Galactic Scale Energy, Part 2: Can Economic Growth Last?
Posted by Euan Mearns on July 29, 2011 - 11:29am
This is a guest post by Tom Murphy. Tom is an associate professor of physics at the University of California, San Diego. This article is Part 2 of a two-part assessment of the implications of continued growth. Part 1 appeared here. Both articles first appeared at Do The Math.
As we saw in the previous post, the U.S. has expanded its use of energy at a typical rate of 2.9% per year since 1650. We learned that continuation of this energy growth rate in any form of technology leads to a thermal reckoning in just a few hundred years (not the tepid global warming, but boiling skin!). What does this say about the long-term prospects for economic growth, if anything?
The figure above shows the rate of global economic growth over the last century, as reconstructed by J. Bradford DeLong. Initially, the economy grew at a rate consistent with that of energy growth. Since 1950, the economy has outpaced energy, growing at a 5% annual rate. This might be taken as great news: we do not necessarily require physical growth to maintain growth in the economy. But we need to understand the sources of the additional growth before we can be confident that this condition will survive the long haul. After all, fifty years does not imply everlasting permanence.
The difference between economic and energy growth can be split into efficiency gains—we extract more activity per unit of energy—and “everything else.” The latter category includes sectors of economic activity not directly tied to energy use. Loosely, this could be thought of as non-manufacturing activity: finance, real estate, innovation, and other aspects of the “service” economy. My focus, as a physicist, is to understand whether the impossibility of indefinite physical growth (i.e., in energy, food, manufacturing) means that economic growth in general is also fated to end or reverse. We’ll start with a close look at efficiency, then move on to talk about more spritely economic factors.
Exponential vs. Linear Growth
First, let’s address what I mean when I say growth. I mean a steady rate of fractional expansion each year. For instance, 5% economic growth means any given year will have an economy 5% larger than the year before. This leads to exponential behavior, which is what drives the conclusions. If you object that exponentials are unrealistic, then we’re in agreement. But such growth is the foundation of our current economic system, so we need to explore the consequences. If you think we could save ourselves much of the mess by transitioning to linear growth, this indeed dramatically shifts the timeline—but it’s also a death knell for economic growth.
Let’s say we lock in today’s 5% growth and make it linear, so that we increase by a fixed absolute amount every year—not by a fixed fraction of that year’s level. We would then double in 20 years, and in a century would be five times bigger (as opposed to 132 times bigger under exponential 5% growth). But after just 20 years, the fractional growth rate is 2.5%, and after a century, it’s 1%. So linear growth starves the economic beast, and would force us to abandon our current debt-based financial system of interest and loans. This post is all about whether we can maintain our current, exponential trajectory.
Squeezing Efficiency: Rabbits out of the Hat
It seems clear that we could, in principle, rely on efficiency alone to allow continued economic growth even given a no-growth raw energy future (as is inevitable). The idea is simple. Each year, efficiency improvements allow us to drive further, light more homes, manufacture more goods than the year before—all on a fixed energy income. Fortunately, market forces favor greater efficiency, so that we have enjoyed the fruits of a constant drum-beat toward higher efficiency over time. To the extent that we could continue this trick forever, we could maintain economic growth indefinitely, and all the institutions that are built around it: investment, loans, banks, etc.
But how many times can we pull a rabbit out of the efficiency hat? Barring perpetual motion machines (fantasy) and heat pumps (real; discussed below), we must always settle for an efficiency less than 100%. This puts a bound on how much gain we might expect to accomplish. For instance, if some device starts out at 50% efficiency, there is no way to squeeze more than a factor of two out of its performance. To get a handle on how much there is to gain, and how fast we might expect to saturate, let’s look at what we have accomplished historically.
The Good, the Bad, and the Average
A few shining examples stand out. Refrigerators use half the energy that they did about 35 years ago. The family car that today gets 40 miles per gallon achieved half this value in the 1970′s. Both cases point to a 2% per year improvement (doubling time of 35 years).
Not everything has seen such impressive improvements. The Boeing 747 established a standard for air travel efficiency in 1970 that has hardly budged since. Electric motors, pumps, battery charging, hydroelectric power, electricity transmission—among many other things—operate at near perfect efficiency (often around 90%). Power plants that run on coal, natural gas, or nuclear reactions have seen only marginal gains in efficiency in the last 35 years: well less than 1% per year.
Taken as a whole, we might then loosely guess that overall efficiency has improved by about 1% per year over the past few decades—being bounded by 0% and 2%. This corresponds to a doubling time of 70 years. How many more doublings might we expect?
Potential Gains and Limits
Many of our large-scale applications of energy use heat engines to extract useful energy out of combustion or other source of heat. These include fossil-fuel and nuclear power plants operating at 30–40% efficiency, and automobiles operating at 15–25% efficiency. Heat engines therefore account for about two-thirds of the total energy use in the U.S. (27% in transportation, 36% in electricity production, a bit in industry). The requirement that the entropy of a closed system may never decrease sets a hard limit on how much efficiency one might physically achieve in any heat engine. The maximum theoretical efficiency, in percent, is given by 100×(Th−Tc)/Th, where Th and Tc denote absolute temperatures (in Kelvin) of the hot part of the heat engine and the “cold” environment, respectively. Engineering limitations prevent realization of the theoretical maximum. But in any case, a heat engine operating between 1500 K (hot for a power plant) and room temperature could at most achieve 80% efficiency. So a factor of two improvement is probably impractical in this dominant domain.
The reverse of a heat engine is a heat pump, which uses a little bit of energy to move a lot. Air conditioners, refrigerators, and some home heating systems use this technique. Somewhat magically, moving a certain quantity of heat energy can require less than that amount of energy to accomplish. For cooling applications, the thermodynamic limit to efficiency is given by 100×Tc/(Th−Tc), again expressing temperatures on an absolute scale. A refrigerator (usually a freezer with a piggybacked refrigerator) operating at room temperature can theoretically achieve 1100% efficiency. The Energy Efficiency Ratio (EER), which is displayed for most new cooling devices, is theoretically bounded by 3.4×Tc/(Th−Tc), which in this example is 36. Today’s refrigerators achieve EER values of about 12, so that only a factor of three remains. The same can be said for the Coefficient of Performance (COP) for heat pumps, which is bounded by Th/(Th−Tc). Like refrigerators, these are performing within a factor of 2–3 of theoretical limits.
Lighting has seen dramatic improvements in recent decades, going from incandescent performances of 14 lumens per Watt to compact fluorescent efficacies that are four times better, at 50–60 lumens per Watt. LED lighting currently achieves 60–80 lumens per Watt. An ideal light source emitting a spectrum we would call white (sharing the exact spectrum of daylight) but contrived to have no emission outside our visible range would have a luminous efficacy of 251 lm/W. The best LEDs are now within a factor of three of this hard limit.
The efficiency of gasoline-powered cars can not easily improve by any large factor (see heat engines, above), but the effective efficiency can be improved significantly by transitioning to electric drive trains. While a car getting 40 m.p.g. may have a 20% efficient gasoline engine, a battery-powered drive train might achieve something like 70% efficiency (85% efficiency in charging batteries, 85% in driving the electric motor). The factor of 3.5 improvement in efficiency suggests effective mileage performance of 140 m.p.g. One caution, however: if the input electricity comes from a fossil-fuel power plant operating at 40% efficiency and 90% transmission efficiency, the effective fossil-to-locomotion efficiency is reduced to 25%, and is not such a significant step.
As mentioned above, a broad swath of common devices already operate at close to perfect efficiency. Electrical devices in particular can be quite impressively frugal with energy. That which isn’t used constructively appears as waste heat, which is one way to quickly assess efficiency for devices that do not have heat generation as a goal: power plants are hot; car engines are hot; incandescent lights are hot. On the flip side, hydroelectric plants stay cool, LED lights are cool, and a car battery being charged stays cool.
Summing it Up
Given that two-thirds of our energy resource is burned in heat engines, and that these cannot improve much more than a factor of two, more significant gains elsewhere are diminished in value. For instance, replacing the 10% of our energy budget spent on direct heat (e.g., in furnaces and hot water heaters) with heat pumps operating at their maximum theoretical efficiency effectively replaces a 10% expenditure with a 1% expenditure. A factor of ten sounds like a fantastic improvement, but the overall efficiency improvement in society is only 9%. Likewise with light bulb replacement: large gains in a small sector. We should still pursue these efficiency improvements with vigor, but we should not expect this gift to provide a form of unlimited growth.
On balance, the most we might expect to achieve is a factor of two net efficiency increase before theoretical limits and engineering realities clamp down. At the present 1% overall rate, this means we might expect to run out of gain this century. Some might quibble about whether the factor of two is too pessimistic, and might prefer a factor of 3 or even 4 efficiency gain. Such modifications may change the timescale of saturation, but not the ultimate result.
Faith in Technology
We have developed an unshakable faith in technology to address our problems. Its track record is most impressive. I myself can sit at my dining room table in California and direct a laser in New Mexico to launch pulses at the astronaut-placed reflectors on the moon and measure the distance to one millimeter. I built much of the system, so I am no stranger to technology, and embrace the possibilities it offers. And we’ve seen the future in our movies—it’s almost palpably real. But we have to be careful about faith, and periodically reexamine its validity or possible limits. Following are a few key examples.
What About Substitutions?
The previous discussion is rooted in the technologies of today: coal-fired power plants, for goodness sake! Any self-respecting analysis of the long term future should recognize the near-certainty that tomorrow’s solutions will look different than today’s. We may not even have a name yet for the energy source of the future!
First, I refer you to the previous post: the continued growth of any energy technology—if consumed on the planet—will bring us to a boil. Beyond that, we hit astrophysically nonsensical limits within centuries. So energy scale must cease growth. Likewise, efficiency limits will prevent us from increasing our effective energy available without bound.
Second, you might wonder: can’t we consider solar, wind and other renewables to be more efficient than fossil fuel power, since the energy has free delivery? It’s true that unlike the business model for the printer (cheap printer, expensive ink cartridges that ruin you in the end), the substantial cost for renewables is in the initial investment, with little in the way of consumables. But fossil fuels—although a limited-time offer—are also a free gift of nature. We do have to put effort into retrieving them (delivery not free), although far less than the benefit they deliver. The important metric on the energy/efficiency front is energy return on energy invested (EROEI). Fossil fuels have enjoyed EROEI values typically in the range of 20:1 to 100:1, meaning that less than 5% of the eventual benefit must be invested up front. Solar and wind are less, at 10:1 and 18:1, respectively. These technologies would avoid wasting a majority of the energy in heat engines, but the lower EROEI means it’s less of a freebee than the current juice. And yes, the 15% efficiency of many solar panels does mean that 85% goes to heating the dark panel.
What About Accomplishing the Same Tasks with Less?
One route to coping with a fixed energy income is to invent new devices or techniques that accomplish the same tasks using less energy, rather than incrementally improve on the efficiency of current devices. This works marvelously in some areas (e.g., generational changes in computers, cell phones, shift to online banking/news).
But some things are hard to shave down substantially. Global transportation means pushing through air or water over vast distances that will not shrink. Cooking means heating meal-sized portions of food and water. Heating a home against the winter cold involves a certain amount of thermal energy for a fixed-size home. A hot shower requires a certain amount of energy to heat a sufficient volume of water. Can all of these things be done more efficiently with better aero/hydrodynamics or traveling more slowly; foods requiring less heat to cook; insulation and heat pumps in homes; and taking showers using less water? Absolutely. Can this go on forever to maintain growth? No. As long as these physically-bounded activities comprise a finite portion of our portfolio, no amount of gadget refinement will allow indefinite economic growth. If it did, eventually economic activity would be wholly dominated by us “servicing” each other, and not the physical “stuff.”
What About Paying More to Use Less?
Owners of solar panels or Prius cars have elected to plunk down a significant amount of money to consume fewer resources. Sometimes these decisions are based on more than straight dollars and cents calculations, in that the payback can be very long term and may not be competitive against opportunity cost. Could social conscientiousness become fashionable enough to drive overall economic growth? I suppose it’s possible, but generally most people are only interested in this when the cost of energy is high to start with. Below, we’ll see that if the economy continues its growth trend after energy use flattens, the cost of energy becomes negligibly small—deflating the incentive to pay more for less.
The Unphysical Economy
In a future world where energy growth has ceased, and efficiency has been squeezed to a practical limit, can we still expect to grow our economy through innovation, technology, and services? One way to approach the problem is to demand that we maintain 5% economic growth over the long term, and see what fraction of economic activity has to come from the non-energy-demanding sector. Of course all economic activity requires some energy, so by “non-energy” or “unphysical,” I mean those activities that require minimal energy inputs and approach the economist’s dream of “decoupling.”
We start by setting energy to flatten out as a logistic function (standard S-curve in population studies), with an inflection point at the year 2000 (halfway along). We then let efficiency boost our effective energy at the present rate of 1% gain per year, ultimately saturating at a factor of two. The figure below provides a toy example of how this might look.
