Page 32 - Policy Economic Report_Feb'25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Jevons Paradox in today’s world: -

In the case of AI, as systems become more powerful and accessible, it is likely that their use will grow
significantly. This could turn AI into a commodity that is in higher demand than ever before, as more
industries and individuals adopt it to perform a wider variety of tasks. While the increased efficiency of AI
has many advantages, the Jevons paradox points to an interesting side effect. As AI performs more tasks
and becomes more widely used, the demand for energy to power these systems could rise, potentially
increasing overall consumption. This paradox suggests that making AI more accessible could
unintentionally lead to higher resource use, as the tasks it performs expand alongside its availability.

Critics of Jevons Paradox

The Jevons paradox is used to argue that energy conservation efforts are futile, for example, that more
efficient use of oil will lead to increased demand, and will not slow the effects of peak oil. This argument
is usually presented as a reason not to enact environmental policies or pursue fuel efficiency.

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