuel cell that can handle
liquids and compressed gases with potentially a thermal
unit for solid materials either mounted or near by.
Battery pack option also.
The power motor is a rebuildable brushless motor.
3.) Gears should be replaced with fluid based converters
get rid of metal gears.

Don't know if this is possible but and google for this post I found out that the lowly o-ring was not invented until 1937 so I suspect that we can and will create tractors that can replace human labor post peak one thats the only market.



My goodness gracious, what will these tractors, you look forward to, do after Bush and friends have strip mined the soil for ethanol and bio-diesel? Raise a lot of dust and little else I think.

My suggestion for post peak oil agriculture is to burn down your neighbours house. He will be off to the city in order to leap off an Olduvai gorge cliff, and you will be the proud possessor of a 10 X 10 foot agricultural field and a 4 or more thousand foot concrete basement filled with wood ash. The wood ash makes lovely fertilizer for your field and the concrete basement will make a fantastic aquaculture fish pond. Gee I am so enthused about this idea I would go right now and burn down my neighbours house except all he has is a crawl space. What a low life!!!

The cost to manufacture, maintain, and operate those machines will rise dramatically. The cost of manual labor will drop dramatically.

These assumptions are made on an empty foundation... especially the second one.

The subject was the minimum conditions to continue industrial society indefinitely. By necessity, that means without one-time-only resources. So what is ridiculous? (talking about straw men..)

A computer without electricity is just a box with chip jewelry. Much of the technology we use has been developed in an environment where fossil fuels were abundant, if not specifically to take advantage thereof. So, a part of it will become slowly expensive, after that unreliable, after that impractical, after that useless, and after that forgotten.

I agree.

In any case, I think that a fair amount of agricultural production could be transferred away from fossil fuels.

Agricultural machinery is slow and stays in one general area; this seems like a good fit for battery powered tractors etc.

You'll have to plug each one in every night, but that's OK. Farmers are quite quantitative about such things---when it becomes cheaper to do it this way, they will.

Distributon is the tough problem---long distance distributed transportation is where liquid hydrocarbons can't be beat.

Tilling the soil takes a tremendous amount of power, hardly the work for battery powered tractors. This is where bio-diesel may be used as a substitute for fossil fuels.

Hi btu,

You are spot on about electric tractors, lets all rush right out to our nearest Oxen dealer and check out the size and power of those guys then see who would go electric tractor or even bio diesel (after PO and likely as well the Olduvai cliff). They work for hay and produce really hoopy fertilizer.

What is an oxen except a bio version of a diesel tractor without the inefficiency! Hay in one end organic fertilizer out the other and work in between...quite a machine.

Please show some calculations for the energy efficiency (field-to-yoke) of a team of oxen.  Make that an annual calculation, because the oxen consume energy even when they are not working.

It is the efficiency of easy gained pleasure from the sun and breeze on the cheek, the sensation of intimacy one has of two living beings working (and resting) together, the enjoyment of producing your living directly connected with rather than dissociated from the world. It is not having to, show some calculations for the energy efficiency... Feeling and dreaming, and connectedness are so intrinsic to life as to be incalculable ...as your name implies you should understand. Or is 'Engineer-Poet' merely a something that consumes energy while not really working?

I think possibly some time spent at a petting zoo could be instructive?

His point is that your assumption that mechanized farming is energy inefficient compared to using oxen is premature.

Hi Dezakin,

I am sure your heart is well directed but I would appreciate a coma or two to see which way your oxen is traveling, or is it merely resting.

My son thinks I'm flogging a dead oxen!!! Oh sharper than a serpent's tooth.....

You ought to take a few hints from your ol' grammar. (pun in ten did)

Let's think about this argument. Let's take a country I'm familiar with and I think represents a possible realistic example of the future, Cambodia. A day's labor here is about $2 USD, and represents about 1.5 kWh. The work value of the labor is approximately equal to half a liter of diesel fuel. So basically, in this example, human labor has become equivalently priced to fossil fuels at about $15.14 USD/gallon. Note however, that human labor does not require a huge outlay in capital expenses and maintainence, and is infinitely more flexible in terms of utility. It does, however, suffer from bouts of unreliability.

Basically, I will argue that in most of the world, and eventually even in westernized countries as the slide down the energy curve becomes real, human labor will be used in place of diesel fuel for farming. And it will be used in large volumes.

I believe Dezakin, you suffer from a disorder that thinks current western society is real, rather than an abberation based on fossil energy. Just look at developing countries to see your own future. They suffer from lack of capital, minimal energy, and decaying infrastructure. This is exactly what the west will face. And the solutions to it will be quite similar.

Namely, a very, very rich well off class enjoying the best of everything, and a peasant population that earns the equivalent of $2/day and does manual labor.

Under these conditions, fossil fuels are far too valuable to be used for trivial things like agriculture. They will be reserved for the private jets and manufacturing facilities of the rich.

Tom In Thailand

I believe Dezakin, you suffer from a disorder that thinks current western society is real, rather than an abberation based on fossil energy. Just look at developing countries to see your own future. They suffer from lack of capital, minimal energy, and decaying infrastructure. This is exactly what the west will face. And the solutions to it will be quite similar.

Except that it isnt based only on fossil, and we aren't depleting our energy resources; Capital spreads as does technology. The average price of human labor has continued to climb over the past century globally, not just in the west, and Cambodia wont be immune to this change either. In addition, the price of capital has been dropping.

The issue that humanity may face wont be that human labor is too cheap, but priced out of the market.

As it Applies to Electrified Freight Rail

First, the "rebound effect" ignores that, absent efficiency gains equal to diminished oil supplies, consumption would drop significantly. SO either conservation by efficiency or conservation by recession/depression.

In the specific case, let us assume that multi-billions (say $150 to $200 billion) is spent to electrify every main line and most branch lines and every main line is either double or triple tracked. A few new lines are built. Multi-modal centers abound. And with the aid of higher oil prices and tolls on interstate highways, 80% of intercity freight currently trucked is moved from truck to electrified rail.

For the cost of a year in Iraq, the US trades 2 million barrels/day of diesel for the electrical energy equivalent of 90,000 b/day. That 90K comes from new wind turbines (with plenty to spare to reduce NG & coal use).

What rebound effect would result ? Slightly higher freight movements perhaps. But electrified rail is *SOO* efficient that a 10% gain = 9,000 barrels/day equilavent.

IMO. dramatic energy gains (say 20+:1) can ignore the rebound effect. And the capital costs required to build this efficiency savings will reduce consumption in other areas as well.

Best Hopes,


What rebound effect would result?

By looking at only the conventional view of "rebound effect," it is pretty easy to marginalize. This is exactly the point I am trying to make: we generally ignore the "shadow" rebound effect.

Take your example: We save 2mbpd diesel by reducing how much we drive due to better access to electrified rail. There are two choices:

A: It costs less to ride the rail. What do people do with the money saved? Most likely, they spend it, and what they purchase has embodied energy. As I argued here, they consume roughly as much energy in this spending as they saved by not buying gas for their cars with that money. Minimal, if any, net energy savings.

B: I costs about the same to ride the rails. This money goes to the rail company (or government agency). It is spent on maintenance, salaries, etc. Regardless of whether the money is directly spent on replacing a piece of track, or goes to an individual via salary who then spends it at Wal-Mart, this represents energy consumption (as above) roughly equal to the energy saved by riding the rail.

I am NOT saying that electrified rail is a bad idea (I am actually a big supporter)--rather, I am saying that in this (and all other) calculation, we are ignoring this "shadow" rebound effect. We're just assuming that it is OK to ignore this and that everything will work out OK. There is a great risk, due to this shadow rebound effect, that there will be unintended and unanticipated consequences from our attempts to mitigate Peak Oil. This is--in my opinion--something that we must take into consideration, and that we currently ignore.

...absent efficiency gains equal to diminished oil supplies, consumption would drop significantly. SO either conservation by efficiency or conservation by recession/depression

IMHO, the "rebound" effect will be absorbed by reduced economic activity post-Peak Oil.

I really think that an electrified rail system could make the difference between a severe recession and a true blue depression post-Peak Oil.

We will burn the oil available post-Peak Oil. The question is how much other economic activity can we support with that more or less fixed amount of oil ?

This may be another way of rephrasing the rebound effect.

Best Hopes,


"IMHO, the "rebound" effect will be absorbed by reduced economic activity post-Peak Oil"

I actually think Alan is on to something here. Shoot this one down Example my old refrigerator dies and I purchase a new energy star refrigerator saving 40% electricity use over my pre 1992 current refrigerator. An additional 15-20% over a similar non-energy saving refrigerator. Net Impact same as far as money flowing back to company selling as they could have sold me either frig for virtually the same $. Due to the sale they build another Energy Star frig potentially saving more energy for the next consumer
I also recycle the old refrigerator saving energy over mining new ore. With my 15%-20% savings over the non Energy Star frig. I purchase a used bicycle and begin commuting with it instead of by car. Saving more energy. Some of those savings $ I spend with a hot unemployed masseuse to massage my now tired legs. She gives me a really great massage outside under a big tree. No need for additional lighting. She uses some of the money to pay her utility bill and for some of the food she needed instead of drawing welfare resources from the State. She also uses some of the money to rent a garden spot from Jed she raises some of her own food and saves some more energy instead of driving to the store and buying green beans that used to come from Wisconsin. Jed works hard in his garden so he needs a massage every once and a while too so She uses that money to buy a used bike so she can ride over to Jed's saving more energy. The money she saves from not using her car goes to Steve who runs the gas station and is now low on dough because no one is buying much gas. Steve keeps her equipment working and uses the dough to pay his utility bill instead of getting his dough from the State.
The gentleman we purchase the used bikes from has also recently lost his job and will use the bike sale revenue for paying part of his utility bill instead of getting welfare.... no new net consumption. He also buys some more used bikes to refurbish and sell to another energy saving consumer potentially saving even more energy.

Tell where have we created more energy consumption? Point is if we are consuming services and not creating incremental demand short of stalling a die off how are we driving or creating incremental energy demand? I still think their is much validity in Jevon's its not an absolute IMO.

Almost right I think. But if you make saving money a good thing to do by deflation a lot of the money you save via efficiency gains would go into the bank not back into circulation and if you get rid of fractional banking if the money is lent its lent for something that is valuable to the community. Say starting a refrigerator manufacture that produced very efficient fridges or a repair shop. if in general the money supply is deflating lending standards will be very high by default. To me one big trick is that money is worth more setting in the bank then spending it on consumption or growth. By making money increase in value you create a economy where people can afford to be sensible and think about what they want to do with money.

