Wednesday, April 18, 2012

Does making cars more fuel efficient make us use more fuel?


When the price of something goes down people will buy more of it. It's one of the first laws of economics, as fundamental as gravity. 

It's best to think of the law on a national or global scale, not a personal one. It's a law that describes large effects. If the price of shrimp goes down by half you might not buy more frozen shrimp for yourself. But, on a global scale, the price of shrimp has dropped in the last couple decades—and people are buying a lot more shrimp.

The law of lower prices has interesting implications in all that we do. Some of the implications are obvious. As cars get cheaper more people can afford them so more are sold. Some implications are less obvious. As calories get cheaper to produce (more food produced per acre and so on) we buy more of them (and get fatter). 

The law of lower prices can have some perverse effects. Consider making cars more fuel efficient. Increased fuel efficiency has the same effect as making gas cheaper; we get more out of our cars for less money. And what happens when we lower the price of gas? On a global scale we use more gas. We use even more than the amount of the efficiency savings in part because second order effects come into play. We extend our commutes to suburbs where houses use more energy. We use the money we saved on gas to buy things that consume gas. In other words, making cars more fuel efficient makes us use more gas.

That and many more difficult to swallow environmental issues are in the book I just read, The Conundrum, whose painful subtitle reads How Scientific Innovation, Increased Efficiency and Good Intentions Can Make Our Energy and Climate Problems Worse.


lam said...

You need a reaction labeled "depressing."

lam said...

Where have you been! More, please.