Long run consumption and price of energy services in the United Kingdom

Increases in the consumption of energy services are a hallmark of the transformation of society from its agrarian roots to manufacturing and services. This history has been richly documented for the United Kingdom by Roger Fouquet at the London School of Economics.

From 1700 to 2010 there was a 120-fold increase in power consumed in industry, a 250-fold increase in freight transport, a 220-fold increase in household consumption of heating, a 48,000-fold increase in land passenger travel, and a 295,000-fold increase in lighting consumption.1


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The increases in energy consumption were driven by a variety of factors, including shifts to higher-quality fuels, improvements in the efficiency of energy conversion, higher incomes, and changing consumer preferences. For example, the price of household heating declined for more than two centuries due to the shift from wood to coal, the latter fuel being less expensive, and dramatic improvements in the efficiency of fireplaces.


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Similarly, the price of passenger transportation services declined in the 18th century due to the expansion of turnpikes and continued through the 19th century with the introduction and expansion of railways. In lighting services, gas lighting was much more efficient than candles, and electric lighting quickly became much more efficient than gas lighting. The dramatic decline in the price of lighting driven by efficiency improvements spurred a nearly 2000-fold increase in the per capita consumption of lighting services between 1800 and 2010.

The United Kingdom’s history of energy use also reveals what is called the rebound effect. This is the situation in which improvements in the energy efficiency of a service stimulate an increase in the consumption of that service. The net effect of energy efficiency improvements generated energy savings over the long haul, but the savings were smaller than one might expect due to the rebound effect.

1 All data in this article are from Fouquet, Roger, “Long-Run Demand for Energy Services: Income and Price Elasticities over Two Hundred Years.” Review of Environmental Economics and Policy 8, no. 2 (July 2014): 186–207. https://doi.org/10.1093/reep/reu002. Additional details and data are available in Fouquet, Roger. “Heat, Power and Light: Revolutions in Energy Services,” Edward Elgar Publishing, 2008; and Fouquet, Roger. “Divergences in Long-Run Trends in the Prices of Energy and Energy Services.” Review of Environmental Economics and Policy 5, no. 2 (July 2011): 196–218. https://doi.org/10.1093/reep/rer008.

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