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The idea that increased energy efficiency can increase energy consumption at the macro-economic level strikes many as a new idea, or paradoxical, but it was first observed in 1865 by British economist William Stanley Jevons, who pointed out that Watt's more efficient steam engine and other technical improvements that increased the efficiency of coal consumption actually increased rather than decreased demand for coal. More efficient engines, Jevons argued, would increase future coal consumption by lowering the effective price of energy, thus spurring greater demand and opening up useful and profitable new ways to utilize coal. Jevons was proven right, and the reality of what is today known as "Jevons Paradox" has long been uncontroversial among economists.

Economists have long observed that increasing the productivity of any single factor of production -- whether labor, capital, or energy -- increases demand for all of those factors. This is one of the basic dynamics of economic growth. Luddites who feared there would be fewer jobs with the emergence of weaving looms were proved wrong by lower price for woven clothing and demand that has skyrocketed (and continued to increase) ever since. And today, no economist would posit that an X% improvement in labor productivity would lead directly to an X% reduction in employment. In fact, the opposite is widely expected: labor productivity is a chief driver of economic growth and thus increases in employment overall. There is no evidence, the report points out, that energy is any different, as per capita energy consumption everywhere on earth continues to rise, even as economies become more efficient each year.