The bottom line is that simply keeping money in a savings account should be a very good investment.

If you increase the value of idle money (by raising interest rates?) I suppose it could reduce frivolous consumption. But at some point, even if it isn't until retirement, a person is going to want to spend this money. How is the concept of interest compatible with a zero growth economy?

I can't argue that saving money is a good thing to encourage because if we Americans had done more we would be in better shape financially. But as Welaka pointed out savings can be viewed as deferred consumption and I wanted to illustrate the impact of how continually spending the money generated by energy savings could be neutral or even be used to continually lower enegy efficiency savings if properly directed. I.e. as humorously pointed out from time to time on the board thru various references to SUV's and the male anatomy. "Status" needs to be redefined as increasing or saving resources by our actions instead of defined by over consuming.

I'm arguing that its absolutely critical that saving money becomes one of the top choices. Next your assuming that a person would spend all their money on retirement in this society thats not the case they would pass it on too their children so money could be spent over many generations. Consumption could well be deferred for hundreds of years.

This changes the situation quite a bit and its why saving money should be the focal point not a secondary issue.

With this viewpoint when you buy a bicycle your buying one to last for generations not for yourself. Maybe its having a chinese wife that allows me to understand generational wealth but their is a good reason to take that approach. The only thing that causes problems is rapid inflation since a lot of the money is controlled by conservative older people.

Without inflation this approach becomes valid. And no you don't have high interest you deflate the currency so instead of interest each year a dollar gains in buying power.

The reason this is important is it allows you to hold cash and make money without depositing it and allowing it to be lended. So the actual owners of the money have significant power over the banks who must convince the people with money to allow it to be used for loans.

Banks are not banks in this scenario they are investment groups and the investor is just as important if not more than the banker. The problem today is if you don't allow your money to be invested your inflated away so your forced to feed the every growing beast.

If instead investments are profitable over simply storing the money by even very small percentages say 0.1% since they only have to be profitable to beat not lending the money your encouraging innovation without inflation of the money supply. Instead of growing the money supply in general its decreased incrementally each year with cash becoming more and more valuable and small returns over just holding the money a respectable business. Innovation that causes a spending spree in this environment will be amply rewarded.

One response to this claim might be that the free market probably will do a good job in reallocating energy resources only this reallocation will take an unpalatable form post-peak: dramatically lower consumption for non-transportation related energy uses as we transition to higher efficiency and electric power in the transportation sector. We pay more to get where we are going, and have to buy less stuff we don't really need anyway. It will be a decline in the "standard of living" but certainly not a collapse of our way of life.

I guess what I'm getting at is the positive spin on Jevon's paradox: we can (will) save a lot of fuel by drastically reducing overall consumption of embedded fuel in consumer goods.

Jevon’s Paradox is much more complex than that. What do you think Oil Companies do with the money they receive? They spend it or give it to stock holders who spend it. You forgot about that... So whether money is spent by the oil companies or stays with the consumer and is spent, on a global view of things – it doesn’t matter!

Here is the real problem: Any and all improvements in efficiency only allow continued additional growth that offset the efficiency improvements... so you haven’t changed anything and in fact have made the problem worse.

Again – I’ll keep saying this until everyone understands Bartlett and we start getting articles that cover the whole problem.

Until we get a handle on continued growth and decide as a community, nation, world to STOP, every improvement be that tax changes, efficiencies, more renewable energy, etc. does not matter and makes the problem worse.

That’s the real Jevon’s Pradox….

We can use Peak Oil as a platform for advocating a certain style of life but I don't see how one can argue that PO requires us to adopt that style of life: that is an argument based on other factors: the world could probably support tens of billions of people, but would you really want to live here then?

We could have nuclear reactors in every nook and cranny of the world. I'm not sure that is a good idea but it would certainly make possible a lot of growth in the global economy.

I'm not advocating a certain style of life.
In fact, I’m arguing that a reduced life style is futile and counter productive on a global scale until we stop growth.
“Sustainable growth is an oxymoron.”

When we approach energy consumption even 1/100th of the solar flux it might be worth talking about. The fear of growth is based in ignorance.

The embrace of "growth" is based on innumeracy. Where's Albert Bartlett when we need him... (Actually he's alive and well and still trying to educate the world, but we all need to help with that.)

it's not ignorance.
growth if not constantly dealt with when conserving energy will completely negate any gains you make by conserving. It's only a matter of time, be it a year for some of the milder stuff proposed here, or about a decade to 15 years if alan's fantasy that we can just all go back to the way it used to be(though it never was).

so you have three options.
one is politically, and practically a no go. that is conserving and doing so more every year to both make up for the yearly declines and the growth that will happen.

the second is to conserve while aggressively combating growth, think china's one child policy on steroids. this one is basically dead on arrival due to political reasons.

the third is just to let the system crash.

Clearly not dead in China, nor in many countries. Iran implemented a family planning scheme despite being fundamentalist. There is some hope. But the US may choose economic suicide instead. Stubborn false beliefs here.

You're not getting it. Everyone knows theres limits. What we're disagreeing on is what the limits are.

Our energy consumption could rise 100 fold and still be inconsequential towards the total energy budget of the earth. The solar flux is 10^16 watts and we're barely scratching 10^13.

Even when our energy consumption rises to the radiative capacity of earth, theres still avaliability of space industry in the future; Given we wont hit that limit for centuries at todays growth rate, it doesnt top my list of worries.

A nice mantra for incurable cancer patients.

True. Never let reasoned discussion get in the way of a snappy one liner.

Glad you say so, mister If-I-call-it-a-straw-man-then-I-don't-have-to-answer.

Look up strawman sometime and you'll realize why answering to one is counterproductive.

"Here is the real problem: Any and all improvements in efficiency only allow continued additional growth that offset the efficiency improvements..."

That's exactly my point. However, I disagree with your conclusions. You don't necessarily "make the problem worse" by shifting energy consumption from liquids to other sources--there can be benefits here. Tax changes CAN be effective if that money is not returned to the economic cycle--if it rather reduces existing deficit spending.

That said, I agree with your ultimate conclusions: an economy predicated upon the notion (requirement) of perpetual growth is fundamentally unsustainable. We need true conservation, not gains in efficiency that permit growth elsewhere, exactly as you say. This is EXACTLY why it is important to raise this issue of the "shadow rebound effect." If we include this as part of our consideration of proposed "fixes" for global warming, peak oil, environmental destruction, etc., then we will realize that merely shifting the growth elsewhere isn't a solution at all.

Urban survival Thursday April 26, 2007

Oil Plateau

On the other hand, I'd be enjoying the good times while I could. A look at this chart of all world liquid fuel supplies is sobering. As you click here to see the chart as yourself: What's ahead for industrialized economies if there really is Peak Oil and this is "IT"?

in my opinion, within a closed system, the total rebound effect will always be 100%. it just depends on the timescale u look at. Efficiency will help to make the time longer before before we reach that 100%.

economics is the excuse we use to consume the resources of our planet.

This is exactly true. But time scale is important.

Our current trajectory looks like 200 years boom to bust. We want something more Roman or Egyptian and stretch that into the thousands of years.

Plus, there are changes we can use fossil fuels to achieve, that will not be easy once we are living on the flows of a sustainable economy. Right now moving tons, and tons of granite building blocks is pretty easy. In the future, it won't be.

Structures like the Chunnel (or train tunnels in general) are other ways to spend fossil fuels now to give the next generations a leg up.

Right now moving tons, and tons of granite building blocks is pretty easy. In the future, it won't be.

Why would you imagine that? Its not like we dont have substitutes for oil. What becomes much more expensive isn't large industrial processes, but personal transportation for the masses.

This is an absurd argument if ever I saw one. Dezakin, do you understand the world fungible? Do you understand that people buying personal transportation buy from the same fuel pool as industrial processes? That if fuel costs rise, they rise for everyone equally?

As liquid fuel costs rise, any industrial process dependent on liquid fuels will see its cost rise in proportion to the rising liquid fuel costs.

Or do you intend to distribute these fuels via some other mechanism than the marketplace?

Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett

Hi Dezakin,

We differ in opinion because I don't believe that Nuclear is a viable option. My main concern is the long life and deadly nature of the pollution. Even small quantities of long life toxin build in the environment "rapidly" if they never decay.

It was after reading "Limits to Growth" that I started to see what often seemed like good ideas in the short run, were really poor ideas in the long run.

There is plenty of room for disagreement on nuclear, the issues are clouded in politics. I would like to understand better why M. K. Hubbert stopped supporting nuclear (he did a paper showing the end of the oil age replaced by the nuclear age) and pushed solar instead. I had read a piece that attributed it to the waste problem, but no details or references were provided.

Well paradoxes are a joy, and here's a related pardox from the consumption side, which I posted late on another thread yesterday

OK folks, what's this constant attack on SUVs? Surely the major problem preventing our investment in energy alternatives is the low price of oil, and surely SUV drivers are doing us all a favor by burning through the stuff faster, and thus bringing us to the point where it will be economical to invest in alternatives sooner.

Now, you want to say that we need all the time that we can get? But as long as the price is low, do you really believe that private investors or the governments will move toward alternatives?

So, while I bike to work every day, let's all praise the SUVs which are burning through the fuel, and thus through the illusions, that lie a the base of our current economy, and hastening the arrival of economic realities that will make more forward looking investments and policies possible.

Also, from a climate change perspective, we need high fuel prices sooner... not later, so again, let's all praise SUV owners, and in fact let's require all cars to be constructed with heavy armor plating for passenger protection of course... but more importantly to decrease gas mileage and hasten the end of the oil age.

You think I'm kidding? I'm not sure. I might not be.

So let's decrease the efficiency of cars, increase demand, increase energy prices and hasten investment in alternatives.

We don't need to hasten the oil age to end. It WILL end. We need to mitigate the consequences, and possibly give ourselves a good start for the age after oil.

We also don't want global warming to speed up to increase investment in alternatives, do we? Because that's what we're trying to avoid. Therefore, SUV's are bad. All the other things mentioned (increase energy prices, invest in alternatives) are good, because they don't make the problem worse, and may spur some people to finding a solution. Increasing consumption is the root of the problem, so why stimulate that?

SUVs are great because they DO increase energy prices by keeping demand high... and therefore make investment in alternatives viable.

Global warming IS a disaster, but we will only address it if we reach a crisis point, ergo more SUVs supporting high levels of consumption, and creating higher prices, mean that we get to the (speculated upon) economic collapse/recession SOONER.

Will that be good for the environment or bad? If it results in a major decrease in industrial activity and associated carbon emissions, it would be good.

