Excerpts from "Energy, Growth, and Sustainability: Five Propositions" by Steve Sorrel
Posted by Gail the Actuary on April 19, 2010 - 10:18am
Steve Sorrel, Senior Fellow, Sussex Energy Group, University of Sussex in the UK has recently published a 25 page paper called Energy, Growth and Sustainability which can be downloaded at this link. This post provides some excerpts from the paper, which summarize its findings. Readers are encouraged to read the entire paper.
According to the introduction to the paper:
This paper questions the conventional wisdom underlying climate policy and argues that some long-standing and fundamental questions regarding energy, growth, and sustainability need to be reopened. It does so by advancing the following propositions:
1. The rebound effects from energy efficiency improvements are significant and limit the potential for decoupling energy consumption from economic growth.
2. The contribution of energy to productivity improvements and economic growth has been greatly underestimated.
3. The pursuit of improved efficiency needs to be complemented by an ethic of ‘sufficiency’.
4. Sustainability is incompatible with continued economic growth in rich countries.
5. A zero-growth economy is incompatible with a debt-based monetary system.
These propositions run counter to conventional wisdom and highlight either blind spots or taboo subjects that deserve closer scrutiny. While accepting one proposition reinforces the case for accepting the next, the former is neither necessary nor sufficient for the latter.
1. Rebound effects are significant and limit the potential for decoupling energy consumption from economic growth
This is basically Jevons' paradox, which has been discussed quite a few times on The Oil Drum. As technology increases the efficiency with which a resource is used, use of the resource tends not to decline as predicted. Instead, there tends to be a rebound effect, and the amount of the resource used may even increase instead. The section concludes:
In sum, rebound effects will make energy efficiency improvements less effective in reducing overall energy consumption than is commonly assumed. This could limit the potential for decoupling, although by precisely how much remains unclear. In principle, increases in energy prices should reduce the magnitude of such effects by offsetting the cost reductions from improved energy efficiency. This leads to the policy recommendation of raising energy prices through either carbon taxation or emissions trading schemes. Price increases will induce substitution and technical change , but their impact on total factor productivity and economic growth remains disputed (Jorgensen, 1984; Sorrell and Dimitropoulos, 2007c). This leads to the second proposition, discussed below.
2. The contribution of energy to productivity improvements and economic growth has been greatly underestimated
Many of the arguments in favour of Jevons Paradox focus on the source of productivity improvements and the relationship between energy consumption and economic growth. Orthodox and ecological economics provide very different perspectives on this question with correspondingly different conclusions on the potential for decoupling.
Orthodox economic models imply that the economy is a closed system within which goods are produced by capital and labour and exchanged between consumers and firms. While such models can be extended to include natural resources, ecosystem services and wastes, these remain secondary concerns at best. Economic growth is assumed to derive from a combination of increased capital and labour inputs, changes in the quality of those inputs (e.g. better educated workers) and technical change (Barro and Sala-I-Martin, 1995; Jones, 2001). Both increases in energy inputs and improvements in energy productivity are assumed to make only a minor contribution to economic growth, largely because energy accounts for only a small share (typically <5%) of total input costs. It is also assumed that capital and labour will substitute for energy should it become more expensive. From this perspective, improvements in energy efficiency are unlikely to have a significant impact on overall productivity, so the corresponding rebound effects should be relatively small. Hence, there seems to be no reason why energy consumption could not be substantially decoupled from economic growth.
Ecological economists consider that the orthodox models ignore how economic activity is sustained by flows of high quality energy and materials which are then returned to the environment in the form of waste and low temperature heat. The system is driven by solar energy, both directly and embodied in fossil fuels, and since energy cannot be produced or recycled it forms the primary input into economic production. In contrast, labour and capital represent intermediate inputs since they cannot be produced or maintained without energy. So far from being a secondary concern, energy becomes the main focus of attention.
Ecological economists claim that the massive improvements in labour productivity over the last century have largely been achieved by providing workers with increasing quantities of high quality energy, both directly and indirectly as embodied in capital equipment and technology . . .
Ecological economists also claim that the indirect energy consumption associated with capital and labour (e.g. the energy required to manufacture thermal insulation) limits the extent to which they can substitute for energy in economic production (Stern, 1997). The energy embodied in capital goods is commonly overlooked by studies that estimate energy-saving potentials at the level of individual sectors and then aggregate the results to economy as a whole. Furthermore, many energy-economic models assume a greater potential for substitution that is allowed for by physical laws (Daly, 1997). Hence, from an ecological perspective, the potential for decoupling energy consumption from economic growth appears more limited (Table 1).
The paper provides considerable discussion and gives empirical support for the ecological perspective. This section concludes:
In sum, orthodox analysis implies that rebound effects are small, improvements in energy productivity make a relatively small contribution to economic growth and decoupling is both feasible and cheap. In contrast, the ecological perspective suggests that rebound effects are large, improvements in energy productivity make an important contribution to economic growth and decoupling is both difficult and expensive. While the empirical evidence remains equivocal, the ecological perspective highlights some important blind spots within orthodox theory that are reflected in the design of economic models used to underpin climate policy. If this perspective is correct, both the potential for and continued reliance upon decoupling needs to be questioned.
3. The pursuit of improved efficiency needs to be complemented by an ethic of sufficiency
The key idea here is sufficiency, defined by Princen (2005) as a social organising principle that builds upon established notions such as restraint and moderation to provide rules for guiding collective behaviour. The primary objective is to respect ecological constraints, although most authors also emphasise the social and psychological benefits to be obtained from consuming less.
While Princen (2005) cites examples of sufficiency being put into practice by communities and organisations, most authors focus on the implications for individuals. They argue that ‘downshifting’ can both lower environmental impacts and improve quality of life, notably by reducing stress and allowing more leisure time. This argument is supported by an increasing number of studies which show that reported levels of happiness are not increasing in line with income in developed countries (Blanchflower and Oswald, 2004; Easterlin, 2001). As Binswanger (2006) observes:
“…the economies of developed countries turn into big treadmills where people try to walk faster and faster in order to reach a higher level of happiness but in fact never get beyond their current position. On average, happiness always stays the same, no matter how fast people are walking on the treadmills”.
It is possible that an ethic of sufficiency could provide a means of escaping from such treadmills while at the same time contributing to environmental sustainability.
The section concludes:
A successful ‘sufficiency strategy’ will reduce the demand for energy and other resources, thereby lowering prices and encouraging increased demand by others which will partly offset the energy and resource savings. While this ‘sufficiency rebound’ could improve equity in the consumption of resources, it will nevertheless reduce the environmental benefits of the sufficiency measures. But since the global ‘ecological footprint’ already exceeds sustainable levels in many areas the global consumption of resources needs to shrink in absolute terms (Rockström, et al., 2009). To achieve this and to effectively address problems such as climate change, will require collective agreement on ambitious, binding and progressively more stringent targets at both the national and international level.
4. Sustainability is incompatible with continued economic growth in rich countries
The preceding arguments highlight a conflict between reducing energy consumption in absolute terms whiles the same continuing to grow the economy. Recognising the importance of rebound effects and the role of energy in driving economic growth therefore re-opens the debate about limits to growth. This debate is long-standing and multifaceted, but a key point is that the goal of economic development should not be to maximise GDP but to improve human well-being and quality of life . . .
Table 2 compares this emerging ‘green’ perspective on economic development with the orthodox model. . .
Over the long term, continued economic growth can only be reconciled with environmental sustainability if implausibly large improvements in energy efficiency can be achieved. This point is easy to demonstrate with the I=P*A*T equation, which represents total environmental impact (I) as the product of population (P), affluence or income level (A) and technological performance or efficiency (T) (Ehrlich and Holdren, 1971). In the case of climate change, I could represent total carbon emissions, A GDP per capita and T carbon emissions per unit of GDP (itself a product of energy consumption per unit of GDP and carbon emissions per unit of energy consumption). The decoupling strategy seeks reductions in T that will more than offset the increases in P and A, thereby lowering I. . .
The required changes look even more challenging when rebound effects are considered. The I=P*A*T equation implies that the right-hand side variables are independent of one another - or at least if any dependence is sufficiently small that it can be neglected. But in practice the variables are endogenous. So while a reduction in the economy-wide emission intensity (T) may have a direct effect in lowering emissions (I), it will also encourage economic growth (A), which in turn will increase emissions. Over the long term and up to a certain level of income, rising affluence (A) encourages higher population levels (P), which will further increase emissions (I). Hence, a change in T will trigger a complex set of adjustments and the final change in emissions is likely to be lower than the IPAT identity suggests. This in turn, implies that greater changes in T will be required to achieve a particular reduction in I.
Hence, in an increasingly ‘full’ world, the goal of continued economic growth in the rich countries deserves to be questioned.
I have omitted several paragraphs of this discussion, taking about how reductions in emission would have to be vastly larger than assumed in the Stern report, to get both economic growth and 350 ppm of CO2. A direct calculation of the needed reduction in emissions would be 6.9% per year, but with the impact of Jevons' paradox, the necessary reduction in CO2 emissions would need to be much larger that 6.9% per year. This is far outside the range of anything anyone has considered.
5. A zero-growth economy is incompatible with a debt-based monetary system
An excerpt:
A purely private enterprise system can only function if companies can obtain sufficient profits which in turn requires that the selling price of goods exceeds the costs of production. This means that the selling price must exceed the spending power that has been ‘cast into circulation’ by the production process. Hence, to ensure sufficient ‘aggregate demand’ to clear the market, additional spending power is required from some other source. In a purely private enterprise system, this normally derives from investment in new productive capacity which will increase the amount or quality of goods supplied, but only after some interval. Investment therefore serves the dual role of increasing productive capacity and creating additional demand to clear the market of whatever has already been produced (Hixson, 1991). Importantly, the investment cannot be financed from savings since the resulting increase in aggregate demand would be offset by a corresponding decrease in consumption spending.
Aggregate demand is commonly expressed as the product of the amount of money in circulation and the speed with which that money circulates through the economy. Hence increases in aggregate demand require increases in the money supply or the speed of circulation or both. Increases in the money supply, in turn, lead to increases in aggregate output, the average price of goods and services or both.
The key issue is how the increase in the money supply is brought about. Governments could (and should) create the new money interest-free and spend it in to circulation in much the same way as coins and notes are created. But instead, the bulk of the money supply is created by commercial banks who print credit entries into the bank accounts of their customers in the form of interest-bearing loans. This system of ‘fractional reserve banking’ has its origins in the essentially fraudulent practices of the early goldsmiths who made ‘loans’ of a far greater quantity of gold that they actually held in their vaults. This gave them substantial profits and allowed them to increase their claims on wealth (in the form of collateral), but also served the essential function of increasing purchasing power in a growing economy. This practice gradually evolved into modern banking, with central banks imposing minimum reserve requirements and acting as a lender-of-last-resort.
A crucial consequence of this system is that most of the money in circulation only exists because either businesses or individuals have gone into debt and are paying interest on their loans. While individual loans may be repaid, the debt in aggregate can never be repaid because this would remove virtually all the money from circulation. The health of the economy is therefore entirely dependent upon the continued willingness of businesses and consumers to take out loans for either investment or consumption. Any reduction in borrowing therefore threatens to tip economies into recession.
Individual loans need to be repaid with interest, but the money required to pay this interest was not created with the original loan. While banks will recycle a large part of the interest payments in the form of wages, dividends, and investments, a portion will be retained as bank capital to underpin further loans (Binswanger, 2009). Hence, the only way that individual borrowers can pay the interest on their loans, without at the same time reducing the money supply, is if they, or other borrowers, borrow at least as much as is being removed (Douthwaite, 2000). As a result, the amount of money in circulation needs to rise each year which means that the value of goods and services bought and sold must also rise, either through inflation or higher consumption (Douthwaite, 2000). In other words, both debt and GDP must grow - with the former growing faster than the latter.
Slow or negative growth will leave firms with lower profits and unused capacity, discouraging them from investing. Less investment will means fewer loans being taken out and thus less money entering into circulation to replace that being removed through interest payments. And less money in circulation will mean that there is less available for consumers to spend, which will exacerbate the economic slowdown and cause more bankruptcies and unemployment. By such processes, the monetary system creates a structural requirement for continued growth and increased consumption.
Summary
This paper has advanced five linked and controversial propositions regarding energy consumption, economic growth and sustainability. These run counter to conventional wisdom and highlight either blind spots or taboo subjects within orthodox theory. Each raises numerous theoretical and empirical questions that deserve both detailed and critical investigation. This will take time, but that commodity is becoming increasingly scarce.
A sustainable economy needs to have much higher levels of energy and resource efficiency than exist today and policies to encourage this have a crucial role to play. But for the reasons outlined above, this is unlikely to be sufficient to meet growing environmental constraints. Instead of encouraging further growth and greater consumption, the benefits of improved efficiency need to be increasingly channelled into low carbon energy supply and improved quality of life. Quite how this can be achieved remains far from clear since a credible ‘ecological macroeconomics’ has yet to be developed. Most importantly, a crucial element of that macroeconomics - namely monetary reform - remains almost entirely overlooked. It is hoped that this paper will at least stimulate some thinking in that direction.
Excerpts from "Energy, Growth, and Sustainability: Five Propositions" by Steve Sorrel
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219 comments
Excerpts from "Energy, Growth, and Sustainability: Five Propositions" by Steve Sorrel
PDF version
219 comments
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While the report doesn't come to this conclusion, when I read the report, the first thing that comes to mind is that if climate change plans are actually successful, they will quickly crash the financial system, based on point 5. We can debate the fallout of a crash of the financial system. It would seem to me that there could be great loss of life, at least in some parts of the world, as people are no longer able to buy food, water, and essential services.
The Stern report, which most people rely on, suggested that the cost would be modest, and growth could continue, but it is based on standard economic thinking, and thus has a very optimistic view of how energy use can be decoupled from the economy.
Gail: Obviously, any plans to address climate change without incorporating peak energy are ridiculous. And vice versa. That's not news. Both the Hirsch and Stern reports are flawed in this regard, as Rob Hopkins kas pointed out.
But the growth-based financial system is doomed for many reasons. You seem to be saying that by not addressing the climate issue (or not regulating oil sands, gas fracking, etc.) we could continue BAU. I know you don't believe that, Gail, but many of your comments seem to suggest this.
It's quite clear what we need to do -- address BOTH climate & energy. And that means deconstructing the present economy step-wise before it implodes catastrophically. It's also quite clear that the national politicians (and even President Goldman-Sachs) are willing to have it go down catastrophically.
This means we need to prepare at the individual/family/community level.
I am not saying that by not addressing climate issues, we continue BAU.
It looks to me that we are likely to crash in the not too distant future, regardless of what we do. The crash is very likely to fix the climate issue, as well as dramatically reduce the population. (It will probably also fix our ocean problems, too.)
We can attempt to fix the climate issue, but that likely just moves up the date of the population crash. The effect on climate is pretty much the same, whether we make any attempt to fix climate or not, because of the two crashes are not very far apart in timing. "Pulling the rug out" in an attempt to fix climate change could act to make the downslope worse.
