Previous posts in this series have linked the philosophical roots of the global climate-change movement to the doctrines of Deep Ecology (optimal, fragile, sacrosanct nature) and Malthusianism (the people problem). A third sister intellectual/activist movement is conservationism, or less-is-more as a physical (versus economic) imperative.[1]
Nonuse or less use for its own sake is different and beyond self-interested, voluntary conservation, or market-based efficiency, wherein cost-minimization/profit-maximization by the economic actor reduces usage. In personal situations, it generally is an affordability decision to not buy; in business settings, it is paring inputs (reducing cost) for a desired, given output.
Unlike natural conservation, conservationism is thus about personal sacrifice (going without) and government intervention to reduce energy production or usage.
Market-based Conservation (Efficiency)
Less-is-more conservationism can be contrasted with more-from-less/less-to-more conservation. The history of the energy industry is replete with examples of increasing energy efficiency without the heavy hand of government.
“Today the [wellhead petroleum] conservation movement is led by sober business men and is based on the cold calculations of the engineers,” wrote resource economist Erich Zimmermann in 1933. “Conservation, no longer viewed as a political issue, has become a business proposition” (Zimmerman, p. 784).
Turning to electricity, the natural evolution of business efficiency can be appreciated in terms of how much coal is required to generate a kilowatt hour of electricity. At Samuel Insull’s Commonwealth Edison Company in Chicago, for example, new power plants required the following pounds of coal to produce one kilowatt hour of electricity: 1888 (12 pounds), 1894 (6 pounds), 1903 (2.5 pounds), 1921 (1.8 pounds), and 1924 (1.5 pounds) (Bradley 2011, 483). That progress has continued. Approximately a pound of coal now is required per kWh in electric generation, and this efficiency can be expected to increase in the next decades.
From Conservation to Conservationism
The (Malthusian) fear of mineral energy depletion inspired conservationism, an “ism” predicated on the belief that less energy consumption is good per se. Such a policy was rejected in the 19th century by the father of energy economics, W. S. Jevons. He feared that freezing coal usage meant that “Britain should be stationary and lasting as she was, rather than of growing and world-wide influence as she is” (Bradley, 2009, p. 242).
A century later, amid America’s (regulation-created) energy crisis, when the mainstream view was that we were running out of oil and natural gas, neo-Malthusians saw salvation on the demand side.
Wholesale shortages of petroleum products that threatened the same at retail (to trigger gasoline lines) inspired the first congressional hearing on energy conservation. This March 1973 event (seven months before the Arab Embargo) attracted the first wave of energy conservationists and environmentalists from organizations such as the Environmental Defense Fund, Friends of the Earth, and the Sierra Club (Bradley, 2009, pp. 243–44).
An energy intelligentsia got busy promoting conservationism as a cure for the energy crisis. The Ford Foundation’s A Time to Choose: America’s Energy Future (1974) reached three major conclusions (Bradley, 2009, p. 244):
- the energy crisis is real and long-lived;
- “conservation is as important as supply”; and
- the U.S. needs an integrated national energy policy.
Energy conservation in the Ford report, headed by S. David Freeman, went well beyond self-interested economic conservation—economizing by eliminating waste in response to higher prices. The report proposed ending energy demand growth by creating a federal-level Energy Policy Council. Assisted by a Citizens’ Advisory Board, the council would set conservation goals for the nation, for each region, and for each industry sector. A first step was to set “a uniform system of accounting for energy” for industry to follow. Government energy planning was born—and not to go away even when oil and gas shortages turned to surplus in the next decade (Bradley, 2009, p. 245).
Amory Lovins (Romantic Conservationism)
In 1976, the 29-year-old energy representative of the UK environmental group, Friends of the Earth, wrote an essay that impacted the energy policy world. “Energy Strategy: The Road Not Taken?”, the most reprinted piece in the history of Foreign Affairs, coined the term soft energy paths to differentiate energy conservation and decentralized renewable technology from the “hard” path of central-station power plants fueled by oil, gas, coal, or uranium.
Lovins was soon testifying before the US Congress and advising President Carter on the proposition that the least-cost energy option was not to produce energy, but to save it. In 1977, Lovins presented his case in romantic, something-for-everyone terms to a congressional subcommittee (Bradley, 2009, p. 251):
A final feature of the soft energy path that I wish to commend to this committee as politicians is that it helps to avoid conflict between constituencies by offering advantages to all of them; jobs for the unemployed, capital for businesspeople, environmental protection for conservationists, increased national security for the military, opportunities for small business to innovate and for big business to recycle itself, savings for consumers, world order and equity for globalists, energy independence for isolationists, exciting technologies for the secular, a rebirth of spiritual values for the religious, radical reforms for the young, traditional virtues for the old, civil rights for liberals and states’ rights for conservatives.
