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THE Jevons Paradox Thread Pt. 2

Discuss research and forecasts regarding hydrocarbon depletion.

Re: How to offset Jevons' Paradox in a free market

Postby MonteQuest » Thu 19 Jul 2007, 21:31:02

$this->bbcode_second_pass_quote('Ludi', 'I')t seems to me the answer is what the Puritans won't want to hear - we need an incredibly lazy, inefficient way of life, in which we produce virtually nothing beyond our needs for survival, and produce those in a way which doesn't require much, if any, non-living (human, animal, or plant) energy. This is so counter to our society, our culture, our historical values, as to be anathema to many, possibly most, people.


Yes, demands for increased efficiency only come from having exceeded the sustainable limits.

If our human footprint were sustainable, we wouldn't need to be more efficient.

No other life form plants crops.

Why must we?

For power.
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Re: How to offset Jevons' Paradox in a free market

Postby DavidFolks » Thu 19 Jul 2007, 21:41:36

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('aflurry', 'I') think there have probably been many observable efficiency gains, but very few genuine conservation gains. We have yet to know the effect of a genuine, sustained conservation effort.


Sure we do. We called it the Great Depression.
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The great depression was caused by a disparity in monetary income and oversupply of goods. Rampant speculation produced artificial "wealth" and strong supply of goods. This led to a credit economy for low wage earners in the middle and lower class citizens. Eventually, production outstripped demand, stocks fell, jobs were lost, loans were defaulted on. Then the depression started, and then conservation and stretching what resources could be purchased began in earnest.

Asserting that conservation caused the depression is exactly opposite to what really happened.
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Re: How to offset Jevons' Paradox in a free market

Postby MonteQuest » Thu 19 Jul 2007, 22:23:11

$this->bbcode_second_pass_quote('DavidFolks', ' ')Asserting that conservation caused the depression is exactly opposite to what really happened.


LOL! I guess that one was over your head.

Let me rephrase aflurry's comment.

"We have yet to know the effect of a genuine, sustained reduction in economic activity."

Which is the same as a "sustained conservation effort."

The effects are massive unemployment, loss of homes and businesses, and a scarcity of money.
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Re: How to offset Jevons' Paradox in a free market

Postby EnergyUnlimited » Fri 20 Jul 2007, 03:48:48

I had red all posts above.
My overall impression is that Jevon's paradox will be around, as long as we have free market economy and population growth.
Perhaps in environment of die off (natural population decline) we may temporary "suspend" its effects, as peoples will have some more important things to worry about, than mindless consuming of more and more.
Once die off is over Jevon's paradox will kick in again as long as market economy is still around...
In any case it is rather default situation.

Some possible solution would be in relentless increasing of taxes on natural resources in a kind of "elevator" scheme run ab infinitum, regardless of consequences to economy and well being of individuals. Such undertaking would have to be run worldwide.
Any state income from such taxation would be spend to facilitate transition to sustainable way of life, not to improve healthcare, education etc.
I would find it difficult to call such a setup "free market".

Again, actual chance of introducing such a scheme in existing civilization is next to nil.
So we are sentenced to follow Jevon's route in our relentless race to the bottom.

It is interesting observation that sustainable life is deeply against "man's hubris".
That is why all civilizations built by man are invariably collapsing. This one will not be an exception.
There is no realistic way out.
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Re: How to offset Jevons' Paradox in a free market

Postby IslandCrow » Fri 20 Jul 2007, 05:05:17

In a free market economy, the only way to offset Jevon's Paradox (and I realise that this will only be a very, very [sub]small[/sub] offset) is to control how I use any benefits from conservation and efficiency that I receive. How I spend my money (or don't spend it) is one signal that I can give to the market.

Jevon's Paradox seems to work in well functioning markets, where if I do not buy someone else will. This also works well for items that are easily transported from one place to another. I don't have any academic papers to support this, but I suspect that the Paradox works less well in small populations where maybe surplus production can not be easily used, or where the system breaks down (eg crops rotting in the fields because not enough cheap labour is available locally to pick them). So in this I have a gut feeling that the best way to work on offsetting Jevon's Paradox is to support the process of re-localization.
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Re: How to offset Jevons' Paradox in a free market

Postby Byron100 » Fri 20 Jul 2007, 07:46:31

In the face of forever declining oil, isn't this whole Jervon's Paradox a moot point? Sure, we can conserve all we want, but one thing remains the same...there is less to go around, period.

