While the formal rules and social structures that shape our behavior are mere echoes of recent history, the primal forces that drive us—the pursuit of belonging, connection, status, security, comfort, and novelty—are as old as humanity itself. Once our most basic needs—water, food, and shelter—are secured, these deep-seated instincts, honed over hundreds of thousands of years of evolution, take center stage. They are the invisible hand guiding our desires, shaping our aspirations, and, ultimately, steering the course of our economic choices.
Despite modern policies designed to curb energy consumption and mitigate greenhouse gas emissions, our fundamental instincts propel us in the opposite direction. The result is a paradox: as our energy systems grow more efficient, we do not consume less—we merely uncover new ways to harness that energy to fuel ever-expanding desires and innovations. This is no mere coincidence; it is the inevitable interplay between human nature and technological progress, a cycle where each advance in efficiency begets new avenues for consumption, ensuring that demand continues its relentless ascent.
Efficiency Produces More Supply Which Creates New Demand
We need look no further than the evolution of computing power to see this principle in action. Over the past few decades, the efficiency of computing—measured in FLOPS (floating-point operations per second) or MIPS (million instructions per second)—has skyrocketed. Processing power has increased by a factor of ten every few years, while marginal costs have plummeted. One might assume that, at some point, people would be satisfied with their computing capabilities, leading to a plateau in demand.
Yet reality tells a far different story. Instead of reducing consumption, the explosion in computational efficiency has unleashed even greater demand. With cheaper, smaller, faster, and more powerful machines, we have invented new ways to use them, from utilizing blockchain to form computer networks, to crypto mining to cloud-based data management services, to AI models, all requiring the development of increasingly massive data centers. This same pattern mirrors the rise of renewable energy - greater efficiency doesn’t mean we use less; it enables us to use more than ever before.
The Efficiency Paradox in Renewable Energy
The economist William Stanley Jevons recognized this phenomenon in 1865, long before computers or modern energy grids existed. In his seminal work, The Coal Question, he described what is now known as Jevons Paradox: when steam engines became more fuel-efficient, coal consumption did not decline as coal producers feared —it surged. Cheaper and more efficient coal-powered machines enabled industries to expand, increasing demand far beyond the savings gained from efficiency improvements.
As industries become more efficient, they expand, driving demand far beyond the savings gained from improved technology. This paradox is now unfolding in the realm of renewable energy. Over the past decade, the cost of renewable power generation has plummeted, thanks to advances in technology, economies of scale, competitive supply chains, and increasing expertise among developers. The price of electricity from utility-scale solar photovoltaics (PV) fell by 85% between 2010 and 2020, while wind and solar have reached record-low costs worldwide.
Since 2010, a staggering 644 GW of renewable energy capacity has been added globally at costs lower than the cheapest fossil fuel alternatives. In emerging economies, 534 GW of renewables have been deployed at a cost advantage over fossil fuels, cutting electricity generation costs by $32 billion annually.
New utility solar and wind projects are now outcompeting even the cheapest and least sustainable coal-fired power plants. According to IRENA analysis, 800 GW of existing coal-fired capacity operates at costs higher than new solar and wind projects, even when factoring in integration costs. Replacing these coal plants would save $32 billion per year and slash global CO₂ emissions by 3 gigatons annually.
While these developments mark a shift toward cleaner energy, history suggests that declining costs do not curb overall energy consumption—they in fact encourage further expansion. Just as efficiency in coal-powered steam engines led to greater coal use, the affordability of renewables is driving a surge in electricity demand, reinforcing the very cycle of consumption environmentalists seek to mitigate.
Consider the unprecedented rise of data centers—the digital era’s insatiable powerhouses. Artificial intelligence, cryptocurrency mining, data storage and cloud computing services have transformed electricity into the lifeblood of the modern economy, fueling an endless cycle of increasing demand. The paradox is clear: the more efficient our energy production becomes, the more we innovate new, power-intensive applications, ensuring that global energy consumption will continue its relentless ascent.
And this is only the beginning. AI data centers are the harbingers of an even greater transformation—one where human labor itself will be electrified, replaced by a vast, networked ecosystem of autonomous machines. Over the next decade, robotics and automation will begin to pervade every facet of our lives, from manufacturing to logistics to healthcare, to daily homemaking, ushering in a world where machines, powered by an unceasing flow of energy, take on the physical tasks once performed by human hands.
