When companies decide to cut their carbon emissions, one of the easiest and most effective steps they can take is to implement eco-efficient technology. But does this increased efficiency lead to greater energy/resource use? Put another way, does cheaper/cleaner energy lead to more energy consumption?
This conundrum is known as the Jevons Paradox, named after William Stanley Jevons (The Coal Question, 1865). Jevons discovered that improved efficiency in coal use made it more cost effective an energy source, thus leading to further coal consumption.
Two scholars, Brett Clark and Richard York, have recently extended this concept to explain how, in our “advanced capitalist” state, we cannot rely on improved technological efficiencies to reduce overall carbon consumption. They, and others, have shown that “economic growth and expansion typically outstrip gains made in efficiency.” For example, the U.S., the Netherlands, Japan, and Austria have each improved their carbon efficiency (GDP per unit of CO2 emissions) by over 30 percent between 1975 and 1996. During that same time period, each country has seen a huge increase in total CO2 emissions and in C02 emissions per capita.
The drive for more energy consumption is encouraged in a capitalist system. From an organizational perspective, profits made from improved efficiencies are usually reinvested in company activities. Growth in corporate size (increased manufacturing and/or service provisions) leads to overall greater resource use.
If the application of new technologies are used simply to expand the operations of capital, then we are in trouble. We need to ask ourselves, “How can profits made from increased technological efficiencies be used to effectively address climate change?”
This is all the more important in light of the recent growth in carbon markets. With the push towards a carbon market system, we can expect to see more organizations adopt eco-efficient technology. When companies sell their excess credits, what do they do with their profits? As Lexington pointed out in an earlier post this week, there is currently $100 million carbon market in the U.S. and a $60 billion carbon market worldwide. How can we ensure that this money is not used to fund further carbon emissions?
I raise these questions because I wonder if they can effectively be addressed. All of us who are proponents of “green capitalism” believe that our economic system can work in favor of creating a better environment. We also tend to be big proponents of eco-tech. But, is it possible to create a clean energy economy while also scaling down overall capitalist expansion?