So again, all real environmentalists, and all real advocates of alternative energy development should be buying and driving the biggest honking hummers they can find to hasten the crisis of oil fueled capitalism.



Now before you dismiss this as worn out Marxist dialectical reasoning, consider the alternative, the "buy a Prius" argument (or "buy a bike and sell all your cars")

That view holds that we should all by high mileage vehicles and attempt to conserve. Doesn't that prolong the age of oil and prolong the number of years during which we are free to imagine that global climate change is not much of a problem... but is instead something that we can deal with later? And if you conclude that there is some truth in the "buy SUVs" argument, and some truth in the "buy a Prius" argument, maybe the sensible thing is to just stay in the middle and do exactly what you are doing already, responding rationally to the price signals you experience, operating a mid-size vehicle, trying to be a little bit "good" out of concern for the planet, but also enjoying being a little bit "bad" because ... unless things get worse, what incentive will we or investors or our governments have to to take action to make them better?

That's great, very amusing.

However, the economy and the planetary environment aren't quite voluntary loosely entrained systems like messy streets and garbage clean up... they are connected systems in which actions have direct consequences.

The number of years doesn't matter for peak oil - extraction will go down. Regarding global warming, a slower flood of CO2 might actually be better digestible by the ecosystem. What we get on our plates now has already been ordered decades ago anyway.
Gambling on a recession is at best a risky tactic; and if it works, you're royally screwed with a SUV. As an analogy: "Oh, my house is on fire. Let's throw on a few extra cans of gasoline, then the neighbours will come help me extinguish it!"

I think it is a better tactic to try things now when there is room for error, and that will provide alternatives and reduce the desperate gambling when the belts become really tightened. And if you want to drive up the price of oil, by all means: buy, buy, buy! ..but don't use it for a *** hummer, spend it on alternatives - you did want to stimulate those, didn't you?

I think that part of what must be considered here is that there is no economic system of any type -- capitalist, socialist, whatever -- that can do a very good job of handling a severe and sudden shock. Free markets will assure that supply and demand are matched at some equilibrium price - this is what free markets do, and they do it elegantly. But there is nothing elegant about the severe social havoc that results from the sudden price changes necessary to reach a new equilibrium. Socialist/authoritarian systems sometimes do a better job of mitigating the pain and spreading it around equitably, but at the cost of a lower aggregate level of economic efficiency.

Any and all economic systems function considerably better in an environment of stability, or at least of gradual and more or less predictable change.

All things considered, it is indeed quite rational to hope that the inevitable shifts in energy supply, demand, and pricing will occur at a steady and moderate pace.

Reducing energy consumption (in any way) means reducing production and throughput (all [economic] activity requires energy, hence less energy equals less activity).

Those who question this, invariably point to efficiency. Doing more with less. Apart from physical limits to efficiency, there's a few other quirks, as Jeff describes.

There is something else though. Our economic system, requires growth, which means more activity, not less. Even after you've done all you can to be more efficient, when you've reached the limits of doing more with less, that economic principle still stands (or moves, more correctly).

The only possible conclusion is that at some point reducing energy consumption will collapse the economic system. It can't function in its present paradigm if there's no growth. This underlies all our problems with peak oil, the climate, even the economy itself (the system is necessarily self-destructive). You can't be a good steward of the planet while at the same time wanting, needing, to extract ever more out of it.

Anyone who wishes to advocate efficiency or reduction needs to address the economic issue, or misses the point entirely. That is why environmental organizations are such utter failures. Greenpeace has been active for decades, and the planet is in much worse shape than when they started. That is not a coincidence: they have always missed the point, and never addressed economic issues.

In a sweet and bitter irony, it's Jevon's paradox that has kept the economy going. Equally sweet and bitter, even Jevon's paradox has limits.

I couldn't agree more that it is, at the end of the day, the nature of our economic system that needs to be addressed. We can address it proactively, or we can undergo collapse at some point--the choice is ours, though I'm pretty confident about which one will win out.

The issue with our economic system is, itself, due to its reliance on hierarchy as the underlying organizational theory. I've addressed this here: A Theory of Power

.... it is, at the end of the day, the nature of our economic system that needs to be addressed

Why not address it at the start of the day, instead of spending precious time tweaking taxation laws?

We then get into the Big Problem of the consequences of addressing the nature of our economic system. For me the "solutions" to Peak Oil, Climate Change, environmental degredation, world poverty and hunger... all these complex issues seem to require a radically different economic system. How one manages this without first changing our political system is another Big Question.

Unfortunately, I believe a lot of the debate on TOD in relation to "solutions" is... Utopian in character. This may should a bit harsh. But it's said more in sadness than anger. We are never going to adjust to the changes Peak Oil has in store for us in the coming decades, while we remain shackled to our present economic system and form of social organization.

In all honesty, I don't think we can make the transition without profound political change. I suppose I'm talking about a substantial re-distribution of power and wealth. This transfer won't happen easily or without real oposition. But if we're serious about Peak Oil I believe that we inevitably have to start getting very serious about politics too, and that really opens a can of worms and starts to get rather dangerous as well.

One could spend a lifetime thinking and agitating about the politics of Peak Oil. Not necessarily out of choice, but because it will become a necessity in the era of energy scarcity. There will be a struggle for access to and control of the remaining sources of energy, nationally and internationally.

This may sound amusing, foolish and archaic, but I wonder what the consequences of Peak Oil will have for the Class Struggle? Class Struggle? That really sounds like terminology from the stone age! But I think Peak Oil may radically alter the relationships between social classes with the great American middle-class really getting squeezed hard as their lifestyle is based on the era of cheap and plentiful energy. When we talk about our mobility being constrained by rising energy costs, I think we should also factor in constrained social mobility.

Just as there is no silver bullet that will solve the whole energy question, neither is there a one size fits all answer to your whole political & economic question.

The future answer for energy is a mix, and the mix will vary by location. Solar will be a big component in lower latitude, sunny locations, but less so the farther north one goes. The same holds true for most of the other renewable resources: wind, geothermal, hydro, wave/tidal, etc. - local conditions will dictate which make sense. Biomass of some form or another will have its place in the mix everywhere, but the specific form will vary. Conservation and efficiency will be the only true universal.

When we come to considerations of the type of political and economic system needed, again I believe that the answer will have to be a local mix fitted to the local situation. We really need to be thinking in terms of evolving our political boundaries into something more of a bioregional basis, not because of some mystical Gaia-worship, but because it will make good sense in a world that will be totally focused on making efficient use of limited local resources. The exact pattern of political and economic arrangements will vary with each bioregion. It is starting to appear that mixed economies such as those one can find in some parts of Europe do seem to be better positioned to perform better over the long haul. We already know that extreme totalitarian socialism has been a dismal failure, and extreme libertarian capitalism appears to be heading to a train wreck as well. The best solution appears to be a mixed economy that makes the most of the elegant solution of markets to the problem of efficient resource allocation, but is not affraid of social intervention in the economy to correct market failures and protect important social interests. The exact mix will and should vary amongst each bioregion to match local needs.

Class struggle? There will always be some form of social stratification, that appears to be an inherent part of human nature. It does appear, however, that the wealth and power of elites directly correlates to the size of the political and economic sphere within which they operate. It only stands to reason that elites standing on top of a larger pyramid will stand higher. The phenomenon of the rich getting richer can be directly correlated to the phenomenon of mostly bioregional mini-states becoming consolidated into multi-cultural empires, and now we're on toward globalization. An evolution toward bioregional localism suggests an unwinding of all of this, leading to greater (but by no means perfect) egalitarianism. This also suggests where we can expect the opposition against this necessary trend to come from.

I think your right about increasing class structure in society. I think it will happen for exactly the same reasons that Jeff argues that nations will lock up oil supplies.

From Jeff's " Five Geopolitical Feedback-Loops in Peak Oil"

Mercantilism: To avoid the dawning “bidding cycles” between crude oil price increases and demand destruction, Nation-States are increasingly returning to a mercantilist paradigm on energy.

This is a positive feedback-loop because, like an iterated “prisoner’s dilemma” game, once one power adopts or intensifies a mercantilist attitude all others must follow suit or lose energy share.

Without economic growth, there will be no "extra" jobs created each year. A young person either replaces someone who has retired (or died) or they starve (or join the army and die of some terrible disease or something).

But the replacement will not be on "merit" because this is evolution we are talking about. It will be on inheritance. So parents will pass jobs to children. Once this starts, it has a positive feed back, and soon it will be common. (I can't remember the name of the Roman decree that made this the law...)

The point is that very quickly people will be locked into a social position. It should happen fairly rapidly after zero economic growth is reached.

So with the efficiency gains of the last 30 years, is our economy less reliant on oil because more GDP units are generated with one barrel of oil input, or is it more dependent on oil because so many GDP units hinge on one barrel ?

I think this is a critical question. It's pretty common to hear how we're LESS succeptible to an oil shock today because we produce more GDP per barrel of oil consumed. But I think your point on more hinging on each barrel is more accurate. Actually, I think that the most accurate notion is that, because we produce more GDP per barrel of oil, our demand elasticity for oil consumption is much lower today than it was in the '70s...

We in the U.S. produce far less per barrel of oil than does Western Europe or Japan, the U.S is hopelessly inefficient.


The US does not use more oil per unit of production than Western Europe or Japan. You are taking all of the oil used for transportation due to the large size of our country, and its extraordinary mobile society, and then allocating that oil to production. In addition, we have one of the highest standards of living. So, e.g., you are taking the oil that it takes to build, heat and filter a swimming pool and allocating it to production. I believe that if the US were truly as inefficient as many people think, we would not have a superior standard of living. Or, is there a new law of economics that rewards inefficiency that I am not aware of?

Yes, efficiency makes it worse. The system is less resilient. So not only is LESS the vector, there is also the related question of scale. It's not only that everyone on the planet needs to have less, and that there need to be less of us, the scale at which we operate needs to be smaller in relation to the planet: no more global-spanning corporations like Wal-Mart, no more seed monopolies. Patents and IP laws need to open up. That amounts to a complete change of technology and economics.

Our technology includes terms of trade, culture and finance - it's one piece with our economic system. IF we do somehow survive peak oil and climate change, then we will have successfully changed our technology and economic system.

cfm in Gray, ME

As it applies to a Transformed Miami

Instead of a global overview, I would like to use a specific case.

Miami finishes building out it's plans for 103 miles of elevated "subway" (Rapid Rail is the industry term). A heavily used Miami Metro gets 900 pax-mpg electrical equivalent. 90% of the population is within 3 miles of a station (over half within 2 miles) with 2000 population. Intensive TOD moves 1/4th of the population (and over 3/4s of the office space) to within 4 blocks of a station.