The timescale is not the important feature of the figure. The important result is that trying to maintain a growth economy in a world of tapering raw energy growth (perhaps accompanied by leveling population) and diminishing gains from efficiency improvements would require the “other” category of activity to eventually dominate the economy. This would mean that an increasingly small fraction of economic activity would depend heavily on energy, so that food production, manufacturing, transportation, etc. would be relegated to economic insignificance. Activities like selling and buying existing houses, financial transactions, innovations (including new ways to move money around), fashion, and psychotherapy will be effectively all that’s left. Consequently, the price of food, energy, and manufacturing would drop to negligible levels relative to the fluffy stuff. And is this realistic—that a vital resource at its physical limit gets arbitrarily cheap? Bizarre.
This scenario has many problems. For instance, if food production shrinks to 1% of our economy, while staying at a comparable absolute scale as it is today (we must eat, after all), then food is effectively very cheap relative to the paychecks that let us enjoy the fruits of the broader economy. This would mean that farmers’ wages would sink far lower than they are today relative to other members of society, so they could not enjoy the innovations and improvements the rest of us can pay for. Subsidies, donations, or any other mechanism to compensate farmers more handsomely would simply undercut the “other” economy, preventing it from swelling to arbitrary size—and thus limiting growth.
Another way to put it is that since we all must eat, and a certain, finite fraction of our population must be engaged in the production of food, the price of food cannot sink to arbitrarily low levels. The economy is rooted in a physical world that has historically been joined at the hip to energy use (through food production, manufacturing, transport of goods in the global economy). It is fantastical to think that an economy can unmoor itself from its physical underpinnings and become dominated by activities unrelated to energy, food, and manufacturing constraints.
I’m not claiming that certain industries will not grow: there will always be growth in some sector. But net growth will be constrained. Winners will not outpace the losers. Nor am I claiming that some economic activities cannot exist virtually independent of energy. We can point to plenty of examples of this today. But these things can’t grow to 90%, then 99%, then 99.9%, etc. of the total economic activity—as would be mandated if economic growth is to continue apace.
Where Does this Leave Us?
Together with the last post, I have used physical analysis to argue that sustained economic growth in the long term is fantastical. Maybe for some, this is stating the obvious. After all, Adam Smith imagined a 200-year phase of economic growth followed by a steady state. But our mentality is currently centered on growth. Our economic systems rely on growth for investment, loans, and interest to make any sense. If we don’t deliberately put ourselves onto a steady state trajectory, we risk a complete and unchoreographed collapse of our economic institutions.
Admittedly, the argument that economic growth will stop is not as direct a result of physics as is the argument that physical growth will stop, and as such represents a stretch outside my usual comfort zone. But besides physical limits, I think we must also apply notions of common sense and human psychology. The artificial world that must be envisioned to keep economic growth alive in the face of physical limits strikes me as preposterous and untenable. It would be an existence far removed from demonstrated modes of human economic activity. Not everyone would want to participate in this whimsical society, preferring instead to spend their puffy paychecks on constrained physical goods and energy (which is now dirt cheap, by the way, so a few individuals could easily afford to own all of it!).
Recognizing the need to ultimately transition to a non-growth economy, I am personally disconcerted by the fact that we lack a tested economic system based on steady-state conditions. I would like to take a conservative, low-risk approach to the future and smartly place ourselves on a sustainable trajectory. There are well-developed steady-state economic models, pioneered by Herman Daly and others. There are even stepwise plans to transition our economy into a steady-state. But not one of those steps will be taken if people (who elect politicians) do not crave this result. The only way people will crave this result is if they understand (or experience) the impossibility of continued growth and the consequences of not acting soon enough. I hope we can collectively be smart enough to make this transition.
Acknowledgments: Thanks to Brian Pierini for his review and comments.
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I should be impressed by all this, but I'm not. Too much qualitative, not enough quantitative (despite the charts). Little credit given, perhaps not even understood, to human characteristics.
As Hawkings said, we're capable of building our own genes now.
On the contrary, I think this is a great article, because it uses a minimum of numbers to deduce it's conclusions. It shows that the
actual numbers are irrelevant because economic growth as it is defined now cannot continue much longer.
Yes we can manipulate genes. Sort of. Can you tell me the code for Superman? (I worked on the human genome project).
What this article doesn't talk about is human numbers. Population. We have finite, indeed declining natural resources. We have growing population. We can grow the quality of life long term for the average human being only by reducing the supply of human beings.
That is the bottom line. We in the OECD (even the poorest of us) live like kings compared to half the world's population. We cannot bring them up to our standard of living. There is not enough land to raise the cattle.
We all need to eat lower down the food chain and we need population control and we need it yesterday.
When the inequality in the world has fallen from 1000 to 1 to 10 to 1 then we can talk about growing the economy for us lucky few.
The snippet below exemplifies the problems of a growth political system.
How do we build a political system in which the lack of the ability in an individual to gather resources without conflict results in eating lower down the food chain and lower procreation? Perhaps, the old Chinese custom that saving a life means that one is legally responsible for that life forever would do this. Perhaps the outlawing of charity would be enough.
Yes, I remember a comment on a thread here some time ago about how the "gene guys" at Monsanto, DuPont, etc. were going to work miracles and we would have 1000-, 5000- or 10,000-bu/acre corn to make corn ethanol and other genetic wonders. And I have heard claims that we could totally engineer our genetics to have chlorophyll in our skins so we could just make our food by lying around in the sun. That sounds like fun so I wish they would bring it on!
Inequality in the world will fall when the population drops from 1000 to 1. The fewer people the greater the equality and the lower the complexity. In the complexity resides the inequality.
Not only in complexity, but in the sheer numbers of the mass market. If you can make an iphone app that sells for $10 and ten million people buys it, then you can retire. The bigger the base, the higher the pyramid.
As the author notes, we have to be careful about faith.;-)
Personally, I find this article to be utterly convincing.
The only reason it doesn't scare the hell out of me is that my monkey brain time discount rate prevents me from actually being emotionally afraid of things still a decade away, or longer, in the future;after all, I will have been safely composted myself by the time the real energy crunch hits, when we are short of not only oil but also coal, natural gas , etc.
OFM, we will embalm you ;-)
Old Farmer would prefer the composting...it has a sort of natural poetry to it.
Anyway, my 4 grandperents had a total of 14 children. Of those 14, only my own father and mother had 4, all my aunts and uncles (city and country folk alike) had 3 or less, most had 2, all combined not quite getting to the total of 14. From my father and mothers children, myself and my 3 sisters have had a total of 3 children, and we are all past childbearing age. All my cousins have had 2 or less, with several having either none or one. In 2 generations, from my grandparents to mine, in about one century, we have cut our population growth to not only no growth, but to about half of what my grandparents generation was very used to. Our case is not exceptional, many of my school friends families had exactly the same or even more pronounced lack of population growth, in fact, population shrinkage. Similiar results are occurring in every nation passing into industrialism and then on to "post industrialism". At the rate we are going, what few offspring there are in the world in a couple of centuries will inherit a mostly empty planet...full of empty cities and abandoned buildings...much the way Gary IN or much of the old once crammed full but now empty industrial slums look today. They will have room to breathe thanks to one of the least energy consumptive but most revolutionary devices in history...the birth control pill and the human desire to be unencumbered by children.
And as old Farmer Mac says, I will be long composted by then...
RC
It was foretold:
Isaiah 24
How would new genes solve the 2nd Law of Thermodynamics. Most biological systems run at or near maximum efficiency anyway. LOL. The problem is that people require a lot of fossil energy to "live" today. Are you suggesting that genes could be engineered to reduce our need to burn fossils.
Maybe we could all pack into 1 square meter boxes with the right genes and live happily being fed mush from bacterial growth on seaweed.
I would say that this article is very important and shows that we are headed to steady state.
Would love to see a part 3, where we get an idea of what the steady state world will be. Can the US lead steady state or is Wall Street doomed to die an ugly death? When will the growth paradigm die?
I am sick of hearing about how China growth will save us. LOL. What a load of false logic.
A steady state world is an impossibility, because those trying to retain some sort of status quo will eventually be supplanted by those who grow. The growth meme is the one that will always succeed according to the laws of nature - produce overshoot, or die out.
The growth meme (as you call it) is nothing new for humans---but having petroleum products at our disposal to enagage willy nilly in the growth meme is relatively new. Without a lot of fossil fuels, the war-loving or exoansion-minded groups find themselves bogged down inthe realities of everyday existence....not that they can't win a few battles, or even take some territory but their hands are tied by thermodynamic laws. So a steady state world is going to look like the past, probably, with lots of localized skirmishes, lots of people who make efforts to grow but are forced to give up past a certain point. So the whole system is steady state but here and there you can see some groups dominating for a while. Those battles, or forays, or whatever you call it, would keep people busy and happy planning....Really it is nothing new, now we have global business, it amounts to the same thing (grow or die)---if and when it whithers due to lack of energy all those busy business people will not care much and look elsewhere for strategizing opportunities. People are such giddy creatures....
The problem is, the past never was steady state either.
Like a colleague of mine puts it: "By 2100, we'll all be living sustainably - one way or another".
We'll either solve this or we won't.
I agree. Growth will not say us. the opposite will. Since few in the world choose lower birth rates nature will take care of it with higher death rates. It is just we are usually afraid of the 4 horsemen. Since the west has not seen them for a generation we think they are not in the mix.
You missed the point. Most people hear about peak resources, and just say "science" will find a way. The entire point of this article was to debunk that argument. He does a great job of it.
If 2.3% growth continues, no matter how -- we boil the oceans in 400 years. So much for a "star trek" future ;)
A Star Trek future would cause the growth to move off of Earth and continue until we consume all the resources in the universe that we can access. If the universe is finite, then the day of reckoning would be delayed but not avoided. How long would be needed for humans to construct a Dyson Sphere around every star in the universe? Alas, we fanciful monkeys will not even construct one.
Who's Hawkings?
Surely, if we were to live in a Matrix style system, where everyone is effectively a brain in a jar, then this would massively reduce the need for energy consumption. After, all the cost of simulating a rich and energy intensive lifestyle would be little different from simulating a deprived and miserable one.
This doesn't really solve our immediate energy problem, but it does suggest a way in which an incredible standard of living could be achieved, without cooking the planet...
Only if applied toghether with some form of population control. The first article of the series was quite clear about that...
Tom, in Figure 1 what is the cause of the gradient change in GWP growth? Is this Bretton Woods (1945) and subsequent unilateral break from gold standard by USA (1971), following their peak oil event, setting the scene for deficit, monetary, bubble based growth that looks like is entering the end game?
It is just a fit to two straight lines, to describe a nearly straight line, while adding one slight wobble to improve the fit. A slightly curved parabola would probably also do. Or maybe an S-shaped curve: to my eye it looks like the growth in the most recent points is slightly lower again, more like earlier parts of the 20th century.
@Tom, Euan, Nichol,
The data behind the chart 1 above shows three distinct different paces of growth from 1900 to 1950, from 1951 to 1971, and from 1972 to 2000. It is likely that the 1950 switch has a lot to do with the end of world war II, rebuilding of the European economy speeding up, and the 1970 switch with the peak in US oil production and ensuing oil crises.
I have plotted the GDP growth figures to energy consumption from 1900 until 2000 (excluding biomass) which shows quite good correlation between energy consumption and GDP until 1970, after which the energy consumption pattern becomes much more erratic. Take care though that this is interpolated GDP data as the source provided by Tom only gives figures every 5 or 10 years (and the energy data as of 1970 is annually)
Rembrandt: Thanks for the significant analytical contribution! The tracking in some segments is stunning.
The tracking virtually disappeared after 1970. That's what's really stunning.
What is even more stunning is that some may interpret the erratic lack of tracking over the past few decades as some predictor of the future—against all physical reasoning.
That per-capita energy started saturating in industrialised countries around 1970 has profound implications, and there is no reason to expect that to change either, especially as more countries get saturated the same way.
Interesting point. Could you expand on what those implications are, in your view?
My sense is that the mantra of eternal growth had become systemic by the mid to late 70s and financing became a bigger part of the economy, so people could grow steadily through the drops in energy growth because they had enough borrowed money--which was ultimately based on the faith that net energy production growth would bounce back.
What we are starting to see is what happens when that faith is challenged. The top layers of the financial system--the investment banks--were hit first. Yes, they had gotten into some wild shenanigans, but those generally worked out (short term) average as long underlying energy growth kept bouncing back with enough demand (i.e. with high enough prices). But now with prices about ten times what they were in '98 and essentially no net growth in crude oil production since about late '03, the cracks in the system are starting to become more and more evident--the faith in the mantra is slowly being shaken to its root.
One might even call the idea that energy and economic growth are linked Faith!
.. I wonder if I've just committed left wing heresy?
We now have power through technology that believers once thought was the realm of the Gods. Well, congratulations, we've become God, and each one of us have to start being aware of our power and take responsibility for it. Most importantly that includes trying to discern what actually *is* in our power, and what is in the power of others.
.. Hopefully that is sufficiently heretical for the right wing as well..