From the point of the view of the planet, it is hard to see that there would be any material difference in the two crashes. But from the point of view of the people who die sooner, it could make a difference.
Every year we are adding about 70 million people to the planet. If we assume the population crash will be back to some fixed number that is sustainable, every year we put off the population crash 70 more million people will die when it happens.
So would you put "die sooner" for those now living above "die more"? If we put off the crash 5 years, many will get to live 5 years longer but 350 million more will die. When we evaluate "die sooner" that includes us so it seems important, while the 350 million doesn't include us but may include relatives if we can't get our relatives to stop having babies. Regardless any person once born has to die eventually. However the unborn might well be saved that unpleasantness if the crash comes sooner rather than later.
And of course not doing anything about climate NOW means that the sustainable number in the future may well be smaller so the total deaths could be much higher with the attempt to avoid "die sooner".
Population is a third world issue. If there is not enough available food that they can import they'll starve and that'll be it.
Floridian, if we ignore climate change in order to have BAU or some approximation of BAU for a bit longer, food may well be our problem too. I think you must have very little idea of how little of a climate change it would take to disrupt BAU in the agricultural section. IMO we are overpopulated in the US as well post peak oil even if we reduce our eating to third world standards.
But my point was that Gail was saying we should not address climate change as if we do a crash comes sooner and people die sooner, and I was saying that if we let the crash come sooner less people are ever born who have to die sooner than they might have otherwise expected. Both of us we caring about people general and neither of us discriminated between categories of people (ie first world people over third world people). Sorry you have such a narrow view of the world. Things may not play out as you expect.
It is kind of like this. We should have compassion for the poor and starving in places like Haiti and Zambia, and parts of the U.S. for that matter. However, while the left hand is providing food, the right hand needs to be providing birth control pills and other actions such as female education. Just continuing to do the same things over and over again, just reacting to each crisis, just makes the problem next time even worse.
Further, the impact of a baby born in the U.S. is way bigger than a baby born in places like India. Therefore, we should not just be pointing a finger at the third world as if they are the biggest part of the problem. Think of the carbon footprint of your children and their children for several generations. Then cut your footprint to zero and you haven't accomplished very much considering the legacy footprint of all those future children.
Well, when you decide on a final date to let it happen please let me know. I know a lot of other people who would also like to know also so please don't forget us when you decide to let the crash happen.
Ron P.
Darwinian I was commenting on Gail's comment that if we choose to deal with climate then the crash might come sooner and dieoff would start sooner. That choice is not in my hands or Gail's hands either for that matter. But the attitudes of the public have some impact on what governments might do. Thus I think it is useful for those who would rather keep putting CO2 in the air than to powerdown now at least not think that they are doing it for the sake of humanity. Humanity would be best off with a planned powerdown, but per the Hirsch report it is too late for that. Since we have waited too long for a planned powerdown, I think the best result for humanity is a quick crash sooner rather than later. I can't make that happen. I can encourage people to not have false ideas that putting off the inevitable is better for humanity even if it gives certain humans a bit more time. Pretty futile I know. BAU is so seductive. But since you want me to decide on the final date I will assert it will be tomorrow. That make you happy Ron? Come on, you know I was just addressing one point that Gail made with a different way of looking at it. Gail as a TOD personnel has more power to affect the future by promising that a few more years of BAU is OK because it puts off dieoff than I do with my little comments that while those of us living might be worse off with a dieoff soon, many unborn would remain in that blissful state.
Why?
Did the financial crash of 2008 (or 1987, or 1929) result in "great loss of life"? Historically, if there is any causal connection between financial crash and population decrease (the latter happening almost always through war), then there is at least a delay between one and the other. This delay could be a decade at minimum (1929-1939) or perhaps as long as hundreds of years (the decline of the Roman Empire). Meanwhile, some financial crashes are followed by recoveries (long or short in coming) before things get violent. Meanwhile, populations sometimes increase rather than decrease in reaction to stressful times (look at Iran, or Gaza, for contemporary examples).
From a historical standpoint I think there is very little to go on in predicting a relationship between financial collapse and population reduction.
I don't think they are talking jsut about a fincial crash. The 2008 GFC has been effectively reset by fiddling the books. You can't print oil however and when the world wakes up to that particular realisation, there is going to be one god-awful scramble to hoard the remaining supplies. I'm betting that the Chines have a long range strategic plan for that just as the USA and partners have had a more overt strategy for that past decade or more. The black hole of military adventures is just going to suck exponentially more of the economy into it until the system that brings everyone their daily bread crashes and can't get restarted before many people simply starve in place, First Second and Third World alike. I imagine though that the last one will more resilience that the first two and may indeed contain the seeds of the next civilization, whatever that may be.
Did the financial crash of 2008 (or 1987, or 1929) result in "great loss of life"?
In the US - I had posted a link to a Russian site that claimed millions died in the 1930's crash.
A more interesting thought experiment is:
What will be the reaction of Nation States to the various fraud going on in markets?
You have claims of rigged morgage markets - and the products sold off to other nations. Claims of national parks no longer held by nations but instead held by 3rd parties to secure the debt. Claims of gold bars being produced by Nation States with non-gold cores.
What happens historically when trade between Nation-States stops? What did the US of A claim back in the 1970's when it appeared that trade in oil from the Middle East was under threat?
What happens if large Nation-States say "no" to paying off debt?
WAR
“It looks to me that we are likely to crash in the not too distant future, regardless of what we do. The crash is very likely to fix the climate issue, as well as dramatically reduce the population. (It will probably also fix our ocean problems, too.)”
The thought of a crash at a magnitude that would fix the climate, reduce the population, and fix the oceans could have just the opposite effect. It would probably lead to a global conflict that could ruin the oceans, throw the climate issue out the window, but it would certainly lead to a reduction in population. In the end it could lead the world into a period of chaos that could end with a worldwide Easter Island calamity. Scary stuff Gail.
hotrod
If global heating and energy scarcities continue their current trajectory, there will be great loss of life, of both human and non human species. The damage to the planet will be much greater than an economic crash scenario.
Having said that, we appear to be conducting an experiment either way we go. While I tend to gravitate towards the idea that energy use and economic growth cannot be decoupled, there is still an element of uncertainty. Maybe this uncertainty is just my inability to fully understand the issue, but nevertheless it exists.
When I super insulate, my capital requirements increase in the short run while my expenses decrease after that. Even assuming that there is a decent energy and financial return, what is the impact of the additional funds I will have available in the future on energy use? Is it possible to maintain my current level of expenditure and reduce my energy consumption. It just seems like increased efficiency will result in more funds to be used elsewhere which will ultimately result in no significant decrease in overall energy use.
But as the author say, further investigation is required.
Not necessarily. Assume you increase your home's energy efficiency 25%. Now assume that over the next 5 years heating fuel costs as a percentage of income increase 25% (not a prediction, just an example.) The possibility is that you pay the same proportion of your income to stay in the same place. It's a gamble. You would not be as far in the hole in the scenario presented (without insulating, you would face much worse choices.) The question is whether it is an optimal solution.
A hypothetical: suppose instead of "superinsulating" (we posit now that you are living in a Centrally-heated North American conventional home)you rebuilt the south-facing portion of your house (assuming sufficient solar gain potential)into a passive-solar structure, with the potential to separate it from the conventionally-heated portion of the house in the event of an energy discontinuity? Not only do you reduce your heating costs with absolute certainty and permanence (at the very least on that portion of the house), you build in a survival cell for the unexpected. (I am pondering this scenario myself. Nobody tell my wife, please...at least, not yet.) Of course, the better solution is building or rebuilding using passive solar, but like you, I live in the real world and have to be concerned about current mortgages, lifecycle costs and resale values...just throwing these concepts out there.
No one is forcing you to buy a new Camaro, vacation 3000 miles from home or own a second home. Saying "no" is always an option.
I would not be consuming anything like the examples you cite, but my question is,does it make a difference?
Sure. You're only one family, so the difference isn't big, but sure it does.
If everyone insulated, FF consumption would fall distinctly. Unless everyone took their savings and put it directly into filling oil tanks in their back yard, it would improve the situation.
Think of it this way: if everyone in the US everyone replaced their 22MPG vehicle with a Prius at 50 MPG, it would reduce gasoline consumption by about 55%, oil consumption by about 25%, and oil imports by about 50%. That's real.
Just curious, how many people who currently drive 22MPG vehicles do you supposed could actually afford to buy Priuses right now? And what kinds of global impacts would you anticipate that would have on the availability of say lithium and the price of importing it, not to mention the entire supply chain of components that go into building that many Priuses?
My friends all drive Priuses
I must make amends
Oh, Lord won't you buy me,
A hybrid, new Benz!
Apologies to Janice Joplin.
how many people who currently drive 22MPG vehicles do you supposed could actually afford to buy Priuses right now?
The average new car sold in the US is more expensive than a Prius.
Let me say it again: the Prius is cheaper than the average car.
what kinds of global impacts would you anticipate that would have on the availability of say lithium and the price of importing it,
There's plenty of lithium: see http://energyfaq.blogspot.com/2009/02/could-we-run-out-of-lithium-for-ev...
not to mention the entire supply chain of components that go into building that many Priuses?
It's not that different from the supply chain for ICE vehicles. Sure, you'd need more electric motors and fewer ICEs. Overall, not a big deal in terms of raw materials.
Now, you may be asking about the question of a fast rampup. Well, that would be a little more difficult (we might have to do some carpooling in the meantime, if we were really were serious). But, that's not the subject of the Original Post.
How will we convince people to switch to Priuses (or carpool)? Well, it's going to be one heck of a lot easier than convincing them to accept an overall stagnating or declining standard of living....
Given that only 10 million cars were sold last year, with some subsidized by the govt., and 20 times that many cars on the road, chances are that very few can actually afford a Prius today. More can afford a 10-yo Prius, when they arrive on the lot.
Given that only 10 million cars were sold last year, with some subsidized by the govt.
That was at the bottom of the recession. Sales are about 12M now, without subsidies.
20 times that many cars on the road
50% of miles driven come from cars less than 6 years old. Turnover is faster than you might think, because newer cars are driven much more than older ones.
You might want to check Toyota's site, because I think what I saw there is more representative of real life than what you claim about the cost of a Prius. The Prius is the 3rd most expensive car in Toyota's car lineup. It's starting price is nearly identical to the Camaro.
Hybrid vehicles don't make much sense, at least as currently conceived. Think about it logically: a guy in an SUV may get low mpg and really gets hurt in the wallet when gas prices rise, so he drives and spends less! i.e. consolidates trips, doesn't go out unnecessarily, which reduces his gas consumption. Whereas the guy in the Prius happily goes on driving and even decides to take a long road trip in the face of high gas prices. So the end result is that he never really has to make the tough choice not to drive. So he ends up using even more gas. So the guy in the SUV is less resilient, but that's precisely what we need to stop growing our economy and using so much gas.
The only way out of this is to have forms of transport like trains/electric cars that don't use gas. Then people can use or not use them to their hearts content without having these overall effects on the economy.
It really doesn't work that way: neither driver changes their behavior a lot when gas prices go up: the SUV driver just complains a lot.
The only way out of this is to have forms of transport like trains/electric cars that don't use gas.
I agree.
Long road trips in hybrids don't make any more sens than an ICE. The savings are negligble on the open road. Hybrids are urban cars as will electric cars be. Agree with trains/ light rail in combination with electric urban vehicles but not necessarily the large 5 people cars we are used to.
A Prius gets substantially better highway mileage than comparable conventional cars. The Chevy Volt will do even better: when you decouple the ICE from the wheels, the ICE can operate only part of the time, which is much more efficient.
With the average person's driving pattern, a Volt would only use a gallon of fuel every 230 miles - that's about 10% of the current average. In time the battery will get larger, and that % will fall. Is it worth redesigning our whole transportation system to get that last 5%? It's less than the ethanol we're producing right now...
You might want to check Toyota's site
I tend to go by Edmunds.
The Prius is the 3rd most expensive car in Toyota's car lineup
That's not including Lexus, or Toyota's trucks. Trucks still account for about 50% of new light vehicles, and they're substantially more expensive than cars.
The average new vehicle buyer can pay less, and get better mileage, by switching to a Prius.
And have many Hybrid will live longer than a ordinary car? If they only last 10 years, it is worse if you count the embedded energy.
We don't know now, Hybrid cars are not that old.
From "Sustainable Energy - without the hot air" David JC MacKay http://www.inference.phy.cam.ac.uk/withouthotair/c20/page_131.shtml
The Prius has been around for more than 10 years now, and the batteries show every sign of lasting much longer than that.
Here's the whole quote: "If electric cars require new batteries every few years, my numbers may be
underestimates. The batteries in a Prius are expected to last just 10 years, and a new set would cost £3500. Will anyone want to own a 10-year old Prius and pay that cost? It could be predicted that most Priuses will be junked at age 10 years. This is certainly a concern for all electric vehicles that have batteries. I guess I’m optimistic that, as we switch to electric vehicles, battery technology is going to improve."
So, that's much less negative than it appears at first blush.
As it happens, his optimism has already been proved correct: batteries are lasting longer, and costing much less already.
If you didn't do any of the things cited (or like them), then your personal carbon footprint will go down. Your energy use will go down.
Will it stop all the suffering in the world?
Will it reduce it a little?
Who can say?
There is no absolution at the Oil Drum (at least, not from me, though I think somebody (Rockman, maybe?) once wrote that we should sell indulgences.)
Do the best you can.
The problem with all this analysis is that you are looking at an exogenous improvement in energy efficiency (energy efficiency drops from heaven).
By exogenous I mean an improvement not motivated by a higher real price of energy. Imagine someone invents a more energy efficient technology.
According to economic analysis, a more energy efficient technology generates a positive wealth effect. That wealth effect leads to greater demand for goods and services and hence energy as an input.
But when oil prices rise sufficiently, it will trigger energy efficiency improvments that will not generate a big net wealth effect since the oil price rise will have reduced wealth.
In other words, the Jevons Paradox will run out of the steam ...
Ironically, the Jevons Paradox is a classic example of economics at work. Technological improvements improve energy efficiency and hence lower the price of energy intensive goods.
Standard economics at its best ....
Economics as rhetoric at its best. A few of us actually try to make sense of what is going on by, god forbid, doing data mining and applying variations of statistical mechanics to the problem.
Perhaps one day the people who claim understanding will give the label the US economy is now running under.
As "vulcanologists" have been lauded and encouraged by the media in trying to predict further volcanic ability, at least we can give some encouragement to study something man-made and potentially predictable.
I like the word "enthropic" or the phrase "entropic warfare".
Sorrell's argument can be falsified if it is assumed, that Generation IV nuclear technology can effectively replace the use of fossil fuels in energy production. Most Generation IV nuclear advocates point to a multipart program of replacing fossil fuel power generation technology, with advanced nuclear generation technology, substitution of electricity for fossil fuel use in transportation, the use of electrical powered technology - for example air source heat pumps, in space heating, the use of nuclear produced heat in heat driven industrial processes, or alternatively the greater use of nuclear generated electricity in industrial setting, it does not cut it to claim that the French substitution of conventional nuclear power for fossil fuel produced electricity only lead to a 1% a year in CO2 emissions. The French did not seek to extend the nuclear powered substitution of fossil fuels beyond the primary electrical market. They did not extend electrification to other economic areas, which would be required to achieve decarbonizatton goals. By ignoring the potential of Generation IV nuclear technology and expanded electrification, Sorrell has in effect set up a straw man argument. It is of course impossible to sustain economic growth without Generation IV nuclear power, and thus adjustments would require acceptance of sufficiency.
