LEDs are great, right? Not so fast

On Tuesday, the Royal Swedish Academy of Sciences awarded the 2014 Nobel Prize in Physics to three researchers whose work contributed to the development of a radically more efficient form of lighting known as light-emitting diodes, or LEDs.

In announcing the award, the academy said, "Replacing light bulbs and fluorescent tubes with LEDs will lead to a drastic reduction of electricity requirements for lighting." The president of the Institute of Physics noted: "With 20 percent of the world's electricity used for lighting, it's been calculated that optimal use of LED lighting could reduce this to 4 percent."

The winners, Shuji Nakamura, an American, and Isamu Akasaki and Hiroshi Amano, both from Japan, justly deserve their Nobel, and should be commended for creating a technology that produces the same amount of light with less energy.

But it would be a mistake to assume that LEDs will significantly reduce overall energy consumption.

LEDs are but the latest breakthrough in lighting efficiency. Consider the series of accelerated lighting revolutions ushered in by the Industrial Revolution. In the early and mid-1800s, for instance, "town gas" made from coal was developed and used to illuminate streetlights. Whale oil became the preferred indoor lighting fuel for upper-income Americans until it was replaced by more efficient kerosene lamps. And finally, in the late 19th century, the electric light bulb emerged.

Along the way, demand would rise for each of these new technologies and then increase as new ways were found to use them. This led to more overall energy consumption.

From outer space, you can see the results of this long progression of illumination. More and more of the planet is dotted with clusters of lights.

Energy-efficient lighting has been, without question, a boon for economic development. Over the past two centuries, the real cost of illumination in Britain has declined by a factor of 3,000, largely because of efficiency improvements, according to the researchers Roger Fouquet of the London School of Economics and Peter J. G. Pearson of Imperial College, London. This cheap lighting technology is used today not just to light our streets, workplaces and homes, but also for televisions, computers and cellphones.

These productivity improvements are a primary driver of long-term economic growth. Especially in developing economies, cheap, energy-efficient lighting will almost certainly allow poor people to bring modern lighting into their homes much faster than they otherwise would. And that will almost certainly result in faster growth in energy demand globally.

The growing evidence that low-cost efficiency often leads to faster growth in energy use was recently considered by both the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA). They concluded that energy savings associated with new, more energy efficient technologies were likely to result in significant "rebounds," or increases, in energy consumption. This means that very significant percentages of energy savings will be lost to increased energy consumption.

The IEA and the IPCC estimate that the rebound could be over 50 percent globally. Recent estimates and case studies have suggested that in many energy-intensive sectors of developing economies, energy-saving technologies may backfire, meaning that increased energy consumption associated with lower energy costs because of higher efficiency may in fact result in higher energy consumption than there would have been without those technologies.

That's not a bad thing. Most people in the world, still struggling to achieve modern living standards, need to consume more energy, not less. Cheap LED and other more efficient energy technologies will be overwhelmingly positive for people and economies all over the world.