I think the real question is whether we limit total consumption via market pricing (rich countries outbidding the poor ones, and within the rich nations, the rich people outbidding the poor ones) -or- institute a comprehensive rationing system that matches the rate of decrease of fossil fuel production. But the chances of something like this being enacted without a world government in place is probably tougher than trying to win the Mega Millions lottery. One country decides to conserve by rationing, another will surely take advantage of having that little bit more to use for their economic advantage. So market pricing it will be until we run short enough to actually bring down the global economy :/

Another point to consider is how to move society away from hydrocarbons for good...a total paradigm change if there ever was one. But this will not happen until we're deep into decline, as people in general aren't going to get off their duff with this until its affecting them directly. And we all know this isn't going to be a pretty picture...
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Re: How to offset Jevons' Paradox in a free market

Postby Battle_Scarred_Galactico » Fri 20 Jul 2007, 09:39:59

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('Ludi', 'I')t seems to me the answer is what the Puritans won't want to hear - we need an incredibly lazy, inefficient way of life, in which we produce virtually nothing beyond our needs for survival, and produce those in a way which doesn't require much, if any, non-living (human, animal, or plant) energy. This is so counter to our society, our culture, our historical values, as to be anathema to many, possibly most, people.


Yes, demands for increased efficiency only come from having exceeded the sustainable limits.

If our human footprint were sustainable, we wouldn't need to be more efficient.

No other life form plants crops.

Why must we?

For power.



True.

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Re: How to offset Jevons' Paradox in a free market

Postby Ludi » Fri 20 Jul 2007, 10:07:37

$this->bbcode_second_pass_quote('EnergyUnlimited', 'I')t is interesting observation that sustainable life is deeply against "man's hubris".
That is why all civilizations built by man are invariably collapsing. This one will not be an exception.
There is no realistic way out.



Fortunately it is only "civilized man's hubris" and there are examples of people who walked away from collapsing or collapsed civilizations and went on to form new societies (but not new civilizations). Examples I can think of are the Maya and Hohokam, who broke off into smaller groups, forming tribes some of whom survive to this day.


This is the "realistic way out" - to walk away from civilization, which we know to be unsustainable.


We have the advantage currently of very good communication and ability to exchange information about other ways to live. We needn't function in a vacuum and we needn't reinvent the wheel. The models are out there; we need to implement them. Not easy, but not impossible. Certainly "realistic" though perhaps not "likely."
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Re: How to offset Jevons' Paradox in a free market

Postby MonteQuest » Fri 20 Jul 2007, 11:41:22

$this->bbcode_second_pass_quote('Byron100', 'I')n the face of forever declining oil, isn't this whole Jevon's Paradox a moot point?


Face of forever declining oil? Wedon't know what the decline rate will be. We don't know how long we will be on this plateau. We don't know how many URR's we have. We don't know what role substitutes will play.

We could muddle along for quite some time with a roller coaster of supply and price volatility.

Unless you see the cliff coming rather soon and quite steep, then efforts at conservation and efficiency gains will be quite subject to Jevons for quite some time.


Jevons' Paradox will never become moot, as any efficiency gains will increase the available supply relative to what it would have been...even in a declining supply scenario.

No more net supply, but more available supply=cheaper price...relative to what it would have been without the efficiency gains.

As long as efficiency gains offset decline, the price will drop...relative to what it would have been.
Last edited by MonteQuest on Fri 20 Jul 2007, 12:05:43, edited 1 time in total.
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Re: How to offset Jevons' Paradox in a free market

Postby MonteQuest » Fri 20 Jul 2007, 12:03:22

$this->bbcode_second_pass_quote('EnergyUnlimited', ' ')My overall impression is that Jevon's paradox will be around, as long as we have free market economy and population growth.


Which brings us full circle back to Aaron's basic argument.

If we cannot offset Jevons', then conservation and efficiency gains will be the death of us.

Like throwing gasoline on a fire.

But yet, we will conserve.

The micro gains are self-evident.

It's the macro-gains that will forever elude us.

The bottom line here is that, under our current system of thinking and economics, conservation and efficiency gains are not part of the macro solution...which is what we are looking for.

Asset inertia rules.
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Re: How to offset Jevons' Paradox in a free market

Postby mididoctors » Fri 20 Jul 2007, 16:26:32

Rationing and "free" markets are not incompatible

increased utility or growth of utility with a capped consumption limit can operate in a market fashion


there are no "free" markets anyway

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Re: How to offset Jevons' Paradox in a free market

Postby Bas » Fri 20 Jul 2007, 16:28:26

Jevon's paradox just doesn't apply in a decreasing supply situation, go figure.

edit: i.e. we will only use less no matter how efficient we get at using oil. Only a good thing IMO.
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Re: How to offset Jevons' Paradox in a free market

Postby Permanently_Baffled » Fri 20 Jul 2007, 16:59:33

$this->bbcode_second_pass_quote('', 'A')s long as efficiency gains offset decline, the price will drop...relative to what it would have been.


Hmmm.... this seems to be the real crux of the Jevons issue, even in a declining oil scenario.

How about some sort of variable tax that increases/decreases with the price of crude.

For example, when efficiency gains decreases the relative use of oil, the tax returns the price to the higher amount?