On advice of their consultant, Alan Drake, they also build 50 miles of streetcars to better connect everything together. And he also advises changing stop lights to give bicycles a special green light (3.5 second head start) and convert traffic lanes into bicycle lanes.

With the increased fuel economy of new cars and the wisespread use of bicycles, tricycles and GEM cars

Miami now uses 9% of the gasoline that it did in 2005, the Year of Peak Oil.

New solar PV energy runs Miami Metro during sunny days, some wind helps as well, but coal makes up the difference :-( But at 900 pax mpg, not a lot of coal for part-time use.

Miami experiences (suffers ?) a population boom as the "No Oil Needed" city. Lots of embedded energy goes into 250 to 675 sq ft medium and high rise condos and apartments (high efficiency of course and almost all built within a few blocks of Metro or a streetcar line). Miami Metro adds more rolling stock and finally adds a 3rd track on selected segments of its route. Capacity expands at low marginal cost and energy efficiency climbs to 1,100 pax mpg as load factors increase.

Best Hopes for Urban Rail,


An alternative to the Gem car is the low-speed Miles Automotive ZX40. 60-70 mile range on a 3-5 hour charge, fully enclosed for inclement weather, $14-15,000 price tag.

In light of global warming's effect on rising sea levels we should be encouraging people to leave Florida and not waisting resources on infrastructure that will be unusable in a few decades.

Hi Tom,

I would suggest the Maldives as destination for that flight of Floridians. Groucho Marx would approve...see 'Coconuts'.

About the Marx Brothers, if they could happen during the 'Great' depression, I can hardly wait to see what the coming 'Greatest' depression will have to offer.


can you give us a list of Oceans that have been recorded as having a rising level. Is the Atlantic on that list. How about the Gulf of Mexico.

Do you have that handy.

Quid Clarius Astris
Ubi Bene ibi patria

Consider these points:
Gravimetric observations of Greenland show that it is losing a net of 52 cubic miles of ice per year. Just the other day a new island was discovered when melting revaeled it wasn't a peninsula. Summer melt water is draining through crevases and lubricating the bottom of glaciers and accelerating their slide into the ocean.
The rate of mean sea level rise is increasing to over 3 mm per year. When, not if, the West Antartic and Ross Ice shelfs collapse sea levels will rise several meters very quickly.
The rate of CO2 buildup closely tracks the increasing use of fossil fuels. There is little likelihood that fossil fuel use will end before 2100 which means GHG levels will continue to rise for at least the next century.
Insurance companies are not dumb. They have good reasons for pulling out of Florida as well as refusing to insure near ocean property elsewhere.

ust the other day a new island was discovered when melting revaeled it wasn't a peninsula.

Whether it is a peninsula or island depends on the sea level.

There is little likelihood that fossil fuel use will end before 2100 which means GHG levels will continue to rise for at least the next century.

No, sea levels would continue to rise for a century EVEN IF fossil fuel use ended now.  There is a huge amount of thermal inertia in the system, and both glacier melting and thermal expansion of the oceans will continue to raise sea levels until the earth actually starts cooling again.  This is one reason I believe we need to aim not just for stabilization but for GHG reductions from today's levels, down to perhaps 330-350 ppm of CO2.

All of the oceans are rising, PrisonerX. If you need educational assistance in this area, you might start here. For the last 8000 years the general trend has been very slowly upwards but up it is going. The USGS discusses this too.

The main point of question is whether the rate of rise is accelerating or static, but not whether it is rising or not. Global sea levels rose 8 inches roughly in the 20th century.

Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett

Here is my problem with all these sorts of ideas: They are nothing more than social manipulation masquerading as something else. In other words, it all starts with a big lie that will eventually be discovered.

Further, speaking for myself, I have absolutely zero, none, nada trust in any government to use tax funds received to use them appropriately even were there public oversight.

There is no 'big lie' - a carbon tax is designed to persuade people to drive less, to consume more efficiently. That's the claim from the start. Social manipulation can be a function of government, for evil(50 cent reward for any witches found!) or for good($50k reward for anyone found discriminating based on race in hiring!).

Ideas include:
A)Tax CO2 production significantly on an escalating scale.(10+2*year cents/gallon-gas-equiv)
B)Forbid anything that gets federal fuel tax money from drawing from general funds, and 'recommend' that states do the same in order to protect their matching funds (necessitating an increase of around something like 25-60 cents/gallon).
C)Tariff imported oil significantly(call it $1/gallon of gas equivelent).
D) Then deal with the repercussions in manufacturing, which will be a challenge and would necessitate backing off from the WTO a bit.

Put all the money from A and C into a seperate fund, and require that it be rebated annually in an equal amount to every US taxpayer. Not dissimilar from Alaska's rebate on production. This doesn't give the average person any burden in the near term. If they refuse to change their ways for a decade while the population shifts to conserve, they will be taxed for the privelege, while those who conserve will be rewarded. It presents a much better picture of externalities.

The Carbon Tax has more going for it than just trying to persuade people to drive less et al.

Its also an attempt to make the consumer "feel quilty" about what they have done or going to do. It is a subtle form of mind control.

The TAX is another attempt by govt (s) and those that "run" them to transfer more wealth.

When you hear the word "tax". Your antenna should go up in my opinion. Its a manipulated way of transferring wealth and income, "guilt" in many cases. a "sin" tax.

The tax money will be used for this and that. Really, I've heard that for years, and the evidence does not bear that out. Tax dollars are used for what in the US and other countries. Bad corrupt leaders and govt is the problem.

Peak oil is a problem for the ECONOMY and LIFESTYLE. If you believe it contributes to GW that is a separate issue.

Nasa just launched a spacecraft a couple of days ago. Something is going on over the poles and they want to find out why. The CO2 group tries to spin it so it fits their model. I have trouble understanding their "science" on how cold water vapor has to be,.. to "freeze". I tried to find out what the temp needs to be to freeze water at 355 mile up or so. I know at more than one earth atmosphere it will remain liquid below 32. What about less than one atmosphere. Why does it need to be "colder" to make water freeze. (they concept is more CO2 is up there and it makes the atmosphere "colder". The ambient air temp at 355 miles up has to be way below 32 degrees already above the poles.

Note also these "ice" crystals in the clouds are "hexagon" shaped. Why,.. that is is also a mystery. They didn't say that in the press briefings. Though if you look up this type of ice crystal you will find this information. The original belief was that volcanic activity was causing the formations. They were first noticed after Krakatoa. No such event now, and I imagine that the Saturn info had a bit to do with this.

I watched the launch and listened to the project managers. I heard an awful lot from them about "water vapor" and the huge amount up there. But not a word about CO2 from "them". Also I don't think any of the experiments of the craft )with its three ) are designed for any CO2 research, but I may have missed that in a bathroom break.

This isn't "dry ice" this is water vapor. Also the clouds are "geometric" (my words), they wouldn't say that. THey used words like. spaced ripples, formations, etc. They are beautiful.

Note that this is a recent phenom, and must be increasing from what I heard. Its a pretty quick mission according to NASA standards it seems.

Note the hexagon storm on Saturn and Jupiter has a storm over its poles . Now we have water vapor forming at high altitudes in hexagon crystals over our poles. If it starts "rotating" in a hexagon pattern that is visible what does that say.

Its not case closed as they try to ram it down your throats.

Quid Clarius Astris
Ubi Bene ibi patria

Water vapor does not have a crystal structure, because it is not a solid.

And if you doublequote one more innocuous phrase without explaining yourself, your tin-foil hat will be taken away and you'll be sent to your room without dinner. I'm not sure the rest deserves a reply, but I'll take a shot at it.

Earth Day is an unsubtle way to make people guilty for their lifestyle, and that's all. A carbon tax is an unsubtle way to make people change their lifestyle. A 'sin' tax? If you want to debate fiscal policy through rosary-colored glasses, I guess you could call it that.

Of course a per capita annual rebate check would be a form of wealth redistribution, but please explain to me how it could be manipulated to serve the powerful.

What alternatives did you have in mind?

Jevon's paradox in its purest form applies in the case where supply is infinite, or at least elastic enough to be functionaly infinite in the near term. In the case of a decreasing resource base, perhaps rapidly decreasing, the conclusion is less clear. If the efficiency of cars doubled, and thus consumption decrease 50% (obviously compution would decrease slowly since the existing fleet of cars is replaced over the course of years at best), the price may collapse in the near term, but 10 years from now, post peak, when production may be strugglling to keep up even with the reduced consumption, the price would likely be right back up.

The dynamics are hard to gauge as there are obvious many inputs. But it seems to me increased efficiency and decreased consumption are not really choices or options. We will be required, indeed forced, to do both.

I've never been a fan of Jevon's Paradox - it strikes me as lazy man's systems dynamics. Its only true if everything else is equal; but we are never in a situation where everything else is equal. Cheaper goods and services does not necessarily mean we use more of that goods or service, it means the system will seek an equilibrium - which may well mean more of something else entirely. That something else is up for debate dependent of policy, taxation, social demands,etc.

In particular in a post-peak world its not just the cost of tranportation fuel that will increase. Food will get more expensive, goods will become more expensive, inflation in interest rates will eat into reserves, companies will fold, pensions will be curtained and social structures will warp into different shapes. To say that greater efficiency will lead to greater use is to massively overly simplify the complexity of the systems changes.

Jevon's paradox is a very simplified rule of thumb from stable situations. Don't try and apply it to 'interesting' times.

Jevon's paradox is indeed a simple causality model, not a systemic set of loops easily attached to other bigger systemic loops.


Another way of putting is this:

IF(1) all money/time/energy saved is in the end spent on something else that requires energy
IF(2) almost all spending is primarily fueled by non-renewable energy in the end (i.e. fossil hydrocarbons, see 1)
IF(3) economy and it's associated benefits (employment, food, home, security) depend on minimum average c. 2% annual economic growth
IF(4) our per capita consumption (in developing countries) is growing in absolute numbers than any per capita energy saving scheme we could even theoretically adopt (in the developed world)
IF(5) total population is still growing, mostly (90%) in the developing countries (see feedback to 4)
IF(6) our planet's energy/material bio-geo cycles (CO2, heat exchange, cycle, water/aquifer, mineral, biomass, etc.) are already utilized faster than what they can internally regulate through homeostasis (i.e. we are speeding them up artificially with external energy inputs from fossil fuels)
IF(7) we are running out of fossil fuels (see 6)
IF(8) there are no foreseeable replacements for those fuels in sight
What use is there from energy or more specifically fuel savings, other than diversion or self-delusion?