Some charts I made in post Financial Return on energy Invested:
Energy Data from EIA link in previous post by this author, population from US Census, and real GDP in 2005 $ from USDA. GDP growth per capita is 1.34 % and population should level off at 10 billion in 2100 according to UN (medium fertility scenario). I don't want people to give up hope, but the transition to no growth still needs to happen, maybe just not in 100 years, but probably in 200.
Thanks for the graphs, Euan.
I'm confused about an apparent discrepancy between the last two graphs. Why, in the European one, is the energy efficient path toward the top while in the previous chart it was at the bottom?
Hello,
I believe that we are missing an important point. China has a energy intensive GDP, but they produce a lot of what we consume. Production is an energy intensive activity, so when they export goods to the USA or Europe, they export embeded energy (a iron garden table is somehow raw material + energy). When you pay 10$ for a chinese product, at least 75% stay in your country, so you increase your GDP without increasing much your energy need.
Best regards,
Esteban
Good point. And I think it is important to also put some of these figures in percapita terms.
The early 50s was when the Green Revolution kicked into high gear. All this new food enabled the population to take off. I believe this had no small part in GWP growth rate that took off at about the same time.
Ron P.
Its a good point Ron as one possible contributing factor. No doubt that population growth is one of the basic things that underpins GDP growth. This is one of the main reasons US growth has outstripped Europe for decades. But one cost of this is living beyond energy means resulting in deficit based finance.
Yes! We have been taking part in an Population Ponzi scheme.
I wish I knew a way to come down off this high we are on. I am afraid a crash is inevitible, and all of our talk is just an erudite effort at denial.
Facts are facts Once critical mass is attained, Uranium will undergo fission. Is this also a necessary result from some population cm? And, if so, what would you say that mass is, and what will be the ultimate impact?
In a word, is there a way to actually realize a sustainable steady state economy, or are we wasting time even considering it?
Serious times ahead. Maybe interesting, in the 'Chinese Proverbial' way, but serious.
Craig
Hard to say. Looking at history, most would say that there are few cases of large scale societies achieving steady state over long periods of time and many the overextended and imploded.
But human's are not uranium molecules. Supposedly there are things like cognition and culture that are malleable.
To some extent, it could be that to the extent we decide we can't change to adjust to these realities, we won't. In other words, any attempt to look at human society in a scientific way is bound to be like heisenberg (the principle, not the TOD poster) on steroids. Everything observation affects the subject being observed.
So, watch out for Heidinger's cat! The real problem is we really have never been here before, and prediction is difficult. Easy to look back and say, this is why that happened. Looking forward - not so much.
Underlying question: what do I tell my grandchildren? Other than, "Sorry!" that is.
Craig
"In a word, is there a way to actually realize a sustainable steady state economy"
A very good question. I think that if there is a way to realize a sustainable steady state, it will involve a revolutionary break through in economic theory. All rational thinking in economics now involves the core assumption that the goal of economics is to guide thinking about how to maintain 'healthy growth'. Tom argues that:
1. Sustained growth in energy consumption is not possible.
2. Economic activity cannot be entirely decoupled from energy consumption.
Taken together, it follows that sustained economic growth is impossible.
My thought is that we don't have any economists thinking about how a constant size economy might work. Maybe if they thought about it carefully ... maybe they might get some good ideas as to how to reorganize and act.
This is not a proof that anything good has to follow from more careful thinking, just a thought for further investigation.
Economists are very optimistic about technology coming to the rescue.
But this optimism is based on absolute ignorance of technological and scientific fact. No. Economics is not science. At best it is a coherent belief system, like Islam or Christianity, but with a much cruder moral code than either.
What economists know as 'fact' about technology is not fact but is stories told them by hucksters pedaling investment 'opportunities'.
"if there is a way to realize a sustainable steady state, it will involve a revolutionary break through in economic theory. All rational thinking in economics now involves the core assumption that the goal of economics is to guide thinking about how to maintain 'healthy growth'."
You should learn some economics, this is just embarassingly silly.
I have met or heard of very few economists who don't think that eternal economic growth is possible, necessary and a kind of absolute good. Is your experience different? Most economists still, asfaics, still accept growth as an unquestionable axiom of their faith.
But this part of his/her post did reveal some ignorance:
"we don't have any economists thinking about how a constant size economy might work"
S/He apparently has not heard of Herman Daly and others that have further developed his ideas, in spit of there having been main posts here about his work. But these do seem to be exceptions to the rule, in my experience.
But perhaps there are vast numbers of economists working on steady state economics that I am unaware of, beyond the relatively tiny (as far as I know) but interesting 'de-growth' movement.
"I have met or heard of very few economists who don't think that eternal economic growth is possible, necessary and a kind of absolute good."
I have heard of very few economists who don't believe in pink unicorns. Actually, I have heard no-one say that they don't. No a single one! Could it be the same with you? You expect them to believe in eternal economic growth and assume they do if you don't hear them say otherwise?
"Most economists still, asfaics, still accept growth as an unquestionable axiom of their faith."
Then just how do you see this?
"But perhaps there are vast numbers of economists working on steady state economics"
You came closest to the truth above when you said that about "absolute good". So, if economists generally (1) think growth is good, (2)don't see any near-term end to growth and (3)don't believe the system will be unable to handle no growth, then there is no point in working on steady state economics, right?
The above economist position comes from a NYT Econo-blog post mentioned elsewhere on TOD.
What I don't get is what kinds of twirly bird thoughts fly through the echo-chamber brains of most economists.
Do they imagine that there are these mythical "job creators" out there?
And all we've got to do is take a cattle prod labeled as "aggregate demand" and put it to the back sides of these so-called "job creators"?
And that will fix everything?
Which aisle at Home Depot do I search to get me one of them "aggregate demand" prods?
[ i.mage.+]
________________________
[i]= image, [+]= more info
"You expect them to believe in eternal economic growth and assume they do if you don't hear them say otherwise?"
No, I make a point of asking them specifically.
If find your final point incomprehensible.
No matter what some or most economists think, it is still of course always worthwhile for someone at least to work on steady state economics. So your last paragraph seems to be a non-sequitur, at best.
I honestly want you to enlighten me, if you know of vast numbers of economists working on steady state economics. It would really make my day and change my view of the whole discipline.
So please do tell me if you know of any, especially if they represent a large part of the field or a major movement.
"No, I make a point of asking them specifically."
Really? Care to name drop?
"No matter what some or most economists think, it is still of course always worthwhile for someone at least to work on steady state economics. So your last paragraph seems to be a non-sequitur, at best."
Yes, you think it would be worthwhile, but I tried to explain why economists doesn't think so. I don't get why that would be non-sequitur.
"I honestly want you to enlighten me, if you know of vast numbers of economists working on steady state economics."
I'm quite sure very few do. I explained the reason why that is so.
"S/He apparently has not heard of Herman Daly "
But I have heard of Herman E. Daly. AFAICT, his writings are ignored by both fresh water and salt water economists. Both schools are busy currying favor with the rich. Like Tom Murphy, Daly has written good pieces on how continued growth is impossible. ( different starting context and chain of reasoning. same conclusion. ) But neither has addressed what must change in our financial system in order to actually transition deliberately from the here and now to the promised land. Or have I missed something? Please show me.
There was a nice piece by Daly on a stepwise plan to transition to steady state on some website that may be familiar to this readership: http://www.theoildrum.com/node/3941. It was good to see a carefully thought-out plan, but I was struck by the sense that none of the steps would be enacted unless society's goal was to deliberately transition to steady state.
I wonder how much of past economic growth was just dependent on population growth, and how slowing end ending population growth would affect economic growth. With a growing population, it is rational for a current generation to take on large debt, to be payed off by the larger future generation, that will profit from the investments made using those debts.
I can remember when GDP used to be reported as 'per capita'. And people were only supposed to be happy if this per capita number increased - which would indicate real raising of wealth/living standards.
Sometime in the early 90s (if memory serves) the 'per capita' was mysteriously dropped and it was just the aggregate GDP in the whole economy that was reported.
Another sign of what Chris Martenson calls 'fuzzy numbers'
Tom, politicians can be informed that exponential growth of economy, energy use and population must stop one day but knowing when that day actually arrives is really quite important. Whilst accepting your broad arguments on energy efficiency gains, I believe that massive gains are still there to be had. For example, wind produced electricity is extremely efficient in energy terms and charging a car battery from this source can provide vehicular transport that is 2 to 3 times more efficient than ICE. Add to that legislation that penalises single occupancy journeys and so forth then i think the possibility exists for even larger gains - that of course cannot go on for ever. Similar argument may apply to heat pumps powered by wind or solar sources linked to pumped storage.
On the other side of the coin, replacing extreme high ERoEI energy stores with lower intermittent flows places a large burden on the system.
As I commented in your last post, I believe that the Human - Earth system response to boundaries and limits will be incremental. One of the first things to be hit will be pensions and social services (social security, education and healthcare) - it is already happening, but just that society's view is that the cause is banking and debt miss management.
Part of the system response is for population to stabalise and the growth rate is already slowing. How the population knows to do this is of course intriguing - pressing on limits.
My main point is this. If efficiency gains and incremental change enables the current system to hobble along for another 50 years or so then that is what I think will happen. Virtually zero chance of OECD and BRIC deciding to adopt a new model now based on the unflawed logic of the eventual and ultimate need to change. Of course political hands may be forced by events and at that point having good understanding of the underlying causes of stagnation and economic depression would be good to have so that a more sustainable system can be designed to replace the current one.
Euan: Yes, our lack of ability to predict a year when economic growth will stop reduces any chance of deliberate, pre-meditated action. Even if we could put a definitive, convincing number on it, anything beyond 5 or 10 years may not inspire action. So I agree that the actual path will be to muddle along until we can't any more. Of course this path poses significant risk: making a transition away from the growth-based economy in crisis-mode may be ugly. But even if this is our fate, I see a role for universal awareness that growth is fated to end eventually. As you suggest, understanding the underlying cause of stagnation will be handy in a pinch.
Slightly facetiously, this is a bit like trying to predict one's (or someone else) last breath. Wrong everytime until overtaken by the event.
"transition", "crisis"... Don't those words have the same meaning?
Why would anyone expect or even WANT a political solution to over population? Even small groups of people are ungovernable and resent being controlled. The world will never have a useful overall leadership. It's too diverse. Too many cats to herd.
The markets will fix this in due time. Rising resource prices will naturally curb growth. No need to fear the future. It will fix itself.
The 'markets' are what got us into this mess. I am not optimistic that the cause of the problem will be a very good solution to it.
Some may say the markets accelerate resource consumption. Offshoring energy intensive production to China did nothing to reduce the consumption of resources. There are no market solutions to resource limitation in a debt-based society other than to impoverish future citizens, which is what we are presently working towards (i.e. read the front page of the newspapers).
How long can you raid the future my friend with your markets?
It seems to be a common misconception here that debt is about lending from the future. It isn't, you always borrow from the present.
Markets doesn't accelerate resource consumption as much as it optimize the utility of available resources. Given resource constraints, markets are the way to go to make the best of what we got.
Hence, Social Security and most pension funds are currently being raided. CO2 deposition into the atmosphere. Cheap fossil stores are eliminated using ever more energy units per returned energy units.
Sounds like the future is being raided.
"Markets doesn't accelerate resource consumption as much as it optimize the utility of available resources. "
To my mind this statement is nonsense that illustrates something of the nature of the problem. To say that something optimizes something else without having a clear idea of what that something else is -- is foolish. I suggest that the easy way to make the statement very believable is to say that utility is growth, in the population and in per-capita consumption. But isn't that the rat race from which we must escape?
I don't have any crazy alternative to crazy growth economics. I just don't believe conventional wisdom has much to offer.
A crazy thought for your consideration: If gold were bid up to about $500,000
per troy-oz, by the gold bugs, the US government could pay off its debt in one grand stroke by selling its gold holdings and buying back its outstanding treasury notes.
I'd like to give an answer, but I don't know where to start. What you wrote just don't make sense. The utility is defined by you and me, all that is acting on the market, having preferences in consumption and life style.
But how can the markets optimize both your concept of utility and mine simultaneously?
You should not attribute to me a shared belief in your definition of utility and optimum, which you have not defined. That really does NOT make sense! Or perhaps it makes sense, but only to a madman. IMHO, you are offering a muddled version of conventional wisdom.
The problem that is central to the existence of TOD is the advent of a gigantic decrease in availability of an important 'available resource', namely petroleum. Many people here are skeptical of the belief that the market optimum utility of the available resources, with petroleum no longer so plentiful, will not provide for the continuation of civilization as we know it today. Your assertions offer them little comfort.
"But how can the markets optimize both your concept of utility and mine simultaneously?"
By adapting to what I demand, and by adapting to what you demand. This is one reason markets are so great.
"Many people here are skeptical of the belief that the market optimum utility of the available resources,"
Sure, but they should not be skeptical. It is the best way. Neither planning nor rationing can do a better job.
"The utility is defined by you and me" is what you said. I took that to mean that we agree on the definition of utility, which I found highly implausible for a starting assumption. Now you are indicating that what is optimized is some melding of your desires and mine into a single composite desire. But without any idea how this melding is to be done. It boggles my mind to think how you can test such an hypothesis, or claim that it has been proven.
