Jevon’s Paradox is an economic concept that states that increasing the technical efficiency with which a resource is used will lead to a greater overall consumption, as lowered prices lead to bigger markets for the product.
It was first noted in relation to James Watt’s steam engine, which dramatically increased the efficiency of earlier coal-burning engines, but led in the end to a massive expansion of coal combustion.
This “rebound” effect has been studied with respect to energy efficiency, and appears to be small. Technical improvements in energy efficiency lead to an overall reduction in energy usage, though that reduction is often smaller than would be expected. One meta-analysis showed a 10–30% rebound effect in both space heating and automobile use.
In other words, more efficient cars save fuel, but perhaps 20% less than they would have if car owners had continued to drive as they had when their cars were less efficient and more expensive.
Less simple to isolate and measure are indirect effects – whereby consumers spend money from energy savings on unrelated goods that may also produce emissions – and dynamic effects, whereby lowered resource prices incentivise the development of new technologies and products based on those resources.