To critics, however, Lovins was “selling a dream without presenting the bill” (quoted in Bradley, 2009, p. 250).
Daniel Yergin: Fooled by Shortages
The esteemed energy historian Daniel Yergin went Malthusian during the energy crisis, believing that oil and gas reserves were fixed and rapidly depleting. Costs and prices could only rise, in his view, since demand had overtaken supply.
In their 1979 book, Energy Future: Report of the Energy Project at the Harvard Business School, Yergin and Robert Stobaugh concluded that “the government must be the champion of conservation and solar” (Stobaugh and Yergin, p. 229). One major policy goal was to reduce energy usage between 30 and 40 percent with only “modest adjustments in the way people live” (Yergin, p. 136) This was not a free market program or outcome.
Hayek on Conservationism
In The Constitution of Liberty (1960), economist F. A. Hayek evaluated “the necessity of central direction of the conservation of natural resources” (p. 370), a view that was “particularly strong in the United States, where the ‘conservation movement’ has to a great extent been the source of the agitation for economic planning and has contributed much to the indigenous ideology of the radical economic reformers” (pp. 367–68). The US debate was about keeping more oil and gas in the ground via state wellhead-conservation regulation to better the future.
While not denying that economic error could produce real waste in the “consumption of irreplaceable resources” (p. 369), Hayek cautioned that government was unlikely to have the knowledge of future conditions of price and scarcity that would enable it to impose the “right” solution.
“Any natural resource represents just one item of our total endowment of exhaustible resources, and our problem is not to preserve this stock in any particular form, but always to maintain it in a form that will make the most desirable contribution to total income,” he wrote (p. 374).
Hayek also noticed a circularity problem in the conservationist argument: postponed consumption was still supply lost for the future. Quoting fellow economist Anthony Scott, Hayek noted the irony that “the conservationist who urges us ‘to make greater provision for the future’ is in fact urging a lesser provision for posterity” (p. 374). In other words, production had to be avoided indefinitely, not merely postponed, or it was not supply-side conservation. Yet this would create perpetual non-usage in the present—an impossibility.
Conclusion
Conservationism, substituting a physical standard for a consumer-driven one, is market conservation gone too far. An individual or business can overinvest in conservation just as it can underinvest in the same. Personal preferences and net-present-value economics, not engineering, dictate energy usage in a free society.
The hidden premise of conservationism—the unsustainability of carbon-based energies—is in full intellectual debate. Depletion, pollution, energy security, climate change—these issues, one by one, have been exaggerated by anti-fossil-fuel activists, a story told in many other posts at this website.
Natural consumer decisions about energy are not a “market failure” requiring government subsidies and mandates. No wise government planner or bureaucracy can know the “optimal” level of energy consumption, and any government involvement must be evaluated against public-sector failures.
The case for government conservationism has not been made. Energy policy predicated on market conservation is merited on consumer, producer, taxpayer, and civil grounds.
Bibliography
Bradley, Robert. Capitalism at Work: Business, Government, and Energy. Salem, MA: M & M Scrivener Press, 2009.
Bradley, Robert. Edison to Enron: Energy Markets and Political Strategies. Hoboken, NJ: John Wiley & Sons and Scrivener Publishing, 2011.
Hayek, F. A. The Constitution of Liberty. Chicago, IL: University of Chicago Press, 1960.
Lovins, Amory. “Energy Strategy: The Road Not Taken?” Foreign Affairs 55 (1): 65–96 (October 1976).
Stobaugh, Robert, and Yergin, Daniel. “Conclusion: Towards a Balanced Energy Program.” In Energy Future: Report of the Energy Project at the Harvard Business School, edited by Stobaugh and Yergin, 216–33. New York: Random House, 1979.
Yergin, Daniel. “Conservation: The Key Energy Source.” In Energy Future: Report of the Energy Project at the Harvard Business School, edited by Stobaugh and Yergin, 136–82. New York: Random House, 1979.
Zimmermann, Erich. World Resources and Industries. New York: Harper & Brothers, 1933.
[1] Conservationism as a political-economy term was introduced in Bradley (2009), including pp. 187, 218, 242, and Bradley (2011), including pp. 226-27, 509. A fourth intellectual/activist strand, small-is-beautiful (E. F. Schumacher), will be next in this Paris series.
