Abstract

Jevons’ Paradox hypothesizes that natural resource usage increases despite more efficient technological improvements. Since natural resources are used to produce energy and consumer goods, understanding how more efficient technological improvements affect resource usage is important for policymakers. China and India are very interesting case studies because they are two of the fastest growing economies, as well as the two largest populations, in the world. To feed this economic growth and their population, a substantial amount of resource consumption is necessary. If China and India exhibits Jevons’ Paradox, then, due to scarce energy resources, the repercussions will be felt worldwide. In this paper, we will empirically show that Jevons’ Paradox is likely in existence for China and India, the reasons for the presence of the paradox, and the resulting public policy implications and the applications for sustainable economic development policies.