Net Zero and Jevons Paradox

Achieving net zero requires a shift to renewable sources of energy. There is another way that not many people talk about – energy efficiency. Unfortunately, improving the energy efficiency of products is not sexy enough (unlike a solar power plant!) to be talked about but is a crucial lever for net zero.

There have been gradual improvements in the inefficiency levels of many products. Our cars guzzle lesser fuel. Our refrigerators, air conditioners, washing machines, dishwashers use less electricity. All this should lead to lower carbon emissions. But it doesn’t. Why? As the fuel cost decline, we compensate it by buying larger cars. Instead of using one air conditioner, we use two. We use larger refrigerators and higher capacity washing machines.

This phenomenon is attributed to the Jevons paradox. The theory, named after the 19th-century British economist William Stanley Jevons, posits that efficiency gains often increase demand.

One possible way to manage the situation is communication and bringing in a culture of sustainable consumption. 

Published by Utkarsh Majmudar

Utkarsh Majmudar is a Fellow, IIM Ahmedabad and a professional with experience encompassing academics and administration at top business schools in India (IIM Lucknow, IIM Udaipur, and IIM Bangalore) and working with large corporations. His interest areas include corporate finance and CSR.

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