[CAnet - news] Energy efficiency may result in greater CO2 emissions

For more information on this item please visit my blog at 
http://green-broadband.blogspot.com/ or http://billstarnaud.blogspot.com
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[I highly recommend a recent a report by Jeff Rubin of CIBC World Markets
who documents the Khazzoom-Brookes postulate, also known as the Jevons
Paradox where greater energy efficiency may result in increased energy
consumption and resultant Green House Gas emissions.

Currently the ICT industry is largely focused on energy efficiency as the
primary mechanism for limiting the impact of ICT on global warming. I argue
in an upcoming paper that this may be a wrong headed approach (draft copies
of this paper are available on request). To avoid the Khazzoom-Brookes
postulate it may be necessary for the ICT industry to focus on a "zero
carbon" strategy as opposed to energy efficiency. It is my belief that the
ICT has the technological ability to target a zero carbon strategy through
the use of next generation optical Internet networks linking zero carbon
data centers, hosting clouds and grids using latest Web 2.0 and SOA
applications. -- BSA]

Does Energy Efficiency Save Energy?
http://research.cibcwm.com/economic_public/download/snov07.pdf

"Much is being banked on the notion that
improvements in energy efficiency will be the
answer to both oil depletion and greenhouse
gas emissions. But is it a realistic economic
premise that technological change can
reduce energy usage, and by implication, its
carbon trail?

The OPEC oil shocks spawned huge
improvements in energy efficiency, particularly
insofar as oil was concerned. But three
decades later, we find that the net effect of
all of those efficiency initiatives has been to
increase the world's appetite for crude. While
oil per unit of GDP has fallen impressively in
large energy-consuming economies like the
United States, total oil consumption, and
indeed, total energy consumption, continue
to grow by leaps and bounds. The increase
in energy usage has dwarfed the gains in
economic efficiency. Hence, instead of
capping energy demand, what we observe
is that improvements in energy efficiency
lead to ever and ever-greater levels of energy
usage.

Following the OPEC oil shocks, a few renegade
economists argued that improvements
in energy efficiency would perversely
lead to increases in energy demand. The
Khazzoom-Brookes postulate, as it has
come to be known, is based on the standard
substitution and income effects that result
from any change in the price of a good. The
standard theory of the consumer argues
that a reduction in energy costs (due to
improvements in energy efficiency) can
lead to an increase, not a decline, in energy
demand. Moreover, to the extent that
overall economic growth would benefit from
cheaper energy prices, there is an additional
macroeconomic stimulus to energy demand,
all contributing to a very powerful rebound
effect. The postulate suggests that energy
intensity targets, commonplace in most
countries' energy strategies, are effectively
incapable of limiting future growth in
either energy-demand growth or carbon
emissions.

To date, there has only been one sure-fire
way of reducing energy consumption-
shrink the economy. But even small
reductions in the level of global GDP would
lever huge increases in human hardship.
But at the same time, reducing energy
consumption per unit of GDP has not been a
viable policy option. From gasoline demand
to the energy requirements of the average
American home, the legacy of energyefficiency
improvements is ever-greater
energy consumption (see pages 4-7).

In the past, the efficiency paradox has
been used as an argument against efforts
to promote greater energy efficiency and
conservation. That is not our intention here.
On the contrary, for a world facing the
twin challenges of oil depletion and global
climate change, there has never been a
more urgent need for both. But in order for
total efficiency to actually curb total energy
usage, as opposed to energy intensity,
consumers must be kept from reaping the
benefits of those initiatives in ever-greater
energy consumption. Otherwise, energy
usage will be the beneficiary of our best
efforts towards greater energy efficiency.
The road to hell is paved with good
intentions.




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web: www.canarie.ca/~bstarn
skype: pocketpro
blog: http://billstarnaud.blogspot.com/


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