William Stanley Jevons (1835-1882) is best known as a British economist who was one of the pioneers of contemporary neoclassical economic analysis, with its subjective value theory rooted in marginal utility. Jevons first gained national fame, however, for his work The Coal Question (1865). Here Jevons argued that British industrial growth had relied on cheap coal and that the increasing cost of coal, as deeper seams were mined, would generate economic stagnation. He suggested that technological innovation and the development of substitute forms of energy would not alleviate the problem of resource depletion. Of course, history would prove Jevons wrong. His principal mistake was to underestimate the importance of coal substitutes such as petroleum and hydroelectric power.
But there is one aspect of Jevons' argument was remarkably insightful Chapter Seven of The Coal Question was called Of the Economy of Fuel. Here he argued that increased efficiency in using a natural resource, such as coal, only resulted in increased demand for that resource, not a reduction in demand. Jevons argued, improved efficiency could lead to increased consumption because that efficiency improvement appears as a cost reduction or lower price to consumers. This has become know as Jevons paradox or in some cases the rebound effect, and is an important area of scholarly debate in contemporary environmental and ecological economics.
-- Cutler J. Cleveland, Editor-in-Chief
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