" It is the best way. "
This really does smack of a belief system like Islam or Christianity, only much more shallow. Where is the observational support? Listen to yourself.
The way things are being done now seems not to be working very well for many people. You appear to be taking a position that was parodied in Voltaire's Dr. Pangloss. Do you really intend that?
"Now you are indicating that what is optimized is some melding of your desires and mine into a single composite desire. But without any idea how this melding is to be done. It boggles my mind to think how you can test such an hypothesis, or claim that it has been proven."
Melding into a single composite desire? Again, you don't make sense. Perhaps I expressed myself a bit too tersely, but I was convinced that readers would know enough of the world to get what I was talking about. I'm sorry, I simply won't try to explain to you how grassroots' demand is aggregated and supplied efficiently in the market place. It is too basic.
"This really does smack of a belief system like Islam or Christianity, only much more shallow. Where is the observational support?"
Is this candid camera or something?
"The way things are being done now seems not to be working very well for many people. You appear to be taking a position that was parodied in Voltaire's Dr. Pangloss."
No, we don't live in the best of worlds. It is far too statist.
I don't think a more sustainable system can or will be designed...it will be the outcome, an unintentinal one, of a more local economy. People will simply stop havingthe ability to build dams, bridges, highways, factories, etc. They will just make do with what is around and stop noticing what is happening far away because of constraints of paper and electricity costs. Little by little large empty abandoned buildings will be seen as potential sites for new farms or other more sun-based economic activities. LArge governments will whither and then all of their important activities will be curtailed...It is a scary future because of the nuclear power plants that need constant tender care. People will simply shrug...ah well, it had to be this way....infinite growth was an unrealistic dream.
Tom,
This would mean that an increasingly small fraction of economic activity would depend heavily on energy, so that food production, manufacturing, transportation, etc. would be relegated to economic insignificance. Activities like selling and buying existing houses, financial transactions, innovations (including new ways to move money around), fashion, and psychotherapy will be effectively all that’s left. Consequently, the price of food, energy, and manufacturing would drop to negligible levels relative to the fluffy stuff. And is this realistic—that a vital resource at its physical limit gets arbitrarily cheap? Bizarre.
(1)Why are you assuming that the price of food, energy and manufacturing will not increase in price relative to service sector?
For example if these items were X10 more expensive in you projection to 2100, they would account for 20% of economy rather than 2%(about what they are now).
(2) You are using a very narrow definition of services; what about entertainment(movies, internet),is there a limit to value of what can be spent on restraunt meals(same amount of food, compare one star with five star). What about medical services? or software? or improved education? surely these are not "fluffy stuff" but real valuable services worth paying an ever increasing portion of GDP to access.
I would agree that growth in financial services or doing each others washing are "fluffy" .
@Tom, Neil1947
The growth in financial services, entertainment, restaurant meals, washing in today's society are not fluffy in an energy sense these are quite costly activities. Unless you are referring to an economy were all these things are done solely by hand (which means a huge drop in income). In our society washing is done by complicated energy consuming machines, financial services require vast electronic and digital infrastructure (the energy cost to produce a laptop or computer is substantial), the production of a movie involves hundreds of people, lots of equipment, tens to hundreds of flights, the production of restaurant meals is tied into the global interconnected system. The bottom line is that there is no such thing as an unphysical economy possible. The only thing that would come close is a lifestyle were we go back to a manual labour economy with far less of the wealth we have today as substantially more human labour is necessary to create an "unphysical" economy.
Rembrandt,
I was drawing attention to the range in quality and thus value of say a $10 fast food meal or a $200 fine restaurant meal, similar basic food inputs, or a movie grossing $500 million is only going to require a fraction of the energy of $500 million spend on driving a million low mpg SUV's an extra 1000 miles.
In general the service economy is less energy intensive( tourism being an exception) than manufacturing, oil refining, mining. If the energy intensive parts of the economy become relatively more expensive more of the economy will be dominated by lower energy and resource intensive service sectors. This shift can be very slow and still have growth in GDP and no growth in energy consumption.
@Neil1947
"In general the service economy is less energy intensive( tourism being an exception) than manufacturing, oil refining, mining. If the energy intensive parts of the economy become relatively more expensive more of the economy will be dominated by lower energy and resource intensive service sectors."
That I agree with, however you assume that the service economy can do without the manufacturing, oil refining, and mining sector. It relies on it to function. The idea that we can shrink the manufacturing, oil refining, and mining sector and increase the service sector is a fallacy.
Rembrandt,
The idea that we can shrink the manufacturing, oil refining, and mining sector and increase the service sector is a fallacy.
Even though the services sector relies on the energy, mining and manufacturing sector there is no intrinsic ratio, as the energy intensity of the economy decreases, the energy sector may account for a smaller portion or energy may become more expensive as FF use is replaced by more expensive renewable energy. Mining could decline in absolute production (tonnes/year) as % recycling increases and still have growth in absolute consumption(tonnes/year). Manufacturing value could continue to grow(even if at a slower rate than GDP) but consume lower amounts of materials and energy by producing more high value products( for example an Chevy volt rather than a Chevy pickup).
I don't see a limit to services increasing, although there would be a minimum of manufacturing required/capita just to maintain basic needs(food, water housing, transportation) so mining, energy and manufacturing would not necessarily shrink in absolute terms(KWh of energy or tonnes of goods) even if they didnt increase or increased at a very modest rate.
I think Neil1947 is on to something that most of the rest of the comments are missing. Try to think about the idealized world that the original post envisioned: energy inputs approaching a fixed limit but non-energy using aspects of the economy continuing to grow. It seems to me very unlikely that the value of the energy intensive parts of the economy would go to zero. Instead there would be inflation in the cost of these parts to keep demand in check. If growth of non-energy intensive parts was still possible with fixed energy input, then you would indeed have growth in a system with fixed resources. Note that it is likely impossible to grow non-energy intensive parts indefinitely, but that is not under discussion. That is an assumption of the model in the original post. And I think this argument in the original post is wrong. You can't show that exponential growth is impossible in an economy with fixed inputs without showing that no parts of the economy can be fully decoupled from the inputs.
We all need to eat, drink, sleep and socialise. (and some other basic functions). We need education, medical care, and we need a social backup system, to help when our house catches fire.
Beyond that, we need entertaining to stop us going stir crazy, and we need a belief system to help us make sense of the world, and to give ourselves some self-respect. Some of us manage to carve out our own, most of us select, or are indoctrinated into, a pre-existing one.
All these needs require energy and resources. Some are absolute. We all need enough clean water and food to keep us alive and healthy. How much we spend on a belief system or entertainment, is highly variable.
The US system is hopelessly inefficient in providing all of these functions, except basic food and water. The US has never needed to be efficient because it had resources to burn. Unfortunately, it evolved a belief system that included profligate consumption of resources as both a right and necessity. This was most unfortunate and is unsustainable.
The OECD has used cheap energy to build a huge material and social infrastructure which support a high quality supply of all these requirements (except self-respect). This infrastructure has increased efficiency and quality on the large scale, but it has a high operating cost in energy and resources, and will require an even higher cost in maintaining and upgrading this infrastructure. We are hitting the law of diminishing returns, and we have lost resilience. the system cannot be maintained in its entirety and it will not degrade gracefully.
The irony is that we can have a long, healthy and fulfilling life on a far lower energy and resource input, and plenty of evidence that the GDP required is well below $20,000 per capita. Unfortunately, there is no easy way to redesign our infrastructure or culture around this lower figure. We cannot easily transition without collapse.
With 7 billion people, even $20,000 is probably unsustainable worldwide. The point is academic because we are degrading our biosphere so rapidly already that we could never transition quickly enough.
There is no well defined or universally accepted metric for monitoring these basic quality of life requirements, although there are many attempts. We urgently need to redesign global society around one of them, all of them would be an improvement over what we have now.
Exceptionally well stated RalphW.
Indeed. Especially:
"The US system is hopelessly inefficient in providing all of these functions, except basic food and water. The US has never needed to be efficient because it had resources to burn. Unfortunately, it evolved a belief system that included profligate consumption of resources as both a right and necessity. This was most unfortunate and is unsustainable."
And of course, beyond the logistic difficulty/impossibility of scaling down the economy and society, there is the political difficulty/impossibility that a very powerful Republican party is rabidly against anything remotely suggesting such a thing, and most Dems are not too far behind them. Other parties are so minor as to be irrelevant, and most of them are as a bad as or worse than the major parties on these fronts.
We should, though, recall that monastic life sustained bodies and souls for many for thousands of years on much less than the modern equivalent of $20,000 (or even $1000?). That is why it seems to me that something like a mass immediate religious conversion of some sort is the only thing that has a chance of even slowing down our spiral into becoming an essentially dead planet.
A former oil market analysis and peak oil follower writes this blog :
http://oscfreeland.wordpress.com/
Yes very true. One thing not often mentioned in consideration of a powered down economy and the (for me) fear of a brutish/dangerous dumbed down society is the wonder of instant communication and transfer of ideas via the internet, email etc; TOD a prime example. We can be linked, can learn, discover, entertain, and share without using too much energy.
However, getting from here to there for many stuck on the inside of the ship going down will not be pretty.
"We urgently need to redesign global society around one of them, all of them would be an improvement over what we have now."
And yet the turkeys cannot move forward on debt ceiling vote, the banking crisis, and the rape of economies by a few powerful individuals and organizations.
This excellent article gives creedence to the idea that one best get building that personal lifeboat and hope it floats.
All the best....Paulo
Well said. Diminishing marginal returns on investment, sunk costs etc. The pieces of the puzzle are starting to come together.
We will become poorer, whether by deflation or inflation is fairly irrelevant. Life will get down to the essentials, which will take up all of the remaining cash flow even as everything else is liquidated. Permanent joblessness, with the remaining jobs becoming less exciting and less lucrative. Endless political and financial instability as the decline continues. Maybe a drought here, a famine there, a war over yonder.
What can stop this? The energy isn't there. Krugman the debt pimp is welcome to go back to school, get a degree in physics, and try to make nuclear fusion work.
Rembrandt: thanks for making this point. I am completely with you that none of our activities can be totally decoupled from energy. This only makes the point stronger that capped energy growth translates to capped economic growth. In the post, I entertained the economist's fantasy that perfect decoupling is allowable, and showed that even then growth has limits (if energy has any cost at all). It sounds like you don't believe in this fantasy any more than I do.
@Neil1947:
For point 1, I think its ridiculous that food, energy, etc. would sink to arbitrarily low prices. But I'm saying that this would have to happen in order to see unabated economic growth: once the physical system is tapped-out/level (if we are lucky enough not to see decline, that is), then the only way to continue economic growth is through the "fluffy" stuff—meaning that the relative price of food/energy/etc. would have to drop. I think this goes against simple supply/demand, which only reinforces my point that the fluffy stuff can't grow without bound, and therefore economic growth is capped.
For point 2, I'm happy to add any services you like. I just didn't want an exhaustive laundry list weighing down the paragraph. And I don't discount their value to us, or their ability to grow to a larger fraction of total economic activity than we see today. I just think these things can't grow to 99.99999% of economic activity (and beyond), which is required to keep the growth dream alive indefinitely.
I applaud your physics insight, but I think your economics is a little sketchy. It is emphatically not true that the price of a resource depends on its share in the world economy. Case in point: platinum. Platinum mining and processing is a negligible fraction of economic activity, but we can't do without it: it's indispensable for catalytic converters in automobiles and chemical plants. And yet it's very expensive, and hasn't gotten cheaper over time.
But platinum has always been a tiny part of the economy. So let's consider horses. In the mid-19th century, horses drove the Western economy, and a decent horse cost in the ballpark of $50. Today, they're a nearly irrelevant sideline to our economy, and cost around $1500 --- a factor of 30 price increase. On a consumer price index-adjusted basis, the price of a horse is the same as it was 150 years ago.
You're absolutely right that, come what may, everyone has got to eat, including the farmers. (I'm using "farmers" as a proxy for everyone who produces goods in the "physical" economy) But that doesn't place any limit on the price of food, or its share in the economy. Why not? Because in an expanding service economy, each member of society spends more and more money on things that aren't food -- INCLUDING THE FARMERS. For the last 200 years, farmers have spent less and less of the products of their labor on feeding themselves, and more and more on machinery, fertilizer, technical expertise, and luxuries. As farming has gone from the majority of our economic output to a small minority, the *number* of farmers has shrunk dramatically, but their food output has increased.
Consider the absolute limit of a future world with only one farmer. He controls a robotic fleet of planting, harvesting, and transporting machines, and pays many billions of dollars a year to people in other market sectors: robot machinery vendors (who employ thousands of skilled engineers and shopworkers), repair mechanics, weather forecasting agencies, crop planning consultants, industrial architects, etc., while his family ingests a steady diet of blockbuster movies and video games. Running all this is expensive, so his food doesn't come cheap; he's a negligible part of the economy, and yet food still costs money, and everyone still gets fed.
I think the way forward is to focus on the physics wherever possible: money is slippery and vague stuff, but energy is always conserved.