Politically quite tough though, I suspect!

:)
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Re: How to offset Jevons' Paradox in a free market

Postby aflurry » Fri 20 Jul 2007, 17:29:54

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('aflurry', 'T')his important distinction between conservation and efficiency often goes overlooked. It is only by doing so that people regard Jevons Paradox as this inescapable doom law.


Again, Jevons' Paradox is not a law, it is a consistent observation of reality.

Both efficiency gains and conservation lead to greater supply, which lowers the price, thus increasing consumption.


Sorry, still looks to me like what was observed was the effect of increased efficiency, not conservation. And what i am saying is that the two things don't have the same overall effect, even if their effect on prices is arguably the same. "If the quantity of coal used in a blast-furnace, for instance, be diminished in comparison with the yield...," that describes greater efficiency, not conservation. Conservation does not increase the yield.

I know we aren't supposed to be debating Jevons, but this seems fairly relevant, especially in light of the conclusions you seem to want to draw from this, that conservation plays no part in a solution.

One difficulty I am having with the question is how poorly "Conservation" is defined. I think it can be simply thought of as any direct restriction on consumption, voluntary or imposed. As such, there can be no paradox, because rising consumption would just show that conservation had not been achieved.

But this totally reframes the discussion.

the question becomes:

1. Is imposed conservation possible within a free market? And by definition the answer is pretty much "no."

2. Is voluntary conservation possible within the free market? Perhaps, but only with great effort, education, appropriate taxation, and whatever else cajoling and maneuvering, scare tactics, etc. I am not convinced either way.

(It's cute to say that the great depression was a case of imposed conservation, but that was a case of "market imposed" conservation which I don't think counts here, especially as that directly contradicts the main problem we are discussing - that the market encourages consumption. I am talking about institutionally imposed conservation.)

However, neither of these questions lead to the conclusion that you seem to be entertaining, which is that we should counter-intuitively burn it all with abandon, reversing the effects of Jevon's paradox, and thereby reducing overall consumption. I am just not ready to jump on that topsy-turvy logic yet.

The free market determines a price for oil that I personally believe to be too low. If I rig the price, the market is no longer free. But I am not obligated to buy larger amounts as the price falls. Conservation efforts are located at this point in the chain of events, convincing people to use less though they can afford to use more.

I am by no means saying that this will be possible in our free market economy. i am only saying you cannot use Jevon's paradox to say it is undesirable.
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Re: How to offset Jevons' Paradox in a free market

Postby MonteQuest » Fri 20 Jul 2007, 18:34:30

$this->bbcode_second_pass_quote('mididoctors', 'R')ationing and "free" markets are not incompatible

increased utility or growth of utility with a capped consumption limit can operate in a market fashion


But the rationing forces efficiency gains to do more with less.

Gas on the fire.

How can you limit consumption and prohibit more efficiency gains?
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Re: How to offset Jevons' Paradox in a free market

Postby MonteQuest » Fri 20 Jul 2007, 18:38:03

$this->bbcode_second_pass_quote('Permanently_Baffled', ' ')How about some sort of variable tax that increases/decreases with the price of crude.


You mean a tax that increases with every gain in efficiency, don't you?
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Re: How to offset Jevons' Paradox in a free market

Postby MonteQuest » Fri 20 Jul 2007, 18:53:09

$this->bbcode_second_pass_quote('aflurry', ' ')Sorry, still looks to me like what was observed was the effect of increased efficiency, not conservation. And what i am saying is that the two things don't have the same overall effect, even if their effect on prices is arguably the same.


That reasoning just doesn't follow. Both result in a gain in available supply which lowers the price thus increasing consumption.

$this->bbcode_second_pass_quote('', 'I') know we aren't supposed to be debating Jevons, but this seems fairly relevant, especially in light of the conclusions you seem to want to draw from this, that conservation plays no part in a solution.


Never said that it plays no part. The point is that the expected results are the opposite of what we want.


$this->bbcode_second_pass_quote('', '(')It's cute to say that the great depression was a case of imposed conservation, but that was a case of "market imposed" conservation which I don't think counts here, especially as that directly contradicts the main problem we are discussing - that the market encourages consumption. I am talking about institutionally imposed conservation.)


No one I know have ever said that. The effects of the great depression was a case of reduced economic activity on a huge scale.


Which is what a massive case of conservation on the scale needed will bring about...reduced economic activity.


$this->bbcode_second_pass_quote('', 'H')owever, neither of these questions lead to the conclusion that you seem to be entertaining, which is that we should counter-intuitively burn it all with abandon, reversing the effects of Jevon's paradox, and thereby reducing overall consumption.


Nowhere, in my almost 10,000 posts on this site can you quote me saying anything remotely along those lines.

