By Dom Nozzi, AICP
David Owen, in the December 20, 2010 issue of The New Yorker, wrote a superb, highly counterintuitive article regarding the “efficiency” paradox. His thesis: Making cars and appliances more energy efficient results in an overall increase in gas and energy consumption.
According to Charles Komanoff, who reviewed the Owen article (http://www.grist.org/article/2010-12-15-if-efficiency-hasnt-cut-energy-use-then-what), we need to couple efficiency with higher gas and energy taxes if we expect to see meaningful, enduring conservation.
A colleague of mine (let’s call him “Greg”) challenged much of Owen’s thesis. He noted that at the extremely progressive, green university he works for, the University has cut total energy use on campus by 23 percent in five years by using efficiency and incentives that were not price-based (ie, by not increasing, say, taxes or fees for energy).
Another friend of mine countered Greg by noting that “[a] 100-watt incandescent bulb turned off uses less energy than an energy-efficient 20 watt bulb left on all day. Clothes hanging on a line use less energy that an energy-efficient drier. A mid-90s American sedan sitting in the garage while you walk, bike or use transit for short trips uses less gas than an energy-efficient hybrid. A 5-minute shower using a conventional water heater uses less energy than a 20-minute shower hooked to an energy-efficient water heater.”
Greg responded with the observation that “this is not rocket science: conservation first, then efficiency, then renewables. If you follow that bat
ting order—which is why we were able to drop 23 percent total energy use on campus while growing 14 percent new facilities—you can’t use more energy.”
I then pointed out to Greg that throughout the nation, as any first-year economics student can easily predict, more efficient appliances, cars, etc., did not drop per capita energy use (mostly, energy use increased). It is simple economics: Decrease per unit cost tends to increase consumption. This principle is known as “Jevon’s Paradox.”
Why did Greg’s progressive university see a decrease in energy use? Almost certainly because of self-selection, primarily. People who are already convinced of the need for conservation migrate to the progressive community (or in this case, the progressive university). That largely explains why there is so much transit and bicycle use in many university towns. It is largely not because of education campaigns or bike parking or lots of buses (people who migrate to a progressive place tend to already have a strong interest in bicycling or using transit).
I told Greg he was absolutely correct that it is conservation first, then efficiency, then renewables. The point of the Owen article is that even in enlightened places, there are no serious efforts to conserve. I formerly lived in Alachua County, which contains the relatively progressive college town of Gainesville FL. But despite the enlightened nature of the county, county government steadfastly refused to engage in serious conservation by increasing gas taxes for quite a long time (I was surprised and impressed to learn, however, that the County DID manage to increase their gas tax in 2006 or 2007). How many counties in the US have increased gas taxes in the past 10-15 yrs? I suspect the number is close to zero.
How can anyone claim “conservation first” if they don’t employ increased energy costs as a tactic?
In general, Americans tend to aggressively push efficiency and pay only lip service to conservation because it is a lot easier, politically, to adopt efficient light bulb standards than to increase gas/energy taxes.
To get back to my friend Greg, when conservation incentive programs are used at relatively well-educated or progressive universities or towns, such programs are being applied to a population that is already tending to be susceptible to the conservation message, which makes the incentive programs much more successful. But with less progressive towns, using non-price incentive programs within a town, as opposed to an enlightened university population, is unlikely to have much success in inducing meaningful conservation. Unless price signals are used.
It is no coincidence that higher gas prices ramp up non-car travel, as we have seen in recent years. The high prices ramp up conservation behavior far more than any non-price tactic. And far more sustainably (if the gas prices stayed high).
If all we have is a hammer, all our problems look like nails. In general, all we have are non-price tactics (because price tactics are nearly impossible, politically). So we are mostly stuck with non-price tactics as our (often ineffective) hammer.
But to be intellectually honest, we need to understand and admit the limitations of non-price tactics.
Basic economics clearly informs us that if we make driving more convenient, cheaper or faster by widening roads and highways, or by providing abundant free parking, we can be certain that a great many people will make the rational decision to drive more (and live in more remote locations) because the cost of doing so has shrunk. The prices are relatively low, which signals us to use more of it.
Simple cost-benefit analysis.
Similarly, if a person enjoys efficiency gains with better insulation or more efficient appliances, their price signals will nudge them towards using air conditioning and heat more often, not being as careful about keeping doors shut, and leaving lights on longer, because now it is cheaper to do so.
I am very concerned that too many of us have a tendency to “rest on our laurels” if we, say, engage in curbside recycling or drive a Prius. I have heard people, countless times, sanctimoniously state that they are living “sustainably” or “green” because they recycle newspapers and their car gets 45 mpg.
And yet they live in a sprawl location and drive everywhere.
They drive so much that they use a lot more gas than a person who lives in the town center. A town center resident who is chastised for having a car (which he hardly ever uses) that gets 20 mpg.
The guy in sprawl is enabled or otherwise encouraged to live in sprawl because his more efficient car means his gas costs less. And he parks in a free parking spot for every trip he makes.
But he parks in a parking lot that uses native xeriscape, so he has done enough to live a “green” life.
Too many of us only fight the battle of making cars more efficient. And providing xeriscape parking lot landscaping.