On the other hand, with the very great low cost high output energy potential of Generation IV nuclear technology, a great deal more global economic is both possible, and probably inevitable. Since developing nations like India and China, have already opted for the high growth, high energy nuclear model, Sorrell's failure to consider nuclear power is a stunning omission, that smacks of Euro-centricism. Indian nuclear planners have stated that India has set very ambitious goals for the use of Generation IV nuclear technology as part of its future energy plans. Sorrell has pulled an ideological motivated fast one by ignoring the nuclear plans of major Asian economies.
ALL work takes energy! It always has amazed me how economists (orthodox) just can't seem to grasp this.
I wrote this back in March 2008.
That's fine, as far as it goes, but follows a tendency on TOD whereby analysis is based on a variant of the "vulgar" form of the labor theory of value, where labor is replaced with energy. The core reasoning is similar: without labor (energy), there would be no output, ergo labour (energy) is the source of all value. The problem is that this does a poor job of explaining actual prices - prices are not exactly related to the embodied labor (energy). You might want to look into the neo-Ricardian (Sraffarian) system of value, a non-mainstream approach which is based on input-output matrices and adding up constraints (the price sums up to profits plus the cost of all inputs). The approach successfully solved some of the problems with the earlier Classical theory of value and has been used to construct a logical critique of the Neoclassical theory of distribution. The same critique also applies to claims based on the Ayres-Warrs frame work that energy is undervalued by a factor of 10. In addition, this system illustrates fundamental problems with how economists think about substitution of inputs in production, and suggests that the concept relies on constructing aggregate variables (capital, labour, energy) that are inconsistent with the theory itself.
I throw the following out there as bait for you to expand further on this (pointers):
Sraffa's Production of Fallacies by Means of Fallacies
I'm trying to envision a heated discussion between two economists, but I can't quite form the image in my head.
I am not sure whether the Neo-Ricardian theory is correct, but I concur that there is definitely a vulgar view of energy on this site. Too many people act as though energy is the source of all value. Labor, skills, technology, capital are viewed solely in terms of the energy they require.
You can make the counterargument that technology is the source of value since raw energy is itself is completely useless. It is only through man's inventions such as the combustion engine that we were able to harness energy.
Not to mention the potato. Great invention, that.
Not to mention the potato. Great invention, that.
Not if you were Irish in the 1840s
Economists recipe for making Potato Vodka... note they ignore energy inputs and don't even mention yeast. But please drink it responsibly...
http://www.squidoo.com/How-To-Make-Potato-Vodka
"It is only through man's inventions such as the combustion engine that we were able to harness energy."
Or, we could say that it is only through the use of raw energy that man or woman is able to stave off the unwanted advances of entropy and atrophy and remain alive, let alone invent combustion engines.
It could be that I'm missing something because I'm thinking too much from a physics/thermodynamics perspective, admittedly I have relatively little training in any type of economics, but I really can't see how you could have a vulgar enough view of energy. We literally could make NOTHING happen without it. If I come up with a way to increase the efficiency of a process at the plant at which I'm an engineer, are my skills and labor responsible? Or, was it only possible because of the roobis tea and cereal I had for breakfast that kept me nourished enough to remain alive and think clearly. In today's industrial economy, that food traveled thousands of miles using energy intensive methods. I would agrue that the natural gas that was used to make ammonia that fertilized the wheat that went into my cereal that nourished me the morning my labor and skills came up with the innovation is more the ultimate source of the new innovation than my labor and skills, since I wouldn't have been able to use my labor and skills without the natural gas that made the fertilizer that made the food.
Lorax:
That is what net energy is all about. Or if you want to get deeply into the micro of it, H.T. Odum's eMergy analysis Yes, eMergy (not a misprint). It is an energy flow chart, much like the early flow charts you studied as a kid in Richard Scary's books, such as "What Do People So All Day?"
You are not missing anything. It's economists who refruse to understand the practical results of the 2nd Law of thermodynamics on the net yield of alternate fuels and the practical results of this.
Cap'n Daddy
And while you are looking at eMergy Lorax you can go to Sourceforge and download the java program that models eMergy.
(somewhere in my profile is the link to the 1937 energy as money paper by the Technocrats)
It's because they know so much more than everyone else...though that might just be a refurbished ruse ;-)
Yes, energy is important. OTOH, the same can be said for air; metals; water; and a lot of other things to a lesser degree.
I call this the garbage-man's fallacy: during the NYC sanitation-worker's strike, the claim was heard that no worker should be paid more than the sanitation-workers, because without them the city would grind to a halt.
Just because something is essential, doesn't make it the only thing that's important, or even the most important on a day-to-day, functional level.
But Christ, it is hard for this little bunny to ignore the big Mac truck roaring down with headlights glaring.
An alternate answer to this question, at least, derives from looking purely at the changes in the global economy that have happened over the last 25-30 years, without reference to BTUs at all. Thirty years ago, when the Fed incented banks to create cheap credit, the Fed had a good idea where it would go. Lending standards for mortgages, both residential and commercial, meant it didn't go into construction; the large expenses associated with securities trading (raise your hand if you remember large odd-lot fees) meant it didn't go there; restrictions on international capital flows meant it had to pretty much stay in the US. So it went to businesses who could make a reasonable case for expanding to a conservative banker, and the borrowers had to hire domestic labor to do useful things.
All of those restrictions have disappeared, and if Dr. Bernanke were honest, he would admit that he doesn't know where the cheap credit will go after he creates it. Although the evidence from the recoveries of the last recessions in the early 1990s, the early 2000s, and now is that he should know that the place it probably won't go is into wages and salaries for workers in general.
Sorry George, but economists are quite aware that work takes energy.
The issue is whether energy is a binding constraint or not. If there is 10 trillions barrels of economically viable oil, then the constraint is not binding for the next half century or maybe the next one hundred year. In the long run we are all dead as Keynes noted.
If the Peak Oil crowd is correct (and I believe they are), then the constraint is binding in the near term, which is pratically speaking, an entirely different matter.
You can't do intelligent energy modelling without taking price into account. And there is no alternative to economics for analyzing the impact of prices on scarce goods and services.
The Jevonx paradox is best understood using standard economic analysis.
Perhaps you should tell the trophic (systems) ecologists. They are unaware that monetary price has to be taken into consideration in their models.
Sorry for the sarcasm. But the fact is that exergy is the only meaningful currency whether you are talking about trophic networks in nature or human economies. Price would be a perfectly good means of communicating value if money had a more direct relation to exergy, e.g. an energy standard based on total available energy to do work in the future, or net energy available to the economy (sans the energy sector that is modeled with EROI). Some writers prefer emergy accounting (for cost build up as indicated in my linked post above). It is an alternative but records after-the-fact uses of energy as opposed to future potential work. One suggestion is to use emergy for cost accounting as H.T. Odum and many others have suggested, and exergy calculations for monetary policy, e.g. setting the amount of money in circulation. Except for ecological and biophysical economists, the prevailing voices in economics don't even have a clue about what I just described.
It is this lack of understanding that the orthodox economists have failed to grasp and hence has led to their many mistaken predictions (I love this Krugman gem, one of the few things I think he gets straight).
exergy is the only meaningful currency whether you are talking about trophic networks in nature or human economies.
Natural systems are very, very different from human systems with extrasomatic energy. In almost all natural systems energy is very scarce. Currently humans systems have quite a surplus of extrasomatic energy, and that's highly likely to continue.
But the principles of energy flow and work are the same. Work produces wealth in the economic sense. And our so-called exosomatic energy is about to get scarce too.
And our so-called exosomatic energy is about to get scarce too.
That's where we disagree. We have an enormous amount of coal, and wind and solar (and nuclear) are relatively very easy to harvest. We will use coal before we allow economic collapse (or even a relatively modest descent).
It would be relatively easy to ramp up wind power to replace coal. Will we do it? I'm not entirely optimistic on that, but we do have the choice available to us. We will certainly make that choice rather than reduce overall energy/exergy dramatically. And...that's ok, as wind has a very light "footprint".
Nick,
You claim this is the case. But I would seriously like to know how you came to believe it. What data are you looking at that gives solid evidence that this is so? I certainly read the popular MSM stories (including the nonsense now being published in Scientific American) about this engineer or that scientist working on breakthrough technologies that will help solve the energy problem. But just when are these breakthroughs going to hit the market? I also note that most of these stories are wishful thinking by the reporters more than clear evidence that we have somehow beaten the laws of thermodynamics.
If you really want to look at data and its interpretation please study Charlie Hall's Balloon Diagram and then note particularly where wind and solar (and nuclear) map into the scheme of things. Coal? Yes, there seems to be a lot of it left and you may be right that in desperation we will turn to it to try to keep things going. But there are many technical and social problems with doing so. One of the first things that will have to be done is to figure out how to extract coal using coal or a liquid fuel derived from coal, since diesel fuels will be in short supply and are currently the primary energy source for extraction.
You really need to dig deeper and distrust any claims you read or hear in the MSM. Go to the primary literature if you want reality.
What data are you looking at that gives solid evidence that this is so?
I believe I've read most of Cutler Cleveland and Charlie Hall's reports. It's perfectly clear that wind's E-ROI is sufficiently high, with existing technology.
please study Charlie Hall's Balloon Diagram
I have, many times. If you look closely, you'll see that wind's E-ROI is well above the minimum line. More importantly, Cutler Cleveland's summary of the literature http://www.eoearth.org/article/Energy_return_on_investment_(EROI)_for_wind_energy shows that wind's E-ROI is around 19 sometime ago, with much smaller turbines. If you study his sources, you'll see that that most of the studies are quite old. If you look at the turbines used in those studies, you'll see that the turbines studied were much smaller than those in use today - look at Figure 2, and read the discussion. If you study that chart, you'll see a very clear correlation between turbine size and E-ROI. It's perfectly clear that Vesta's claim for an E-ROI of around 50 is perfectly credible.
Furthermore, it's silly to suggest that there is an important difference between an E-ROI of 20 and an E-ROI of 50. It's like miles per gallon: we're confused by the fact that we're dividing output into input, when we should be doing the reverse, and thinking in terms of net energy. An E-ROI of 20 means a net energy of 95%, while an E-ROI of 50 means a net energy of 98%: there really isn't a significant difference.
Coal? Yes, there seems to be a lot of it left...But there are many technical and social problems with doing so. One of the first things that will have to be done is to figure out how to extract coal using coal or a liquid fuel derived from coal, since diesel fuels will be in short supply and are currently the primary energy source for extraction.
CTL is perfectly feasible, but I don't think we'll actually do much of it. It makes much more sense to go to electric transportation, as discussed here: http://energyfaq.blogspot.com/2008/09/can-everything-be-electrified.html
diesel fuels will be in short supply and are currently the primary energy source for extraction
1st, electric coal mining is widely done today: Much mining, especially underground, has been electric for some time. Caterpillar manufacturs 200-ton and above mining trucks with both drives. Cat will produce mining trucks for every application—uphill, downhill, flat or extreme conditions — with electric as well as mechanical drive. Here's an electric earth moving truck. Here's an electric mobile strip mining machine, the largest tracked vehicle in the world at 13,500 tons.
2nd, diesel will be around for quite some time. Aleklett projects an 11% decline in all liquid fuels by 2030, and that decline will come out of personal transportation, not industrial/commercial activity: industrial/commercial will outbid personal transportation.
uh, wow, please don't keep repeating this. Whatever you're talking about here, it's not to be labeled 'net energy'. A net energy of 95% would be an EROEI of 1.95. An EROEI of 20 means a net energy of 19 (or 1900%) and an EROEI of 50 means a net energy of 49 (or 4900%). There's a huge difference there, that would vastly change the speed at which wind would replace other sources.
That said, I'm inclined to agree that as far as whether it makes sense to adopt wind power, the difference between 20 and 50 is not so important. ;-)
hmmm. I wonder what a good term would be for the percentage I was using. % net energy?
I can't think of anything very elegant. "net energy as percent of energy produced" is about the best I can do.
It might also be useful to turn things around and talk about "input as percent of output", which would be 5% and 2% in the above example.
Yes, I think "input as percent of output" makes sense - it highlights the relative size of the amounts.
Yes, I think "input as percent of output" makes sense - it highlights the relative size of the amounts.
Thank you for answering my question. I think I can see more clearly where you are coming from. That probably concludes our discussion.
Ah, but does what I said make sense to you? If not, why not?
We've had this kind of conversation before, and not finished. I like pursing dialogue until some kind of agreement is reached. I think we've made substantial progress - for instance, we've come to agreement on coal resource availability, and the likelihood of it being used if needed.
What the heck, let's keep on going!
George, Charles Hall's account of the potential of nuclear power was written by a poorly informed graduate student, who admitted that he had learned quite a lot from the criticism his essay received. i am not sure that Hall learned as much. I have argued that deployment of nuclear power can be drastically scaled up by factory manufacture of small generation IV breeder reactors, and that enough thorium is recoverable with acceptable ERoEI to power provide all of the human population of Earth with all of the energy it requires for until solar evolution makes the Earth uninhabitable.
I was OK with your comment right up to this point:
That is hyperbole. It makes it hard to then take the rest seriously.
I have no idea what Charlie Hall may or may not have learned about nuclear. It is true that the Balloon diagram is dated and I believe he may be working on a newer version with more recent EROI numbers. We never discussed nuclear in the mix. I myself am for the development you refer to but not as a means of taking care of all of humanity's needs forever (how many humans did you have in mind?)
If you have a well worked out paper on the EROI and practical feasibility of these reactors, then publish and let it be counted in the development of a new diagram. If, on the other hand, you are merely stating an opinion then please don't get angry just because others who do publish in the primary literature don't take your word for it.
George, what makes you think that my statement about recoverable thorium resources is a hyperbola? Do you know what are the recoverable thorium resource and how efficiently those resources can be used in Generation IV reactors? My complaint against Charles Hall was that he discounted nuclear power before being well informed about its potential. You seem far to willing to do the same.
In fact there are an estimated 120 trillion tons of thorium in the earths crust. and it can be recovered with favorable EroEI at well below average crustal concentration levels. Phillip Morrison, Harrison Brown, and Alvin Weinberg established all of this a long time ago.
http://nucleargreen.blogspot.com/2010/02/will-we-run-out-of-uranium.html
http://www.theoildrum.com/node/6116#comment-578474
OK, let me make it clearer. This is the hyperbole:
I have no knowledge of thorium recoverability or much else about nuclear. Thanks for the links but they don't appear to be scientific papers published in journals.
george where do you find a hyperboly. 1500 tons of Thorium will more than supply the United States with all of its energy needs for a year. Assume that global energy demand per person is the same is the same as that of the United States. That would require 45000 tons of thorium. In a Billion years that will equal 45 trillion tons about a third of the thorium in the earths crust. Remember most crustal thorium is recoverable with a favorable ERoEI. But in another billion years a very large amount of thorium with be introduced into the earth's crust by volcanic processes. Thus it seems plausible that the global thorium supply will never fail.