I'm not saying it is like this. There are plenty of IFs above one can shoot down.

However, by the looks of it, with my bounded rationality, it pretty much looks like a combined Malthus/Erhlich/Bartlett/Catton/Campbell situation, regardless of what we do:

as a combined unit, we the population of earth, will consume up all energy and material resources we have available (due to our economic systems), esp. using non-renewable fuels, pushing both carrying capacity and economic expectations into an overshoot and a crash (population, economic, consumption, energy use).

Is there a way to avoid this?

To solve this, we would need to reduce total & redistribute energy consumption.

To redistribute consumption, we would need to switch to renewable fuels.

To switch to renewable fuels, we would need to increase economic spending.

To actually reduce consumption, we would need to reduce total consumption and more likely also total population.

By reducing either total consumption or total population, we would reduce economic stability.

By reducing economic stability we would reduce our ability to sustain population and to continue the transfer to renewable resources.

This could result in a crash.

Thus, here is the dilemma for energy conservation that seems to divide so many thinkers. What do you choose:

1. Short term economic growth (spend our way into the glorious future, if we dont crash first. View endorsed by the WorldChanging.org camp)


2. Long term carrying capacity (reduce consumption and risk an economic/survivability crash, before we find our way into some sort of permaculture model)

I dont see world coming to a self-realisation and picking up option 2 in masses any time soon.

I try to think myself around this, but on a high level it seems to be fairly difficult. I hate thinking in dichotomies (the pitfall of human reasoning), there must be a third way. Maybe even fourth and fifth.

As such, the only sane thing for me is to keep working on the details and not the big picture. Keep working towards more sustainable goals, regardless of what happens.

In that sense, personal energy consumption reduction, reduction of complexity and loosing up tight couplings to other critical systems will likely increase local resilience.

That makes sense to me personally, even if it does not solve any of the issues on the high level.

So for me, energy savings when applied properly, make sense, but they need be systemic and well thought out.

But I do not believe (although also cannot prove) that they will solve anything in the great scheme of things.

Excellent summation and synthesis of macro issues, which need to be addressed by those who simply advocate (without thinking, IMO) conservation, powering down, etc. I completely agree that it benefits the individual to reduce energy consumption, without coming to the conclusion that doing so will help on any but a personal or local level.

Can you define the options a little bit better? Short term economic growth vs Long term capacity?

Eventually, our children will have to live on the sustainable flows available. But what standard of living does that translate into?

For instance, if we spend the fossil fuel energy building housing that needs little energy to heat and cool and lasts centuries, then our children will live pretty well on the flows.

If instead we build cheap housing that is energy expensive to heat and cool and rots away in just a few years, then our children will be no better off than if the fossil fuels never existed in the first place. (Worse off, because they must also deal with the latent pollution and eroded topsoils etc).

I suspect you go wrong with eventually. That time has already passed.

cfm in Gray, ME

Good summation and understanding. Permaculture design is great, can be applied to a lot more than growing potatoes without digging.

Only thing I would add is that it is not a question of preventing a crash. It is a question of how much we can mitigate a crash.

Human history shows that we only make real change when the dam has already broken, but the solutions that are then finally applied are mostly born before the crash started. Our current peak(or near peak) in consumption is not only providing excess growth in the physical world, on an intellectual level there has never been a time when so much brain power could be put to solving a problem. There is no consensus yet; this blog is an excellent example of the brain storming that is going on. Once the crash begins we will have far less leisure time, and perhaps not the physical means to create forums that can examine these issues in the depth we can today.

The more people that can be inspired to work on this problem now the more chances we will have of evolving effective solutions when the crash begins.

Simply starting at home by being more energy efficient and encouraging others to do the same is a great start. If you do not know how to run a home efficiently then how can you apply efficiency to a world economy and completely rework the very foundations of our market economy.

Jevon's Paradox probably applies in a situation where supply and demand are in a stable equilibrium, then there is a sudden, one-time change in the equilibrium due to a shift in the supply curve (oil exporter cartel) or in the demand curve (efficiency innovation), leading to a new equilibrium. I am not at all sure it applies in a situation where the supply curve is in continuous motion, as peak oil theory predicts will happen. In a constantly contracting supply environment, any economic gains that consumers are able to realize through conservation or efficiency should rationally be invested in further conservation or efficiency efforts. In a constantly declining supply environment, demand must be driven down, which implies that one way or another, less will be consumed.

How would Jevon's paradox play out post Peak Oil!! Increasing efficiency(?) will meet decreasing supply. It may even out for a while but eventually reducing supply may win? Efficiency requires constant technological and mass social effort. With constantly reducing supply those efforts will also have to increase with time. But eventually, even that may not help. But yes for time being it might help.

Thanks for the useful analysis of the complications of efficiency standards and mandates.

Yet, the underlying assumption in the posting is that the use of energy is morally tainted. This is a suicidal worldview.

Energy is life. If you and your offspring want to fulfill your biological destiny, you need energy. The more you have at your control and dispoal, the more security and comfort your life will enjoy.

Remember that a fundamental condition of all life is competition. Groups that use the most energy effectively thrive and displace those with less effective energy. Just as sails and gunpowder overwhelmed canoes and arrows, a society with large amounts of energy will displace a society without.

Agreed that use of petroleum needs to be curtailed in the future but the answer is substitution. Efficiency issues are best handled at the individual's decisionmaking level, ie by the market.

I think that building a society for our children predicated upon a fundamentally unsustainable use of energy is morally bankrupt, not just tainted. HOWEVER, there is nothing even morally tainted (in my opinion) about the use of energy per se.

Here is a thought experiment about two ways to spend the fossil fuel energy:

1. Roller Coaster Ville: Energy is spent as fast as it can be extracted. Extraction increases at some compounded rate. No energy is placed into long term stores (like houses). Everyone lives in disposable plastic houses that crumble and are rebuilt every year. This results in the sharp spike up, sharp drop down Hubbert first predicted.

This society will have a growth and death profile that exactly matches the extraction rate that is dictated by geology. Essentially, the people will have given up all intelligent, rational planning.

2. Flow Town: Passes a law that fossil fuels can only be spent building sustainable energy sources (flows), like wind power, or passive solar heated houses. All consumer energy (heating, cooling, entertainment, transport) must come from these sustainable energy sources.

Growth in Flow Town is very slow. Much less than Roller Coster ville. But as the fossil fuels run out, Flow Town just keeps on running. It slowly fades, as entropy will always win in the end, but the fall takes centuries.

The question is which one is more "moral"? I would ague the latter, because I like a higher standard of living for my descendants. But from evolutions point of view, they might just be exactly alike (which is why we cannot get people to give up the first one).

Why should Flow Town ever fade away?  Some of its flows might not decline with time (sun, wind, hydro).  If it can increase its production of goods and services from those flows (e.g. wood-burning steam to biomass IGCC to direct-carbon fuel cells and PV), it can get more and more prosperous over time.

The essential feature of a growable Flow Town is that it would have to be able to meet its essential needs plus invest in greater efficiency even as its total energy supply was declining.  The US is tantalizingly close to having this capability, but we aren't there yet.  The more of our total energy comes from wind, solar, tidal, biomass, etc. the closer to that point we'll be.

Yet, the underlying assumption in the posting is that the use of energy is morally tainted. This is a suicidal worldview.

In an absolutist sense, almost all of the fossil fuel so far used by the world has been wasted: that is, used for current consumption. We have been living on principal rather than income. Burning fossil fuel has allowed most of the North to escape deforestation, but when the fossil fuel is exhausted, what then?

And some of the fossil fuel so far used has been WORSE than wasted, in that it has allowed the world's population to explode. Again, when the fossil fuel is exhausted, what then?

Morality is an elusive concept when we get into whole-world issues. There is nothing obviously immoral about having three children, but the aggregate effect of everyone having three children (and consuming fossil fuels to keep them warm and fed) would in the long run be a disaster for humans and many other species.

This is a very philosophical discussion, but I think a fundamental condition of all life is co-operation more than competition. What we often call competition, isn't really competition at all, but our narrow perspective and lack of understanding of complex and apparently chaotic structures and relationships, leads us to premature and false identification of the system we are observing.

I'm sticking my neck out here, but let us assume the entire planet is one, gigantic organism. All life is part of the whole. We are all consumed and consuming each other in an endless loop which stretches way across the the apparent barriers between the species. In fact seen from another, higher, broader, perspective; maybe there are no real species, just one planetary super-organism which is not in "competition" with itself for anything. It just is.

I think this is an important discussion, even though it would make most peoples' heads explode.

When the 'shadow' rebound effect is considered along with the primary rebound, you wind up with something reminiscent of Malthus.

Seen in this way, our "free and efficient" global economy will tend to block any amelioration efforts, making us even more analagous to yeast in terms of being mindless agents of entropy.

Energy conservation thus becomes more relevant to what we're left with after the energy crash, rather than affecting its timing. What actually becomes more relevant is geopolitical sequestration of energy, such as botched energy wars, which might tend to keep fossil fuels in the ground.

Bottom line, humanity burns it as fast as it can figure any way at all of getting at it and 'metabolizing' it. The rise of immortal corporate entities which feed on "growth" itself has de-coupled energy use largely from actual biological needs in the industrialized world.

Jevon's paradox may simply be another aspect of basic biological competition for energy. If it's available, something will evolve to metabolize it.

So, any bright ideas out there of how to sequester fossil fuels from humans?


Already, world oil consumption is flatlining, and it actually dropped after the price spike of 1978. This time around, we may see permanently reduced levels of fossil fuel consumption, as the price seems sticky above $50 to $60 a barrel. That price level will eventually curtial demand, as consu,ers move to more efficient consumption patterns.
Much higher energy taxes in the U.S. would be a good thing to keep consumption down. Sooner or later he cartel will crack. Remember, there is no field in the world in which it costs more than $30 a barrel to lift, and most are under $20 and even $10. OPEC is already cutting production. The terrific new technologies out there for both alternative fuels and efficiency (especially the plug-in hybrid) spell doom for the oil industry, which someday will get clobbered by excess supply. Well, not doom, but get ready for $30 oil again, and maybe $20. It will take years.
Happily, even if one accepts the reserves estimates of peak oilers, if fossil fuel consumption goes flat, it is a long, long time before the world "runs out".
I hope the peak oil crowd get past its doomsday mentality, and moves towards planning for a better world of hybrid cars and bio-fuels. The need for energy taxes to keep the ball rolling in the right direction is an excellent topic. (Although I would advise a slashing of middle class taxes at the same time).

None on sequestering fossil fuels, but plenty on how that energy can be expended for long term use.

