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Jevons paradox

paradox In economics, the Jevons paradox (/ˈdʒɛvənz/; sometimes Jevons effect) occurs when technological advancements make a resource more efficient to use (thereby reducing the amount needed for a single application), however, as the cost of using the resource drops, overall demand increases causing total resource consumption to rise.[1][2][3][4] Governments have typically expected efficiency gains to lower resource consumption, rather than anticipating possible increases due to the Jevons paradox.[5] In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological progress could not be relied upon to reduce fuel consumption.[6][7] The issue has been re-examined by modern economists studying consumption rebound effects from improved energy efficiency.

First, in the context of a mature market such as for oil in developed countries, the direct rebound effect is usually small, and so increased fuel efficiency usually reduces resource use, other conditions remaining constant. [30] As Microsoft CEO Satya Nadella noted, the increased accessibility and efficiency of AI tools like DeepSeek's R1 model could lead to a surge in applications and use cases. For example, while DeepSeek's model uses fewer resources per task, the growing demand for AI-driven solutions—ranging from chatbots to complex reasoning models—could increase the total energy requirements of the global AI infrastructure.

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