Can Efficiency Improvements Reduce Resource Consumption?A Historical Analysis of Ten ActivitiesJeffrey B. Dahmus1,2 *and Timothy G. Gutowski31Materials Systems Laboratory, 2MIT Energy Initiative, 3Department of Mechanical EngineeringMassachusetts Institute of Technology77 Massachusetts Avenue, Room E40-417Cambridge, MA [email protected] and [email protected] work explores the historical effectiveness of efficiency improvements in reducing mankind’s resource consumption. 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 the quantity of goods and services provided. Thus, the end result over these time periods has been a sizeable increase in resource consumption across all ten sectors. However, there do exist a few examples of shorter, decade-long time periods in which improvements in efficiency were able to match or outpace increases in quantity. In these cases, 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 impacts, could be stabilized and even reduced.Keywords: efficiency, resource consumption,IPAT identity, eco-efficiency, rebound effect* Corresponding Author, phone 617-324-4634, fax 617-258-74712IntroductionEfficiency improvements are often touted as effective and unobtrusive means of reducing resource consumption. For many, and perhaps in particular for engineers, the idea that reductions in resource consumption, and thus a reduction in the associated environmental impacts of resource consumption, can be achieved through technology-based solutions is especially attractive. As such, improving efficiency is often mentioned as a critical component of green engineering or design for environment (DfE) guidelines for engineers (Graedel and Allenby 1998, Anastas and Zimmerman 2003). More broadly, such efficiency improvements have 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). While encouraging engineers to focus on efficiency improvements certainly has economic and social benefits, the notion that such improvements lead to reductions in resource consumption is less certain. After all, engineers have been pursuing efficiency improvements for centuries yet,during that time, resource consumption has continued to increase. This increase in resource consumption is not surprising, given the growth in population and the rise in affluence, among other factors. Clearly, in order for efficiency improvements to reduce resource consumption, these technological innovations must outpace increases in the quantity of goods and services provided. The historical data and analyses presented here examine past trends in efficiency and resource consumption across ten activities. In particular, this work focuses on identifying historical cases in which efficiency improvements have resulted in reductions in resource consumption and, looking forward, what insights those cases provide with regards to leveraging future efficiency improvements to realize reductions in resource consumption.BackgroundIn framing the relationship between efficiency improvements and resource consumption, the familiar IPAT identity can be used. 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 as3, (1)where affluence is represented as the Gross Domestic Product (GDP) per person and technology is represented as the environmental impact per unit of GDP (Graedel and Allenby 2003). Whilethis 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).Many variants on the IPAT identity exist, variants that often either combine terms for added simplicity, or further disaggregate terms for added resolution. In discussing the role of efficiency improvements in reducing resource consumption, the basicIPAT identity shown in (1) can befurther disaggregated to,, (2)where “Quantity” refers to the quantity or level of goods and services provided in a society and “Resources” refers to the amount of resources consumed. In (2), the affluence term from (1) isrepresented as the product of GDP over Population – which represents per capita income – and Quantity over GDP – which represents the quantity of goods and services provided per unit of income. The technology term from (1) is represented in (2) as the product of Resources over Quantity – which represents the resource intensity of the goods and services provided – and Impact over Resources – which represents the environmental intensity of resource consumption. It can be easily shown that other variants of theIPAT identity, including the Kaya Identity and the ImPACT Identity, are in fact contained within (2) (Yamaji et al. 1991, Waggoner and Ausubel 2002). In focusing on the role of technology-based solutions in reducing resource consumption, the population and affluence terms in (2) can be combined, yielding. (3)In focusing on resource consumption, as compared to environmental impact, (3) can be further simplified to GDPImpact x PopulationGDP x PopulationImpact ResourcesImpact x QuantityResources x GDPQuantity x PopulationGDP x PopulationImpact ResourcesImpact x QuantityResourcesQuantity xImpact 4.