We won those battles.
But we lost the war, because we naively congratulated ourselves when we used efficiency and xeriscaping, and ended up with more per capita gas consumption (albeit with people driving 45 mpg cars). We ended up with more people living in sprawl and driving everywhere. People who sanctimoniously tell us they are “green” because they have an efficient Prius and successfully lobbied elected officials to install xeriscape in parking lots.
Let’s put conservation before efficiency, like we say all the time. I’m very eager to do so, and have been pushing for decades that we adopt conservation tools that effectively sprawl reduction and car mileage reduction tactics. I’m much less eager to put efficiency first, as we so often seem to do.
Let’s not start with more efficient cars. I’m not interested in having us rest on our laurels when we have a guy live in sprawl with a Prius, and parking at a place using native landscaping.
Sustainability and “putting conservation first” means that guy is living in the town center. And our not “needing” that parking lot at all.
So this is where much of my frustration comes from. I am so tired of our saying “conservation first, then efficiency,” when all I ever see is “efficiency” efforts and ignoring effect demand destruction tactics.
We’ve been seeing aggressive efficiency efforts for over 40 years. It has been 40 years of brief gains in efficiency, followed by a return to unsustainable consumption when price signals led us to quickly forget about being efficient. We have therefore spent over 40 years failing to see durable gains in demand destruction, because we always seem to put efficiency first, and always seem to forget about effective conservation tactics.
There were at least three major economic events that substantially changed price signals over the past few years: A crash in the value of housing, a big jump in the price of gasoline, and fiscal woes for the nation and the world (largely caused by the most severe recession in several decades).
As an aside, with regard to the recession, it has been pointed out that the most effective way to reduce energy and resource consumption, and related pollution impacts, is to orchestrate (or suffer through) an economic recession. Indeed, there was a dramatic decline in per capita energy use, consumption, and driving in the US in recent years—which clearly illustrated the power of price signals in motivating conservation.
Given these enormous economic influences, we need to be extremely cautious about claiming that non-price incentives (such as building insulation, education campaigns urging folks to shut the lights off or recycle newspapers) are the primary cause of efficiency and conservation gains over the past 3-5 years. Instead, it seems nearly certain that price signals have been the primary cause of such gains when we observe what has happened historically: Several decades of aggressive, non-price education campaigns have only succeeded when we’ve seen big jumps in energy prices or big recession troubles with our economy.
In other words, it is going to take more than our urging people to shut off the lights to see durable, sustainable conservation behavior. Once (or if) the economy ramps up again, it is quite likely that the old, more wasteful behavior will return. Unless long-term price increases in energy and resource consumption are adopted and sustained.
Surely, more energy efficient buildings with, for example, better insulation, can reduce energy consumption in the long run. One needs to ask, though, why so many building owners who have recently installed such conservation measures waited for several decades to install efficiency measures in their buildings? Why were their buildings leaky for so long? Efforts to aggressively promote conservation by shutting off lights and using better building insulation have been in place since at least the Sixties. That is over 40 years of using non-price educational incentives. Why did those tactics not work for 40 years? I strongly suspect that the primary explanation for recent installation of conservation measures in older buildings is that we saw a spike in gasoline prices recently (which has a ripple effect for a great many energy and resource product prices), and, as I mentioned above, we experienced a painful recession/housing value crash.
Those factors caused substantial changes in price signals throughout the nation.
That, in turn, ramped up efforts to conserve and be more efficient (leading, in part, to the first decline in vehicle miles traveled that we have ever seen in the US). Combined with that, we’ve had quite a bit of media hysteria over these energy, resource and economic woes. All of us have therefore been sensitized to conserve and be more efficient as a simple matter of survival.
Note, by the way, that the media attention we’ve been seeing in recent years regarding efficiency and conservation have certainly helped somewhat, but again, I question whether the media will give such attention to these matters in the long term. Given the short attention span of the US media and American citizens, I suspect all this attention will soon fade away if/when the economy recovers and price signals inform us to be more wasteful.
What troubles me is that we may fool ourselves, as I said above, regarding causation. The conservation and efficiency gains we’ve seen over the past 3-5 were almost surely motivated by the price signals generated by the housing crash, the gasoline price spike, and fiscal woes for the overall local/national/international economy. Providing such things as better-insulated buildings and education campaigns to urge people to “shut off the lights” were leveraging these price signals and the resulting media frenzy.
The promotional efforts to get people to conserve have been pushed, again, since the Sixties. They are suddenly effective not because they work better than price signals. They worked, suddenly, because of concurrent changes in price signals (and the short term media attention).
If we desire durable, sustainable conservation and efficiency, we need durable price signals that clearly show us that saving energy and reducing consumption makes financial sense. That means higher gas taxes, road fees, etc. Such price signals can help us overcome Jevon’s Paradox by masking price reductions that would induce us to consume more. Without those price signals, I don’t believe we’ll see durable improvements in efficiency and conservation. We’ll be back to leaving the lights on and driving SUVs. Back to a media focused on Paris Hilton instead of efficient light bulbs. Back to non-price education campaigns that fail to produce the conservation and efficiency gains we so desperately need.
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