Efficiency, Production, and Resource Consumption A Historical Analysis of Ten Activities Jeffrey B. Dahmus and Timothy G. Gutowski* Department of Mechanical Engineering Massachusetts Institute of Technology 77 Massachusetts Avenue, Room 35-234 Cambridge, MA 02139 [email protected] and [email protected] Abstract This work explores the historical effectiveness of efficiency improvements in reducing mankind’s impact on the earth. Ten activities are analyzed, including pig iron production, aluminum production, nitrogen fertilizer production, electricity generation from coal, oil, and natural gas, freight rail travel, passenger air travel, motor vehicle travel, and refrigeration. The data and analyses presented here show that historically, over long time periods, improvements in efficiency have not succeeded in outpacing increases in production. The result has been sizeable increases in energy-related resource consumption for all ten sectors. However, there do exist a few examples of shorter, decade-long time periods in which efficiency improvements were able to outpace production increases. In these cases, during times of relatively small increases in production, efficiency mandates, price pressures, and industry upheaval led to periods of reduced resource consumption. These cases suggest that with appropriate incentives, including, for example, efficiency mandates and price mechanisms, future resource consumption, and its associated environmental effects, could be controlled and even reduced. Keywords: efficiency, production, resource consumption, IPAT identity, rebound effect * Corresponding Author, phone (617) 253-2034, fax (617) 253-15562Introduction Efficiency improvements are often touted as effective and unobtrusive means of reducing mankind’s impact on the earth. For many, and perhaps in particular for engineers, the idea that reductions in environmental impact can be achieved through technology-based solutions is especially attractive. As such, improving efficiency is often mentioned as a critical component of design for environment (DfE) or green engineering approaches (Graedel and Allenby 1998, Anastas and Zimmerman 2003). Such efficiency improvements have also frequently been embraced as “win-wins”, in that they allow for both economic and environmental progress to occur (DeSimone and Popoff 1997, OECD 1998, WBCSD 2000). Although improving efficiency may appear to be a promising approach to reducing environmental impact, it is important to point out that such improvements have been taking place for centuries. While these improvements have clearly helped to drive economic and social progress, where have they led us with regards to the environment? Perhaps more importantly, what do past efficiency improvements say about efficiency as a means of reducing environmental impact in the future? This paper addresses these very questions, and makes recommendations about the use of efficiency improvements as a means of reducing mankind’s impact. The IPAT Identity One way to examine the relationship between efficiency improvements and environmental impact is to use the IPAT identity. This identity, first developed in the 1970s, is commonly used to help isolate and quantify the multiple factors that contribute to mankind’s impact on the earth. The IPAT identity disaggregates impact (I) into the product of population (P), affluence (A), and technology (T). It can be written as , (1) where affluence is represented as production over population and technology is represented as impact over production. While this disaggregation allows one to focus on individual aspects of sustainability, it is important to note that these terms are not independent (Ehrlich and Holdren 1972). ProductionImpact x PopulationProduction x PopulationImpact =3In discussing the role of efficiency improvements in modifying mankind’s impact on the earth, the technology term in (1) is of particular interest. This technology term represents environmental intensity, the inverse of which is environmental efficiency, and can be written as . (2) The efficiency term shown in (2) is in fact an eco-efficiency, a ratio of economic value to environmental load (Ehrenfeld 2005).1 The quantification of economic value and environmental load can range greatly, from dollar figures to production quantities in the case of economic value, and from amounts of resources consumed to amounts of emissions outputted in the case of environmental load.2 It is clear from (2) that those who tout efficiency improvements as a means of reducing environmental impact are in fact advocating improving the technology term in the IPAT identity. Graedel and Allenby affirm this focus on efficiency improvements, commenting that the technology term, “…appears to offer the greatest hope for a transition to sustainable development, especially in the short term, and it is modifying this term that is among the central tenets of industrial ecology.” (Graedel and Allenby 2003). While many variants on the IPAT identity exist, the variant used in this paper combines population and affluence into a single term that represents total production. Thus, (1) simplifies to , (3) or, using (2), . (4) From (4) it is clear that in order for efficiency improvements to successfully reduce impact, the rate of improvement in efficiency must exceed the rate of increase in production. At the same time, in order to maintain economic growth, the rate of change in production must be positive. Thus, in order for this “win-win” scenario to occur, the inequality Efficiency1ProductionactImp Technology ==Efficiency1 x ProductionImpact =ProductionactImp x ProductionImpact =40>∆>∆PPee, (5) where e represents efficiency and P now represents production, must be true.3 Historical Trends in Efficiency and Production Historical efficiency and production data were compiled to examine if past improvements in efficiency have been able to outpace past increases in production. If this had indeed been the case, (5) would have been satisfied, and reductions in impact would have occurred. The data presented here covers ten activities, including pig iron production, aluminum production, nitrogen fertilizer production, electricity generation from coal, oil, and