Efficiency INCREASES Consumption

Automobile manufacturers have been working for decades on improving fuel efficiency. So why aren't the cars we drive today getting dramatically better gas mileage?

A study by MIT economist Christopher Knittel in the December 2011 issue of the American Economic Review found that since 1980 the average fuel economy of American vehicles has increased only slightly, from 23 miles per gallon to 27. Yet Knittel found that fuel efficiency-the amount of power an engine produces per gallon of fuel burned-increased by 60 percent during that period. What's going on here? 

Cars and trucks have become bigger and more powerful: The average weight of passenger vehicles has increased 26 percent since 1980, while their horsepower has risen by 107 percent. Most of the gains in fuel efficiency have gone into compensating for the extra size and thrust.  Automobiles are not the only category in which greater efficiency has failed to translate into reduced energy consumption. Lighting efficiency has improved during the last three centuries by many thousand-fold, from sputtering candles to modern LEDs, as Jeff Tsao and his colleagues from the Sandia National Laboratory note in the July 2012 issue of the journal Energy Policy. But the result "has been an increase in demand for energy used for lighting that nearly exactly offsets the efficiency gains." The authors note that "when lighting becomes cheaper, economic agents become very creative in devising new ways to use it," such as illuminating office ceilings with LED virtual skies. 

In coming decades, Tsao et al. predict, increased demand for lighting probably will again swallow up any new gains in energy efficiency.  In another recent study, reported in the July 2012 issue of the journal Sustainability, Graham Palmer, technical director of an Australian heating and cooling company, looked at trends in space heating efficiency during the last 50 years in Melbourne. Modern houses are up to 10 times more energy efficient, Palmer found, yet Australians are collectively using just as much energy to heat their homes as they did a half-century ago. Why? New houses are much bigger, people heat larger areas for longer, and fewer people live in each dwelling. 

Of course, modern Australians are much more comfortable in the winter than their grandparents were.  Similarly, a 2006 study commissioned by the U.S. Environmental Protection Agency found that homes in Phoenix, Arizona, that qualify for the EPA's Energy Star designation use 12 percent more energy than homes that don't. Owners of Energy Star houses may use 16 percent less energy per square foot to keep their indoors livable, but they spend those gains on bigger houses.  

This energy "rebound effect" has important implications for efforts to restrain climate change through conservation. Various studies have suggested that improvements in efficiency could reduce energy consumption enough to cut global carbon dioxide emissions by as much as 25 percent during the next four decades. 

http://reason.com/archives/2012/10/31/the-paradox-of-energy-efficiency

This is why the CAFE standards are and have been nothing but wishful thinking ever since they began.  They amount to wishful coercionist thinking, which is linear and unable to conceive of 2nd and 3rd order effects.  Sadly, where this will go after they wake up and smell the economics coffee will be efforts to even further restrict the choices of the citizenry.