Efficiency and Growth T. Gutowski 2.83 and 2.813 1 Efficiency and - - PowerPoint PPT Presentation

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Efficiency and Growth T. Gutowski 2.83 and 2.813 1 Efficiency and - - PowerPoint PPT Presentation

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Efficiency and Growth T. Gutowski 2.83 and 2.813 1 Efficiency and Growth Can efficiency improvements out run growth? Historical review of 10 activities including materials and electricity production and consumer services (Dahmus &

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Efficiency and Growth

  • T. Gutowski

2.83 and 2.813

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Efficiency and Growth

  • Can efficiency improvements out run growth?
  • Historical review of 10 activities including

materials and electricity production and consumer services (Dahmus & Gutowski)

  • Can demand saturate? (Tsao paper on

Lighting)

  • How to change your lifestyle (ELSA paper)
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Eco-Efficiency

load tal environmen services and goods e =

  • assigns responsibility
  • allows comparisons
  • attempts to balance economy with

environment

  • many examples from company reports
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Total Resources used depends upon efficiency and growth

Consider Q = Quantity of useful output (e.g. kg of pig iron…) R = Resources used to produce Q (e.g. kg. coal, kWh of electricity etc.)

e 1 Q Q R Q R ! = ! = ) efficiency eco , efficiency

  • f

type (a R Q e ! =

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For small increments

! R R = ! Q Q ! e e

efficiency = conservation

If ! e e > ! Q Q then ! R R < 0

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from historical data, however

generally ! e e > 0 and ! Q Q > 0 but ! Q Q > ! e e so ! R R > 0

efficiency ≠ conservation

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Readings

  • “Efficiency, Production, and Resource Consumption: A

Historical Review of Ten Industrial Activities” Dahmus, J. and T. Gutowski, 2008

  • “Does Energy Efficiency Save Energy: The Economists

Debate”, Herring, H. 1998

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  • Why does “Q” grow?

– Markets grow – more customers – wealthier customers

  • Why does “e” grow?

– to reduce cost – new technology in addition⋯

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Interactions between terms

! R R = ! Q Q ! e e

+Learning and Economies of Scale +Rebound Effects: Substitution and Income Effects

± “Capacity Effects”

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Efficiency and Growth*

Activity Dates Boundary Quantity Resource Pig-Iron 1800-1990 World kg pig iron Joules of coke Aluminum 1900-2005 World kg aluminum Joule of elect ricity Nitrogen Fertilizer 1915-2000 World kg Nitrogen Joule energy Electricity from coal 1920-2007 US Joule electricity kg coal Electricity from Oil 1920-2007 US Joule electricity Liter of oil Electricity from Natural gas 1920-2007 US Joule electric ity m3 of natural gas Freight Rail 1960-2006 US Revenue tonne - km Liter fuel Air Travel 1960-2005 US Seat -km Liter fuel Motor vehicle 1936-2006 US Vehicle – km Liter fuel Refrigeration 1960-2002 US Hours refrigeration Joule electricity

* Dahmus and Gutowski, 2008

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Energy Efficiency in Pig Iron Production

Worldwide Energy Efficiency of Pig Iron Production

10 20 30 40 50 60 1750 1800 1850 1900 1950 2000

Year Efficiency of Pig Iron Production . (kg produced per GJ of energy used) .

Efficiency

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Steam engine Efficiency

after Smil, 1999

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Energy Efficiency in Pig Iron Production

Worldwide Energy Efficiency of Pig Iron Production

10 20 30 40 50 60 1750 1800 1850 1900 1950 2000

Year Efficiency of Pig Iron Production . (kg produced per GJ of energy used) .

Efficiency

! p = BFe BFe2O3 + Benergy = 0.33

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100 200 300 400 500 600 700 800 900 10 20 30 40 50 60 70 80 90 1750 1800 1850 1900 1950 2000

Year

FIGURE 1: Pig Iron Production ( Q) and the Efficiency

  • f Pig Iron Smelting

( e) (World) a

Efficiency Quantity

improvement 30:1 production 90:1

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5 10 15 20 25 30 35 5 10 15 20 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 2: Primary Aluminum Production ( Q) and the Efficiency

  • f

Aluminum Smelting ( e) (World) b

Quantity Efficiency

improvement 4:1 production 32:1

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20 40 60 80 100 5 10 15 20 25 30 35 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Year

FIGURE 3: Nitrogen Fertilizer Production ( Q) and the Efficiency

  • f the Haber -Bosch Process ( e)

(World) c

Quantity Efficiency

improvement 4:1 production 36:1

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1000 2000 3000 4000 5000 6000 7000 1 2 3 4 5 6 7 8 9 10 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 4: Electricity Generation from Coal ( Q) and the Efficiency

  • f Electricity Generation

from Coal ( e) (US) d

Efficiency Quantity

1970 CAA

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200 400 600 800 1000 1200 1400 2 4 6 8 10 12 14 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 5: Electricity Generation from Oil ( Q) and the Efficiency