1. The English Language. A common language that is shared by most of humanity and thus increases the ability to communicate for multiple future generations. Energy cost is huge, but has long lasting value. (the metric system. Arabic numbers. etc).

2. Panama and Suez canals. Huge energy investments that have paid off for years.

3. Deep road beds. Once the trucks are off them, they should last for centuries. Now that they are built, no matter how far we collapse backwards energy wise, Europe (for example) will have cheaper more efficient transport than at any time in human history.

Any proposed solutions will fail under our present economic system. We have to basically perform triage to create an economic system that can function under a steady-state or declining economy. Some of my suggestions.

Eliminate the Fed
Wipe out all public and private debt. This one might be a little tough, but I don't see anyway out of our debt obligations without this or hyperinflation.
Renege on all foreign debt obligations
Cut military budget by about 80%
Go to a non-fiat based monetary standard
Implement universal health-care.
Implement a true retirement and welfare program.
Pull out of all free trade agreements, and place big duties on almost all imports.
True immigration control with a goal to begin reducing population.

While these policies would be hugely tramatic short-term, most of the trama would actually be to corporations and the extremely wealthy. Most poor and middle class would see immediate benefits.

Once our economic system has been changed, we can begin implementing energy, education and employment policies to solve our problems.

Hi enviro,

I like the idea of listing specifics.

A couple of quick qs just to get a better picture:

What do the people do who were formerly employed in the military (budget)?

How does the non-fiat money work?

How to enforce immigration control as Cantarell declines?

How to implement universal health-care, when the present system relies on research and innovation? How does this work out?

What do you do with and about multinational corporations? Esp. ones with offshore banking or offshore headquarters?

I am not sure efficiency is a goal worth striving for. Not because of Jevon's paradox, but because Homer-Dixon's argument, that efficiency = lack of resilience.

If one builds my favorite systems, where expansion is cheaper than the average cost before AND you get 20:1 effiency gains AND much more flexability in energy feedstocks, I see more and not less resilience.

Best Hopes,


If you do it by reducing complexity, resilience increases.

Then make the goal reducing complexity, not increasing efficiency.

Increasing efficiency indeed won't solve the problem. Peak oil is after all the inevitable outcome ordained by geology+capitalism. But when everything is said and done, I'd much rather inherit solar panels and 150 mpg diesels/EV's than coal plants and ethanol-fed SUV's. Efficiency will be our goal ultimately, because it will be the only way to do more. Right now, doing more requires simply filling up the tank again. But when everything you have is one tank, efficiency will prove its worth.

It will even be better if our cancerous economy can be inhibited, because striving for efficiency will then not only make our infrastructure more useful, it will actually save resources for later. But don't count on that.

But when everything is said and done, I'd much rather inherit solar panels and 150 mpg diesels/EV's than coal plants and ethanol-fed SUV's.

I don't think any of those will be around when all is said and done, that is, after the catabolic collapse.

However, I would vote for technology that can fail gracefully, even if it's not as efficient. For example, a wind turbine fails gracefully. If it's not maintained, it may fall on someone eventually, but that's about it. A nuclear power plant that is not maintained could do a lot more damage.

Oh, we still find celtic jewelry today. If a collapse happens to that extent, our destructive power will collapse also.

Agreed on elegant technology. One could consider dependence on other technology as inefficient, because it is risky.

They'll be around. Sitting in the front yard. Lawn ornaments or objects of worship.

cfm in Gray, ME

Exactly. We need resilient and energy effective solutions.
This is not difficult- but takes time to implement.
Another point is that energy efficiency does not mean larger energy consumption. By reducing the family energy baseload.
My own situation. 20 Years ago. ca.2500 liter heating oil per year. Consumption now 1500 liter per year as a result of insulation , better windows, more efficient oil pan etc. My heating energy costs higher than 20 years ago, but tolerable. Further savings potential 500-750 litres/year.

Main protion of energy cost is taxes... National energy taxes (DK)has been invested directly and indirectly in national wind power and energy efficiency.
My personal situation is that energy efficiency has made me more energy secure. I cannot see it different elsewhere.
Recent research from GB show that heating energy efficiency gains are to 15-25% offset by people raising temperatures in the improved homes. But still >70 % is real savings.

So my experience is to swallow the bitter pill.
Save energy and accept taxes on all energy use and make sure that the taxes are spent on sustainable transport systems and more energy efficient energy infrastructure.

The most sustainable energy is saved energy
Kind Regards/And1

I agree with the implicit assumption of the shadow rebound effect but disagree that this is a problem.

It is a depends issue.

If the freed up money and energy is spent on useless energy consuming crap (UECC) than we have made no gain. However if the freed up energy and money is used to install capital equipment that is more energy efficient than gain has been made. Trading energy used for innefficient travel or UECC into a more energy sustainable lifestyle is the goal. A constant shift of money and energy from UECC (including cars) is our only hope for a soft energy landing.

Now expecting people to do that on their own may be wishful thing. But a bit of a nudge here or there in the tax code and some education and you never know. Maybe people will shift to a new reality where recycling the old UECC into new high efficiency goods will underpin the whole economy, but always to drive total energy use on a downward trend.

Ideally energy and food would be just scarce enough so that population shrinks over time and keeps pace with the shrinking energy supply. It always seems to me that most of northern Europe has already achieved this vision.

the paradox is reliant on the ability of efficiency measures to create spare cash that go into further consumption.

the solution is rationing

rationing means spare cash goes into increased utility via efficiency that simulates extra consumption the paradox produces

the solution is blatantly obvious.. though tricky to implement

rationing has worked


I wrote this letter to Dr. Hansen in October.

> At 06:58 AM 10/12/2006, Lee Brown wrote:
> >> Dear Dr. Hansen:
> >>
> >> I listened to your comments that were published on the Internet.
> >> You discussed auto efficiency as a possible mitigator of CO2
> >> emissions. I believe this statement is false. This is because
> >> the number of cars on the road is growing. Moreover, more
> >> efficient cars would allow the growth to happen more quickly
> >> because it would remove pressure on the price of gasoline.
> >> There is reason to believe I am correct. We have made major
> >> strides in electrical appliance efficiency, yet electricity
> >> consumption has grown steadily. This is true for the US alone,
> >> nevermind the growth in other countries.
> >> Why should gasoline be any different? It won't be. The world
> >> will continue to consume as much gasoline as can be produced
> >> because demand is growing much faster than efficiency ever could.
> >>
> >> If the world put a soft cap on the total number of vehicles,
> >> say, by increasing vehicle registration fees to price some
> >> people out of having a vehicle, then increasing efficiency
> >> would have the impact you state. But without this second
> >> contraint, you would probably end up doing more harm than good
> >> from an environmental standpoint, because with more cars, there
> >> would be more ecologically damaging infrastructure put in place.
> >>
> >> I believe that you are unwittingly promoting a myth that stems
> >> from the 70's when demand was well below production capacity.
> >> This is no longer the case. The solutions of the 70's no longer
> >> apply. It's just not that easy.
> >>
> >> I mention this because I believe that it could really hurt the
> >> environmental movement to tell people that a certain behavior
> >> will help, only to find out 5 years later that it was no help at
> >> all. Not only would that waste 5 years, it could also create a
> >> credibility gap between the general populace and the movement.
> >>
> >> Sincerely,
> >> Lee Brown Jr.
> >> Pittsfield, MA
> >> M.S. Physics UFlorida, 2000

My previous comment was posted on TOD at http://europe.theoildrum.com/story/2006/11/18/93514/869#72

On Nov 22, I made the following policy recommendations:

As you say, there are 2 problems here.
1) global warming
2) peak oil

The solution to problem #1 is not as obvious as simply finding a 'sustainable' rate of fossil fuel consumption. I doubt that there exists such a rate of any significance because what ultimately determines the Earth's climate is the cumulative amount of CO2 in the atmosphere. That is, the total amount _not_ sequestered in the ground or water. Since the time scale is hundreds of years, then any rate that would consume all fossil resources within, say, 300 years would end up more or less like consuming them in 30 years. It might give a some extra time, but the end result would be the same. I don't think any rate that we set as a 'sustainable' amount will last over 200 years.

Ultimately, we need to have as much CO2 sequestered in the ground or water as possible. Clearly, the amount in vegetation is limited. Most CO2 must be sequestered under ground, either in form of coal or waste CO2. We have to set limits on what we can burn and/or how we burn it.

Problem #2 complicates things. Given the tremendous value of liquid fossil fuels, I would say that if we are going to emit CO2, then using oil gives the most punch for the emissions. So, I would write off all crude oil as gone. It will be burned. The stuff is too good.

That leaves coal, tar sands, and oil shale. Since these give less return for cO2 emissions, this is where we need to set limits. Designate areas as 'no mining', or 'carbon-sequestered mining only'.

Natural gas may be in the same boat as oil.

My suggestion would be to ban oil shale globally. Move towards banning tar sands globally. Designate the most envirnomentally sensitve areas as 'no mining' zones. And figure out how much CO2 from the remaining coal must be sequestered.

As for peak oil, since the global warming issue is off the table for oil, the issue is simplified. State outright, that every nation has complete and unquestionable domain over its oil reserves. The oil reserves of any foreign country or region can not be of 'strategic interest' to any nation. If its Russia's oil, it's Russia's oil. No country has a 'right' to another nation's oil or gas.

Make nuclear technology a universal right of every nation. Use IEA to monitor and regulate. Make all alternative technologies available globally.

In short, minimize the damage from CO2 emissions, mining and petro-wars.

I am glad to see that very similar recommendations are gaining traction.

The way I see it, ALL ELSE BEING EQUAL (ceteris paribus, The Big Black Hole In Every Economic Theory) rebound will never be 100%.

Imagine gas was priced at 1€/liter. You are a completely rational consumer, and have an income of 50K€. Out of it, you spend 10K€ directly and indirectly on gasoline, so you use 10Kl. Suddenly every single gasoline engine doubles efficiency so you can get the same stuff (driving, tube socks) with 5Kl. Everybody instantly passes those savings to you, so now you have 5K€ yearly of extra cash. ¿What do you do with it?

Last year, you thought that 10K€ bought you all the gasoline and gasoline derivatives you needed, and used 40K€ in other stuff. Now, ¿would you again spend *exactly* the same in the other stuff, and buy *twice* as much of gasoline? ¿Is not there anything in the non-gasoline side that you would like to expand, even just a bit?

