Friday, October 7, 2016
Conservation works for a lot of things, but it doesn't seem to work for energy. Why not?
I read an interesting article the other day which exemplifies this paradox.
Some Missouri residents and businesses soon could see a new charge on their electric bills a fee for using LESS energy.
Though it might seem illogical, the new energy efficiency charge has support from utilities, most lawmakers, the governor, environmentalists and even the state's official utility consumer advocate. The charge covers the cost of utilities' efforts to promote energy efficiency and cut power use.
So the idea here is that consumers cut back on their energy use and it ends up costing them more money? Why the backward logic?
Peter Huber, a professor at the Manhattan Institute and author of a book on the history and future of energy called 'The Bottomless Well' provides an enlightening answer below.
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Many people believe that one way to lower our nation's energy demand is to increase energy efficiency. However, history reveals a paradox: the more efficiently we use energy, the more energy we end up using.
Efficiency fails to curb demand because it lets more people do more, and do it faster and more/more/faster invariably swamps all the efficiency gains. Ironically, efficiency increases consumption. It makes what we ultimately consume cheaper, and lower price almost always increases consumption. To curb energy consumption, you have to lower efficiency, not raise it. The United States' energy efficiency improved 49 percent between 1949 and 2000, according to the EIA. However, during the same period, U.S. energy consumption increased a whopping 208 percent!
In terms of the story above...the assumption is that charging consumers for those initiatives ultimately will cost less than charging them to build the new power plants that will be needed if electricity use isn't curtailed.