Tim Garrett shows that efficiency is an accelerator of economic growth rather than a means of conservation. It’s not hard to understand.

If a company increases its efficiency it will produce more profits which can be reinvested to grow the business.

Or if you insulate your home and spend the savings on an annual trip to Hawaii you will stimulate the economy and emit more CO2 than had you not insulated your home.

Efficiency can mitigate overshoot if you capture the dollar savings from the efficiency and prevent them from being spent. For example, tax all the efficiency gains and then bury the tax revenue. You could use the taxes to retire public debt but then you’d have to find a way to prevent the government from borrowing more money to replace the retired debt.

In addition, an efficient economy tends to be brittle and less resilient. For example, most businesses to increase efficiency have reduced inventories and their associated carrying costs by relying on just in time deliveries from all over the globe. If something were to disrupt global shipping and/or the credit system it depends on, most businesses would grind to a halt, including your grocery store, in a few days. Efficiency is not always a good idea. Sometimes it is wise to have some fat in the system.

Efficiency can and should be used to lessen the impact on our standard of living as the economy contracts. However people should realize that all of the low hanging fruit for efficiency has already been harvested.

I wrote more about efficiency here.

The biggest opportunities for reduced consumption are now lifestyle changes.

One thought on “Efficiency”

  1. Very good essay by Andrew Nikiforuk.

    In a nutshell, higher energy efficiency has enabled us to consume more per person and to increase our population, thus efficiency worsens climate change and other forms of overshoot.

    “Let’s begin with aviation as just one salient example. The average fuel efficiency of new aircraft has improved about 1.5 per cent a year between 1960 and 2008 while passenger traffic grew by nearly nine per cent. More efficient planes translated into cheaper fares as industry spent its energy savings on increasing range and speed. As a consequence, flying is responsible for 4.9 per cent of man-made climate change and chugs about five-million barrels of oil a day. The International Energy Agency expects jet fuel demand to rise by more than 50 per cent to above nine million barrels per day (Mbd) by 2040.

    Jevons would recognize the pattern. As per-seat fuel efficiency of jet airliners improved, a combination of cheaper fares, increasing incomes, and a growing population raised the number of airborne humans from millions in the 1960s to the current four billion a year. In the airline industry energy efficiency just licenses growth and more efficient techniques to move people like cattle through the atmosphere. Thanks to efficiency “an airline ticket is one of the most environmentally damaging goods money can buy.””

    “Improving efficiency will not reduce consumption and therefore won’t reduce CO2 emissions. The only way to reduce total energy consumption levels, say in the aviation industry or any other sector, is to limit the number of planes, travellers and airports. Higher energy prices and higher taxes will do that. But that means a shrinking economy and a radical rethink about the dominant role of technology in our decision-making.”

    “No politician alive at the moment has proposed changing the ruinous and efficiently convenient way we live. No one is saying we could be happier consuming much less energy and owning fewer energy slaves — even though that’s what the evidence clearly suggests. No political party claims that sacrifice and courage will get us to a leaner tomorrow. No political party has advocated that the rich drive less, fly less, live in smaller homes or own less shit.”

    “This refusal to acknowledge the truth leaves the world but two options for change: collapse or revolution. We may get both.”



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