Jevons Paradox: Why Efficiency Can Increase Consumption

Efficiency often feels like progress. But when making something cheaper or easier to use expands how much of it we consume, total resource use can rise. That counterintuitive outcome is the Jevons Paradox.

What is the Jevons Paradox?

In the 19th century economist William Stanley Jevons observed that improvements in the efficiency of steam engines made coal use more economical—and overall coal consumption grew. Today, the same logic shows up whenever efficiency reduces the effective cost of a service and people respond by using more of it.

How the mechanism works

Efficiency lowers the cost (in money, time, or effort) of delivering a service. When cost falls:

• Existing users increase their use
• New users adopt the service
• New use cases and markets become viable

If demand grows enough, the increase in total usage can outweigh per-unit savings. In short: lower cost per unit can drive higher total demand.

Modern examples

• Computing and data: As compute and storage get cheaper, we see higher-resolution media, always-on cloud services, more logging and analytics, and larger model training runs. Per-operation efficiency rises, but total compute often grows faster.

• Transportation: More fuel-efficient vehicles can lower cost-per-mile and encourage longer commutes, more driving, or larger vehicles—so total miles or fuel use may not fall as expected.

• Home energy: LEDs use far less electricity than incandescents, yet cheaper lighting enables more fixtures, brighter spaces, and decorative or outdoor lighting that can blunt expected savings.

Implications for policy and strategy

Efficiency remains a powerful tool, but it is not always sufficient to cut absolute resource use. To ensure efficiency translates into lower total consumption, pair it with complementary measures such as:

• Pricing mechanisms (for example, carbon pricing or congestion charges)
• Absolute caps or quotas on resource use or emissions
• Demand-side policies and incentives that shape behavior
• System redesigns that change incentives, not just per-unit costs

Takeaway

Efficiency changes incentives. When cheaper use triggers enough additional demand, total consumption can rise—this is the Jevons Paradox. Recognizing it helps design policies and strategies that actually reduce total resource use rather than only improving per-unit performance.