The Economist: Making lighting more efficient could increase energy use

Michael Giberson

The current issue of The Economist reports on research that concluded “making lighting more efficient could increase energy use, not decrease it.”

SOLID-STATE lighting, the latest idea to brighten up the world while saving the planet, promises illumination for a fraction of the energy used by incandescent or fluorescent bulbs. A win all round, then: lower electricity bills and (since lighting consumes 6.5% of the world’s energy supply) less climate-changing carbon dioxide belching from power stations.

Well, no. Not if history is any guide. Solid-state lamps … will indeed make lighting better. But precedent suggests that this will serve merely to increase the demand for light. The consequence may not be just more light for the same amount of energy, but an actual increase in energy consumption, rather than the decrease hoped for by those promoting new forms of lighting.

Lighting efficiency is just the latest in a long line of examples of the Jevons Paradox – the observation made in 1865 by William Stanley Jevons that increasing the efficiency with which a fuel is used may increase the overall consumption of the fuel. (Also sometimes called “the rebound effect.”)  Jevons observed that improvements in the efficiency of coal use led to increases in coal consumption.

Conservationists and environmentalists sometimes complain about the Jevons Paradox, note the defensive tone from Energy Circle, “The Jevons Paradox: Time to Send it The Way of the Dodo?,” or The Encyclopedia of Earth entry on the paradox. But is isn’t the case that the lower-cost based rebound is always so big as to overwhelm efficiency-based savings.  The key issue, Edward Glaeser reminds us in a recent column, is “that the demand for the thing in question (power, vehicle miles, tasty cookies, cigarettes) has to be sufficiently elastic with respect to the thing’s price.”

The Economist‘s story draws on an article recently published in the Journal of Physics D: Applied Physics by Jeff Tsao and co-authors, “Solid-state lighting: an energy-economics perspective.”  The magazine sums up the piece as concluding that new, highly efficient solid-state lighting could increase the consumption of light by ten times over the next 20 years, and even though those lights will be more efficient, energy consumption for lighting would double (if the real price of electricity remains stable).  That would make for a pretty big rebound.

NOTE: There is much more detail on the assumptions and calculations that went into the conclusion reported in The Economist. Related research is available from Sandia National Lab. Here’s the full abstract of the Tsao, et al. article:

Abstract: Artificial light has long been a significant factor contributing to the quality and productivity of human life. As a consequence, we are willing to use huge amounts of energy to produce it. Solid-state lighting (SSL) is an emerging technology that promises performance features and efficiencies well beyond those of traditional artificial lighting, accompanied by potentially massive shifts in (a) the consumption of light, (b) the human productivity and energy use associated with that consumption and (c) the semiconductor chip area inventory and turnover required to support that consumption. In this paper, we provide estimates of the baseline magnitudes of these shifts using simple extrapolations of past behaviour into the future. For past behaviour, we use recent studies of historical and contemporary consumption patterns analysed within a simple energy-economics framework (a Cobb–Douglas production function and profit maximization). For extrapolations into the future, we use recent reviews of believed-achievable long-term performance targets for SSL.We also discuss ways in which the actual magnitudes could differ from the baseline magnitudes of these shifts. These include: changes in human societal demand for light; possible demand for features beyond lumens; and guidelines and regulations aimed at economizing on consumption of light and associated energy.


10 thoughts on “The Economist: Making lighting more efficient could increase energy use

  1. I read this article and I don’t totally buy it.

    In order for consumption to increase in response to decreasing costs, people would have to understand the relative costs of light. When we used candles for light, we were very aware of the costs of light. Now that we use electric light, and pay an electricity bill at the end of the month, we’re insulated from the price signal. Jevon’s paradox requires elastic demand, but demand will be inelastic if consumers of light are insulated from the price signal.

  2. Jevons rides again. The real question is why do politicians and the media promote conservation schemes as if they were somehow a solution to a problem that somebody has.

    Tom, some of us worry about the monthly bill, and we do our best to hold it down.

  3. Tom, I agree that demand for electricity is inelastic in the short run for consumers insulated from price signals (and even relatively inelastic in the short run for consumers facing price signals). But the underlying research looks forward over a 20 year period, providing plenty of time for consumers to adapt to the changing cost of lighting.

    My initial response to The Economist article was, like you, to think it likely a little exaggerated. But I pulled up the underlying research paper, and while I didn’t examine it in detail it is clear that the authors did a very thorough job of analyzing the question. (Looked at lighting demand over time in many countries, over many income levels, and with many different relative prices for power.) Of course there is some uncertainty how things will turn out – particularly what will happen to the real price of power over the next 20 years – but their best assessment is well captured by The Economist piece.

  4. Mike-
    I’m glad you looked at the underlying paper, but I guess I’ll have to look at it myself to be satisfied. My big question is not if they did a thorough job, but if they made the assumption that the current supply/demand for light is price sensitive even in the long term. I don’t think that it is, and my evidence is the existence of energy efficiency investments with extremely high IRRs and Net Present Values. I don’t just mean CFLs (which for many people come with a perceived cost in terms of light quality), but also lighting controlled by motion and occupancy sensors.

    If demand for lighting were price-sensitive even in the long term, most of these measures would already have been taken. As it is, they are the exception rather than the rule.

  5. I’ve looked at the paper. Here’s what they say:

    “Rather than assuming that consumption of light is insensitive to the cost of light, we assume a sensitivity consistent with simple extrapolations of past behaviour into the future.”

    Their calculations assume that the elasticity of demand for light has not changed in recent years, an assumption implicit in their log-log model relating the demand for light to GDP and the price of light.

    Hence, their conclusions will only be valid if the elasticity of demand for light has not changed in recent years or decades, and is unlikely to change in the future. As I outlined in my previous comments, I believe the elasticity of demand for light has decreased because of the increasing distance between the consumer of light and the means of light production, and so I believe the paper overstates likely future light consumption.

  6. So what your saying, Tom, is I should go back and think more carefully about what the research article actually says? Do more work? Well, that’s what Labor Day weekend is for, I guess.

  7. The Economist got the conclusions of the research correct.

    I’m questioning the researchers assumptions. If the assumptions are not correct, then the conclusions cannot be taken at face value.

    The researchers assumed that the elasticity of demand has been constant for 160 years and will remain so. If you believe that the elasticity of light demand has been constant for 160 years and will remain constant for another 20-30, you should believe the paper’s conclusions, because there seems to be nothing wrong with their methodology given that assumption.

    I believe that the elasticity of demand for light has been decreasing over the last few decades. If I am correct, the paper overstates the effect of Jevon’s Paradox (which applies when demand is elastic) and future consumption of light will be lower than the paper states.

    All you need to do is decide if you think the elasticity of demand for light has or will change over time.

    By the way, I recently wrote about a case where Jevon’s paradox is becoming *more* significant due to increasing demand elasticity: the demand for driving. http://cleanenergywonk.com/2010/08/22/drivers-rising-price-elesticity/

  8. I call it “The #1 sustainability issue in the world”! It opens a gaping hole in our strategy for making the earth sustainable too find out that, in fact, our central organizing principle for reducing our impacts on the earth has actually always increased them, because we mostly use efficiency for profit and growth. It’s a fact.

    We have actually been making sustainability plans using myths and not research findings. That is the concerted conclusion you really must come to with a careful look at the facts.

    That we have had THAT kind of misguided principle at the heart of our strategy for survival goes deeper than just a slip of the pen… of course. I trace some of the history of it along with a rigorous presentation of the evidence on my recent posting on the topic: http://synapse9.com/SustIsh1.htm

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