If there's going to be one farmer, it's going to be me. But the family diet will be more along the lines of the latest supercomputers, Terabit network access, and college tuition/room/board grants for up-and-coming game programmers. Or maybe video feeds from private space exploration.
goodmanj: I don't deny that the nature of farming has changed over time so that fewer farmers produce more food. We still spend 17% of our energy in the U.S. on food production. Some of that is shifted into manufacture of gigantic farm equipment, for instance, that allows one farmer to do more. A significant portion of the economic pie also goes to Monsanto, ADM, Cargill, etc. to control the genetically modified seed supply. So while farmers themselves are being squeezed to lower levels, I think you'll find most Americans paying 10–20% of their incomes on food (more in Europe, and perhaps most of income in impoverished places).
I very much doubt that we'll ever consider food to be an insignificant part of our economy—especially as population pressures, overtaxed lands, and climate change-induced crop failures create food shortages. As you concede, platinum is not a good example. Horses aren't either since we replaced them with cars and spend much more on this mode of transport than we ever did on horses (cars are more expensive than the inflation-adjusted horse price, and at least as ubiquitous). What do we replace food with? Food?
Finally, I'll just say that if you're really willing to envision a future where one (or a few) "farmer(s)" control a robotic, automated fleet of farm machines, then we do have to part company and may not see eye to eye on a number of issues. We have not proven that we can do anything of the sort. If this is the corner we must paint ourselves into to support endless economic growth, then I think it only highlights the absurdity of the notion.
We still spend 17% of our energy in the U.S. on food production.
Well, no. We spend that much on food related things, but the inputs are very different. In particular, the single largest item is refrigeration in the home of consumers.
I think you'll find most Americans paying 10–20% of their incomes on food
Sure, but the food is very different. If Americans still cooked their own food, that would require about 2% of their income. Instead, Americans consume the majority of their food through restaurants (including fast food restaurants), and the majority of the remainder is heavily processed. This is far more convenient, if not necessarily higher nutrition...
cars are more expensive than the inflation-adjusted horse price
Cars are far less expensive to buy, adjusted for horse-power, or any other measure of utility you might want. They have far lower operating costs, and last far longer.
One book that I enjoyed the hell out of a couple years ago was Steel Beach by John Varley. And this was the whole premise of it (and of all the stories he wrote in that setting). Given enough (magical) energy and a complex enough (fantastical) manager to support a population, and tapped at efficiency, he imagined humanity sinking pretty deep into frivolity, occupying itself with entertainment and tourism, and generally constructing stories out of the character types that struggle for meaning in an advanced, brave new world sort of steady state of civilization. I've always found his writing to be an astute balance of basic understandings of thermodynamic limits, complexity, and human nature, extrapolated however ludicrously far.
See also the Culture novels of Iain M. Banks. Banks's specialty is finding meaningful conflicts to support plotlines in a post-scarcity society. (His other specialty is the Really Big Thing.)
I think the Culture is one of the most convincing post-scarcisty utopias from the socio-psychological point of view. Unfortunately, Banks not only needs post-scarcity for this to happen, but also superhuman AI.
@Tom
Thanks for the post, the points about efficiency and the difficulty of substitution are especially important. The efficiency gains in industrial societies these are fairly low unfortunately, except from a user perspective which is too little recognized by governments and business.
One topic I would like to see addressed is what population level, given our current level of technology, can we expect the earth to consider sustainable (carrying capacity).
Currently, we are drawing deeply down into our resource reserves and if we just stopped now and held our energy limit, we would still soon bump up against other resources like:
arable land
clean air
low CO2 air
sustaining forests
sustaining ocean fisheries
sustainable amounts of mined products (using a combination of mining and recycling)
Thus, if we put the two subjects together we soon see that not only must we stop growing, but ride the decline to sustainability. Anyone else feel uneasy about this? It strikes me like a reverse roller coaster - fun on the way up but depressing on the way back.
Yair...I see this "arable land" limitation all the time. What is arable land? If it is land that can produce food there is no shortage here in Queensland.
There are millions of acres of country in forty inch plus rainfall regions right up the eastern seaboard. If it was in China or Indonesia the whole region would be farmed...right now it's running Brahmans at about one beast to nine acres.
Now a question to economists: which steps should governments take to ease into the necessary transition into an economy that in the future might need to have quite different underpinnings. A stable non-growth economy, with stable or even falling population numbers, probably needs to depend less on debt. Unless the debt is inflated away, which seems to be the way that structural change of economies often works .. ?
Would targeted stimulation and investment in future-directed business help? Or is the current craze of austerity what we need to force a large part of the population into a different state of mind, and reduce consumption? Or is a combination of austerity and stimulation needed?
Regarding steady-state economies, I have no faith that such can exist, unless the system greatly reduces the use of debt. Even then, to be steady state for the long term, they essentially have to do without fossil fuels. To me, they sound pretty much equivalent to post-crash scenarios in which we move to an economy where our only food is that that we grow ourselves with hoes and perhaps farm animals, and we dig our own wells with shovels.
I read through the 1972 version of Limits to Growth. The authors hypothesized some sort of steady state economy that lasted only until 2100, by dropping fuel use way back, and assuming that it could be used in a level fashion (perhaps with a lot of nuclear energy) over the approximately 125 years in question. (Then fuel use went to 0!) They also would control population to remain level. I don't think this type of temporary steady state is really an option. For one thing, our current financial system would not withstand the huge drop in production needed to negotiate the step-down in energy use required for this to occur. It is also doubtful that we could support the world's population on a tiny fraction of today's fossil fuel use.
"our current financial system would not withstand..."
Maybe you haven't noticed, but our current financial system is imploding in any case--time to find a new system.
And note that it is only a tiny fraction of the world's population that uses the lion's share of the ff's.
As a shameless plus I would like to present a paper I have written about almost the same topic.
http://adsabs.harvard.edu/abs/2007arXiv0711.1777D
Yvan,
The abstract looks interesting, but I can't figure out how to get a copy of the paper. Do you have a link to instructions?
Click on arXiv e-print (arXiv:0711.1777)
Then click on Download PDF and you'll get the paper
A few very basic criticisms:
1. Per-capita economic growth has been decoupled from energy the last 40 years in industrialised countries (like the US, UK, Germany...). For them, only the part of growth that is dependent on population increase leads to an increase in the energy consumption.
2. That our economic system needs growth is simply incorrect. I have raised the point before on TOD, and nobody has been able to defend the idea that investments, loans, interest and so on would depend on growth. They do not!
3. Economic growth may stop one day, but it may very well be so far off that it would be purely sci-fi to speculate about what the world will be like then. For instance, revolutionary genetic reengineering of humans may be part of the mix.
In short, the focus on growth (of either kind) is unwarranted, and these articles are a bit like straw men. We need growth for poorer countries, to industrialise them and get their populations to peak. The rest of the chips may fall as they will, and the invisible hand can and should be allowed to sort it out for us.
1. US, UK and Germany etc. are DE-industrialised countries. We have exported manufacturing and other energy intensive activity to BRIC and the rest of the world, and imported the products using debt. We have NOT decoupled energy and economic growth. We cooked the books.
2. Maybe, but our current financial system most definitely does need economic growth to avoid default or inflation. It is simply unstable. It needs to be replaced.
3. delusional.
[edit]
OK Germany is still an industrial country. However, even Japan is increasingly post-industrial as heaviest industry moves to Korea, China, etc., leaving the the high tech ( but low ultimate quality of life) production behind. Is an ipod so much better than close harmony singing?
"Is an ipod so much better than close harmony singing?"
LOL: if you mean participating in close harmony singing, then it depends - after all, if you have a tin ear, you might not enjoy it; or on another hand, you might enjoy it and yet drive the others to the point where they exclude you.
If you mean listening to 'live' close harmony singing, then it will often depend on whether you're affluent enough to pay for (expensive) live performance (and be careful - the sound quality over an iPod will be better than the sound quality over a bad PA system.) Or, LOL again, it might depend on whether you have a tin-enough ear, or a strong enough inclination to drink to excess, to "enjoy" what you can get for "free" in the barroom.
If you mean something else, then who knows what it might depend on.
You say "decoupled", I say "outsourced". Let's call the whole thing off. It's one thing to say that we can get more bang per joule than previously. It's quite another to say that it doesn't matter at all.
If banks charge interest on loans, or investors expect returns, those percentages have to come from somewhere!
?
All answers seems to follow the same pattern, so I pick your randomly.
"You say "decoupled", I say "outsourced"."
Not so. The industrialised countries in question has been growing their manufacturing all along, and in the first decades of the decoupling, China wasn't even in the game at all.
"If banks charge interest on loans, or investors expect returns, those percentages have to come from somewhere!"
Simply from a steady income. If you build a restaurant, you expect to fill it with X customers eating for $Y each day, on average, and you expect a proportion of that will go toward repaying the loan. I think growth quite seldomly enter such calculations, in fact, and if it does, it isn't about overall growth - just local growth (a new mall will fill) or sector growth (more people will go to restaurants instead of buying big cars).
jeppen -
This question of whether a debt-based economy can survive in a steady-state, no-growth economy is indeed a fascinating one. Here's my two cents.
The example you gave of the restaurant owner paying off his loan with a portion of the revenue of his diners appears to negate a NO answer to the above question, but upon further examination I don't think it really does.
First: I thing that, almost by definition, a no-growth economy is a zero-sum game. In other words, everybody's income cannot increase if there is no overall growth. So, the only way that your income can increase is if somewhere someone else's decreases. Agree?
Getting back to the restaurant example, if you open up a fine restaurant to which I decide to visit and spend money, then money flows from me to you. But that is money that I no longer have to spend elsewhere, say for a new shirt and tie. So, your restaurant prospers by the amount I spent on the meal, but a clothing store somewhere loses by the same amount.
Now, the interest that you have to take out of revenue to pay interest on your loan is really coming partly from me, your customer. But where do I get it? Presumably from doing some form of work for which I get paid. So part of production of something is going to pay the interest on your loan. But if that production never increases, then that interest represents a gradual hemorrhaging of the revenue from production.
Therefore, if the interest on loans keeps accumulating without a corresponding growth in overall production, then it will not take all that long before the total amount of interest due exceeds the total value of production, and one is then in an economic black hole.
Thus, I conclude that a debt-based economy and a no-growth economy are mutually exclusive. I think it comes down to the fundamental truth that you can't indefinitely remove something from a closed system without putting the same amount back in.
Joule, you forgot that the banker also has to eat.
Some level of debt can exist in a steady state economy. Enphasis on that "some" word.
Agreed.
"So part of production of something is going to pay the interest on your loan. But if that production never increases, then that interest represents a gradual hemorrhaging of the revenue from production."
No, not if I understand you correctly. It is not gradual and there is no accumulation here. You, the customer, can produce a million carrots a year, and you can then pay 10,000 each year to go to restaurants, and the owner of the restaurant can use 500 of those carrots a year (for 15 years, for example) to cover interest and repayments for the loan which he got to build his restaurant. The base production is steady state, renewable if you will, and the debt interest and repayments is simply covered with a portion of that.
"Therefore, if the interest on loans keeps accumulating [...]"
Why would it? Loans gets repayed. They're transient.
"I think it comes down to the fundamental truth that you can't indefinitely remove something from a closed system without putting the same amount back in."
The system isn't closed in that sense. There are new carrots every year. These can be borrowed and then returned, and they can even be used to pay interest. There is no problem here.
But the carrots get eaten. Are you saying that there is a greater quantity of carrots each year? That would mean more land use which puts us back where we started. Am I missing something?
IIRC (and maybe sailorman can set me straight if I don't--is he still around?), one source of the idea of interest was the idea that if I loaned you a cow, after a few years you could give it back to me well taken care of, along with a calf or two that she produced. But if all cows reproduce beyond replacement level, eventually you run out of grazing land and fodder on the large scale. In this sense, all growth/debt economies are essentially robber economies, either robbing from neighbors or from the future or both.
"But the carrots get eaten. Are you saying that there is a greater quantity of carrots each year?"
No, the same quantity.
"one source of the idea of interest was the idea that if I loaned you a cow, after a few years you could give it back to me well taken care of, along with a calf or two that she produced."
No, but you give a fifth of the milk as interest, and then return the cow after a few years.
"In this sense, all growth/debt economies are essentially robber economies, either robbing from neighbors or from the future or both."
Not from the future - that's not physically possible. Not from neighbors either, it is a voluntary transaction with win-win results. And yes, win-win is possible in a steady-state economy, since others may lose a piece of their revenue (or simply retire due to old age) to the new business-maker.
""In this sense, all growth/debt economies are essentially robber economies, either robbing from neighbors or from the future or both."
Not from the future - that's not physically possible."
You may think it is physically impossible, but it is what most of our economy is now based on.
The ff we use today will not be available to the future, nor will the stable climate we inherited, nor a thousand other things we are either using up or despoiling. Perhaps for some semantic reason you do not consider these stealing from the future, but I can't think of a better term for it.