So the thing is, what you save is 100% gas, and whatever you decide to do with those savings is not going to be 100% gas, because there will be something else you might want to do with it. This applies even if the gas expense is through several intermediaries. So you spend 1K€ extra in gas, but 4K€ in other things that are not gas (people's time, rainwater, a parcel of land...). A rebound of 20%. Now you are using 600Kl of gas a year.

Then you have the effect of the price reduction: gas use is reduced, so sellers have extra stuff to sell and they lower the prices to get rid of it, now that people wants less of it (if efficiency did not make people use less of it, though, there would be no price reduction). The price of gas goes down, so the same spending buys you more gas, and also the price of gas (and gas things) makes them more attractive. ¿Would that raise your gas consumption over the initial 1000 liters?

Uh, this is getting a bit too complicated for me, and my boss is breathing down my neck. I cannot express it easily, but my feeling is that whatever gas savings consumers, producers and society as a whole get from an efficiency rise will not be spent back in gas, but a part of it will be spent on other things. Of course the problem is that many other things are changing at the same time, so efficiency rises are countered with population, production and consumption rises, which keeps us consuming more, not less. But efficiency is not the bad guy, it is just a good guy that is weaker than the bad guys.

All things being equal, and within a closed system, the rebound effect will eventually reach 100% equivalency in energy consumption. As I noted above, the *type* of energy consumed may shift significantly--and to the extent that Peak Oil is only a liquid fuels problem, this is huge. However, to the extent that Peak Oil is the result of a civilizational system predicated upon perpetual growth in a finite system, it is the 100% equivalency in total energy consumption that is relevant over the long term--which is why this is ultimately an argument for collapse, either conscious and controlled, or unintended and uncontrolled.

And yet, Europe uses something a little more than half the energy per capita as the U.S. with income levels approaching and, in some case, exceeding the U.S. After all is said, and done, it appears that we can cut our consumption per dollar of GDP and our overall consumption of energy. After all, it is being done all over Europe as we speak.

The fallacy seems to be that extra dollars don't necessarily translate into equivalent energy consumption to replace the consumption saved by increased efficiency or reduced use.

Your theory seems to assume that all goods and services possess the same amount of energy intensity per dollar of good and services.

Our infinite and continuous growth paradigm certainly increases our energy consumption and will or has caused peak oil to occur earlier. But even is a steady state economy, we would still eventually reach peak oil.

Having said that, we are heading towards disaster as long as we insist on perpetual growth. If nothing else, the population increases are so out of control, that overall GDP will need to cease growing and start shrinking.

And yet, Europe uses something a little more than half the energy per capita as the U.S. with income levels approaching and, in some case, exceeding the U.S. After all is said, and done, it appears that we can cut our consumption per dollar of GDP and our overall consumption of energy. After all, it is being done all over Europe as we speak.

I don't think this kind of comparison is all that meaningful in this day of globalization. Here in the U.S., we are using less energy per capita than we were in the '70s, and in terms of material goods our standard of living is higher. But how much of that is efficiency, and how much of that is the offshoring of energy-intensive and dirty heavy industry? The numbers do not take the energy embedded in imported goods into account.

That said, I do think Europe is actually more efficient than the U.S., due to everything from more public transportation to smaller refrigerators. But I'm not sure this will be a good thing when it comes to dealing with peak oil. The more energy-efficient you are, the less you can cut back.

Similarly, the U.S. cut back on oil use a lot after the '70s energy crisis, but I do not expect similar gains now. The low-hanging fruit has already been picked when it comes to energy efficiency.

Your analysis seems to assume that Europe is doing a lot more importing than the U.S. If not, it would seem that the comparison is meaningful.

I think Amory Lovins would strongly disagree with you with respect to low hanging fruit. Further, we still have a lot of slightly higher hanging fruit. Even further, I consider all our vehicle that get less than 40 mpg low hanging fruit. You've got to be kidding; we haven't made any progress in the last 20 years with respect to gas mileage.

Further, while it is true that I will have a harder time reducing my gas costs because I already have a Prius; I will still benefit big time from having switched. In fact, the higher gas prices go, the better my previous "investment".

"The more energy-efficient you are, the less you can cut back."
Look at it this way: the more energy-efficient you are, the more you can do with the energy you have left. If you are more energy-efficient, you already have cut back. That would be the same like starting a race a mile before the start line, because you can cover more distance that way.


Oil Drum Readers

The rebound effect of improvements in technological efficiency demonstrates why the focus should not be exclusively on improved gas mileage but on the economic efficiency of the entire transportation sector. The price of driving your car a marginal mile should accurately incorporate the actual marginal cost (including insurance, pollution, congestion, parking and infrastructure wear) of doing so. If you got the price of driving right, everything else would start falling into place: you would see a drop in VMT of about 50%, accompanied by higher density land-use, increased public transportation ridership, more local agriculture, retail commerce and industry (due to increased hauling costs), market-driven incentives for higher-mileage vehicles...in short, all the things that our society should be moving toward in a post peak-oil environment.

If you haven't already done so, see Todd Litman's (Victoria Transport Policy Institute) many articles for a more complete explanation of the effectiveness of comprehensive per-mile charges and the drawbacks of emphasizing technological efficiency over economic efficiency.

Per-mile charges as proposed above completely avoid Jevon's paradox.

It's the "shadow" rebound effect that they don't avoid. Per-mile taxes will reduce per mile travel, which will reduce energy consumption in traveling those reduced miles. That equates to money saved, which will be spent elsewhere--and that spending represents energy consumption to at least some degree. The bride of Jevon's rides again...

Economic Efficiency still suffers from the "shadow" rebound effect. For example, if we reduced the total VMT through pricing, that increase in price (tax) goes somewhere. It then gets spent on something. That something represents energy consumption--and the result is that you haven't actually saved much energy. Hence the vicious circle. The pricing to reduce direct energy consumption in the taxed activity will work, but HOW THAT REVENUE IS SPENT will undermine your ultimate purpose if not carefully considered.

Economic efficiency is not the answer either--it just leads, as noted by another post above, to growth that aborbs any energy use freed via economic efficiency. Rather, our fundamental economic system must be changed, away from a hierarchal, perpetual-growth-based system.

I agree that we have to move "away from a hierarchal, perpetual-growth-based system" it's just a question of how you get there. The current economic system is built upon a vast system of market inefficiencies and subsidies that benefit powerful vested interests. Of course, the savings from an efficiently-priced transportation sector would get spent on something; it's just a question of whether the new consumption is less energy-intensive than the old. Assuming energy externalities are incorporated into all prices throughout the economy and all energy subsidies are eliminated, the true (and very high) price of energy would result in increased consumption of goods and services that are less energy-intensive. In the long run, once the cost of exploiting the remaining supply of prehistoric solar energy reserves equals that of producing it currently, we will reach steady state with regard to energy costs.

I have an ambivalent attitude to learning to live with less energy
1) someone else will use what you didn't but
2) you will be more ready for the crunch when it comes

I also think this shows why cap-and-trade will work better than revenue-neutral carbon tax. Apart from maybe auctioning the permits rather than handing them out there is little revenue to be gained by the government. However it does create a fixed emissions target provided the offset loophole is restricted. Since the rebound effect is a kind of market failure I think this is a legitimate task for federal governments despite lack of action in Australia, Canada and the US.

2) you will be more ready for the crunch when it comes

When I first introduced ELP, I did it this way:

Assume that gasoline is $8 plus and assume that your income has dropped by 50%, what changes would you make to your lifestyle?

Somehow this reminds me of the republican view of government - anything they do to save money in government programs will enable them to expand and do more, which they oppose. Their solution is to cut taxes, increase government debt, thereby tying up as much future taxes on debt payments, thereby limiting future growth of government. At least that's my best explanation.

Back to energy, in order to reduce Jevon’s Paradox of increased consumption by increased efficiency, you have to make sure people don't benefit from their savings.

I think I have a solution. We just need to increase spending that doesn't consume as much energy. How about gambling? If we legalize gambling into every neighborhood, we can speed the transfer of wealth from the masses, and there by reduce their wealth which risks their consuming more energy. (Every casino will be walkable, and solar powered to minimize energy consumption.)

Every local government ought to have their own casino. I'm just not sure how the republicans will like it. Okay, let the churches have gambling too, but only on Sundays.

Sorry, in a feisty mood today...

Their solution is to cut taxes, increase government debt, thereby tying up as much future taxes on debt payments, thereby limiting future growth of government. At least that's my best explanation.

How about this version of what is happening:

The Republicrats (and Demopublicans) are more than happy to take public dollars and transfer them into private hands, and in that process enrich their families, friends and themselves.

Oh, I'm gotta be careful, not as feisty as you I guess.

Self-interest is a complicated matter, and we're all guilty with our corners of power.

I've seen discussion distintegrate under laments of powerlessness because all elected officials are corrupt ("nothing can change until the revolution"). The reality must have some gray zones between good intention, incompetence, self-interested blindness, and outright corruption.


Systems dynamics might give you another solution: Pulsing.

“…self-organizing systems on all scales pulse. Storages in one unit accumulate, followed by pulsed consumption and momentary surge of temporary structure in another unit.” And “Similar phenomena are observed from the molecules to the stars. Apparently pulsing designs prevail during self-organization because pulsing designs maximize performance and are a reinforcing pattern.”

From H.T. Odum “Modeling for all Scales”, pg 228)

A shortage of fuel drives up the price of heating and the economy as a whole contracts because there is less energy entering which we see as consumer spending redirected into heating costs.

When the shortage is relieved, people invest spare cash to reduce the need for heating fuel. They buy better windows and more insulation etc.

This investment increases the size of the economy as a whole, because now energy that once was turned into waste heat can be redirected to doing other useful work.

The system just needs constant pulses (shortages) to operate. If the environment lacks pulsing, then government intervention would be needed to create the pulses artificially.

A perspective on Jervon's Paradox

I am not sure that efficiency is the goal as much as the path to the goal. The goal being to maximize the size of the economy for any given energy input. (Please pardon a bit of explanation before I tie it back).

If we define the economy as “the amount of embodied energy” like so:

Eeconomy = Efuel – Ewaste

Any increase of Ewaste (waste heat, rusting cars, bombed buildings) lowers the size of the Eeconomy. Efficiency improvements lower Ewaste and thus increase economic growth. So efficiency is good, but that is not enough.

There is one other major aspect, and that is velocity of the energy passing through the economy. All energy expended eventually ends as waste, but some takes longer to get there. Fuel may be expended in a few days from extraction to burning into waste heat (high velocity energy), but energy spent on a road bed may last 1000 years (low velocity energy).