  • f Electricity Generation

from Oil ( e) (US) d

Efficiency Quantity

1970 CAA, 1978 PPIFA

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500 1000 1500 2000 2500 3000 3500 2 4 6 8 10 12 14 16 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 6: Electricity Generation from Natural Gas ( Q) and the Efficiency

  • f Electricity Generation

from Natural Gas ( e) (US) d

Efficiency Quantity

1987 NGUA

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400 800 1200 1600 2000 2400 2800 20 40 60 80 100 120 140 160 180 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 7: Freight Rail Travel ( Q) and the Efficiency

  • f Freight Rail Travel (

e) (US Class I Railroads)

e

Quantity Efficiency

1980 SRA

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200 400 600 800 1000 1200 1400 1600 1800 4 8 12 16 20 24 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 8: Passenger Air Travel ( Q) and the Efficiency

  • f Passenger

Air Travel ( e) (US airlines) f

Quantity Efficiency

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1000 2000 3000 4000 5000 1 2 3 4 5 6 7 8 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 9: Motor Vehicle Travel ( Q) and the Efficiency

  • f Motor Vehicle

Travel ( e) (US) g

Efficiency Quantity

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200 400 600 800 1000 1200 1400 1 2 3 4 5 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 10: Refrigeration ( Q) and the Efficiency

  • f Refrigeration

( e) (US) h

Efficiency Quantity

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Average annual ΔQ/Q versus average annual Δe/e for ten activities.

Pig Iron Aluminum Nitrogen Fertilizer Electricity - Coal Electricity - Oil Electricity - Natural Gas Freight Rail Travel Passenger Air Travel Motor Vehicle Travel Refrigeration

0% 2% 4% 6% 8% 10%

  • 1%

0% 1% 2%

Average Annual _ e/e

! Q Q > ! e e

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Table 1: Average annual Δe/e, average annual ΔQ/Q, and the ratio of the two for ten activities over different time periods. In these activities, increases in quantity outpace improvements in efficiency by factors ranging from 1.2 to 11.0.

Time Period Average Annual _e/e Average Annual _Q/Q Average _Q/Q / Average _e/e Pig Iron 1800-1990 1.4% 4.1% 3.0 Aluminum 1900-2005 1.2% 9.8% 7.9 Nitrogen Fertilizer 1920-2000 1.0% 8.8% 8.9 from Coal 1920-2007 1.3% 5.7% 4.5 from Oil 1920-2007 1.5% 6.2% 4.2 from Natural Gas 1920-2007 1.8% 9.6% 5.5 Freight Rail Travel 1960-2006 2.0% 2.5% 1.2 Passenger Air Travel 1960-2007 1.3% 6.3% 4.9 Motor Vehicle Travel 1940-2006 0.3% 3.8% 11.0 1960-2006

  • 0.4%

2.5%

  • Electricity

Activity Refrigeration

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0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE A2: Resources Consumed ( R) in Primary Aluminum Production (World)

b

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0.0 0.5 1.0 1.5 2.0 2.5 3.0 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Year

FIGURE A3: Resources Consumed ( R) in Nitrogen Fertilizer Production (World)

c

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200 400 600 800 1000 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE A4: Resources Consumed ( R) in Electricity Generation from Coal (US data)

d

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100 200 300 400 500 600 700 1930 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE A9: Resources Consumed ( R) in Motor Vehicle Travel (US data)

g

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Stanley Jevons, 1865

“..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 Rebound Effect or “Jevons Paradox”

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However,

  • Example when efficiency outpaced

production (or consumption)

– pig iron 1970 – 1989 – freight rail travel 1980 – 1989 – passenger air almost 1970 – 1979 and 2000 – 2007 – passenger autos came close 1980 - 1989 – refrigeration 1990 - 2006

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Decade by Decade Analysis

Time Period Average Annual _e/e Average Annual _P/P 1960-2000 2.0% 2.5% 1960-1969 1.7% 3.0% 1970-1979 1.3% 1.8% 1980-1989 3.7% 1.4% 1990-1999 1.9% 3.6% 2000-2005 1.2% 2.9% Passenger Air Travel 1960-2005 1.3% 6.5% 1960-1969

  • 1.6%

15.6% 1970-1979 4.7% 5.3% 1980-1989 1.4% 5.2% 1990-1999 0.6% 3.0% 2000-2005 1.8% 1.6% Industrial Activity Freight Rail Travel

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Decade by Decade Analysis

Time Period Average Annual _e/e Average Annual _P/P 1960-2000

  • 0.9%

2.5% 1960-1969

  • 5.9%

3.6% 1970-1979

  • 4.9%

2.8% 1980-1989 1.9% 2.2% 1990-1999 4.6% 1.7% Motor Vehicle Travel 1936-2005 0.3% 3.9% 1940-1949

  • 0.5%

5.3% 1950-1959

  • 0.5%

5.2% 1960-1969

  • 0.3%

4.3% 1970-1979 0.4% 3.8% 1980-1989 2.4% 3.2% 1990-1999 0.5% 2.5% 2000-2005 0.5% 1.8% Industrial Activity Refrigeration