As technology advances, so too will our unquenchable need for electricity. The future will not be one of energy conservation, but of ever-expanding consumption, driven by the very renewable innovations designed to make energy use more efficient and sustainable.
The Marginal Utility of Energy
Marginal utility theory underscores the inevitability of our trajectory. As the cost of renewable electricity declines, its perceived value rises, fueling an insatiable demand that expands with every technological breakthrough. Whether in computing power, industrial automation, or kilowatt-hours, the same economic principle prevails: the more affordable a resource becomes, the more we find ways to consume it.
In a world increasingly defined by digital infrastructure, the appetite for electricity is not merely persistent—it is boundless. Lower renewable energy prices do not encourage restraint; instead, they will act as a catalyst, unleashing a new wave of high-energy applications. What begins as incremental efficiency gains in lighting and heating swiftly gives rise to the rapid proliferation of data centers, AI-driven automation, electric vehicle fleets, and an ever-growing constellation of power-intensive innovations. In an age where energy is both abundant and affordable, it is not conserved—it is devoured at an accelerating pace.
Even as governments implement policies to curb emissions and corporations champion sustainability initiatives, our economic and technological systems are designed not for limitation, but for expansion. Regulations may provide temporary friction, but they inevitably bend to the pressures of economic growth. While renewable energy is critical to reducing carbon intensity, it alone cannot counterbalance the relentless surge in consumption driven by technological progress and human innovation.
Neither technology nor policy can fundamentally alter the deeper forces at play. Unless we confront the underlying drivers—human nature, economic signals, and systemic patterns of growth—our trajectory will remain unchanged. The phenomenon of renewable efficiency leading to greater consumption is not an anomaly to be corrected; it is the defining feature of our energy economy, ensuring that our demand will continue its relentless ascent.
Can We Break the Cycle?
There is a hard and often overlooked truth in the energy transition: expanding renewable energy capacity and improving efficiency alone will not eliminate our dependence on fossil fuels in the coming decades. Paradoxically, instead of hastening their decline, the rapid growth of renewables will, in many ways, reinforce the continued use of fossil fuel infrastructure.
While the share of renewables in the global energy mix will undoubtedly continue to grow, the relentless expansion of energy demand ensures that fossil fuel generation will decline only gradually rather than vanish entirely. The reason is straightforward: despite their advancements, renewables still depend on a stable, dispatchable backup—a role that fossil fuels will continue to play for the foreseeable future.
Moreover, the expansion of renewable energy infrastructure comes with its own set of resource and environmental costs. The scaling of wind, solar, and battery storage requires an ever-increasing extraction of metals and minerals—the raw materials that form the blades, panels, batteries, and transmission networks essential to generating, storing, and distributing power. Each of these steps—mining, refining, manufacturing, and deployment—is itself energy-intensive and carbon-emitting, adding another layer of complexity to the pursuit of a truly sustainable energy future.
This dynamic is further compounded by the fact that as renewable energy becomes cheaper and more abundant, it drives new waves of electrification and innovation, increasing overall energy consumption. From AI-driven data centers to industrial automation and electrified transportation networks, the coming decades will witness an unprecedented surge in global electricity demand—one that renewables alone will not be able to meet without maintaining significant fossil fuel backup generation.
Thus, while fossil fuels may decline as a percentage of total energy production, their role as a critical safety net in an increasingly electrified world will persist. In this way, rather than accelerating the demise of fossil fuels, the growth of renewables may instead prolong their presence for decades to come—albeit in a transformed and increasingly supplementary role.
A Future of Endless Energy Growth
Jevons’s insight from 150 years ago remains as relevant as ever: efficiency does not curb demand—it amplifies it. No matter how much progress we make in renewable energy, no matter how efficiently we generate power, our ancient instincts and modern economic systems will always push us toward greater consumption, not less.
Without a radical rethinking of our approach to energy, growth, and technology itself, we will not lower greenhouse gas emissions—we will likely continue increasing them. Until we confront this fundamental reality, our future will be one of ever-expanding energy use, accelerating consumption, and a climate trajectory that remains perilously unsustainable.
