Jevons Paradox

08.02.2025

Jevons Paradox

Why in the news?                        

Recently, Microsoft CEO Satya Nadella discussed Jevons Paradox, noting that improved efficiency in AI may boost its demand and make it a commodity.

About Jevons Paradox:

• It is the idea that technological progress that makes a resource cheaper or more efficient to use often leads to an increase in demand for that resource.
• This refers to a form of induced demand wherein efficiency improvements in the use of a resource causes increased consumption of the resource rather than a decrease in its use.

Origin of Jevons Paradox:

• It was proposed by the English economist, William Stanley Jevons, in his 1865 book The Coal Question.
• Jevons observed that the efficient use of coal made possible by technology actually caused more coal to be extracted and consumed rather than allowing the preservation of existing reserves.
• Technological progress, in other words, only allows people to satisfy demands that could not be satisfied earlier in the absence of an appropriate technology.

Examples of Jevons Paradox:

• Fuel Efficiency and Vehicle Usage: Vehicle fuel efficiency improvements can also increase consumption. When cars become more fuel-efficient, the cost of driving per mile decreases, making it more affordable for individuals to use their vehicles — often increasing vehicle miles travelled, offsetting any energy conservation benefits from improved fuel efficiency.
• Digital Technology and Energy Consumption: The rise of digital technology and the internet has undoubtedly brought numerous benefits to society. Yet, the proliferation of intelligent devices and data centres has substantially increased energy consumption.

                                                           Source: Livemint

Which of the following best describes Jevons Paradox?

A.It is the idea that technological progress makes a resource cheaper and leads to an increase in demand for that resource.

B.It explains about empathy and Artificial Intelligence.

C.It explains the relation between employment and consumption.

D.It provides a deep understanding about neurological processes in humans.

Answer A