It seems to me that the key to your system is keeping interest levels, whether in money, cows or milk, relatively low--essentially at natural replacement rates. That would seem to be more the illusion of interest rather than anything substantive. (Of course, much of modern capitalism/consumerism seems to be dependent on an elaborate set of carefully fostered illusions anyway.) And the accumulation of money/power continues to be a problem. There are doubtless some very good reasons that a number of old and wise societies shunned debt.
By the way, is there a reason why you want to keep debt and interest in the picture, or are you just making an academic point that it may be possible to keep some of it in a steady-state economy? (nb. I am not against academic points, being something of an academic myself.)
"The ff we use today will not be available to the future, nor will the stable climate we inherited, nor a thousand other things we are either using up or despoiling. Perhaps for some semantic reason you do not consider these stealing from the future, but I can't think of a better term for it."
We were talking about debt and interest - that is, the ordinary economic concepts. You can use your credit card to borrow from the future, you borrow from the bank. Also, you can't borrow a car from the future, someone has to have it before you can borrow it.
"It seems to me that the key to your system is keeping interest levels, whether in money, cows or milk, relatively low"
In a sense. In a no-growth economy, lending volume will likely go down a bit, anyway.
"And the accumulation of money/power continues to be a problem. There are doubtless some very good reasons that a number of old and wise societies shunned debt."
I don't think so. Actually, I think accumulation problems will be much more pronounced without debt. No debt means a guy with a good idea, or a startup company, can't expand rapidly, so they are more likely to sell their ideas or startups to big established players. Also, without debt, we will get to see more of big conglomerates, as size will be more important than leanness.
"By the way, is there a reason why you want to keep debt and interest in the picture, or are you just making an academic point that it may be possible to keep some of it in a steady-state economy?"
I'm mostly making the academic point, since the incorrect meme of "without growth, our current economic system breaks down" seem to be an important part of TOD thinking. But I do think debt and interest are very important. They grease the wheels and make the economy much more dynamic. Also, on an individual or family level, it allows people to spread out their incomes over their lifes, which is nice.
"No debt means a guy with a good idea, or a startup company, can't expand rapidly, so they are more likely to sell their ideas or startups to big established players."
Yes, I am sure that there are down sides to a no debt society, as there are with all systems. But perhaps 'rapid expansion' is not such a great thing after all in most circumstances.
"Also, without debt, we will get to see more of big conglomerates, as size will be more important than leanness."
This could happen, but need not. And of course even in our heavily indebted society, there are many enormous conglomerates.
"I'm mostly making the academic point, since the incorrect meme of "without growth, our current economic system breaks down" seem to be an important part of TOD thinking."
And I think you have made some good points. (And do note that as something of an academic myself, I having nothing particularly against making academic points--but it is useful to be clear on what level the discussion is taking place.)
I think a more nuanced position would be that using a lot of debt to help run the economy is much easier when there is an expectation of long term economic growth, and long term economic growth is greatly facilitated by (and ultimately dependent on) long term energy growth.
Would that be a happy synthesis to you?
"But perhaps 'rapid expansion' is not such a great thing after all in most circumstances."
I should have said "or even start their business at all".
I think it (big conglomerates) need to happen (without debt). That would allow them to do lots of heavy investments out of pocket, investments few else can afford. This will effectively be kind of internal debt, btw.
"Would that be a happy synthesis to you?"
Yes, I agree, though "long term" may mean different things for you and me.
"I think it (big conglomerates) need to happen (without debt)."
I can't follow this.
And yes, we probably do have different ideas of 'long term' but I'm glad that we could come at least to this kind of provisional agreement. Thanks for the exchange.
Thanks.
You cannot analyze the economy from the perspective of one restauranteur. Money represents claims on present and future wealth. In a no-growth economy, money supply cannot increase without the unit amount losing value. But if you don't increase the money supply to account for the interest and/or investment returns, then those must be paid from the existing supply. Some other restaurant takes a haircut on its revenue.
Regarding outsourcing, the US takes in most of the money paid for something like an IPad. The place where most of the energy is expended in its manufacture, China, receives less. That the US manufacturing base has continued to increase is dwarfed by the concurrent fact that the US financial services industry has grown much larger than anything else.
Apple now has more cash than the U.S. government
This brings up a question I'd love to see addressed explicitly on The Oil Drum: What does economics look like, in a sustainable, zero-growth society? Can loans, investment, interest, and capital gains exist?
Debt can only be made relative to the amount of energy required and the amount of energy that will be present in the future, else you create future money for energy that it not there.
David Graeber shows in a very interesting new book called "Debt. The First 5000 years" that in the historical record systems that had debt and could not grow (through conquest or some such) had periodic debt crises. People became debt slaves, revolted, ran away, etc. Sometimes this led to the institution of periodic debt amnesties, like the Jubilee in the Old Testament. Sometimes quite long lasting systems of debt do exist in circumstances of very low or no growth; typically, then, collecting interest is regulated, outlawed or considered sinful.
http://www.amazon.com/Debt-First-5-000-Years/dp/1933633867
"typically, then, collecting interest is regulated, outlawed or considered sinful."
This would indeed seem crucial. But even highly regulated, successful collectors of debt will slowly become richer than others, and from doing no work other than keeping track of money. Eventually, as I mentioned elsewhere, some of these successful leaches, errrr, loaners, will start some of the power that comes with wealth to influence and relax these regulations, which will lead to them gaining more wealth and power, which will lead to less regulation---the whole bad cycle that we have been in the last few decades. Then your are back to where you started.
So then you are back to outlawing interest, but this leaves little incentive to make loans.
"So then you are back to outlawing interest, but this leaves little incentive to make loans."
Instead of outlawing, we could have the Federal Reserve, which currently loans money only to banks, start loaning money to anyone (with good credit reports) at the same rate that it loans to banks. I suppose that this would pretty much kill the usury business. Perhaps banks could continue to exist by charging fees for other banking 'services'. What unintended consequences are there in this idea?
"Eventually, as I mentioned elsewhere, some of these successful leaches, errrr, loaners, will start some of the power that comes with wealth to influence and relax these regulations, which will lead to them gaining more wealth and power, which will lead to less regulation-"
Yes, this seems to be the pattern. It means that no-interest regimens can last longer only if political power and mercantile power are one way or another kept separate. As examples Graeber mentions the medieval Islamic world, where the market was strictly outside political/state intervention, and some periods of the Chinese empires, where the official Confucian ideology viewed the markets with extreme suspicion, thus keeping it at arms length even though often meddling. The crucial point is that merchant princes do not become political/religious princes, or vice versa.
As for incentives for making loans, for commercial loans profit-sharing seems to be a typical arrangement. Private/consumer loans are often considered a civil duty rather that a business transaction.
Thanks. Many good points.
"The crucial point is that merchant princes do not become political/religious princes, or vice versa."
But keep in mind that 'merchant princes' need not actually become political ones in order to hold great influence over them and over policy.
I think general strong cultural suspicion of financial markets is one of the best protections.
But even those can be influenced by long propaganda campaigns--both painting such markets in more a more favorable light and demonizing anyone with strong or even mild critiques of unregulated financial markets.
This is essentially what has happened in America--first communists and socialists were demonized by both conservatives and the (then middle) liberals. Once this was successfully carried out, the once-centrist liberals were now the only thing remaining on the left, so then they had to be demonized.
Now even someone so mainstream as Obama is lambasted as a communist (and sometimes at the same time as a fascist!). I expect everyone to the left of the Koch brothers will continue to be demonized until we are in a thoroughly ultra-right wing fascist state--we are pretty close already.
"In a no-growth economy, money supply cannot increase without the unit amount losing value."
Absolutely, but we'll increase the money supply and have inflation anyway. A bit of inflation is healthy, it gets money going.
"Some other restaurant takes a haircut on its revenue."
Yes, but that's no problem. Actually, that's the nice part, a no growth economy doesn't mean fashion is static or company structure is frozen. The world will keep moving, and debt will keep helping out.
So if I understand what you are saying, a no growth economy, if it is not also a static economy, has places where it is growing and places where it is contracting. Smart lenders will always be interested in identifying where the growing parts are and lending to them.
This may be true. I would just like to point out that, to the point that these lenders are successful, they will become more and more wealthy and so more powerful. They will then tend to use their ever increasing power to influence policy in favor of more pro-growth-favorable policies. These will then make them more wealthy and powerful, so they will influence policy more... This sets up an unhealthy cycle that leads back to a overall growth oriented rather than no-growth economy.
Great - you have grasped why debt will keep on helping in a no-growth economy. Regarding accumulation, this hinges on lenders being consistently and long-term successful even though the competition may be fierce. Perhaps all they can do is avoiding losing hoarded money to inflation, and do a little back-and-forth? Also, I didn't envision a voluntary no-growth-economy, but a resource-and-efficiency-constrained economy that forces no-growth upon us. This cannot be changed by powerful lenders.
Thanks for the clarification.
For me, though, the whole point of talking about this is stuff is to answer the question of whether we can intentionally transition into a steady state or even power-down economy.
So even if you have persuaded me that some small level of debt based loaning may be able to go on in a no-growth economy, you have not convinced me that it is a good idea, if we want to plot a course that has any chance of getting us to a sustainable future (a course that is likely already no longer in the cards).
"the whole point of talking about this is stuff is to answer the question of whether we can intentionally transition into a steady state or even power-down economy."
I think others have other points. I don't think it is politically feasible to go to steady state prematurely, for very good reasons. It would simply be bad for us.
"prematurely"
hmmmmmm----
The global industrial consumerist economy has probably already pushed the planet passed tipping points that will send the world into runaway global warming, leaving a devastated planet with little terrestrial or marine life.
But you think we should wait till we commit the planet to some even worse future before reconsidering our geocidal trajectory, and because changing course 'prematurely' 'would simply be bad for us'???
You may know something about how theoretical models of economic systems may deal with price and debt, but you seem to be completely clueless as to the current state of the actual world. Or perhaps you know but don't particularly care?
"The global industrial consumerist economy has probably already pushed the planet passed tipping points that will send the world into runaway global warming, leaving a devastated planet with little terrestrial or marine life."
Perhaps, perhaps not. But then the world will have recovered in half a million years, and diversity will have been restored. For the Earth, no big deal. But humanity's only chance lies in the possibility that we do have time, and that growth and related progress will allow us to steer clear. We simply won't power down or go Amish voluntarily, so there is no constructive path to salvation in that direction. However, pushing constructive choices that are in line with growth, tech, globalization, trade and such do have some potential for success.
"We simply won't power down"
Probably not, mostly because economists like you keep repeating that we won't. Thanks for that :-/
"pushing...growth, tech, globalization, trade and such do have some potential for success."
But more and more people are seeing these things as being evils, rather than the panaceas that you and your ideology have defined them as. For this growing mass of people, these terms are not selling points.
As to recovery from mass extinction events, that is a future we cannot and will never know--past history does not guarantee future performance, as they say.
"The impact of mass extinction events varied widely. The worst event, the Permian–Triassic extinction event, devastated life on earth and is estimated to have killed off over 90% of species. Life on Earth seemed to recover quickly after this extinction, but this was mostly in the form of disaster taxa, such as the hardy Lystrosaurus. The most recent research indicates that the specialized animals that formed complex ecosystems, with high biodiversity, complex food webs and a variety of niches, took much longer to recover. It is thought that this long recovery was due to the successive waves of extinction which inhibited recovery, as well as to prolonged environmental stress to organisms which continued into the Early Triassic. Recent research indicates that recovery did not begin until the start of the mid-Triassic, 4M to 6M years after the extinction;[59]
and some writers estimate that the recovery was not complete until 30M years after the P-Tr extinction, i.e. in the late Triassic.[60]"
http://en.wikipedia.org/wiki/Extinction_event
So thirty million years may be more like it. And of course our current mass extinction event was well underway before the effects of GW really got going. So we are hitting the earth with a double mass extinction event. There is no way to tell how this would affect recovery--if it pushes it out by an order of magnitude or so, we are then getting into the period when the sun is starting to get too hot and big to allow for life on the planet to continue.
In other words, cozy as some people may find it to think that 'the earth abides' and will regenerate the lush paradise we found it to be eventually cannot be anything other than a pale hope and wish.
In any case, all this is far beyond the time frame of current human societies.
Human minds and societies have an odd quality that they tend to find impossible what they have convinced themselves is impossible. But then suddenly, a lot of people decide what they formerly thought impossible, is in fact possible--and so it does become so. Something like this happened with the end of apartheid, the fall of communism, the entry of the US into WWII...
What is really in fact physically impossible no matter what is the continued growth of the modern global capitalist industrial society. But if enough people, and enough people with influence, decide that it is possible to start powering down that society for the good of (most) of our kids, for the good of future generations, for the future of the planet, or just because it is the right thing to do--then we could see a very sudden change of direction.
But it depends on people changing a little thing called their minds. A lot of people have started this process.
Care to join us? You could be of great help.
"Probably not, mostly because economists like you keep repeating that we won't."
