Jevon's Paradox: Consumption and Resources

           In today's society we often hear about climate change and the need to reduce consumption. This post is about an often overlooked element of the debate about energy conservation and the need to control consumption. This post is not about whether or not climate change is happening (I am of the opinion that it most certainly is), instead it is about what we need to do if it is.
         It is often said that we need to combat climate change with a dramatic reduction in consumption. This argument is often countered by people concerned about the economic impacts of consumption reduction by the following argument; it is not necassary to reduce consumption as technological advances will increase efficiency dramatically. I will make the argument that this alone is not enough.
       When efficiency (say in energy production) is increased it is observed that consumption, likewise, increases. This has been noted since 1865 in 'The Coal Question' a book by William Stanley Jevons and is called 'Jevon's Paradox'. Jevons noted that the increases in the efficiency of the steam engine in his time did not lead to a reduction in coal consumption. Instead due to the decreased cost of running a steam engine the demand for steam engines increased and resulted in demand for coal also increasing.
       Now, fast-forward to the modern day and the concerns of climate change and these arguments are being put forward by the likes of Jared Diamond in his book 'Collapse'. It is often touted that the increase in efficieny in the future will lead to a reduction in oil consumption and in pollution due to less oil and other materials being required to maintain current consumption levels. This however assumes that consumption levels will remain the same or are not affected by the increased efficieny. This assumption is, however, wrong. To give an example, if it costs me 50 euro a month less to fill up my car then the odds are that I will spend that extra 50 euro on some other good (or service), a good most likely produced using oil or at the very least transported using oil.
        As a result we as humanity cannot rely on increased efficiencies to stave off the very real threat of climate change. What is required is a reduction of consumption or an increase in efficiency coupled with constant consumption levels. A practical example in terms of oil would be a green tax on petrol to ensure that even if oil production becomes more efficient the prices do not fall for the consumer (although such a situation is unlikely to occur). Also, even if we tax pollution and things are produced more cleanly it might not mean a reduction in pollution if more goods are produced following an increase in 'cleanliness'. These are just some issues with regard to consumption and climate change that we face in our modern world.