In almost all natural systems energy is very scarce.
Natural systems are powered (mostly) by the same amount of photons hitting the planet. photon -> plants -> animal muscle -> work has a very poor conversion rate. photon -> PV -> watts -> work is a far better conversion rate.
Currently humans systems have quite a surplus of extrasomatic energy, and that's highly likely to continue.
But as we are fond of saying at TOD - Untill it doesn't.
Untill it doesn't
Unless it does. :)
We really need to have a more detailed discussion than that....
George,
I completely agree with you on this post.
I just can't believe it isn't slap in the face obvious to everyone!!
Keep at it because I am convinced you are on the right track and the future will prove that Energy/Exergy/emergy as the basis for economics
is the only true economics.
We are at the cusp of a major paradigm change.
I just wish there was some way that I could get involved as an agent for this inevitable and absolutely necessary change.
We need to clean house and fire all the current policy makers and their advisers.
They are destroying any chance that we may have left to turn the tide and re-align with nature.
We need the University of Noesis...........Yesterday.
By the way have you ever heard of the Astronaut Edgar Mitchell?
Thanks Porge.
I have indeed heard of him! I've even met him at a conference on anticipatory computing in Liege Belgium back in the late 90s, the year of the total eclipse in Europe. He gave a keynote talk. I think that is where I first heard the term noesis used to describe knowledge as both process and stuff (my paper on prototypical intelligence and how I had developed a robot brain to demonstrate it can be found here).
I had previously seen the use of noos (Greek - mind) in Teilhard de Chardin's term "noosphere". I liked Mitchell's thoughts about consciousness, but the psychic stuff was a bit much for me. We took a field trip to the European Space Center and watched him harness up to the moon walking simulator and show us how it was done! What a blast.
The University of Noesis, for those who don't know, is my dream of what education could be if we weren't all so enamored with getting a job and making money as the point of school.
Yes, I often point out the first law of thermodynamics when talking with people who think energy conservation will take care of everything. We must have useful energy to do WORK.
Pure speculation here, but I believe that the economy behaves as if it has a great deal of inertia. The basis of that inertia is debt. Debt service drives much of the economy. Those debt obligations tie us to the status quo so long as those obligations persist. Reforming the monetary system away from debt/credit to value based currency would be a big help, but how is that to be accomplished when debt obligations are already in place? How are those contracts supposed to be honored or abrogated? In the political space, is it reasonable to expect the most powerful lobby in Washington to suddenly fall on their swords?
It seems more likely to me that changes to fundamentals like the kind of monetary systems we use will come after a collapse of the existing institutions. The current players must first be removed from the game. There will likely be a great deal of luck involved in what fills the vacuum.
Could Mr. Sorrel please tell the engineers and scientists where to start on increasing energy efficiency? The last time I checked we have just about squeezed the last percent out of the cycles.
"The pursuit of improved efficiency needs to be complemented by an ethic of ‘sufficiency’."
I take it that "sufficiency" is the new code word for voluntary reduction in energy consumption. IOW folks will voluntarially reduce their life styles for the benefit of mankind as a whole. And I suppose if voluntary sufficiently isn't embraced universally then we can go to gov't enforced sufficiency. And given how the political system is working today I suppose we should expect some portions of society to be forced to be more sufficient (more rationing) then others. Sorta like we're all equal...just some are more equal then others.
I think 'voluntary' sufficiency will only occur when we re-engage with local communities. It can only happen then the dominant moral ethic is one of managing resources for the 'good of society'. This was part of the morality of many Polynesian societies, and has traditionally been associated with native american tribes. It is (or was recently) a sub-text in Indian morality, when high population density has learned to cope with resource limits and frequent famines for millennia.
It is a morality which is now derided in the world dominant culture, which treats Malthusians as deluded misanthropes, and is the opposite of the 'American Dream'.
It will require the suppression of the rights of the individual in favour of the needs of the 'family', 'tribe' , 'nation', 'mankind', 'planet' - take your pick.
It won't happen this side of collapse.
I'm a misanthropic Malthusian.
:)
Ah, yes, the tired old Myth of the Noble Savage. But I guess the chiefs who ordered the building of the Stone Heads were unconstrained by this particular noble "morality". Which might even lead a person to wonder if anyone was ever seriously constrained by it, except possibly in the eyes of a few wishfully thinking "anthropologists" seeing the world as a Walt Disney movie.
PaulS,Easter Island was only one of hundreds of Pacific island communities and the only one that I know of which indulged in an orgy of monument building.
While the notion of the Noble Savage may be a myth our present system has many mythical notions some of which you,no doubt,are a part.
Many of us already engage in voluntary sufficiency. Unfortunately, we don't have time for the hundreds of millions of others to get on board. Of course, we also have those engaging in involuntary insufficiency, which will increase in numbers after the collapse.
Does that mean some of us get real sugar while the rest of us get "Equal" (aspartame, dextrose and maltodextrin) artificial sweetener? The real question is what is the EROEI of "Equal"
I think some of us are going to want to get "Even"...
If I understand your point (ie, "cycle" as in Carnot), there are still gross inefficiencies in the overall system. Typical household lighting is terribly inefficient at watts to lumens. Typical domestic heating is inefficient not because the furnace is inefficient, but because the heat is lost so quickly to the outside because of poor insulating properties. Electric transportation from wind turbine to wheels is much more efficient than almost anything that includes some sort of internal or external combustion. Land use policies in many areas almost guarantee that large concentrations of jobs will be located where there is no mass transit.
The engineering/science for most of those improvements has already been done. The hard parts remaining are in public policy and economics. To focus on the land use example: (1) economics because the creator of the large tech campus on the outskirts does not pay for the externalities of transportation; and (2) public policy because enforcing those externalities is hard to do politically.
Comment 5 is complete nonsense. Only central banks create money. This is then loaned out to commercial banks. A commercial bank which tries to utilize the methods described will soon be bankrupt. No central bank would ever relegate the creation of money to commercial banks; unless one wants to lump in the Federal Reserve banks which are a rather lame attempt to avoid the reality of having a central bank system while actually having a de facto one.
The piece is riddled with similar 'deficiencies' which I'll leave to those with more time on their hands to delineate. I have serious work to do.
Apparently you're not familiar with fractional reserve banking. Currency and moeny aren't the same thing.
I suggest you read up a bit more on how the financial system works. If I get a mortgage to buy a house I get the money from the bank. The money I get has come from depositors. However, the credit in the depositors account does not change. In other words the bank tells the depositor that they have so much money, but they have actually given it to me. So you have a larger amount of money in circulation. The pretend money in the depositors bank balance and the money I have borrowed. If I cannot pay back my loan and the value of my property is too low, the money in the depositors bank account evaporates.
This is exactly the reason the banks would be bankrupt if the government had not stepped in, lending them money at 0.5% interest and borrowing it back for 5%, with the banks keeping the difference.
**Only central banks create money** Not sure where you get your info from, but commercial banks create money all the time. It's called fractional reserve banking, you can learn about it in any basic econ book. Basically, if I'm a local bank, and you deposit $10 at my branch, and I loan out $9, then I have created money. Because, you still have $10 in your name, and some borrower now has $9. The money supply has increased, money has been created. Hope this helps. Luke
Petrosaurus, Have a read or listen to this guy
http://www.financialsense.com/Experts/2006/Griffin.html
Petrosaurus,
WRONG
Read this.
It is called the reserve multiplier and it is the 90% (10% reserve requirement) that is lent by one bank being deposited in another bank that then again lends out 90% etc. etc.
It creates about 10 times the amount of credit in the system that the fed puts in.
It is blatant fraud.
http://www.rayservers.com/images/ModernMoneyMechanics.pdf
I see a lot of people beat me to the punch but this is the official Chicago Federal reserve publication.
It's not fraud. It's an efficient use of the underlying reserves (the funds held on deposit at the Fed).
It creates inflation which is theft by another definition.
Funds? They hit a few keys on a computer keyboard and voila new money?
"The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements"
And when the removal of minimum reserve happens - what then?
(and I note that you are not saying/backing up the original claim of 'only central banks can create' is correct.)
Actually, you're wrong. Commercial banks use a fractional reserve system. In essence, their loans increase the money supply. It is very simply. A bank when it makes a loan credits money to an account. It is creating money.
Afternoon Roderick.
Have you done the Crash Courseby Chris Martenson?
I do believe that most of us here on the Oil Drum are influenced by it.
Would you mind critiquing it for us?
I've reviewed it. It's pretty well written, but many of it's crucial points are unrealistic. In this case, I didn't see anything to show that economic growth is necessary to our system.
17c says "Distributing ever-larger shares of money during a period of constant growth is a pleasant job that enjoys broad political and popular support. Operating in a world of declining energy is an utterly new prospect for every single political and financial institution. It makes the science of meeting unlimited demand with limited resources even trickier, if not impossible, if the system is not up to the task."
This could be said about communism, fascism or capitalism. It's not very specific to "our system".
Again, it says "if the system is not up to the task."
Well, is it or isn't it? If not, why not?
Unless you are kidding.
You can read the Chicago Federal Reserves Publication on the Fractional Reserve system.
Google: Modern Money Mechanics.
It is all in there and it is official.
Look at my post a few above this one and there is a link.
"This could be said about communism, fascism or capitalism. It's not very specific to "our system".
Posted by Nick
Actually, I think Nick has a point here. It's not just OUR system that requires growth, its ALL the political and economic systems, ALL the ideologies and isms that we have been experimenting with (at least on any scale) since the beginning of the Industrial Revolution.
So how do we devise political and economic systems to function when the economic growth is gone and replaced by contraction? We can't just "go back" to the previous arrangements, at least not in any near-term time frame because those were agrarian societies, and while we are likely to return to this state, it will likely take a century or two. Big ag and the rest of the physical and political infrastructure of the modern era won't just disappear and be replaced with pre-industrial institutions, economies and structures overnight.
So the question to me is not so much where we will ultimately end up after a few centuries, but how we will get there, and how much chaos will have to be endured while the unwinding of our current arrangements transpires.
Antoinetta III
A3,
Energy/resource based economics a la Hubbert etc.
It's not clear to me that Capitalism can't limp along showing "profits" even as real productive growth and energy consumption fall. Inflation can do the work. It probably can be controlled well enough by central banks to keep from getting out of hand. It's still a competitive game. The tread mill just isn't going "up" any longer.
I just recently wrote a blog essay on The Growth Conundrum which looks at some of the statistics over at Gapminder.org. It seems on-topic with this post.
http://squashpractice.wordpress.com/2010/04/17/the-growth-conundrum/
It doesn't take too long for people to catch on the inflation is to be expected in the future, so one needs even higher interest rates. This quickly becomes too expensive. I don't think it works.
Even now there is expected inflation. Hence, contracts are made with COLAs and interest rates are set with inflation in mind. And society functions. The advantage of a slightly higher base inflation rate is that the economy can contract and we can still have positive interest rates. Right now interest rates are running into the zero bound, so all kinds of other tricks have to be used to prevent an all-out deflationary episode. Allowing interest rates to drop significantly below the expected rate of inflation lets central banks have more control over our fiat money supply during downturns. During the good times, general inflation means that we all have to keep pedaling to stay afloat.
There are a few prominent economists (Krugman) that think the target inflation rate should be higher.
Many folks say that capitalism won't work when growth stops. I'm not so sure. One's relative position in the economy is still dependent upon the same work and innovation incentives. Growth in nominal terms never ceases. Just the real value of what we have slowly disintegrates over time - much like the real world around us could during a post-peak collapse.
I am sadly coming around to Jay Hanson's view that our collective behavior is primarily governed by biologial laws and that we will grow exponentially until we can't at which point we will crash.
Have been studying history looking for any evidence that humans can voluntarily override our biological program. Have not found any yet.
If anyone can point me to some history that proves we are capable of collective decisions to limit today in favor of tomorrow I would be grateful.
Well I suppose Jared Diamond in Collapse gives some examples of societies recognising the problem of diachronic competition. But the problem is that I can't recall JD stating this worked in a democracy.
James Lovelock gave and interesting interview about the dilemma -
http://www.guardian.co.uk/science/2010/mar/29/james-lovelock-climate-change
Lovelock didn't appear to say humans were too stupid, but suppose it makes better copy.
While I don't like the idea of die off, I think the probabilities are very high, exactly when or how is unclear. It would be good to adopt the precautionary principle. China adopted a one child policy, could you imagine that working in developed countries?!
Another one on ecological denial
http://www.greatchange.org/ov-catton,denial.html
Thanks.
My son said he learned in school last week that China has revoked its one child policy. I have not been able to confirm.
Yes, well, that's because it's false, officially. On the other hand, China has never strongly enforced the one child policy, and I think has weakened enforcement in more recent times. And that may amount to the same thing.
I disagree. He gives examples in Australia and Montana. (Also Tikopia is small enough to probably be considered democratic in some way.) Granted, these examples are all somewhat weak.
I am a fan of Lovelock.
It is not that we are stupid but..
It is my opinion that democracies have too many balances of power built in to be effective.
On the other hand dictatorship is hardly attractive.
I conclude that if the situation is too be optimised some power will have to be relenquished in order for an educated and benevolent el Presedente to bring in eMergy.
Western Constitutions are so yesterday, designed for conditions of growth.
(Please don't reply that one man's benevolent autocrat is another man's dictator. A bad situation will need to be optimised. Survival has it's price.)
Lovelock is a loon.
He says climate change will be an unparalleled disaster, and in the same breath condemns wind power because it will ruin the view in the English countryside!!
----------------------
Please don't reply that one man's benevolent autocrat is another man's dictator. A bad situation will need to be
That can go the way of Bush (who disregarded his promises and good public policy) just as easily.
I think we just need more democracy - less private campaign finance (aka legalized bribery), more involvement by volunteers. The internet is a key element: information is flowing much more freely than it used to.
It's a big mistake to go in the direction of autocracy, just because we feel urgency. Autocracy almost always means inferior decision making.
Democracies make much better decisions, overall. Authoritarian systems make decisions within a very small circle of people. Democracies draw from a much wider pool. That makes democratic decision making slower, but better.
I believe that's correct.
The biological prime directive for all living things seems very much to be; "Maximize utilization of all available resources".
I haven't seen anything to make me believe that this isn't the prime motivator for human populations. The only difference I can see is that humans are intellectually clever enough to create mythologies to help them rationalize their execution of the prime directive. This is very useful for suppressing altruistic impulses which might otherwise impinge on the urge to exploit all resources. Altruism seems to mostly only operate in humans at the level of individuals and families/small groups.
Basically human beings are a super predator, plague species. At least on the level of large mammal, plants/trees, etc. The pattern, repeated over and over, is that we use up resources until we starve/collapse, then we move onto other areas to exploit. This time the game is up, though.
