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What are the sound reasons (let's put aside the unsound reasons) why increasing energy efficiency takes us further down the road to sustainability?
Are there real-world circumstances whereby increasing energy efficiency might make sustainability harder to achieve?
Ultimately, it is a question of system boundaries. To be sustainable, a process must not ...
Use energy faster than it can be replenished
Use material resources faster then they can be replenished. Note that you could see most forms of energy also as material (fuel)
Pollute faster than the polluted system can clean itself. Note that most energy generation also pollutes.
If you look at almost any chemical plant, you will see some effort (and energy expenditure, and often material expenditure) to clean exhaust gases or waste water. Obviously the energy efficiency of the whole plant would be better without the cleaning effort, but the sustainability is worse due to pollution.
If you only compare highly similar processes, where matter input/output and pollution are basically the same, you have to look at the energy sources:
Also note that, as you change towards more efficient processes, more sources of energy might become viable. LED lighting powered off batteries charged with photovoltaics come to mind, this would not have been possible on the same scale with bulbs. Not that I think LED toys to be particular sensible.
Note that I speak of "improving sustainability" on one occasion, while some will argue that something is either sustainable or not, no gray areas. This view would dismiss any improvements in sustainability for processes using fossil fuels. This view ignores the pollution side of almost any process, where a hard yes/no on the sustainability of one single specific process cannot be given. Consider the question about sustainability and pollution.
As an answer to your 2nd question, I would cite the Jevons Paradox as a very real and well-documented set of circumstances wherein increased efficiency of a product or process actually leads to increased consumption due to price elasticity. The whole article is well worth reading, but I would like to draw note to one of the last sentences as a way to account for this effect:
The ecological economists Mathis Wackernagel and William Rees have suggested that any cost savings from efficiency gains be "taxed away or otherwise removed from further economic circulation". . .
I am not sure this is a good question for Q&A so much as an opportunity for discussion, and I am not sure why this is acceptable but questions about a possible connection between crafts and sustainability is not.... With that disclaimer in mind though I want to give a very different answer based largely on the work of anthropologist Joseph Tainter ("The Collapse of Complex Socieites"), and look at the relationship between surplus, complexity, and sustainability. I don't think the relationship is a simple one, and yes there are cases where energy efficiency may make moderate-term sustainability harder to achieve.
I also think it is necessary to take a long view both of the past and the future in addressing this question.
Tainter's Theories on Complexity and Collapse
Joseph Tainter has authored a large survey of societal collapse (meaning, as he puts it, simplification), where the number of societal roles decreases radically, as does the coordination between them. A good example would be the fall of the Western Roman Empire. The survey is The Collapse of Complex Societies and it is well worth reading.
Tainter's thesis is that complex societies collapse by simply becoming unsustainably complex, namely that we add complexity to society to solve problems and that at some point we can't keep that going, so major investments required to maintain a current quality of life usually foretell collapse.
Tainter also directly discusses the impact of energy (in the form of agricultural surplus) in the case of Rome. During the expansion of Rome, the government was largely fueled by pillaging acculumated surpluses from elsewhere (or more properly proxies for that in the form of gold). When this could not be continued, Rome had to move from accumulated past surpluses (representing, as he puts it "past solar energy") to current production (as he puts it "current solar energy"). This move was catastrophic for the Roman Empire and it lead to a spiral of currency devaluation, and eventually the inability to maintain food production up to the level it needed to be.
One of the points that Tainter brings up is that much of the complexity added was actually there to stall the collapse, and that Rome would have fallen much sooner had they not added the complexity that they did. However with complexity comes a large sector of the economy which is largely devoted to regulating the rest. In modern parallels, this would include not only government but also business administration. The more complex these fields become the fewer people are actually producing and eventually the whole thing collapses. The level of detail he goes into is astounding and I recommend both watching what lectures he has on Youtube and reading the book.
We Use Energy To Subsidize Complexity
Prior to the age of fossil fuels, greater social complexity meant that people had to work harder. The difference between a simple society governed by local self-sufficiency generally and a complex one with large amounts of regulation meant that in the second, people had to work much harder to achieve subsistence. Historically of course the best example of this is moving from forraging to agriculture (see The Worst Mistake in the History of the Human Race by Jarrod Diamond). In essence the agricultural revolution meant trading quality of life for larger populations and in order to make that work we see additional complexity arise in societies relating to that.
The same thing applies to the so-called green revolution and the dawn of modern fossil-fuel-based agriculture but with a twist. In the past humans and animals put forth the effort into tilling the soil, planting, harvesting, etc. Now the humans and animals are replaced by machines, and the energy comes not from eating grain but from fossil fuels. Similarly much of the nutrition of the soil comes from fossil fuels instead of decaying organic material, but to build and maintain the machines, associated supply pipelines, etc, many new roles had to arise, and farming came to embody more economic complexity. This of course was only possible because the energy came from fossil fuels, and this was only possible because of a surplus, at the time, of fossil fuel-based energy.
