Jevons Paradox

Origin: The Coal Question

Jevons (1865) observed that British coal consumption rose sharply after technologies such as Watt's steam engine made coal use more efficient. He wrote that "it is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption." Higher efficiency lowers the effective price of the power obtained from coal, which opens new uses and industries and raises total demand. Fouquet and Pearson (2006) showed with seven centuries of British data on lighting services that consumption of light rose enormously as lighting efficiency improved.

The rebound effect and the Khazzoom–Brookes postulate

Modern energy economics calls the portion of expected savings offset by increased demand the rebound effect. When rebound exceeds 100% and total consumption rises, the result is backfire, the Jevons paradox proper. Khazzoom (1980) argued that appliance efficiency standards might save less energy than expected, and Brookes (1990) argued that at the economy-wide level efficiency gains raise energy use. Saunders (1992) set out conditions under which this could hold in a neoclassical growth model and named it the Khazzoom–Brookes postulate.

Empirical research and debate

Greening, Greene and Difiglio (2000) surveyed end uses such as household heating and cars and found direct rebound effects generally in the range of 10–30%. Small and Van Dender (2007) estimated that the rebound effect for US motor vehicle travel declined as incomes rose. Sorrell (2009) and Alcott (2005), by contrast, argued that once indirect effects in production and across the economy are included, backfire cannot be ruled out. Gillingham, Rapson and Wagner (2016) and Borenstein (2015) concluded that rebound does not eliminate the welfare gains from efficiency and that income and substitution effects must be assessed separately.

FAQ

What is the Jevons paradox in simple terms?

If cars become more fuel-efficient and driving gets cheaper, people may drive so much more that total fuel use does not fall, or even rises.

Is it the same as the rebound effect?

The rebound effect refers to any partial offset of expected savings; the Jevons paradox is the extreme case in which the offset exceeds 100% and total consumption increases.

Sources reviewed: 2026-10-26

References

1. Jevons, W. S. (1865). The Coal Question: An Inquiry Concerning the Progress of the Nation, and the Probable Exhaustion of Our Coal-Mines. London: Macmillan.
2. Khazzoom, J. D. (1980). Economic implications of mandated efficiency in standards for household appliances. Energy Journal, 1(4), 21–40.
3. Brookes, L. (1990). The greenhouse effect: The fallacies in the energy efficiency solution. Energy Policy, 18(2), 199–201.
4. Saunders, H. D. (1992). The Khazzoom–Brookes postulate and neoclassical growth. Energy Journal, 13(4), 131–148.
5. Greening, L. A., Greene, D. L., & Difiglio, C. (2000). Energy efficiency and consumption—the rebound effect—a survey. Energy Policy, 28(6–7), 389–401.
6. Alcott, B. (2005). Jevons' paradox. Ecological Economics, 54(1), 9–21.
7. Sorrell, S. (2009). Jevons' Paradox revisited: The evidence for backfire from improved energy efficiency. Energy Policy, 37(4), 1456–1469.
8. Polimeni, J. M., Mayumi, K., Giampietro, M., & Alcott, B. (2008). The Jevons Paradox and the Myth of Resource Efficiency Improvements. London: Earthscan.
9. Small, K. A., & Van Dender, K. (2007). Fuel efficiency and motor vehicle travel: The declining rebound effect. Energy Journal, 28(1), 25–51.
10. Gillingham, K., Rapson, D., & Wagner, G. (2016). The rebound effect and energy efficiency policy. Review of Environmental Economics and Policy, 10(1), 68–88.
11. Borenstein, S. (2015). A microeconomic framework for evaluating energy efficiency rebound and some implications. Energy Journal, 36(1), 1–21.
12. Fouquet, R., & Pearson, P. J. G. (2006). Seven centuries of energy services: The price and use of light in the United Kingdom (1300–2000). Energy Journal, 27(1), 139–177.
13. York, R. (2006). Ecological paradoxes: William Stanley Jevons and the paperless office. Human Ecology Review, 13(2), 143–147.