We would never actually be able to eliminate all life on earth i.e. prokaryotes, algae unless the burning of fossil fuels and release of carbon into the atmosphere causes our planet to transform into Venus.
I suspect though that our planet and even life itself is considerably more resilient in the short term. As for human beings, who knows. We are clever and may yet continue to survive some more billions of years until the solar system fries.
Didn't people sacrifice collectively for the world war II war effort? Too bad we don't see our current problems as sufficiently threatening.
When for every $1 spent on carbon reduction, $1 goes to banksters to line their pockets, for every $10 spent, $3 goes to the actual work and $7 is "overhead" - why should I be in favor of that?
When the monied interests seem to have control of the governments - what's my incentive?
And if there was a 'we must all pull together' pitch - does it look like the people at the top are sacrificing also?
Kye Bay,
Unless you are pretty old, I have been looking longer than you have, and I haven't found any evidence of tthat sort either.
There is no reason to expect any to be found, as there has been no evolutionary pressure to cause us to develop such collective decision making on the grand scale.
It's us and them , folks, that's the way the brain and intellect have evolved.
In the earlier days, "us" would have been only those people we could recognize personally as members of our own group by thier appearance and speech.
We nowadays have a wider set of cues , and can recognize others we haven't met as in group members even if they look and speak differently, as Americans, or Germans , etc.
But a mechanism to make us look at all the people in the world as "us" simply doesn't exist in a workable form; we have been competing withe EACH OTHER too long."Them" is part of the hardwiring , and we cannot relate to the in group without an outgroup, anymore than we can understand such a term as "up" without the opposite term "down".
evidence of tthat sort
How about vegetarianism?
I would argue that vegetarianism is a choice to see animals as "us", as part of our family, rather than "them", or prey.
I'd say that "us vs them" is indeed hardwired, but that the definition of "us" is very flexible indeed. I don't see why "them" can't be reduced to the insect world (which outnumbers us anyway). Heck, Jainists even define insects as part of "us" - I'd say for Jainists, "them" is limited to inanimate objects.
Hi Nick,
Of course the predisposition to look at EVERYBODY, EVEN ANIMALS, as in group members exists in SOME individuals.
The problem is that it exists in only a few individuals in a strong form,and the "rules" of the evolutionary game will keep it that way.
Let us suppose that I am hungry and homeless, and show up at YOUR door.Now let's be truthful.
How long can I, a stranger, sleep on your sofa and eat with your family?
How long can your baby sister do the same?
How long can your own kid who might become an unemployable and destitute cripple live with you?
It's us and them , folks.George has the references, I'm just an amatuer.
Of course the predisposition to look at EVERYBODY, EVEN ANIMALS, as in group members exists in SOME individuals. - The problem is that it exists in only a few individuals in a strong form,and the "rules" of the evolutionary game will keep it that way.
Ah, we don't really know that. Early devotees of evolutionary biology just assumed that people were inherently selfish in a very simple way, and it turns out that's clearly not true: people have empathy and altruism hard-wired into them.
I wouldn't make rash any assumptions about our genetics, and how evolution shapes us.
On one hand you are right, but I Have had homeless people sleep here and get fed here. All of them left of there own accord, they are still welcome as far as I am concerned.
Right now I have been housing 2 homeless people for close to 2 years, they live somewhere else, but they are still being housed by me, as I pay the rent and utilities, they get food stamps for eating.
But you are right most people within a certain mindset won't put up with it, and I can't count the number of times people have told me to kick these two people out onto the street, and use my money for me, instead. Several people I know ask me if I have any money then laugh and say "No, never mind, you give it all away to the homeless!" Some of them mean well by the comment, but others have a bit of disdan in their voices when they say it.
I have even given the shirt off my back to someone, and it was a favorite of mine.
I try to practice what I preach, but I am not prefect, and I know that the average person that I know wouldn't do some of the things that I do. Most people tell me that I'll just get taken advantage of by people, yeah that might happen, and has happened, but I trudge on.
Charles,
BioWebScape designs for a better fed future.
Just to bolster your points Oldfarmermac:
David Berreby ("Us and Them: Understanding you tribal mind") makes a good argument that the dichotomous thinking creating categories of us and them is hard wired into the brain. In most animals this takes the form of either specific dichotomies or conspecific/tribal (or heard) dichotomies. But in humans there is an extra dimension. Humans are much more fluid and adaptive in terms of what they are willing to learn as constituting the attributes of the we and the them. Moreover, the dichotomies are much more context sensitive than in any other species. Someone you would consider a "them" because they worked at a competitor firm you regard as a "we" because they belong to the same church.
This is the greater malleability of our brains and our capacity to learn more rules than we have hard coded in the neural (limbic) wiring. We still 'feel' the we/they classification but who we admit as we and who we exclude as being them is quite flexible.
The same is true for the number of people who fit into our various tribal memberships. Otherwise nationalism wouldn't be conceivable. But the geographic scope of this phenomenon probably has its limits as well. It may not (some evidence has been brought out) be possible to have a truly global scope for we'ness because that would mean no them's to contrast with. It seems we always have to have a potential bad guy other. Also we seem to have a tendency to bifurcate tribes (Americans = Democrats + Republicans + Independents + some other minor parties + a bunch of don't-give-a-s***s).
The only hope humanity has for overcoming this natural built in tendency is if the evolution of the brain leads to a higher capacity for the prefrontal cortices (PFC) to "override" or down-modulate the limbic centers that generate this need for dichotomy. This was our evolutionary history, the prefrontal cortex has taken over the role of interpreter of environmental context from the the reptilian centers (e.g. the amygdala involved in fear responses) and intercedes to apply learned knowledge to control the more instinctive reactions we might otherwise have (c.f. Elkhonon Goldberg's "The New Executive Brain"). This is also now thought to be the basis for the evolution of altruism and moral intuitions (c.f. Woodward, J. & Allman, J., "Moral Intuition: Its Neural Substrates and Normative Significance", J Physiol Paris 101(4-6):179-202). So it is conceivable that a further trend in the evolution of the PFC could lead to better modulation of limbic drives and reactions. Speculative, yes, but conceivable based on what we know about brain evolution so far.
The problem looks like we won't have the time to let natural, group or sexual selection do their jobs. Too bad. We might have been angels.
It may not (some evidence has been brought out) be possible to have a truly global scope for we'ness
That's a crucial question - do you happen to have a link?
See my note above.
I'll look to see if I can find something. But more likely it was in the primary sources realm which I get access to on-line by virtue of having a university IP address. The book I mentioned gives some evidence for the limits by virtue of some natural tendency for groups to split or bifurcate as being evidence of a built-in "need" for otherness.
Another note: There aren't too many Janists are there! We know that there are some people with more developed prefontal cortex than most others. Maybe those are able to transcend we-them. But that isn't going to be the majority of humanity, let alone all of the species.
The book I mentioned gives some evidence for the limits by virtue of some natural tendency for groups to split or bifurcate as being evidence of a built-in "need" for otherness.
The question is, how strong is that need compared to the ability of education, culture etc to override it? For instance, the urge to reproduce is pretty strong, and yet culture has overridden it in most of the world to the extent that fertility levels are below replacement.
There aren't too many Janists are there! We know that there are some people with more developed prefontal cortex than most others.
I think it's unlikely that Jainists are genetically different from the rest of us. Furthermore, there are a lot of vegetarians.
This is a fascinating area of study. It's one of the reasons I abhor the "organic"/conventional dichotomy. It falsely divides agricultural workers into in-groups and out-groups.
One of the great social psychology experiments of all time, which I learned about through a Steven Pinker book, sheds some awesome light on this US/THEM hard-wiring of the brain:
The Robbers Cave Experiment.
This is the original meaning of the expression "playing with fire."
Heck, you don't need a complex experiment to find this out.
I discovered as a kid what any summer-camp director (and, I suspect, any counter-revolutionary) already knows well: just divide the kids up on the first day, label them blues and grays, and set them at each others' throats. They'll be so busy fighting each other, that your job will be easy.
Thank you George.
It's been some time since I researched this area simply for my own edification as an interested layman, and I could not have come up with the references easily.
I would give a considerable portion of my rather limited income for a pass word such as yours which would enable me to directly access the better publications and journals directly.
Hi Mac,
One of your favorite guys:
This is too serious for the random walk of evolution.
We could easily evolve for smaller, less energy demanding brains.
Neanderthal had a bigger brain.
(Please don't reply with the brain/bodyweight tosh.
Brains don't cool the blood.
They earn their energy with thought.)
We need to seize control of our genes.
Genetic modification for humans.
"We are gods. We had better get good at it." Brand
My daughter's suggestion.
A BIG spine for extra brain and strength.
I have a post up right now on Question Everything regarding the evolution of a prefrontal patch labeled Brodmann area 10, the frontopolar cap of the brain and the most recent bit to undergo relative (and substantial) expansion (it is much smaller proportionally in other primates). It appears that BA10 has a key role in organizing all of the cognitive processes we associate with being human. It has reciprocal connections with every other patch of PFC and even with limbic centers. It appears to be the final convergence zone for all of our conscious and subconscious thinking.
I am speculating that even a small boost during the fetal development of BA10 would be sufficient to advance a trend in brain evolution that started with early primates and got highly accelerated in Homo sapiens, namely the climb to sapience; more prosaically, the advent of the basis of what we would call wisdom.
You know for the sake of arguement this might all be part of the process, us reaching the breaking point in our systems, overshoot, and species dieoff being part of the whole system that earth has been under for oh so long. The needed push is us reaching the breaking point and seeing our demise just over the next rise.
We'll die off and those that are left will jump ahead to the new standard because they were forced there by US.
Just another step in the human evolving to the next higher stage.
Charles,
BioWebScape designs for a better fed future.
As a Christian I don't think when I die, I'll go become an angel. But I also don't think here on earth it is possible to be prefect, I am just a missfit like everyone else.
It seems to me our success as a plague species was enabled by the following chain of dependencies:
brain -> complex language -> cumulating technology -> non-renewable energy exploitation -> overshoot
Underpinning the accumulation of technology was our ability to cooperate in tribes and societies. This in turn required some "glue" to override biological tendencies to compete in destructive ways with members of your tribe. The glue that created "us" and "them" was religion. The fact that all known societies have had a religion is evidence for strong selection pressures in favor of religion.
So I come back to an idea I have floated here in the past that perhaps the only path to sustainability for our species is to somehow create a new global religion grounded in the god of ecology with "us" being earth and "them" being the cold empty space we drift in.
Hi Kye,
I started reading "Dark Green Religion" - but it's a bit to "spiritual" to hold my interest. Perhaps others have finished the book and can comment.
I think this is a good article, but I note with interest that the author still talks about the effects of Jevons' paradox in a positive sense. I think that most readers here will agree that Jevons' paradox will be running in reverse most of the time (ie. higher resource prices reducing use and assisting conservation efforts), because our conservation efforts will not be reducing consumption as fast as production is declining.
"ie. higher resource prices reducing use and assisting conservation efforts"
Isnt this demand destruction?
Jevons paradox is the reduction of energy prices because of technological savings made.
Maybe saying that Jevons paradox will run in reverse is not quite correct.
With growing energy use, Jevons paradox permits the growth to accelerate by increasing the value gained from the energy used.
Assuming a world in which energy use is declining due to resource constraints, people will be giving up things that use energy all the time. While initially Jevons paradox may lead to some people not having to give up unnecessary items, eventually all the gains from efficiency will be diverted into preventing the societies infrastructure from collapsing (or into the military!).
In a real sense Jevons paradox may work in reverse as reduced demand for items, and therefore reduced production numbers, reduce the efficiency of making those parts.
It's certainly true that Jevon's paradox can't magically result in resource being used that doesn't exist. But the point that efficiency doesn't reduce total use still holds. Thus the hope that installing compact fluorescent light bulbs will reduce global carbon emissions (for example) is probably a false hope. Someone else will simply find it more affordable to use that energy, and the overall curve of resource consumption will probably not be affected much.
I should add that this doesn't mean we all shouldn't bother with individual efficiency. First of all, it saves you money. (Repeat, it saves you money.) Secondly, it results in more equitable distribution of resources. That in turn means greater social resiliency, which means a greater ability to handle crisis without violent implosion.
Thus the hope that installing compact fluorescent light bulbs will reduce global carbon emissions (for example) is probably a false hope. Someone else will simply find it more affordable to use that energy, and the overall curve of resource consumption will probably not be affected much.
Not in the US. Electricity from coal has a very flat cost curve: use less and the price won't go down significantly. Heck, the price is likely to go up, because overhead costs still have to be paid, and they'll be allocated to fewer KWHs.
No, not in the US. Somewhere else. China is on the same planet that we are. Honestly, I'm not sure why you bothered making that comment.
No, not in the US. Somewhere else. China is on the same planet that we are.
Not really. The two electricity markets aren't connected. Falling coal consumption in the US won't cause an increase in consumption in China. Even if China runs out of coal, it's not all that likely that large amounts of US coal will go to China (and it's highly unlikely that the US will ever use up all of it's coal (heck, Alaska has between 2 and 5 trillion tons), so it still wouldn't relate to the question at hand).
I'm not sure why you bothered making that comment.
Because I didn't want you, or readers, to be discouraged: conserving on electricity by buying a CFL will have a direct effect on CO2, without any bounceback elsewhere.
You may be thinking of oil, where the situation is much more complex.
First of all, let's back up. I made a very general statement, in response to Christopher-R, about how Jevon's paradox does not reverse itself just because resource production hits a ceiling. Does what you said really have any bearing on that statement, especially at a global level?
I will grant you the following: Jevon's paradox is not about carbon emissions, it's about utility to human beings. So if using less electricity in this country means less carbon emissions but a marginal drop in price, then perhaps carbon emissions can be reduced without Jevon's counteracting.
On the other hand, I think that's irrelevant, because I simply think you're wrong about no bounceback. If Americans spend less on electricity, they have more money to spend on plastic widgets made in China, where coal powers the factories. The economic history of the last 15 years more or less refutes your assertions here. Our energy use per GDP has only become "more efficient" because we count the selling of the plastic crap in our GDP, but we don't count the coal needed to make the plastic widgets in our energy use. Does the bounceback happen immediately? I didn't say it did, I said "the overall curve of resource consumption will probably not be affected much." By which I mean, I don't think that if everyone in the US switched to CFLs, that this would delay global peak coal by as much as 10 years.
I think you ought to temper that attitude with the recognition that reducing carbon emissions requires much more drastic measures than CFLs. Giving people false hope is much better than discouraging them.
As far as that CFL goes: yes, saving a $1 of electricity will reduce CO2 20x as much as buying $1 of Chinese manufactured goods would increase it- but that's just a detail.
Far more important: the problem isn't that an individual act of efficiency isn't effective - the problem is that we need most people to take such action on most of their power consumption. As a practical matter, we need to take action on a national level. Of course, if the majority of the population was in agreement with that...it would happen.
If the US were to take dramatic action, it's much more likely that other countries like China would too, so this is much larger than the sum of our individual actions.
Source?
