The Jevons Paradox

The idea in plain words

When cloud computing made servers cheap and easy to rent, companies did not spend less on computing. They spent far more, because suddenly a small team could run things that once needed a data centre. When email made messages almost free to send, people did not send the same number of letters more cheaply. They sent vastly more messages, and spam arrived with them.

This is the Jevons paradox: efficiency in using a resource can increase total use of that resource, because lower costs unlock demand that was previously priced out.

Where it comes from

In 1865 the English economist William Stanley Jevons published The Coal Question, asking whether Britain’s coal reserves would run out. Many people assumed that more efficient steam engines would conserve coal. Jevons argued the opposite. James Watt’s engine, far more efficient than Newcomen’s earlier design, had not reduced coal use; it had made steam power economical in many more industries, and coal consumption had soared. He wrote, in effect, that it is a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very opposite is the truth.

The idea lay dormant for a century, then returned during the energy crises of the 1970s. The economists Daniel Khazzoom and Leonard Brookes argued that mandated efficiency standards for appliances and industry would be partly offset by increased use, a claim later formalised as the Khazzoom–Brookes postulate. Energy economists now speak of rebound effects: direct rebound (driving more because a car is more efficient), indirect rebound (spending the savings on other energy-using things) and economy-wide rebound (efficiency fuelling growth). When rebound exceeds the original saving, the result is Jevons’s full paradox, sometimes called backfire.

Reviews such as Steve Sorrell’s in 2009 found that rebound effects are real and often large, but vary greatly by sector. In energy-intensive general-purpose technologies, like steam and computing, they can be very large indeed.

What it does to the mind

Engineers and planners naturally think about efficiency at fixed demand. If a process uses half the resource, total use should halve. This is the inside view applied to consumption: it imagines the current world with one variable changed, rather than a world reorganised around the new cost.

The paradox also undermines a comforting moral story, in which efficiency is always responsible. More efficient technologies can increase environmental impact, attention consumption or information overload, because they make it cheap to do much more of something.

Where it shows up

The compute essay has a section on efficiency that leads to abundance: each fall in the cost of computation produced more demand for computation, not less. The virtualization essay describes how making servers easy to create led to far more servers. The communication tools essay asks who pays when messages become free, and the answer is often the receiver’s attention. The cost moves pattern collects the cases where a fall in one cost shifted the burden somewhere else.

What it asks of someone deciding

When you make something much cheaper, plan for much more of it. Capacity, moderation, support and security all need to scale with the new demand, not the old.

Look for where the cost moved. Abundance in one place often creates scarcity in another, such as attention, trust, storage or review.

If your goal is to reduce total use, efficiency alone may not get you there. You may also need limits, prices or norms that hold demand in check.