Efficiency optimisation is not necessarily a benign pursuit, and may come at the cost of factors that are less quantifiable. In overcoming the Jevons paradox (Spectrum, Life & Arts, May 18), there is an inherent risk that we incentivise and induce an “externality arbitrage”.
The growth of the electric vehicle market, for example, reflects our pursuit of local carbon efficiency. But does our improved carbon efficiency profile outweigh the marginal social cost associated with the inhumane artisanal cobalt mining that may feed into the supply chain?
This is the “externality arbitrage”: focusing on particular efficiencies can incentivise a mere category-shifting of externalities, from the local and quantifiable to the less quantifiable — the out of sight, out of mind.
Karim Henide
London School of Economics
London WC2, UK