I don't think that individual action vs. collective action is exactly the issue here either (although something like a carbon tax, as an intervention in the market, might act against Jevon's). The issue is really that, say, using FFs more efficiently in developed countries isn't going to stop developing countries from using more FFs. Or, say, that using FFs more efficiently in existing neighborhoods isn't going to stop new neighborhoods from being built. Nick, you know perfectly well that in the US we have used energy more efficiently in the past decade or more, and yet total use has still gone up because of more people. I believe the same is true of the whole world. That is Jevon's in action. Until everyone in the world uses energy equally, or until population growth stops (neither of which is going to happen immanently) Jevon's still has a huge potential to act, even if a huge country like the US makes huge changes. There are both practical and moral obstacles to expecting it not to. You can't just ignore it.
Where this leaves us with respect to carbon emissions is that efficiency is not so much good when it comes to reducing them. (I should not forget to mention again at this point that there are other very good reasons to be efficient, see above.) The only real way to get around this is to switch to non-CO2 producing energy technologies.
saving a $1 of electricity will reduce CO2 20x as much as buying $1 of Chinese manufactured goods - Source?
Good question. It's been my personal observation that energy costs are roughly 5% of manufacturing costs, but I haven't seen good published analyses. Anybody seen that? (knocks on microphone) Anyone out there?
OTOH, I think it's obvious that a $1 manufactured item will have much less energy in it than $1 worth of an energy commodity.
total use has still gone up because of more people. I believe the same is true of the whole world.
I agree. The truth is, no one has made efficiency a really, really high priority.
That is Jevon's in action.
Well, it's cheap energy in action, it's true. That's not quite the same as Jevon's: the truth is, consumption just isn't that sensitive to price in any direction as long as price is very low.
Where this leaves us with respect to carbon emissions is that efficiency is not so much good when it comes to reducing them....The only real way to get around this is to switch to non-CO2 producing energy technologies.
I certainly agree. Really, improved efficiency and substitution with non-CO2 tech are both useful, substitution being more so. The point is, with both: we need to act. The solutions are available, technically. They're here now.
Why don't we? I suppose because of the invisibility of external costs: energy really costs us much more than the price tag: climate change, resource wars, economic volatility (how many trillions were wiped out by the recent recession, caused in part, indirectly, by oil?). In part due to resistance from those who will lose jobs, careers and investments in a change to new forms of economic activity.
The first step: pricing in those external costs.
Jaggedben, you are being overly dramatic. If I don't use my air conditioner and just sweat it out for April and May, I will save a lot of energy. That does not mean that someone in China will automatically use that energy that I saved. (I live in Florida.)
The coal may eventually be burnt but not this year. It is not a tit for tat, energy not used here will not be automatically used by China or in some other country. That is rather absurd absurd to assume that it would be. Honestly, I'm not sure why you bothered to make such a comment.
I realize that my personal efforts will not save much coal but the combined savings of a lot of people will result in a lot of coal being saved. That coal will not automatically be shipped to China.
Ron P.
Perhaps I am. Let's get back to the point: does Jevon's paradox 'reverse itself' just because resource production hits a ceiling, as Christopher-R contended above?
You're confused. Jevon's paradox is about improvements in energy efficiency leading to greater energy consumption.
But the source of the energy improvement was an exogenous technological advance, not a higher real price of energy.
A higher real price of energy will induce conservation and reduce energy demand.
The key is that the market or the State must impose higher energy prices.
Why am I confused? I didn't say anything that runs counter to any of this. If people are reducing energy use with efficient light bulbs or appliances because they want to be "green", that is essentially an exogenous technological advance.
So Jevons paradox is a stronger positive feedback loop on resource use than most people expected. Thats not such a suprise to a few people on this list though. I was suspicious of the official figures which put rebound effect on energy use between 15 and 40% after comming across an example in my course work.
A couple living in an average house in Oxford had eco-renevated the place as part of a move to a lower carbon lifestyle. After telling us about all the energy efficiency savings they had made they then said that because they fly to Canada every couple of years to see relatives the flights more than outweigh the CO2 savings made from the house renovations. I suggested that maybe if they hadnt made the renovations, saving energy and providing cash in the bank then maybe they wouldnt have been able to afford the flights to Canada and therefore their carbon footprint would have been lower.
This March, U.S. gasoline consumption was at an all time high for March despite a weak economy, high gas prices, and some efficiency improvements like hybrids over the last few years. And this is just the U.S. The impact of all the talk about peak oil and global heating is zero or less. This may not prove Jevons' paradox but certainly doesn't do anything to refute it.
Deleted.
If you are right we are in serious trouble.
If two and a half years of global depression doesn't convince people to stop driving as much, stop spending so much, and stop having so many kids, what will?
What's wrong with people?
There are several reasons that this might be a one off'r. Not something that would really have held true having this not been tied to other events.
One, April 2010 has had the highest pollen index of the last several years, in fact might be the greatest in over a decade.
Two, Horrible weather due to massive snows and also record floods, all leading people to get out when they could.
The above two examples are tied to an overall trend away from normal, and this is tied into climate change, which changed things in our world, so much so that spring was early and driving increased due to it.
Though Jevon's Paradox might hold true, it might not always hold.
What happens later down the path of resource decline? The energy that He saw in his life, and which formed his Paradox, will fail to be there, and the Paradox will be at the end of the energy rope. For now perhaps the concept works, but only if we have ever increasing amounts of energy.
On a side note, the whole system is full of odd things happening, when it is all said and done we might all be living in a world where we have high seas, no ice and tropical climes everywhere, with a lot less people and everyone getting about in boats, as they are safer and can travel the waterways easier than cars.
Charles,
prepare for the worst, pray for the best. Good canoe builders.
The achievement of much higher levels of energy efficiency is essential if carbon emissions are to be radically reduced. But given the difficulties highlighted above, this may not be sufficient to meet ambitious carbon targets.
This is a crucial assumption, and it appears to be unfounded. Instead of much higher levels of energy efficiency, we can substitute high-quality low-impact wind power for fossil fuels.
How expensive is the wind power needed to eliminate coal generation in the US??
We could build enough wind capacity to replace coal for $400 billion. Here's how I came up with that number:
We generate about 50% of our electricity from coal, which amounts to an average of 220 gigawatts. Wind, on average, produces power at 30% of it nameplate rating, so we'd need about 733GW of wind. Wind costs about $2/W, so that would cost about $1,466 billion. Transmission might raise that about 10%, to about $1,613 billion.
Now, roughly 50% of coal plants need to be replaced in the next 20 years, so about 50% of the $1.6T coal replacement investment is needed anyway; new coal plants are just as expensive per KWH as wind, so that half, or $800B of the investment can be eliminated from our considerations.
Coal plants cost about $.035/KWH to fuel and operate, which is about 50% of the cost of wind. That's an expense that we'll have either way, so we can eliminate 50% of the remainder, which is about $400B: all told, we can discount the wind investment by 75%!
Wind's intermittency is often raised as another source of cost: I address that here.
--------
So, that gives us a cost of roughly $400B, or $40B per year for 10 years. That's a small % of US manufacturing, and a very small % of GDP.
A bargain, in either cost or energy terms.
Wind power is stochatic. When do you simulations, you find that wind power cannot exceed a certain percentage of overall power generation without destabilizing the system. See the DEA for further analysis.
Wind power is stochatic.
Do you mean stochastic? I agree. I'd note that's not the same as random - it's a bit better, actually, as a stochastic process has rather more structure than a truly random process.
When do you simulations, you find that wind power cannot exceed a certain percentage of overall power generation without destabilizing the system.
First, you seem to be assuming that the percentage limit is low. I haven't seen any simulations that gave that result. I've only seen simulations that found that levels much higher than those we see today are possible (such as 30%). That's very different from finding that higher levels are not possible.
Now, will such a simulation find a limit somewhere? Sure, but the limits will depend on the assumptions in your simulation. If you assume that 100% of wind power must be used, as has the practice in Europe for reasons related to their regulatory regime, those limits will be rather smaller. OTOH, if you can throw away a few peaks at a very small cost in lost power, you'll find a rather higher limit.
I'd estimate that around 50% (60% at the most) would be the sensible limit to wind power penetration. The rest would be solar, nuclear, hydro, biomass, wave, geothermal, etc.
See the DEA for further analysis.
I'm not sure how the Drug Enforcement Administration will help us...
Now, if you have in mind the DOE, I can show you some studies, like this one that examines 30% market share, and finds it feasible: http://www.nrel.gov/wind/systemsintegration/ewits.html
This one's for Beck.
Oil discovery is stochastic.
The possibility of nuclear catastrophe is stochastic.
Black swans are stochastic.
The sun rising and setting each day is deterministic.
The last point is key.
????
Are you saying you like solar?
Day in, day out through eternity it has generated our fossil fuels, and we can depend on it in the future.
Sounds good.
I think wind has the cost edge at the moment, but I'm sure solar will be the big kahuna in the long run.
Good post.
Don't forget the cost in lives.
Both forfeit and wasted down in the black depths.
Don't forget the cost in lives.
Lives cost about $2000. Isn't that the going rate for 'whoops someone you are a blood relation to is dead' payment overseas in the war on terror?
Good post
Thanks!
Don't forget the cost in lives.
Absolutely! I think if you include all of the costs (pollution, occupational health, resource wars, economic volatility, etc, etc), fossil fuels have never had the high E-ROI that many people think...
HI Nick,
I agree in general terms that Wind Power *could in principle* provide what the United States needs as an energy source. I don't believe that this the lowest cost solution with the smallest environment impact. It doesn't really matter as it won't happen (100% pure wind). It's a bit like debating how many angles could dance on a pinhead. There will be a variety of different energy sources employed after Oil is firmly on the other side of the peak. I personally believe that Nuclear Power will play a big role post-2020. Maybe not so much in the USA.
I guess we'll see :-)
There will be a variety of different energy sources employed after Oil is firmly on the other side of the peak.
I agree - I don't think it would make sense for wind to provide more than 60% of KWHs.
I don't believe that this the lowest cost solution with the smallest environment impact.
Technically, I suspect you're right. As a practical matter, I think widespread fear of nuclear power (due in part to justifiable concerns about it's link to nuclear weapons) will put it in 2nd or 3rd place after wind power.
I personally believe that Nuclear Power will play a big role post-2020. Maybe not so much in the USA
I think that's very likely.
Given the need to have peak and the need for transmission from the places that wind happens compared to where you can place a Coal generating plant, I would up your numbers to about $60 billion per year.
Wyoming would be a great place for wind farms, Off shore would also be great in several locations. But they both need transmission lines to be built and that will cost you extra.
What ever happened to the talk about making all the new lightbulbs either CFLs Fls or LEDs? Have we talked about this in the past?
We have CFL and FL in over 50% of our fixtures, but not all of them. My dad does not like the burn rate and light output of CFL for reading lights. We have several lamps that we aren't going to replace just so we can save electricity, I can see my mom fussing for weeks just because of it. Me I'd have a few of the newer generation of flat LEDs they are talking about, or just use sunlight and not read at night, or use a lot of candles. Regular old bulbs are in 8 fixtures in the house, 3 of which are in the living room. The heat of the 100 watt bulb in the laundry room keeps plants warm in the winter.
I just wish I could harness the wind off the hillsides around here, and had the money for a solar set up, I'd love to go off grid.
Charles,
BioWebScape designs for a better fed future.
Given the need to have peak and the need for transmission from the places that wind happens compared to where you can place a Coal generating plant, I would up your numbers to about $60 billion per year. Wyoming would be a great place for wind farms, Off shore would also be great in several locations. But they both need transmission lines to be built and that will cost you extra.
Transmission doesn't cost as much as you might think. Large projects in CA and TX have added about 10% for long-distance transmission. Here are estimates for transmission costs in Texas ($.26/nameplate W): http://www.cnbc.com/id/25708335
OK, people, is Nick right about wind? I, and ever so many others, say he is.
So, editors, please put a little bar on the side saying "Wind works, doesn't cost much, we have plenty of it, so quit trying to brush it off as inconsequential relative to oil."
And, I would add. "Same for solar"--solar thermal, that is, not that whimpy PV stuff-(ahem).
Thanks, Nick.
You're welcome!
I agree - it would be nice to come to a consensus that wind and thermal solar are perfectly viable, and even pretty competitive with fossil fuels.
Wind and solar energy are not solutions to peak oil, they are solutions to AGW. Nick has never provided a scholarly source for any of his postings related to EVs, wind, or solar.
Wind and solar energy are not solutions to peak oil, they are solutions to AGW.
In the short term, that's absolutely true. In fact, I've been promoting that idea lately. HEV/EREV/EVs are the ticket to deal with PO.
Nick has never provided a scholarly source for any of his postings related to EVs, wind, or solar.
Sure I have, many times. I'm not sure what aspect of "EVs, wind, or solar" you're concerned about, so it's hard to know where to start - it's a big subject. Could you be more specific?
Here's a pretty good one to start: the DOE/NREL verifies the feasibility of a 30% market share for wind power in the US. http://www.nrel.gov/wind/systemsintegration/ewits.html
As far as EVs go, the fact that the Nissan Leaf is out there at an affordable price reduces the need for "scholarly" support. Heck, the Prius has a full electric drive-train - I don't think we need a paper published in a peer-reviewed journal to accept that it works.
A true mass EV build out is questionable due to a number of rare earth elements utilized in their manufacture. I do not consider the Nissan Leaf to be anything more than a novelty at this point in time.
a number of rare earth elements utilized in their manufacture
Could you be more specific?? The only Leaf ingredient for which questions have been raised (that I'm aware of) is lithium. That's not a rare earth, and it's not a problem. See here (with lots of scholarly sources): http://energyfaq.blogspot.com/2009/02/could-we-run-out-of-lithium-for-ev...
The Prius uses lanthanum, but the Leaf doesn't, and the next generation EVs (Leaf, Volt, etc) generally don't.
I still remain unconvinced the lithium can be extracted at a great enough rate, not that there isn't enough lithium on the planet.
Your sources did not appear to be what I'd normally consider scholarly. Here is a link to an article on the prospects of lithium batteries from a scholarly source. I don't know if you have access to this database or not.
http://www.sciencedirect.com/science/article/B6TH1-4XR5N45-1/2/080bb64e1...
The issues with lithium are clearly stated.
"Scaling up the chemistry of common lithium ion batteries in view of their application for sustainable vehicles, or for renewable energy plants, is problematic. Barriers of various natures still prevent this important step. They include safety, cycle life, cost, wide temperature operational range and materials availability. On the other hand, the intrinsic benefit of lithium technology and its use in these key evolving markets, have triggered worldwide efforts to solve these problems in order to place the lithium ion battery in a dominant position in both EV and REP sectors.
It is now universally accepted that breakthroughs in lithium battery technology require innovative chemistries for both the electrode and the electrolyte components. The goal is to identify materials having performances higher than those offered by the anode and the cathode used in the common versions. Indeed, the chemistry of lithium ion batteries has not changed consistently since their introduction in the market in the early nineties. As already mentioned, most production still relies on a graphite anode and a lithium cobalt oxide cathode, separated by a liquid solution of a lithium salt, e.g. LiPF6, in an organic solvent mixture, e.g. EC–DMC. Generally, the performance of any device directly depends on the properties of the materials on which it is formed; this is also true for lithium batteries. Thus, steps ahead for rechargeable lithium batteries can only be achieved by a breakthrough in electrode and electrolyte materials.