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0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

  • 1%

0% 1% 2% 3% 4% 5%

Average Annual _ e/e

FIGURE 12: Average Annual _Q/Q versus Average Annual _ e/e for Pig Iron a

1800 -1990 1980 -1989 1960 -1969 1970 -1979 1950 -1959 1920 -1929 1900 -1909 1910 -1919 1930 -1939 1940 -1949 1890 -1899 1800 -1809 1810 -1819 1820 -1829 1830 -1839 1840 -1849 1850 -1859 1860 -1869 1870 -1879 1880 -1889

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Coal Prices increase significantly in the 1970’s Iron Ore Prices increase significantly in the 1970’s

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1960 -1969 1970 -1979 1980 -1989 1990 -1999 2000 -2006

0% 1% 2% 3% 4% 5% 0% 1% 2% 3% 4%

Average Annual _ e/e

FIGURE 13: Average Annual _ Q/Q versus Average Annual _ e/e for Freight Rail Travel (US Class I railroads)

e 1960 -2006

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1960 -1969 1970 -1979 1980 -1989 1990 -1999 2000 -2007

0% 2% 4% 6% 8% 10% 12% 14% 16%

  • 2%
  • 1%

0% 1% 2% 3% 4% 5% 6%

Average Annual _ e/e

FIGURE 14: Average Annual _Q/Q versus Average Annual _e/e for Passenger Air Travel (US airlines)

f 1960 -2007

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10 20 30 40 50 60 70 1960 1970 1980 1990 2000 2010

Year

FIGURE 15: Historical Jet Fuel Prices

f

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1940 -1949 1950 -1959 1960 -1969 1970 -1979 1980 -1989 1990 -1999 2000 -2006

0% 1% 2% 3% 4% 5% 6%

  • 1.0%
  • 0.5%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5%

FIGURE 16: Average Annual _Q/Q versus Average Annual _e/e for Motor Vehicle Travel (US data)

g Average Annual _e/e 1936 -2005

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2 4 6 8 10 12 14 10 20 30 40 50 60 70 80 90 1940 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE 17: Historical Motor Fuel Prices and Corporate Average Fuel Economy (CAFE) Standards

g

Fuel Prices CAFE Standards

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1960 -1969 1970 -1979 1980 -1989 1990 -1999

0% 1% 2% 3% 4%

  • 6%
  • 4%
  • 2%

0% 2% 4% 6%

Average Annual _e/e

FIGURE 18: Average Annual _Q/Q versus Average Annual _ e/e for Refrigeration (US data) h

1960 -2006 2000 -2006

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100 200 300 400 500 1950 1960 1970 1980 1990 2000 2010

Year

FIGURE A10: Resources Consumed ( R) in Refrigeration h

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Conditions for

  • “External Value Proposition”

– higher fuel prices – soft demand – efficiency mandates – government interventions

! e e ! Q Q

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Interactions between (Labor)Efficiency and Production

  • Learning – more production can make you

more efficient 0 – 30% reduction per doubling

– Airplane production and cigar rolling

  • Economies of Scale- scale of technology,

bulk purchases, operational efficiencies

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“Capacity effects”

ΔQ/Q Δe/e Flexible technology: Turn “Off” inefficient components when demand decreases Inflexible technology: Power always “On”

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Rebound Effects

D S1 S2 p Q Q1 →Q2 More efficient production can lead to price reductions which can lead to increased consumption from so-called substitution and income effects

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Rebound Effects

D S1 S2 p Q Q1 =Q2 Completely Inelastic Demand

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Interactions between Efficiency and Production

  • Price Elasticity of

Demand

  • eg. if price goes down

10% and Ep=1, demand will go up 10%

  • Ep>1 for tires, autos,

fresh tomatoes…

q p dp dq p dp q dq Ep = =

price, p quantity, q

p p q q Ep / / ! ! =

Idealized linear demand curve Gwartney 2000

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Direct (price only)rebound effect..

! # # # # = % % % % = % % e / e / / Q / Q e / e Q / Q

e e ) ( R R ! # = ! 1 %

Price elasticity

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Greening 2000 Measured Direct Rebound Effects

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The Rebound Effect

  • Efficiency that saves money has the

effect of allowing you to buy more and/or feel richer. What you do with this savings is the key to whether an actual reduction can occur. There is little evidence (historical, nor theoretical) that efficiency improvements result in an absolute reduction in resources used

  • ver the long term on a global scale.

(see Smil Energy in Nature.. p 271-272)

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What Works?

  • Price
  • Regulation
  • “External Value Proposition”
  • ……but not business as usual
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When we become more efficient at producing goods and services…

from “Material Word”, Peter Menzel, 1994

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…we buy more.

from “Material Word”, Peter Menzel, 1994

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When we become more efficient at making the things that go under the hood…

from, Museum of Industry, Waltham

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We add more.

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When we reduce the weight of our tent, backpack and sleeping bag⋯.

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We bring more.

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When we reduce the calories

  • f a soft drink⋯..
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We add fries.

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Eco-Efficiency:

necessary but insufficient