Professionally, I'm an engineer, actually. But I guess that in any group, we take on roles as needed, to fill gaps and niches. The biggest gap here seems to be the understanding of and willingness to explain/defend (classical) economy and economic freedom, so I seem to end up in that role. You may have seen me debating nuclear power vs renewables (which I find most fun and interesting) and to a lesser extent computer science (which is my engineering specialty).
"But more and more people are seeing these things as being evils, rather than the panaceas that you and your ideology have defined them as."
More and more? So says intelligent designers and cell phone allergics too. I don't think so.
"So we are hitting the earth with a double mass extinction event. There is no way to tell how this would affect recovery--if it pushes it out by an order of magnitude or so, we are then getting into the period when the sun is starting to get too hot and big to allow for life on the planet to continue."
Ok, but without humans, does it matter?
"But then suddenly, a lot of people decide what they formerly thought impossible, is in fact possible--and so it does become so."
I agree, at the fall of communism, suddenly a lot of people agreed to act on what they already knew but didn't dare say, that communism was bad. I don't see a possible parallel in modern, high-tech urban life. We like it. People who don't have it strive to get it. People flee to it, not from it, as was the case for communism.
"What is really in fact physically impossible no matter what is the continued growth of the modern global capitalist industrial society."
On the contrary, it is very possible.
"Care to join us? You could be of great help."
Sorry. But perhaps I help anyway.
Again, economic growth is not really decoupled from energy use. Besides outsourcing, infrastructure maintenance is neglected. Keep the infrastructure up and the decoupling probably disappears. Debt goes up with GDP. So, everybody, stop looking at GDP, please!
Yes, I know, cars are so much more efficient now.
"Keep the infrastructure up and the decoupling probably disappears."
I've heard this about infrastructure before. Could you quantify the neglect of infrastructure? And even better, can you do it for Germany too, that has a great industrial base, negative energy growth since the 70-ies and, as far as I know, quite good infrastructure?
Country boundaries are, of course, arbitrary. Much of the growth in GDP in Germany, I imagine, comes from importing more energy from outside its boundaries. I'm sure there are (shortish) periods when some kind of real economic growth can happen purely on increases in energy efficiency, but I can't see how those periods could last very long.
Don't understand your argument. Importing how? Germany has had negative energy consumption growth per capita for the last 40 years. That includes imported energy.
So would you say they are getting steadily more efficient in their use of energy? Do you expect that such efficiency gains can continue for ever?
Yes, I would say they are getting more efficient in their use of energy. No, such efficiency gains cannot go on forever, but for very, very long. And we can also keep expanding non-fossil energy use for a very, very long time.
The trouble is, such optimism of (near) eternal expansion is what got us into this trouble in the first place.
What are we going to use this ever-increasingly-efficient economy and renewable energy to do?
Even if you leave out the effects of ff, what we have used most of the bonanza of energy to do so far is to ravage the planet, instigate the sixth great mass extinction since the beginning of life, wipe out ancient cultures and languages around the world, create more starving masses than have ever existed in the history of the world...
Our record has not been good.
I see no evidence that efficiency of energy use and use of renewable energy is going to change all our other rapacious ways. We will just ravage the planet and the future in a modestly more 'sustainable' way.
"The trouble is, such optimism of (near) eternal expansion is what got us into this trouble in the first place."
Was it? Wasn't it the expansion in itself?
"What are we going to use this ever-increasingly-efficient economy and renewable energy to do?"
I don't believe in a (universal) meaning of life, but I do know that happiness increase with income, and I place importance in different kinds of improvements we have seen.
"what we have used most of the bonanza of energy to do so far is to ravage the planet, instigate the sixth great mass extinction since the beginning of life, wipe out ancient cultures and languages around the world, create more starving masses than have ever existed"
Ravage the planet, perhaps, but in industrialised countries, we have also found ways to mend some of the problems we have created. Many rivers that were polluted are now quite fresh, many chemicals found harmful have been discontinued, the ozone layer depletion was solved, and environmental regulation is in place that preserve species and special habitats. Some people here have likened humanity to yeast, but as we become richer, we behave less like yeast. For instance, energy use and population flatten. The solution obviously is for developed countries to become prosperous and democratic.
Wipe out ancient cultures and languages? Yes, perhaps, and good riddance. Ancient Japan may have been good to samurais, but for who else? Global illiteracy has halved since 1970, from around 36% to around 18%, and more people know multiple languages than ever. 200 years ago, nobody could within their lifetimes enjoy the cultural diversity of what an ordinary person can enjoy during a single evening with youtube.
More starving masses than ever? Perhaps, but the proportion has halved here too, right? And the starving masses are not in the growth areas, right? They only got hold of some artifacts of the growth that surrounds them, such as medicine, but hasn't aquired per-capita economic growth in itself. And that's the problem. Before 1950, North and South Koreans were equally tall. Today, North Koreans born during communist rule are on average many inches shorter than their South Korean relatives.
"We will just ravage the planet"
Philosophically, what do you feel the planet is for? Are you worried that humans destroy our own habitat, or are you worried that humans destroy the planet, period? I.e, if you could, would you simply wipe out humanity so that the planet could once again be an unpolluted green-blue gem in the universe? To me, humanity and its progress and well-being is paramount. To me, the environment is for us to use, change and adapt to suit our needs. (Our needs may often be to leave it be, but that's another matter.)
My humanity-centric view may make me less upset than you seem to be. Sure, it was a real pity that the New Zealand colonizers wiped out the Moa bird, for instance, but OTOH, I do have access to the rest of NZ if I choose to travel across the world. Or if I turn on Discovery channel. Infinitely more nature is "available" to me (and understood by me) than if I would have lived a simple pre-industrial life in a small valley in "harmony" with the local nature. AND I have access to the wonders of the modern world and its diverse subcultures too.
Japan has 3 nuclear reactors and 4 spend fuel rod pond that are spewing radioisotopes all over the northern hemisphere. Russia (Soviet Union) was (is?) notorious for using cheap disposal methods for every piece of toxic junk they needed to get rid of. Ukraine is begging other countries and failing to get enough support to entomb the Chernobyl reactor. British Petroleum blew it at the Macondo well in the Gulf of Mexico. The current trend in the U.S. is to dismantle environmental regulations directly or circumvent them through trade agreements and outsourcing to China. There appears no chance of achieving international cooperation to stop anthropic climate change. The ocean continues to be assaulted by overfishing, acidification and pollution.
The population of the yeast also flattens before it collapses. There are not enough resources for 7 billion people to become prosperous.
Exactly! There are not enough resources to support 7 billion people even at their current rate of prosperity. That is why resources are being depleted at an alarming rate.
It is shocking how many people still buy into that silly demographic transition myth.
Ron P.
Ron,
There are not enough resources for 7 billion people to become prosperous.That is why resources are being depleted at an alarming rate.
Resources are being depleted because either they are not being recycled or managed sustainably. There are no shortages of solar or wind resources to supply the electrical energy required for a very prosperous standard of living, and no shortages of minerals needed to build renewable and or nuclear energy. If farming is not carried out in a sustainable way then even 1billion people would not be able to remain prosperous indefinitely. I dont see why sustainable agriculture is not able to easily feed 7Billion, perhaps not eating 400g steaks once a day but supporting a diverse nutritious healthy diet.
What other resources do you see limiting that cannot be recycled and are essential for 7Billion to have a high standard of living( say OECD average)??
Oh what grand delusions ideology does produce. You haven't researched any of this. It is just a belief produced by your ideology. How does one recycle burnt gasoline, diesel or kerosene? There is no shortage of wind or sun but there is a shortage of infrastructure to produce it. And we won't even talk about nuclear.
You don't see because you have not done ten minutes of research on the subject. Did you know that water tables in India, China and many other parts of Asia are dropping by several meters per year? Did you know that many farms in India are being abandoned because their irrigation wells have gone dry? Did you know that the Yellow River in China no longer reaches the sea for most of the year because the water is used for irrigation? Did you know that 60% of Asia, over half the world's people, get their food from irrigated land? And did you know that this water is disappearing at an alarming rate?
Modernized Irrigation
According to Stockle (2001), irrigation allows land to be, on average, twice as productive as rainfed land. Even though only 16% of the world’s croplands are irrigated, those irrigated crops produce 36% of the world’s food.
Look at China and Pakistan. And their water is disappearing fast. And I won't even mention Egypt, where upstream populations are taking so much water that Egyptian farmers are losing cattle and farms. And climate change is greatly exacerbating the problem.
The situation cannot possibly last because 7 billion people are tapping out the world's water supply, the world's oil supply and the world's supply of topsoil.
Ron P.
Ron,
You don't see because you have not done ten minutes of research on the subject.
If you had done a 10 search you could have discovered that I have worked for 35 years in agriculture.
Did you know that water tables in India, China and many other parts of Asia are dropping by several meters per year?
Yes
Of the irrigated agriculture not all is from ground water and not all ground water is being used non-sustainably.
By your own figures 65% of agriculture is non-irrigated.
Also very large amounts of cereal crops are fed to animals or used for biofuels. The challenge isn't to feed 7Billion it is to feed a possible 10-12billion.
Really? I was raised on a farm but never became a farmer myself. But I have studied the agricultural situation of the world extensively. I know many people who have worked in agriculture for decades who don't know beans about the world food supply.
Yes, I pointed out the fact that a lot of the water comes from rivers:
Watch the Aral Sea Disappear because of irrigation from rivers. The exact same thing happened to Lake Chad and it's all because of irrigation from rivers. The Colorado river dries up over 100 miles before it reaches the sea... largely because of irrigation but also because of the expanding population.
Yes 64% of food is not produced by irrigation but 37% is. Most importantly Asia, home to 4 billion people, depends on irrigation for 60% of its food. And the ability to feed those 4 billion people is shrinking fast as rivers and aquifers dry up.
We are clearing forest and driving species into extinction in a vain attempt to feed the current 7 billion people. Orangutans are being driven to extinction because the forest of Indonesia are being cleared. Soon they will be completely extinct.
Just trying to feed the current 7 billion people, at only the current lifestyle they now have, is destroying the earth. The idea that we could feed 10 to 12 billion people at an even higher lifestyle is totally absurd.
Ron P.
Desalination of a cubic metre requires around 3 kWh (thermal), but technology in this area is improving. According to the water footprint network, 1 kg of boneless beef requires around 15 cubic metres, which corresponds to 45 kWh . 2 kg of beef per person should suffice for people on an all-beef diet, so that's 90 kWh/capita and day, or an continuous power of 90/24 ~= 4 KW. However, on a vegetarian diet, a tenth would suffice.
Since a wind tower can produce 1 MW, it can thus cater to 250-2500 persons irrigation needs depending on diet, and if they all split the cost of the tower, say $5 million every 20 years, or $250,000/year, they would each need to pay $100-$1000 per year out of their average global GDP/capita of $9000. Of course, nuclear would make it much cheaper still, since we'd use process heat directly. As would better desalination tech, better irrigation tech and crops or animals with less water requirements. It is easy to conclude that water may be a local problem and drawing cheap fresh water from rivers and lakes may be a local environmental problem, but it won't pose an existential challenge to feed humans.
"Japan has 3 nuclear reactors and 4 spend fuel rod pond that are spewing radioisotopes all over the northern hemisphere."
In negligible amounts.
"Russia (Soviet Union) was (is?) notorious for using cheap disposal methods for every piece of toxic junk they needed to get rid of."
That's good, all else being equal, right? Jokes aside, Russia has had too much socialism and too little growth, so if you don't think their environmental standards are good enough, that supports my point.
"Ukraine is begging other countries and failing to get enough support to entomb the Chernobyl reactor."
Too little growth.
"British Petroleum blew it at the Macondo well in the Gulf of Mexico."
We'll always have industrial accidents every now and then. No big deal.
"The current trend in the U.S. is to dismantle environmental regulations directly"
I don't believe you. Please quantify.
"or circumvent them through trade agreements and outsourcing to China."
The same old tired anti-trade moaning. Trade supports growth, growth supports rapid improvements in environmental regulations.
"There appears no chance of achieving international cooperation to stop anthropic climate change. The ocean continues to be assaulted by overfishing, acidification and pollution."
Yes, partly because the third world has had too little growth to agree to cut back on some opportunities.
"The population of the yeast also flattens before it collapses."
Not like we do. For us, the ones that are best off, most well fed and so on, flattens first, voluntarily. For yeast, it is the other way around.
"There are not enough resources for 7 billion people to become prosperous."
There most certainly is. 10 billion too.
BlueTwilight, we are both wasting our time and energy. Anyone who believes that we have enough resources to bring 10 billion people into Western prosperity has not a clue as to what is really going on in the world. They just mouth words that support their world view without examining any facts whatsoever.
Ron P.
Interesting question on quantifying. I think a good place to start is to start by using "net" instead of "gross." Net domestic product...net energy...growth net of debt. If we want to measure GDP vs. energy as the only yardstick, I think the trend will continue for quite a while.
Just a few points.
One person’s debt is another person’s asset.
One person’s interest expense is another person’s interest income.
Interest (viewed as an expense) is one more way in which an income stream gets distributed. As long as the interest share is manageable, either because the underlying debt is relatively small or the interest rate is reasonable vs income it is manageable. As was pointed out, debt (payments) can be amortizing so the debt will extinguish over time (and that is where the “mort” in amortization comes from btw).