Accordingly, worldwide research and development efforts are directed toward the replacement of the present battery components with materials having higher performance in terms of energy, power, cost, reliability, lifetime and safety.
The approaches to reach this goal are focused along two main directions:
(1) the replacement of graphite and of lithium cobalt oxide with alternative, higher capacity, lower cost anode and cathode materials;
(2) the replacement of the organic carbonate liquid electrolyte solutions with safer and more reliable electrolyte systems."
"Changes in the chemistry, like those so far exploited for the development of batteries for road transportation, are insufficient. Improvements in environmental sustainability and energy content are mandatory and these can only be obtained by renewing the lithium battery concept, e.g. by passing from an insertion process to a conversion process. Freed from the constraints of insertion electrodes, in which the electrochemical process is limited to one electron per formula unit, conversion processes, which allow from two to six electron transfers per formula unit, make possible to reach high capacity, i.e. even above 1000 mAh g−1. Important examples of this evolution are already in progress with the use of lithium-air and lithium-sulfur batteries [76]. However, key issues are still to be resolved and it must be kept in mind that the solution for the remaining challenges will require joint efforts from a range of interdisciplinary studies and their success will crucially depend on the efficiency of exchange of ideas and results."
This article seems to be quite out of date. For instance, it claims that most automotive application li-ion batteries still use cobalt - I believe this is incorrect. Similarly, it raises concerns which have been addressed by now. It makes the briefest of references to safety, cycle life, cost, wide temperature operational range and materials availability. As it happens, safety, cycle life, and wide temperature operational range problems have been solved, and cost is well on it's way to being solved, largely by moving to large-format batteries, eliminating that expensive cobalt, and achieving manufacturing economies of scale.
It doesn't say anything substantive about materials availability.
The article mostly discusses energy density problems. There's no question that more research is desirable, and that batteries with better technical characteristics would be great to have. OTOH, current li-ion, while not perfect, is good enough, as demonstrated by it's use by GM and Nissan, as well as a host of other major manufacturers.
Journal of Power Sources
Volume 195, Issue 9, 1 May 2010, Pages 2419-2430
The article is not out of date, please cite your sources in regards to the article being incorrect. I have only posted two sections of the article, there is far more to it than what I have posted.
Yes, I noticed the date. That doesn't mean the information is current. OTOH, I didn't try to read the article, as I haven't subscribed. If you'd like to send it to me on a fair-use basis, I'd be delighted to read it.
You might want to research these things yourself, rather than just trying to find articles with a negative tone. I suspect if you read this article carefully, you'd find that it doesn't really support your original concern about resource adequacy...
Scholarly source? How about simple common sense? I have started successful tech based businesses on the 19th idea out of 20 bad ones. Then, when the widget is flying in space, some guy comes along with a "scholarly" study, all full of standard academic math and elegantly phrased conclusions, that says "these are the real reasons why what this crazy inventor did a decade ago actually works". As if it wouldn't if he hadn't. Ha!
Once upon a time, long ago and not all that far away, I got an F in math at a famous engineering school because I simply wrote down the answer to a problem on the final instead of going thru all the tedious procedures. I complained to the TA that the answer was obvious and I didn't need the procedure. He said "Ya didn't show that you had learned the procedure, and so the F stays".
I then went down that long soulless hallway to the office of the SUMG (short ugly math genius) who took one glance at the problem and sneered "don't bother me with such trivia, the answer is obviously--". So I went back to the TA with this, and he answered "no procedure, no grade."
So---I look at wind turbines and think "sure this thing works, and it has a energy return of maybe 20 to 40 as is, and there are obvious ways to make it better. That's good enough, so let's go for it".
Not a solution to peak oil? Gimme electricity and I and my pals with give you anything you want- like for example- transportation.
While banks will recycle a large part of the interest payments in the form of wages, dividends, and investments, a portion will be retained as bank capital to underpin further loans (Binswanger, 2009). Hence, the only way that individual borrowers can pay the interest on their loans, without at the same time reducing the money supply, is if they, or other borrowers, borrow at least as much as is being removed (Douthwaite, 2000). As a result, the amount of money in circulation needs to rise each year which means that the value of goods and services bought and sold must also rise, either through inflation or higher consumption (Douthwaite, 2000). In other words, both debt and GDP must grow - with the former growing faster than the latter.
That doesn't quite make sense to me. If the economy isn't growing, why would banks need to issue further loans? Wouldn't the volume of loans stay stable, and a small interest payment be recycled as wages, dividends, and investments?
Binswanger (2009) actually allows for the possibility that banks recycle all interest payments in his model, in which case debt can be repaid without growth. However, he never really develops this case, instead generating simulations based on contemporary banking practices, which imply that the current system needs an annual growth rate of .45%.
I'm not going to pretend I truly understand this...certainly not well enough to debate it in technical terms, anyway. However, as a lay person, it seems to me that this is no proof that a "purely private enterprise system" requires growth via "investment in new productive capacity." Can't the "additional spending power" required to support a company simply be created by other companies in a mutually supportive manner? Perhaps someone can explain to me what exactly is meant by the jargon, in plainer English.
I'm not going to pretend I truly understand this
That's often a sign that something doesn't actually make sense - don't assume that it's your failure to understand.
A purely private enterprise system can only function if companies can obtain sufficient profits which in turn requires that the selling price of goods exceeds the costs of production.
This is incorrect. Income above the level of production costs are needed for investment into plant and equipment just to keep production at the same level, but those investments are also costs. Income above the level of all costs aren't really needed. They may be considered an incentive for risk taking and entrepreneurial activity - things unlikely to be needed in a zero-growth world.
Now if growth is expected, then additional investment is needed, but not otherwise. This paragraph turns things upside down.
Well, thanks. :-) What I meant is that I'm not too familiar with terms like 'cast in circulation' and 'aggregate demand.'
Right, that's what my intuition tells me too. But beyond that, I don't understand what having a "purely private enterprise system" has to do with anything here. Seems to me that private enterprise has historically weathered economic contraction just fine in innumerable cases. That is to say, a private enterprise system often manages to survive even when income doesn't cover the cost of production. I might add that if he had said 'capitalism' instead of 'private enterprise' I might find the whole thing more sensible, as I think that growth is rather necessary to the former, but not the latter.
I think the whole concept being presented is "woolly", meaning not really well thought out.
There's no question that a decentralized market economy is more volatile and chaotic than a command economy. Still, this whole idea that our economy must keep growing or collapse, as sharks are reputed to have to keep swimming or die, doesn't really make sense.
Right, and a man can manage to survive without food or water... for a few days. And a private enterprise system can manage to survive for a year or two when income does not cover the cost of production. Then he goes bankrupt. In the long run income must cover the cost of production... and a little more... Without just a little more the owner of the private enterprise would starve.
And if he borrowed the money to start his little enterprise, the bank will own it after a couple of years if he generates no profit to pay the interest.
But without borrowed money the enterprise would likely never have existed. Without the availability of credit only a tiny fraction of people will have enough money to start a business.
Ron P.
Is "he" a system? LOL Try reading what I actually said. The failure of a business, or many businesses, does not always result in a collapse of a private enterprise system.
No, that is not what you said at all. Perhaps that is what you meant to say but that is not what you said. What you said, or wrote:
You said nothing about several businesses within the system, you said a system, meaning the whole system. If you had added to the sentence above "That is to say, a private enterprise system often manages to survive even when income doesn't cover the cost of production of one or more of the businesses within the system. But of course you neglected to do that.
Anyway, always some businesses succeed while others fail. That goes without saying. But if the whole system fails to make enough profit to cover the cost of production then the system fails.
Ron P.
No, it doesn't fail (necessarily). If that were true then every time an economy based on private enterprise went into a recession, there would be a communist revolution (or some other type of end to private enterprise). But historically that's just not true. The system usually survives even if it's forced to shrink.
It is incorrect only if you assume the owner of the private enterprise system will risk his capital for no reward. If his sales only match his costs then he gets nothing for risking his capital. And this is assuming that the money for building, equipment and labor and other costs is not borrowed. If that is the case then he must sell his produced goods for more than the cost to produce just to pay the interest.
All in all, I would say that the statement is correct because no one would be dumb enough to invest and risk losing their capital for no reward.
Ron P.
Again, you're not thinking outside the box.
We're talking about a very, very different economy than we have today. This would be a static, no-growth kind of thing. Very boring, very low risk.
If that is the case then he must sell his produced goods for more than the cost to produce just to pay the interest.
The interest is one of the costs to produce. Think of it as a service fee to pay to maintain a static stock of loans, with stable principal amounts.
Operating loans are considered as one of the cost of production but loans for real estate loans and capital equipment loans are not. Growth, at least growth of capital, is one of the requirements for a debt based society. That is what the debate is all about.
Also, the population is always growing, or at least always has up until now. Growth in the economy is necessary to give all the new people new jobs.
And then there is technology. You know, the thing that the Luddites rebelled against because it put them out of work. That is what technology does. Hundreds of thousands of people are busy developing labor saving technology. And if they are successful their labor saving devices will do just that, put laborers out of work. The economy must then grow to give these people jobs.
Ron P.
Operating loans are considered as one of the cost of production but loans for real estate loans and capital equipment loans are not.
I'm not sure what you're referring to. Real estate developers certainly have to include their interest costs as a cost of doing business. So do manufacturers.
Growth, at least growth of capital, is one of the requirements for a debt based society. That is what the debate is all about.
And, again, that's not been shown.
Also, the population is always growing, or at least always has up until now.
Fertility levels are below replacement for most of the world, including the US (though the difference is small in the US, it's true).
And if they are successful their labor saving devices will do just that, put laborers out of work. The economy must then grow to give these people jobs.
Yes, and that's not the kind of world being discussed here. You're talking about the kind of world that I think we'll have for quite a while: dynamic, growing, getting better in most ways. That's not what others have in mind...
Fertility doesn't matter when you continue to import foreigners. Extrapolation of present trends shows growth indefinitely.
Fertility doesn't matter when you continue to import foreigners.
You might want to be more specific. Do you mean Mexicans moving to the US, for instance? That means expanding our "system" to include the US and Mexico. As it turns out, Mexican fertility is dropping like a rock, and is right around replacement level right now. OTOH, in the last year or two emigration to the US has slowed down dramatically due to changing job conditions.
Extrapolation of present trends shows growth indefinitely.
Actually, they don't: check the UN projections.
U.S. census figures for the U.S. show it increasing indefinitely. The UN shows world population peaking in 2050 however.
U.S. census figures for the U.S. show it increasing indefinitely.
Interesting. The US Census makes projections? Do you have a link?
Certainly Nick, http://www.census.gov/population/projections/nation/summary/np-t1.txt
Interesting. I looked around the Census website - here's the latest.
http://www.census.gov/population/www/projections/summarytables.html
Take a look at this: http://www.census.gov/prod/2008pubs/p20-558.pdf
We see that the overall fertility rate is 1.9 (page 1). That means that growth is due to immigration, and declining death rates. Interestingly, they project growth even without immigration, which says death rates are declining pretty fast. Of course, that can't last forever...
I think it assumes birth rates are static, ie hispanic of any race continuing with a 3.0 fertility rate plus continued immigration. It looks like we are headed towards a train wreck, there is no way your current living standards can be maintained with energy sources such as solar, wind, and even a modest nuclear energy build out.
You should read it: they discuss those assumptions in detail. For instance, hispanic fertility rates drop very quickly by the 2nd generation.
there is no way your current living standards can be maintained with energy sources such as solar, wind, and even a modest nuclear energy build out.
Energy won't be the limitation: those sources can provide far more than we'll ever use.
How will energy not be a serious limitation? How much oil do you expect to be available for export come 2040? It's not like solar or wind energy is easily stored.
How much oil do you expect to be available for export come 2040?
Perhaps half of what's available now. KSA and Russia won't stop exporting...
OTOH, the US would be better off if it eliminated all oil imports by then. Domestic production probably won't decline much by then - with luck we'll be exporting again.
It's not like solar or wind energy is easily stored.
Sure it is, with batteries. Of course, that applies mostly to transportation.
Then you assume BAU, how will alternative energy in the form of electricity for EVs make up for the population projections?
I'm not sure what you're asking. Are you asking if wind power etc can ramp up to provide enough power?
The answer would be yes. Let me know more specifically what you're asking...
In the meantime, perhaps this will help:
""The amount of wind power that theoretically could be generated in the United States tripled in the newest assessment of the nation’s wind resources.
Current wind technology deployed in nonenvironmentally protected areas could generate 37,000,000 gigawatt-hours of electricity per year, according to the new analysis conducted by the National Renewable Energy Laboratory and consulting firm AWS Truewind. The last comprehensive estimate came out in 1993, when Pacific Northwest National Laboratory pegged the wind energy potential of the United States at 10,777,000 gigawatt-hours.
Both numbers are greater than the 3,000,000 gigawatt-hours of electricity currently consumed by Americans each year. Wind turbines generated just 52,000 gigawatt-hours in 2008, the last year for which annual statistics are available.
Though new and better data was used to create the assessment, the big jump in potential generation reflects technological change in wind machines more than fundamental new knowledge about our nation’s windscape.
Wind speed generally increases with height, and most wind turbines are taller than they used to be, standing at about 250 feet (80 meters) instead of 165 feet (50 meters). Turbines are now larger, more powerful and better than the old designs that were used to calculate previous estimates.
“Now we can develop areas that in [previous decades] wouldn’t have been deemed developable,” said Michael Brower, chief technology offier with AWS Truewind, which carried out the assessment. “It’s like oil reserves. They tend to go up not because there is more oil in the ground but because the technology for accessing the oil gets better.” "
http://www.wired.com/wiredscience/2010/02/better-wind-resource-maps/
Hi Nick,
You seem to imply that population growth is not major concern because of declining birth/fertility rates - I think adding a couple of billion people to the planet in the next 40 years or so could well be a problem.
Declining birth rates do not automatically imply declining population - although the rate-of-change of population "growth rate" may slow down. It is the growth rate that really determines if our population is decreasing or not. And more importantly, is the recognition that the carrying capacity of the planet is "X" billion, not the 9 or 10 billion being projected in the next 50 years. I'm not sure what "X" is - but, I would SWAG it is much less than 9+ billion.
For growth rate discussion please see http://en.wikipedia.org/wiki/Population_growth
They define "growth rate" = crude birth rate - crude death rate + net immigration rate
As an example if we use a recent US population figure of 307 million and a growth rate of approximately 1% then in 50 years we have approx 500 million people in the US. You can see the population and growth rate figures at http://flagcounter.com/factbook/us
You will also note that the US birth rate is appros 14 per K. which is below the world average of 19.95 per - world average and other data can be seen at:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/20...
Here are the birth rate - growth rate numbers mentioned in some of the discussion above (from flag counter):
US 14 - .975%
Ireland 14.33 - 1.12%
Mexico 20.04 - 1.13%
Brazil 18.72 - 1.2%
France 12.73 - .55%
Poland 10.01 - -0.47% (neg)
China 13.71 - .66%
Note that it takes a negative number (like Poland) to get a declining population.
