Corn, Jevon's Paradox & Tradable Rationing
Here's a stat for you: the number of calories in a SUV sized tankful of ethanol is enough to feed a person for a whole year. This comes from the Earth Policy Institute, in an article about the growing diversion of staple crops to biofuel production worldwide.
An excerpt:
Cars, not people, will claim most of the increase in world grain consumption this year. The U.S. Department of Agriculture projects that world grain use will grow by 20 million tons in 2006. Of this, 14 million tons will be used to produce fuel for cars in the United States . . . In agricultural terms, the world appetite for automotive fuel is insatiable. The grain required to fill a 25-gallon SUV gas tank with ethanol will feed one person for a year. The grain to fill the tank every two weeks over a year will feed 26 people....There are alternatives to using food-based fuels. For example, the equivalent of the 3 percent gain in automotive fuel supplies from ethanol could be achieved several times over—and at a fraction of the cost—simply by raising auto fuel efficiency standards by 20 percent. Investing in public transport could reduce overall dependence on cars.
Ahh, conservation. Very important, yes. But I just read another article by Jeff Vail that made me think about it a different way.
an excerpt:
Is the push for greater energy efficiency a good policy choice to address energy scarcity after Peak Oil? Here’s a bold answer: NO, at least not in a vacuum. Efficiency is not a standalone solution, but part of the much more complex problem of reducing total energy consumption that must address Jevon’s Paradox and the Rebound Effect.
He goes on to say that conservation must be accompanied by "measures to address both the direct and shadow rebound effects" or it basically won't do much good. We need huge systemic changes which will require a mass shift in consciousness and much wider and deeper analysis of the problems. We can't switch enough lightbulbs to CFCs to get out of this.
What is Jevon's Paradox? I've talked about this in the past. Here's Mr. Vail's explanation:
Jevon’s Paradox tells us that when we increase the efficiency of the use of a resource, we initially decrease the demand for that resource, but that ultimately this lower demand reduces price, which causes a “rebound” of increasing demand. When applied specifically to energy efficiency, this is commonly referred to as the “Rebound Effect.”Here’s a real-world example. Let’s magically double the average fuel economy of America’s cars and trucks. Gasoline demand would drop immediately by 50%. This would affect the supply-demand equilibrium of gasoline, reducing its price significantly. However, with dramatically lower gas prices, many people would choose to drive more than they had in the past—this is the “rebound,” where some of the energy savings provided by gains in efficiency are negated by the corresponding effect on energy prices. Clearly, a 50% drop in gas prices won’t result in the average American doubling their driving, as would be required to completely negate the efficiency gains in this scenario. Even if gas was free, there would be some limit to how much we would drive. So this “rebound effect” doesn’t negate the entirety of energy savings due to efficiency. Studies suggest that it erases perhaps 10%-30% of the gains.
If Jevon’s Paradox, via the “rebound effect,” only negates 10%-30% of gains from improved efficiency, then efficiency appears to be a very viable policy option to reduce energy consumption, right? Not so fast. Jevon’s Paradox and the Rebound Effect are models that create snapshots in time of the operation of a highly complex system—it is important that we approach this problem with the entire system in mind. Consider the cascading effects in the energy-consumer system: when you save energy because of improved efficiency, you also save money. What do you do with that money? Chances are that most or all of it is spent on goods and services, and that these reflect energy consumption in some form. Whether you spend your savings on a trip to Hawaii, a new coffee table, or merely a plastic bauble, that expenditure reflects energy consumption. The exact form of energy consumed, as well as the relative quantity of energy consumed compared to energy initially saved via an improvement in efficiency is difficult to quantify, but in aggregate these two may be roughly equal. This is the “shadow” rebound effect. The “direct” rebound effect—that is, the increase in consumption of the same energy resource through the same process that experiences an improvement in efficiency—may be only 10%-30%, but it is possible that the true rebound effect approaches 100% when this “shadow” is accounted for.
I orignally found the link to Jeff Vail's article on my fav blogger's last post. Sharon Astyk wrestles with what these huge systemic changes might start with, and she comes up with a tradable rationing system. Here's how she explains it:
...I think that simple carbon taxation, with the proceeds in the hands of the government (which has no real incentives to curb its spending) ... might be less useful than a system that engaged in wide scale reallocation of wealth - that is, a tradable rationing system. That is, everyone gets a flat amount of energy for the year (it could start at 2% less than our present usage, for example - this is what Richard Heinberg and Colin Campbell's Oil Depletion Protocol does), and those who are already below consumption levels make money. Now they will spend some of that money, of course, but if they like having more money (and people often do) they will also wish to retain their source of income - that is, they'd be forced to find lower impact ways of using their wealth.And this would result in a large-scale net transfer of wealth to poorer people in the US. This is a growing class - 1 out of every 5 people in the US now lives on less than $7 per day, which in buying power is about equivalent to the third world's famous $2 per day income. Wealth inequality has grown steadily over the last decades, and now is as acute as it was right before the stock market crash of 1929.
Did you catch that one? As acute as it was right before the crash of 1929! If we implemented tradable rationing
...every single person would experience a strong incentive to decorrellate wealth from energy use. This would be the deepest benefit of a tradable rationing system - right now, money correllates pretty strongly with energy. Can we decouple them? I think we can - if people have more wealth when they use their money to buy, say, sustainably farmed food, handwoven clothing and other things - costly, but not to our energy budgets, those professions become economically feasible for a larger portion of the population.
But she ends on a discouraging note because - how do we get from here to there with the jokers currently in charge of things?
....Now the issue of political feasibility is a real one in the short term, which is why I think that raised energy taxes may be a shorter term necessity. Ultimately, who would want to see the power to ration resources held in the hands of the present government (or in many of the candidates currently vying to replace it - Hillary is saying she may want to invade Iran too - are you surprised)? That said, everyone raise their hand who thinks that a tax dividend on gas would go into redesigning a better future under the present government. And that is the real problem of top-down solutions.
I certainly don't have an answer. But I am encouraged by learning about some strategies that might help.
peace,
Jennifer