Energy Efficiency being good for Sustainability
One of the largest challenges sustainability-wise that we have is the fact that we are as dependent on fossil fuels as we are both for energy and for materials (coal, fertilizer, plastic, graphene, and much more). Additionally demand for energy is increasing faster than supply and for this reason our individual embodied consumption must decrease at least for now. The larger and more open question of course, is whether being more energy efficient for most of the population just means that their energy consumption can be spread out, where greater energy efficiency of appliances is offset by having more of them (this, itself, may not be a bad thing for reasons below, but it does nullify the effect).
Additionally more energy sources become viable when we become more energy efficient. It may not be sustainable to run cars on sweetgrass ethanol, but it might be if cars were twice as efficient (perhaps fuel-cell hybrids).
Energy Efficiency being bad for Sustainability
There are two significant mechanisms by which increased energy efficiency might lead to unsustainability.
The first is that we have to be honest, that real solutions to problems require large levels of economic investment and consequently if an economy which is based on ever increasing and unsustainable consumption of consumer products begins to falter, it may be much harder to engage in needed projects, such as grid upgrades necessary to guarantee baseline power from wind, or the like. Having more sustainable products doesn't matter of people can't pay for them, and so the simplification of consumption which is needed to achieve sustainability also can thwart that same goal. For example if electricity consumption drops, it is harder to justify investment into wind-based power generation and the grid upgrades necessary to make that happen.00
The second is that if we succeed in freeing up surplus energy we will, as history shows, want to use that energy to solve our problems and therefore the shift will be made from using it in ways which are necessary for human life and towards a regulatory role. This can add to non-productive complexity and make it harder to solve the next challenges down the road. For example, we could see an actual consumption drop in energy lead to an increase in energy consumption in businesses who then use that energy to subsidize complexity of their own operations, or the same for government. The same goes for moving towards higher levels of technology, where greater complexity goes into engineering, manufacturing, and maintenance when compared to relatively simple technologies. Each of these tasks takes energy and consequently, we become far more dependent on energy efficiency and less able to make investments in solving future problems.
I have already pointed to a book written largely on this topic. I am sure many more could be.
Energy Efficiency reduces the amount of energy required to achieve any given task thus increasing the amount that can be achieved from a certain energy source thus allowing it to last a bit longer - the ultimate goal of Sustainability, as simple as that.
Improving energy efficiency may delay a population hitting boundaries on its growth. For instance, if energy becomes scarce it becomes expensive and a potential couple may decide that their child (or second child) would be too expensive to raise and hence choose not to have it. If energy usage is reduced by making devices and processes more efficient, a greater number of people can exist in an area before hitting the same energy scarcity.
The result of this is that when the population does hit that limit, it is larger and therefore growing at a faster rate (since population growth is usually exponential). I expect this would make the "crash" faster and more devastating than if it had happened earlier.
While the effect is mostly speculation on my part, it seems plausible and would make increased energy efficiency less sustainable.
On the other hand, increased energy efficiency with population control should be sustainable assuming energy is the first resource limitation we run into.
Inferring Greater Sustainability from Greater Efficiency
There are a only few energy inputs to Earth's thermodynamic and chemical balance.
Energy efficiency reduces consumption of all five for a given global distribution of human energy usage patterns. This is principle that flows from the engineering definition of efficiency, and it is applicable in practical ways.
In some regions of the U.S., use of LED lighting and the promotion of the EPA's EnergyStar acceptance criteria has reduced coal consumption from what it would have been. Fossil fuel combustion increases risk of environmental imbalance and places energy infrastructure as a dependency on depleting resources, neither of which are sustainable results. Therefore, reducing such combustion increases overall energy infrastructure sustainability.
The planning of replacements for some nuclear plants reaching the end of their life has been questioned and postponed due to reductions in demand during the penetration of these same efficient products. The risk of catastrophe or the burden of containing used fissile material inherent in the use of nuclear fusion is well known. Decreasing this risk by decreasing the number of plants or total power output is arguably in support of sustainability.
The reduction of total energy demand makes the economic burden of transitioning to the more sustainable energy sources (because the energy inputs are effectively continuous and eternal) less. The cost of transition is roughly proportional to demand.
Realistic Scenarios Where Efficiency Increase Has an Inverse Effect
Any technology where the promotion of Energy Efficiency in a product or service that would otherwise be replaced by a more energy efficient alternative or that has some other sustainability problem outside of energy flow considerations could have an inverse effect.
For example, consider a region where wind and solar are providing a large proportion of the region's grid electricity and the human population is inclined to buy electric cars when their combustion engine cars reach end of life. Suppose that a car company promotes an improved regenerative breaking technology that increases MPG ratings significantly for that model.
Many may dismiss the promotion to buy electric cars and go with the new regenerative breaking improvement. They may perceive their choice as a step toward sustainability, but the more sustainable option was not chosen.
Sometimes the good is the enemy of the best.