For comparison the CIA website puts Niger at the top of the birth rate list with approx 50 births and 3.68% growth rate. At the bottom of the birth rate list they show Hong Kong with 7.37 births and still a growth rate of .5%
More data of this type can be seen at http://chartsbin.com/view/xr6
Also, without explicit national policies for population growth issues, I suspect that most projections are a crap shoot - in poor economic times people may start having more children to assist them in old age.
You seem to imply that population growth is not major concern because of declining birth/fertility rates - I think adding a couple of billion people to the planet in the next 40 years or so could well be a problem.
The original comment by Darwinian, to which I replied, suggested that growth in an economy will always be necessary, in a kind of theoretical, long-term way of thinking.
If fertility rates are below replacement, that means that population growth eventually has to stop - does that make sense to you?
Japan, Russia and Italy have already started to see population declines - a lot of others will inevitably follow.
in poor economic times people may start having more children to assist them in old age
That applies in an agricultural society (where kids are tied to the land, and their parents), not an urban one. Furthermore, in hard times the normal human response is to have fewer children - that's what happened in the US during the Great Depression.
--------------------------------------
Now, you're raising another issue: what about population overshoot?
Well, that's a really good question. I'd answer that most of our "footprint" (the kind of thing people analyze when asking this question) is energy related: PO and AGW chiefly among them. Those things have solutions, should we choose to use them. Similarly, species extinction, water and soil issues are solvable, should we decide to do so.
I think we will solve PO relatively easily, and my guess is that we won't do much about AGW (or in time). Water and soil issues we'll solve as we meet them - not cleanly or nicely, but we will solve them. Species extinction - probably not. What will those failures for AGW and extinction mean? Who knows - we'll see the results of that experiment in a little while. I suspect we'll muddle through with human populations intact, but enjoying themselves a lot less than they would otherwise...
Hi Nick,
Perhaps you only skimmed my comment - I thought I explained why fertility rate numbers do not change the fact that most projections for actual growth rate of human population will result in another 2+ billion on our planet in the next 40 or 50 years. I find it hard to see how 9+ billion people in that time frame will not result in some fairly serious consequences. As to your prediction that a "lot of others" will experience declining population - seems that might be speculation. The real question is if "eventually" is soon enough?
Russia has a hefty growth rate decline at -0.47% but some neighboring countries are the reverse. Japan and Italy have very small declines while the US (.98%), Mexico (1.13%) and Brazil (1.20%) more than compensate - see http://chartsbin.com/view/xr6 This is why the world population is still growing.
My experiences from many years of designing automated business systems is that most people don't "decide to do so" until they fully understand the problem and the need to act. I see hugh amounts of disinformation in the MSM that discourage recognition of the real problems. I have found that effective solutions usually require a good understanding of the problem - both symptoms and causes. The next step before implementing solutions is to agree on goals and objectives. I see little that encourages me in this regard.
I suspect I could gather up a whole list of great solutions (many from you) - but, I would wager a good cup of coffee that the majority of people on the planet would dismiss the list as utter nonsense - because they simply can't internalize the real importance of the problems and get beyond various stages of denial.
Perhaps you only skimmed my comment
Not at all. It's just that we were talking about different things. I (and Darwinian) was talking about the very long-term, and you're talking about the short/medium term.
I find it hard to see how 9+ billion people in that time frame will not result in some fairly serious consequences.
Larger populations certainly have to make most problems at least a little harder to solve. OTOH, I really don't think we're very close to the tipping point in some areas (like energy, water or food production), and we're way over the point of serious problems in others (like climate change and species extinction). So, I'm not sure that the large population really makes much difference in either category.
As to your prediction that a "lot of others" will experience declining population - seems that might be speculation.
You get what I mean about a fertility rate below replacement means that eventually population growth must stop, right? If every woman has fewer than two children get to reproductive age, every generation has to be smaller than the one before it...
I see hugh amounts of disinformation in the MSM that discourage recognition of the real problems.
I agree. Basically, those who stand to lose because of change (either jobs, careers, or investments) fight change very, very tenaciously. They buy media outlets, they create think-tanks, they buy politicians, they buy advertising, etc, etc. The potential losers fight change with an intensity that is much, much stronger than the energy that comes from people who want change.
I see dramatic change to prevent AGW as pretty unlikely. OTOH, I'm a bit encourage by this article:
"If you looked merely at the realm of politics, it would be easy to believe that the question, “Is climate change really happening?” is still unresolved....A spring Gallup study found that Americans’ concern over global warming peaked two years ago, and has steadily declined since.
But there’s one area where doubt hasn’t grown — and where, indeed, people are more and more certain that climate change is not only real, but imminent: The world of industry and commerce.
Companies, of course, exist to make money. That’s often what makes them seem so rapacious. But their primal greed also plants them inevitably in the “reality-based community.” If a firm’s bottom line is going to be affected by a changing climate — say, when its supply chains dry up because of drought, or its real estate gets swamped by sea-level rise — then it doesn’t particularly matter whether or not the executives want to believe in climate change. Railing at scientists for massaging tree-ring statistics won’t stop the globe from warming if the globe is actually, you know, warming. The same applies in reverse, as the folks at Beluga Shipping adroitly realized: If there are serious bucks to be made from the changing climate, then the free market is almost certainly going to jump at it.
This makes capitalism a curiously bracing mechanism for cutting through ideological haze and manufactured doubt. Politicians or pundits can distort or cherry-pick climate science any way they want to try and gain temporary influence with the public. But any serious industrialist who’s facing “climate exposure” — as it’s now called by money managers — cannot afford to engage in that sort of self-delusion. Spend a couple of hours wandering through the websites of various industrial associations — aluminum manufacturers, real-estate agents, wineries, agribusinesses, take your pick — and you’ll find straightforward statements about the grim reality of climate change that wouldn’t seem out of place coming from Greenpeace. Last year Wall Street analysts issued 214 reports assessing the potential risks and opportunities that will come out of a warming world. One by McKinsey & Co. argued that climate change will shake up industries with the same force that mobile phones reshaped communications.
http://www.wired.com/wiredscience/2010/04/climate-desk-corporations-risk
A hypothetical steady-state economy could still have debt, but the stock of debt would have to remain fixed, implying new debt can only be issued at the rate at which old debt is retired. In the aggregate, interest income would have to be spent, not used to fund further loans. This suggests a financial system that is far more regulated that what we currently have.
Yes, it would be a very different system.
Returns to entrepreneurship can also be considered a cost, and generally are taken that way in analysis of economic rent. There's no need for some kind of control on risk-taking.
Free enterprise and capitalism are not interchangeable phrases.
Mr. Sorrel of Sussex has done an excellent analysis and each of the five points is essentially correct, though some of it might be better stated.
One key flaw here is in using the phrase “free enterprise” interchangeably with “capitalism” …as in his statement: "A purely private enterprise system can only function if companies can obtain sufficient profits which in turn requires that the selling price of goods exceeds the costs of production."
This statement may be true of the present capitalist system. It is not universally true of all free enterprise, free markets. Free markets existed in steady-state solar based societies long before the slow rise of the modern-day capitalism we know today. This capitalism began evolving out of the late Middle-Ages in Europe. This capitalism co-existed with and slowly subsumed the older free-market economies primarily IMO because it was the most efficient method of harnessing the increasing supplies of energy that were beginning to come into the society.
The sloppy intellectual habit of using “free enterprise” interchangeably with “capitalism” is a hangover from our Cold War propaganda days. We will never be able to clearly understand our options until we clear this intellectual mud from our brains.
To repeat: Free enterprise markets pre-existed capitalism. The end of capitalism will not be the end of free-enterprise market economies.
If/when our society passes what we are loosely calling “Peak Energy” at some point and present-day growth capitalism wanes, free-market free enterprise will continue unabated. People WILL conduct commerce with each other, with or without governments, with or without money, with or without capitalists, or banks, or debt. The Soviet state and the Maoist state may have driven some markets underground for a while in their darkest days, but never all of them. Free markets, black, white, red or green, will exist as long as humanity exists.
Cap’n Daddy
Let me try this again. My operating, although not completely proven, premise is that adequately addressing global heating requires that economic growth cease. Further, whether we continue on a plateau or begin a descent in oil production, economic growth will cease regardless of what energy efficiencies or alternative energy sources we come up with. Growth is incompatible with a planet that will continue to provide the services which we require and to which we are accustomed.
There are those people like Hirsch and Krugman who argue that we can successfully deal with global heating and still maintain economic growth sufficient so that we will remain happy campers. I am guessing that Krugman would also argue that the existence of peak oil or even peak fossil fuel is not a problem and will have a minimal and acceptable impact on growth. He doesn't address whether that growth can continue forever, but I assume he is not an idiot.
I am not certain of my premise, but even if I were 100 percent sure, I would argue that a person with influence is required to pretend that economic growth can continue indefinitely even if we take radical steps to address energy limitations and global heating.
To successfully argue that growth cannot be decoupled from peak energy and global heating would make it even more difficult to actually get something done. Therefore, of course, people like Al Gore and mainstream environmental organizations will continue to argue that we can have our cake and eat it too. This is also why that all expenditures to conserve energy or support renewables are alway couched in the "green jobs" meme.
For the time being, sadly, maximum b.s. will be a necessary prerequisite for meaningful action.
I think it is intellectually legitimate,however, to attempt to portray a world with no growth that is compatible with a reasonable and maybe even enhance quality of life. What we need to do is decouple growth from the notion that it is a prerequisite for human happiness. That is what McKibben has tried to do but not enough people were listening.
We will be required to wait a long time before we have a reality based discussion of this in the mainstream media. A beginning would be a deemphasis upon reliance of the GDP as the be all and end all of economic indicators. People like Bobby Kennedy and Jerry Brown were talking about this decades ago. And then we proceeded to spend 35 years in dumbass land starting with Reagan.
As an aside, the political discussion regarding the gubernatorial race in California will be mainly centered about who can restore the state as the land of milk and honey. Jerry Brown has the ability to cut through the crap but I think it is doubtful that he will do so. It ain't coming back folks, so get used to it.
Nicely summarized tstreet. And IMO your observations lead to the conclusion that we are not going to do anything about the global climate picture ...which is probably just as well as by the time governments finished cutting deals to save this or that economic interest, we would only make it worse. I have in mind in particular the carbon trading CDOs already being touted that would decimate what is left of the rain forests while pretending to save them and meanwhile enriching another gang of banksta boys.
As a retired news guy I can tell you that you are absolutely right about my former clueless mainstream media colleagues being averse to facing anything "outside the box." Ang this has been true for decades where "leaders" would concede things worried them more than they could publicly admit.
And you're right: California's glory days are facing a massive retooling. Jerry Brown is probably the best they could get, but the totally and terminally clueless are still in the majority.
Cap'n Daddy
Well said! "Dumbass land" is about right. We need to develop a more thoughtful and altruistic culture to get through this. But instead we went in the other direction.
Likely econophysicists will be able to isolate that role. We seem to be getting close by using informational entropy arguments to understand labor productivity:
http://mobjectivist.blogspot.com/2010/04/business-as-entropic-warfare.html
The author is right to label his propositions controversial, but I want to ratchet up the controversy a bit.
Proposition 1, about the rebound effect, has been thrashed out by other commenters already. However, most of the discussion has been about efficiency at the point of final consumption. That's not where the rebound effect is greatest. If a new, low-cost way of producing an industrial input is found, suddenly the range of final consumption products that can be sold at a profit, and the range of people willing to buy those products, both increase. A glance at the statistics of global income distribution should tell you that we are nowhere near any kind of limit on that. Typical experience in the past was that the increase in final demand is great enough to cause an increase in consumption of the industrial input, and there is no reason to think that this has now changed.
Energy efficiency is merely one of the techniques for lowering production costs, and not one that was greatly used while energy was cheap. There is reason to think that the rebound effect has plenty of "legs".
Proposition 2: "The contribution of energy to productivity improvements and economic growth has been greatly underestimated."
There is a prima facie case to answer here. The economic expansion that took place since 1700 was accompanied by, and almost certainly enabled by, the industrial revolution. The industrial revolution was, in turn, sustained by the successive exploitation of water power, coal, water power and coal again (for electricity), oil, nuclear fission, and natural gas.
It is not adequate to simply claim that the economic expansion would have happened to a similar degree without one or more of these resources; one must show exactly how. The onus is on those who disagree.
Proposition 3: "The pursuit of improved efficiency needs to be complemented by an ethic of ‘sufficiency’."
(screed deleted)
Proposition 4: "Sustainability is incompatible with continued economic growth in rich countries."
In one sense, that depends on how economic growth is defined. Banks made over 30% of total US corporate profits last year, and finance's contribution to GDP has been increasing for quite a while. It's possible to imagine continued economic growth coming from the activities of banks' computer programs, devising ever more elaborate financial derivatives instruments and selling them to other banks' computer programs. This could increase GDP for quite a long time to come, without any increase in resource consumption, and even with considerable decrease (as other activities shut down).
But I'm sure you've spotted the slight flaw: no employees are required in this new economy, so it's only GDP growth, not anything meaningful.
In another sense, no use of non-renewable resoures is sustainable.
Proposition 5: "A zero-growth economy is incompatible with a debt-based monetary system."
(Summarising another screed:) Well, maybe; I don't think we will try the experiment.
What is incompatible with debt is the situation we're in: The quality of available non-renewable resources is declining, so increasing investment is required to maintain production, while at the same time the return on investment in new resource production is also declining -- for exactly the same reason.
I agree with the general theme of this article and although I can't prove it, my intuition is that humanity needs to embrace the high quality energy source of Nuclear Power.
high quality energy source of Nuclear Power.
Do you mean fusion that generatates photons that get captured on Earth? If so, we've embraced all over the place. What do you think coal and oil are if not expressions of photons captured long ago?
If my Nuclear Power you mean fission reactors - when you have a solution to Man's greed (thus people building/running reactors take short cuts), Man's honesty (thus when a mistake happens people admit them - 'course if the next is corrected there will be no mistakes) and Man's demonstrated ability to created flawed machines that fail, I'll be right there supporting you. Because you'll have also solved Man's war-like nature so the reactors won't be targets in the battle of one man VS another.
I would add another item.
6-Sustanibility is incompatible with a non prioriced nor planified economy like ocurs in the capitalism that is a anarchy-bacterian based system of production in which a minority monopolices the means of production.
The kingdom of Bhutan has been espousing the concept of Gross National Happiness (GNH) as opposed to the Gross Domestic Product (GDP) which is followed by every other nation and society across the globe. Given the negative externalities that a number of economic activities are now known to impose on the society, the ne...ed for devising a new measure of economic progress and a more comprehensive definition of the human condition becomes imperative. The concept of GNH is certainly not easy to translate into practical application, because happiness itself is a very subjective measure, which the state cannot possibly come to grips with. But it is necessary for a new set of values to be accepted, on the basis of which the measurement of economic progress would shift from mere production and consumption of goods and services to a set of variables that are more aligned to happiness and satisfaction of human society.
www.grossnationalhappiness.com