What I have consistently said is that, in a free market, conservation = reduced economic activity, and that conservation and efficiency gains leads to increased use.

We must consider this reality in our decision making and think through ways to counter these paradoxical results.

It comes back to my main purpose on this site:

$this->bbcode_second_pass_quote('Montequest', 'I') write to stimulate thought, and to try to explain the parameters and natural laws which must govern the debate as we discuss solutions and consider the alternatives to our imminent energy decline.

Conservation and capitalism (or the free market) are like oil and water; they do not mix.

You can't take the fuel that runs infinite growth away from it without consequences.
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Re: How to offset Jevons' Paradox in a free market

Postby JPL » Fri 20 Jul 2007, 19:02:56

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('EnergyUnlimited', ' ')My overall impression is that Jevon's paradox will be around, as long as we have free market economy and population growth.


Which brings us full circle back to Aaron's basic argument.

If we cannot offset Jevons', then conservation and efficiency gains will be the death of us.

Like throwing gasoline on a fire.

But yet, we will conserve.

The micro gains are self-evident.

It's the macro-gains that will forever elude us.

The bottom line here is that, under our current system of thinking and economics, conservation and efficiency gains are not part of the macro solution...which is what we are looking for.

Asset inertia rules.


Hi Monte

OK I've been thinking about this for 24h - as requested - and I believe we CAN de-construct Jevon although I don't think you are going to like the results (grin).

One way to square the circle between 1) conservation/resource depletion and 2) an economy that grows on efficiency gains is to re-inflate.

I think another paradox is useful as both an analogy & a foil. Take a look at this famous visual paradox by Escher:

Image

Depending on which way you look at it, the staircase is either endlessly rising (clockwise) or falling (anticlockwise). From the point of view of anyone on it, the progression is totally logical and only if you consider the thing as a whole, does the perspective-distorting trick of the artist become visible.

Earlier on the thread we were talking about the need to preserve economic growth whilst at the same time conserving (or even reducing) consumption. This is the 'sustainable growth' oxymoron, but I think Escher illustrates it better.

In plain English, I think the challenge ahead of us to find a way of increasing each part of the economy without actually increasing the total aggregate. Logically impossible, yes. Do-able, possibly, yes as well, providing we can get our heads around how the above image works.

If we use the image as a picture of the macro-economy we can substitute 'inflation' for 'perspective' and then let each individual part of the economy (wages, stocks, GDP) grow whilst the overall picture does not.

Efficiency gains (as per Jevon) could be translated into increased wealth without increasing overall consumption, because any time one staircase rises above its fellows, a knowledgeble central bank could print more money, and inflate the rest of the economy back up to meet.

Excessive inflation would destroy everything but I think a - carefully managed - inflationary period would allow an economy to both grow (in terms of keeping things appearing normal) and shrink (in terms of 'real' GDP) at the same time. Jevon's paradox wouldn't rear it's ugly head because although some things (like energy costs) would be more expensive, other stuff (like stock value and pension funds) would be getting better, so, overall, no need to panic, huh?

Of course the analogy would work best if the early inflationary period was hidden from the markets (for obvious reasons). A clever central bank would initally have to do stuff like massage down 'real' inflation figures and drop stuff like M3 reporting. I guess a currency decline would help at this stage too.

After that you would need to be a bit more blatent & introduce price controls on core commodities - but also keep printing the money - so the overall picture would be one of steadily increasing wealth at home whilst also squeezing overseas suppliers.

...

JP
Last edited by JPL on Sat 21 Jul 2007, 14:07:20, edited 1 time in total.
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Re: How to offset Jevons' Paradox in a free market

Postby Pops » Fri 20 Jul 2007, 19:25:12

How to offset Jevons' Paradox in a free market?

I would say get out of the market.

I love these Big Theory threads that mean little to folks with some understanding of the underlying problem and a willingness to do something instead of talk.

I guess I am thinking Jevon works to my advantage – the more folks conserve and the lower the price pressure; the easier it is for me.

Conserve away, ride your bike or drive your Pirus and keep tapping away. By doing so you reduce demand and keep the price of energy down…

Which just makes things easier for me to get by and set up stuff for my kids.

In case you have't been paying attention, the point is, conservation just means the end of the dipstick gets closer.

But you all knew that.
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Re: How to offset Jevons' Paradox in a free market

Postby oiless » Fri 20 Jul 2007, 21:07:19

$this->bbcode_second_pass_quote('Ludi', 'I')t seems to me the answer is what the Puritans won't want to hear - we need an incredibly lazy, inefficient way of life, in which we produce virtually nothing beyond our needs for survival, and produce those in a way which doesn't require much, if any, non-living (human, animal, or plant) energy. This is so counter to our society, our culture, our historical values, as to be anathema to many, possibly most, people.


I'm up for that. In fact it's how I attempt to live, although society makes it damn hard in some ways.
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