The Jevons Paradox and the Green New Deal

Climate change is real and its impact is demonstrable at local levels if not on a global scale. While there are arguments about the severity of climate change and humanity’s role in causing it, one thing is indisputable—approaches toward mitigation should be taken. The Green New Deal is one such proposed response. However, it’s an idea better off in the compost heap.

The environmental goals of H. Res. 109, known as the “Green New Deal,” miss out on the fact that green energy isn’t all green, cheap energy has other costs, and the underlying issues of energy may be more about the supply rather than the type demanded.

The Real Cost of Green Energy Is Rare Earth Metals

The Green New Deal calls for “clean, renewable, and zero-emission energy sources,” which would be great if such energy was easy to come by. Many renewable sources, such as solar and wind, aren’t as green as most of us were taught. Many of these renewables rely on rare earth metals. These metals are often difficult to find in any great deposits and can be incredibly environmentally destructive to extract. Jasper Bernes, the Managing Editor of Commune writes:

…nearly every renewable energy source depends upon non-renewable and frequently hard-to-access minerals: solar panels use indium, turbines use neodymium, batteries use lithium, and all require kilotons of steel, tin, silver, and copper. 

Worse yet, a scientific study supported by the Dutch Ministry of Infrastructure notes that the shortage of exploitable rare earth ore deposits makes a transition to renewables infeasible—and that’s just for the Netherlands. The Green New Deal’s renewable energy plan also misses out on the other costs of “going green.”

The Ghost of Jevons

Alexandria Ocasio-Cortez may hold a degree in economics, but she missed out on environmental economics—and it shows. As energy becomes cheaper, demand for it tends to increase. The Energy Information Administration (EIA) shows that increased efficiency and lowered costs often increase demand for one energy source over another. Increasing demand and use lead to William Jevons.

At the age of 29, William Stanley Jevons (1835-1882) published his seminal work The Coal Question (1865), which greatly influenced the field of environmental economics. In this book, Jevons noted that improvements in fuel or energy efficiency tend to increase rather than decrease usage. Jevons wrote, “It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth.”

The Jevons Paradox has led to what David Owen, a long-time environmental reporter at The New Yorker, calls the “efficiency dilemma.” More efficient goods are those that are cheaper, larger, and use less electricity, all of which are net positives. However, this can lead to increased consumption that often cancels out the benefit of the initial energy savings or efficiency.

Plan for the Future 

The Green New Deal is the very image of Ouroboros, the serpent eating its own tail. In the march for a Green future, among the many other things thrown into the proposed bill of the Green New Deal comes a rank-and-file group of young progressives and environmentalists who are well-intentioned but miss the ill-effects of their focus.

The Jevons Paradox and rare earth metals may be dismissed as minutiae in the overall goal of curbing climate change, but their importance is understated. The fear behind the threat of climate change is often wielded like a cudgel to force legislation or silence debate. However, there are many alternatives to the proposed legislation, which is neither green, nor new, nor much of a deal.

The best way to counter the Jevons Paradox is to plan for the future and adjust accordingly, not just engage in public works to build an idea of one.

Barriers to alternative energy and a market-based environmental approach to climate change are found at all levels of government. The Institute for Local Self-Reliance found in its 2018 scorecard that 21 states were failing in policy to enable a more open energy market. Instead of maintaining a centralized grid system, it should be decentralized, which would give consumers greater ability to choose providers and remove additional obstacles to innovation and implementation of renewable energy resources.

The Federal Energy Regulatory Committee (FERC) boasts of its market oversight and has enabled a group of five people to largely instill their personal values over the entire energy industry. Giving this organization further power under a Green New Deal would only further stymie market solutions towards innovative renewable solutions. The best way to counter the Jevons Paradox is to plan for the future and adjust accordingly, not just engage in public works to build an idea of one.