This gives us another place for optimization. We can choose to invest our limited energy in things which have very long lifetimes. (I think this is part of where you are headed with your “Design Imperative” ideas)

The longer energy stays in the economy (say as a masonry house) doing useful work (sheltering people) the larger the economy. And the easier it is to grow the economy. So a path for maximizing the size of the economy is to spend limited energy on “low velocity” investments.

The point (finally):

Jervon’s Paradox is frustrating because what we see as good behavior (energy being redirected into structural efficiency improvements with long lifetimes) just results in the saved net energy being wasted as high velocity energy use somewhere else in the system.

Thus the trick to defeat Jervon, is to separate the high velocity energy uses from the low velocity energy uses and try to get more and more of our limited energy supply directed into those low velocity structures.

While temporary shortages (or carbon taxes) make “sticks” that beat people up and drive people towards correct behavior, Al Gore presented an interesting carrot idea during his global warming speech. A special loan just for long term improvements in efficiency. It is basically a mechanism for an individual to capture that increased economy of later, and spend it today. Maybe something similar can be created for “smart design choices”.

Jeff, well done, thanks!

I think you might have overlooked what to me is the bigger issue with efficiency being materialized in the form of monetary savings, and that's what's called the "general equilibrium effect". This is what I wrote here back in January, with the first two effects the same as you described:

"There are three main offsets to efficiency.

First is the direct rebound effect. When you can have a light on for the cost of 13W (CFL) instead of 60W (incandescent), you might use it more...perhaps not turn it it off when you leave the room. Your monetary savings are somewhat reduced and kWh usage raised. We've seen this in a very big way with car efficiency gains, which have been more than offset by higher VMT. On the other hand, this has not been a factor with refrigerator efficiency gains of over 50% since 1983. Since they already run 24/7, there's no additional use possible (unless you want to leave the door open for some reason).

Second is the indirect rebound effect. This refers to the offset of your energy savings from efficiency by the use of the monetary savings for other consumption. Say you save $20/month on your electricity bill from your new efficient refrigerator, but spend this on Starbucks, or another tank of gas or a few books. Each of these items require energy that would not have otherwise been demanded, and offset your savings to various degrees. Further, your purchase is someone else's income, so there is the multiplier effect in action.

The third is the general equilibrium effect. This is most powerful. This refers to the economic impact of having your monetary savings recycled through our fractional reserve banking system. Say a factory has an audit and replaces a series of inefficient equipment with more efficient ones and saves $10,000/month in energy costs. This $10,000, as savings or a bank deposit, form the basis of up to $90,000 (on average) of new money (in the form of credit with interest obligations) in the larger economy. This, of course, requires some kind of growth in order to generate the profit to pay off the principal and interest. The additional energy demanded for this new economic activity can swamp your savings."

So in the end, the only way efficiency actually saves energy without delivering the rebounds is if 1. prices go up the rate of your savings (as my gas water heater did with rising natural gas prices); 2. monetary savings are taxed away and neutralized (which we have no way of doing); or 3. if the savings are reinvested in natural capital (land, water, air). We have no mechanism to do that now.

13W doesn't do for the chicken brooder. I suppose the right way is to get the chickens to brood their own on their own schedule. That's a whole different way to plan time.

cfm in Gray, ME

To me it appears that the rebound effect of Jevon’s Paradox is that the money previously spent on fuel is now indirectly spent on the same things. In a situation of tight supply and increasing prices, efficiency gains don't necessarily result in the rebound occurring, as the fraction of an individuals income spent directly on fuel does not have to decrease - if efficiency gains are coupled to increase prices, then the effects can counter-ballence one another.

The rebound can only be as a result of the income left over after efficiency gains and price changes are taken into account.

With the current negative savings rate in the US, if on average everyones efficiency increased, I'm sure that people would be happy to just spend a bit less on fuel.
(IMO of course, I'm not an economist)

Rationing doesn't work. Just creates one heck of a black market, and rewards those who manage to get ration coupons. It doesn't make anyone instantly more willing to invest in 'efficiency'. And it causes uneconomic use of gas simply because 'someone has some to burn'.

Efficiency doesn't always work to slow consumption. If you have a family of 4 (2 parents and two teenagers)....who have 2 cars that get 25mpg...and buy two Prius that get 50_mpg...now they have extra gas money (or ration coupons) not spend. THe kids can buy two more, and they consume no more than before. Gas bill for family is the same. Burn the same amount of gas.

WIth Jevon, it was that manufactured goods could come down in price as efficiency rose. (or services). You could produce more stuff, that people would buy at a lower price than before. It was possible to make other things. More stuff to sell. Industries expanded. Jobs expanded.

If everyone started saving 30% on their energy bills by conservaton, that 30% savings would be spent on other things that used energy, creating more jobs, more income, and more energy demand.

As prices of energy rise, folks will conserve. Insulate houses and upgrade appliances and lights, and buy more efficient cars. the problem is there will be more and more people, all demanding energy to live (food, housing, transport, job).

Even if costs rise faster than conservation saves, the money still flows to the energy providers and gets spend. Those petrodollars just don't sit in a bank somewhere. The y are spent or invested in things that cause even more energy consumption. The arab royal family doesn't sit on it..the 10,000 members spend it as fast as they get it. The Mexican gov't and Venezuelan gov't spend it aa fast as they get it, or even faster (debt). That all creates energy demand.

The carbon tax, as much as I hate the idea, if implemented right would spur the creation of clean energy. THis planitng a bush, selling the rights five times, doesn't buy me anything, but financing solar and wind energy does. Cut out the biofuel crap, the 'planting trees' or 're-jiggering' the coal plant to be more efficient (heck, they'll do that on their own!)...is nonesense.

Get the carbon tax money invested in sustainable energy -wind and solar and tidal and geothermal.

If everyone started saving 30% on their energy bills by conservaton, that 30% savings would be spent on other things that used energy, creating more jobs, more income, and more energy demand.

Thats it, todays generation does not know how to save money in grandma's cookie jar- bottom line= savings!

"Rationing doesn't work. Just creates one heck of a black market, and rewards those who manage to get ration coupons. It doesn't make anyone instantly more willing to invest in 'efficiency'. And it causes uneconomic use of gas simply because 'someone has some to burn'"

how about legitamising the black market..

You allow people to sell their allowence... but here is the thing the end user of the allowence gets the carbon credit seperate from the cost of the fossil fuel

some sort of credit card system would allow local consditions to produce local pooled solutions

the net result is the average consumption stays constant.. the total allowence in the system is fixed.. perhaps linked to some depletion protocol

A individual is not forced to use his allownece just because one has it..the ration can be sold..not the actual fuel..the allowence seperate from the fuel

the end user still pays for the fuel ontop of any extra allowence cost they have bought

marketforces still operate

the economic/tax proposals in this discussion ALL ultimatly hope to replicate the effect of rationing even if they do not aknowledge it..

turn the problem around

also how accurate is the statement concerning rationing "not working"


Try this hypothetical: The people in a society find a way to double their food production. But they don't need any more food, and there is no one who wants it in trade. So they only grow as much food as they did before, and use the extra time they have saved to write poetry. They are twice as efficient, and they actually use lees energy, since it takes less energy to compose poetry than it does to produce food. The fallacy in some of the comments is to assume that increased efficiency necessarily results in a saving of money, whereas it can be a savings of time. (Capitalists assume that the only way time should be used is to make money). Even if that savings of time is used in ways that consume some energy, there is no necessity that that energy use will be equal to the energy originally saved.

Search for Jay Hanson's "society of sloth" at dieoff.com.

You are absolutely right that there exists a tradeoff between income and time, even for "capitalists". When I was a researcher at the Fed in my younger days, I worked on a long-term model of the economy that would blow up until we included a function that embodied that tradeoff. Remove the subsidies and market imperfections/externalities that keep the price of energy (and energy-consuming activities like driving) artificially low, and growth will be guided by the invisible hand into leisure time and the consumption of goods and services that use less energy and other rapidly depleting natural resources.

We all know humanity, indeed life of any form, cannot go on forever. So the question is how long do we want to make it last, and what sort of existence do we want to have? I think, with few exceptions, most people when pressed will admit that despite the mess it may have got us into, technology (and its ability to allow us to create a rich, complex culture) HAS made our lives more worthwhile, more interesting in one way or another. Indeed, reading about the prospects of future technology and what it may achieve for mankind is one of the few things that fills me with some sense of hope. Our brains are geared towards creating and mastering tools, and we don't really seem to be nearing any sort of physical or mental limit as to how complex and powerful our technology might become. But obviously technology needs time to develop, and it needs an economy that can sustain a percentage of the population that can spend the time developing the necessary intellectual abilities, acquiring the necessary knowledge, then inventing and building that technology. All that will require a constant intake of energy. But we're nowhere near close to using the total supply of energy that comes from the Sun or is extractable from the Earth, and there's every reason to believe that the technology to use and harness that energy more and more efficiently will improve with time. And ultimately, yes, this will mean that we will consume more and more energy: in fact, providing civilisation as we know it doesn't completely implode, in one or two hundred years time I would fully expect to see that the total energy usage of the human race to far exceed what it is now, and it may not be in a completely sustainable fashion, but as long as it can be sustained long enough to enable us to move beyond Earth, then there really is no reason to suppose humanity isn't capable of achieving even the most optimistic Sci-Fi scenarios - even if it is 1000 years before we do so. On that basis, we should definitely be working towards increased efficiency, as a) it will be the basis of much future technology and b) it will allow us the time necessary to develop that technology. The universe's energy will all run out one day, but it would be sad to think that humanity was incapable of getting any further than it has so far.

This is a great article and is inspiring some really good conversation. I'd like to see more articles like this that look at the underlying problems that peak oil is a part of. If we do not look at the bigger picture then any suggested solutions are like trying to dam a fast flowing stream with one handful of sand at a time.

Thanks, folks, for once again clubbing me over the head with the complexities of this Problem.

May I summarize for the hoi-polloi?

There's just too many people. Most of them Have To Go.
Has Ghawar peaked?
Has the world peaked?
Until after the fact we just won't know.

Thank you for the excellent debate on this topic! I did my best to take a firm position and defend it, as I think that can be the most productive in this type of forum. I've posted a "post-mortem" (no pun intended) on this debate and its impact on my views on the topic over at my blog:

Jevons' Redux

P.S. A poster at peakoil.com was kind enough to point out to me that it's "Jevons' Paradox," not "Jevon's Paradox," as the originator's name was William Stanley Jevons, not William Stanley Jevon.

News on CNN, some guy had a 400 dollar haircut (shh, it was John Edwards), not much news or trickle down there, but put a 400 dollar luxury tax on it and apply that to Allens electric choo choo's and that would be news and of a good variety.