So as long as a debt is not excessive (to cashflow) it can be not just manageable but even productive. If I am a really good baker and my sales are limited because I only have a small oven but I don’t have the cash to buy a big oven taking out a loan, buying the bigger oven, having the cashflow to repay the loan, can actually increase the utility to society (more bread). I may make less (because some of my income is now diverted to interest/principal) but eventually my town will be better off (more bread) and I will be better off (more income).
When I, the baker, get into trouble, is if the loan is made with the assumption that I will be able to double the price of bread and increase sales by 5x etc etc.
So loans per se are not evil and destructive. Quite the opposite actually if used with restraint and thought.
All this does imply that the other resources like bread ingredients, energy to run the oven, labor the make the bread, are not in short supply of course. And that is where peak resources tosses a wrench in the whole thing, and where society in general, and finance specifically, has to make a huge adjustment in it's reasoning and analysis.
Rgds
WeekendPeak
jeppen, very optimistic! I unfortunately don't agree with your points but maybe I will in the future. That or ignorance would become bliss.
1) Just because we move our mass moving to China doesn't mean we are not really doing it. It sure looks nice but those factories in China are making all that stuff we consume. A slide of hand, but mother nature is not fooled.
2) If we go though the whole cycle - take out a loan, money is printed, return loan + interest we see there is that pesky interest that fouls up the works, especially in reserve banking. I can invest some sand to a glass shop and they make it into glass and give make me a profit and that is great. However, we all forget about the infrastructure that supports that complexity of this transaction in such a way as to make the reward outweigh the risk. Without growth our current money system does not behave well. Just think where the interest comes from. If you pay back all debts you have no money and negative credits. Only growth can satisfy that beast.
3) I feel growth has already stopped on a global scale (scary, I know). It is now a zero-sum game. If China grows, someone else must fall. This game is about to get much more competitive, lazy need not apply.
Basically it's the resurgence of risk. Something the developed world, in its hubris, thought it had banished. The finite nature of oil, and fossil fuels in general, reveals this.
Flat earthers have dominated modern thought, despite all scientific evidence to the contrary. Doesn't matter if they are of the Friedmanite or Krugmanite variety. It's one of the paradoxes of our times, but it does fit well with what we know of human psychology.
Wow, a simple thought experiment that puts infinite growth at an even more ridiculous trajectory than it appears by quick inspection. Well done, sir.
I'd quibble that we lack tested economic systems based on steady-state conditions. We've had them, it's just that they sucked. I'd say that massively unequal peasant economies have been a pretty reliable staple in the course of civilization. Sure, there were only a few (hardly stagnant) centuries between the decline of Rome and the coal-fueled Rennaissance, but Asia has a few millennia of that sort of thing under its wide belt.
At any given period in history there have been several relatively independent cultures around the world. Most of these have been steady state, or approximately so, over 10 generations or more. In other words, for generations living in the middle of such a 300 year span, material progress must have appeared to be stopped.
Some examples are Australian aborigines, who had steady state economies for many centuries, sub-Saharan Africans prior to 1900, Chinese in several dynasties, Persians in a few dynasties, etc.
This does not follow. Food could very well get so cheap as to be an insignificant part of the economy while paychecks shrank even faster. This would leave not too many people enjoying a nonetheless growing economy. In fact, since people must eat, then removing them from the economy seems to me like a very effective way to make it more energy efficient.
/me feels like Ebenezer Scrooge.
Tom said (and one or two comments also touched on this):
I have 'known' this intuitively for 40 years, but could you spell it out a bit? I am learning useful stuff from these (Tom's) posts.
(It is possible to think of individual loans that might not require 'growth', though they would seem to need some kind of profit, but on the macro scale, money represents 'something', and we do not get 'something for nothing'. Interest payments feel nice to receive but somebody, or something, must be doing the extra work?)
"Interest payments feel nice to receive but somebody, or something, must be doing the extra work?"
There is nothing "extra" about it. It's just a part of the work you do.
One big difficulty with this sort of reductio ad absurdum is that it always begs the question: Does the phenomenon in question need to slow down or stop now or in any time-frame that reasonably needs to concern policy-makers? If they feel they can answer "no" to that, they'll do so and move on, and the wider public will move on with them. IOW, while it may be academically amusing to argue that something needs to be deliberately stopped now merely because it can't continue on indefinitely into a distant, farfetched speculative-fiction future, it may prove socially and politically futile to do so.
The problem with this approach is that the limits to growth generally do not become apparent in a system until well into the last period of doubling. By that time it is way too late to put the brakes on , design a new system and transition to it without going into catastrophic overshoot. All the signs I see are that we are well into the last period of doubling, not just of oil, but land, food, water, fish, climate, etc.
So long and thanks for all the fish...
Overshoot can be solved by a fairly rapid decline in population. One example is Mexico in the 16th century. Estimates are that population declined by about a factor of 8, although there are higher and lower estimates.
The Peopling of Mexico from Origins to Revolution
This reference is worth study in its entirety. Thanks.
'Overshoot' though is a tad simplistic to describe pre-conquest Mexico and subsequent post-colonial crash!
Catastrophic colonial policy and introduced European disease had dramatic effects.
(The history of smallpox is worth both study and reflection by any "collapse survivalists" among us.
Rapid reaction public health professionals saved Britain from potentially dramatic effects of an introduction as late as 1962. Good job the virus does not exist in the wild anymore.)
Indeed. What would be nice to see is good historical examples of fairly rapid, more or less voluntary decline/powerdown of a large scale, complex society based on less horrific 'methods.'
I frankly can't think of any examples myself. Just of areas that had the possibility of expanding greatly, but chose not to.
In the early 15th century, China had a huge navy that was capable of going to Africa and beyond. Presumably at that point, they could have conquered, or at least colonized, much of the old world (at least), but they didn't.
http://en.wikipedia.org/wiki/Naval_history_of_China
How about Asoka in India? http://en.wikipedia.org/wiki/Ashoka
Good example.
So we need a mass conversion to Buddhism!?
While the post-colonial crash in Mexico is different from a post-Peak Oil crash, it may be instructive as a case where a) population contracts by more than 5 to 1, and b) it does so over a complete society in the sense that for someone in Mexico at the time it must have seemed like the whole world was collapseing. In other words, given transportation and communication at the time, the non-collapse elsewhere would have been over the horizon.
While future declines in population are more likely to be associated with famine and war, epidemics are still a possibility. In face, in a few more decades, smallpox would find a population without immunity in which to spread and cause death, particularly among older patients. And there is always the possiblity of genetically engineered pathogens being released, as well as other pathogens jumping the species boundaries.
Ralph
I have very much appreciated all your comments to this post.
China looks to 'double' within next 10 years. (India?).
Though by our standards Chinese people on average do not eat a lot of animal products, and they will not double their direct calories intake, consumption of extra animal product could require primary production of grain and soya to perhaps double over a similar time-frame. (3-4 units of grain for every one unit of 'animal').
On the other hand large industrial projects tend to long time-frames. Airbus for example talk about their planned 'family' of airplanes extending out to 2080. Extensio ad absurdum?
phil
Edit: I might have exaggerated food changes in China, but more animal product is being eaten by emerging middle classes everywhere, and the impact on global primary grain production (and fertilizer consumption) is already large and apparently accelerating.
The future is not far fetched. It is certainly going to happen.
It is not speculative that acceleration of resource use at current rates is unsustainable. We are already bumping up against many limits.
A skilled politician, in combination with other forces, can make the problem clear enough to enough people to make some needed changes.
But if we keep being surrounded by people constantly whining, "No one is ever going to do anything about this so we might as well stop talking about all this far-fetched, speculative stuff" that is likely to be a self-fulfilling prophesy.
I still think that this problem could be solved by replacing the majority of our physical experiences with simulation. Yes, the baseline energy expenditure per consciousness could be higher, but the actual energy cost per quality of experience could be vastly reduced.
In reality, this is happening to a small extent already. Witness the rise of massively multi-player games such as World of Warcraft and the creation of a virtual economy. In a scenario in which (almost) everyone is already playing an MMO, where are the marginal energy costs for engaging in virtual economic activity?
In a simulated world, I could hypothetically run at 70 miles an hour, punch an enemy into orbit and shoot gigajoules of energy from my eyes, eat my own bodyweight in champagne and caviar and the effective energy cost would probably be only slightly higher than simulating me being face down in a gutter with rats nibbling at my toes.
That said, I think this would only hold true for a society that had already successfully transitioned to renewables/nuclear fusion. I'm not advocating this as a way of solving the impending crunch, but as a way of ensuring continual economic growth in the far future.
It's possible that everybody playing World of Warcraft is actually and unknowingly piloting a Predator drone over Afghanistan.
Gears of War seems more likely for that. ;)
"And yes, the 15% efficiency of many solar panels does mean that 85% goes to heating the dark panel."
This statement is not even close to true.
Yes, it is close to true. If solar panels reflected unused sunlight rather than converting it to heat, they would be white rather than dark in color.
No that is not true. Visible light is not all there is to the solar spectrum and solar cells do a pretty good job with that portion of it. Longer wave-length, near IR components of the spectrum pass right through the silicon or other semiconductors and are reflected out of the cell since the back contact is generally a reflective surface. Similarly, the UV component is not converted but is reflected from the front surface ARC. What is turned to heat is the difference between the energy of the incident photon and the band-gap of the semi-conductor in question within the response range of the solar cell. 38 - 55% is a more realistic value depending on the technology in question. In advanced devices this number can be reduced as low as 22%.
SW: good points—I should not be too cavalier about "black." 22% of the solar spectrum is beyond the silicon bandgap and passes straight through (to be reflected or absorbed at the back, depending on coating, but only dumb design would allow absorption). 65% is between 400 nm and the bandgap at 1100 nm, and falls in the "black" zone. I'm not sure where in the UV they become reflective, but the newer, blacker cells presumably absorb more UV than do the older, bluer ones. So I would think that over 50% absorption is a typical number. Thanks for the correction, and I retract my "black is black" statement below in response to goodmanj.
But not to get lost in the details: today's bulk-market (15%) solar panels generate far more heat energy than delivered electrical energy, which supports the primary point in the original post: that solar panels do not stand apart from heat engines on this count.
Whats critical is the difference in energy reflected by a solar farm and the adjacent non-solar field or non solar roof-top. If both reflect about the same amount of solar radiation consuming PV energy will have no effect on the earths temperature.
As I understand matters (I only knows what I reads on teh internets (for examples) about these things), long-wave radiation (the product of a 'black' PV cell) is absorbed within the atmosphere, and so has a harder time getting out than visible light reflected by sand-coloured desert.
So the wavelength of reflected radiation is as important as the quantity. Converting visible light to infrared should, according to theory, increase local temperature. This jibes with experience of sunlit dark-coloured cars versus light-coloured ones, or new, black asphalt versus new, near-white concrete.
Good job, goodmanj. I can add that my 15% panels in the sun get to 30°C hotter than the ambient air. At typical radiative+convective transfer of 10 W/m²/K, I calculate something like 600 Watts of thermal offloading (2-sided) for 130 W-producing panels. Mind you, these numbers are ballpark, but support the assertion that the vast majority of energy turns to heat in the panels. Sure, some is lost to reflection, but black means black.
Interesting that researchers just recently talked about the heat-shield benefits of having solar panels on your roof. Those heat sinks mounted a few inches above your roof usually allow a nice flow of air to take heat away and actually help to cool down your house, even if the panels are not connected! Another bonus for owning solar panels. However, please connect them to your service as the cost benefit of not doing so would make you the financial fool.
This is the solution to Fermi's Paradox, civilizations run out of energy and resources before they reach a state where they can tap the energy of their own planet, star or universe, Kardashev scale is a mirage has always been.
Any advanced civilization would need to micro manage it's entire population to judiciously use energy for living as well as future scientific endeavors, clearly an impossible task given the scale of the work.
Society is a game. If you set up the rules of the game so that those that use the least 'win'--get the highest prestige and power--you are on your way to solving your problem without exactly 'micro-managing.'
Most pre-modern societies had elements of this, since their holy men and women, whether bhramins, Benedictine monks, sufis...generally did not consume mass quantities of food and other goods, and were the more highly praised for it.
Modernity has mostly discredited such (relatively) ascetic pursuits, but that doesn't mean that all humans are somehow 'programed' to always and only consume at the highest rate possible at all times.
Dohboi has a VERY good point-but just how we are to go about recalibrating our egos to place a higher value on a modest lifestyle versus a high comsumption lifestyle is a very tough question.
As a practical matter, I can't see it happening, but sfaics , there are no theoritical barriers to such a cultural transformation.
But there are practical barriers, like envy and greed. Never forget that we are mere animals, with no means whatsoever to bypass our evolutionary heritage of once necessary, but now utterly self-destructive traits. In the long run instinct will always prevail over culture, because culture can get lost in the black holes of history, while instincts survive even the darkest of times.
So, in theory this planet could certainly be an utopia. In reality, not so much. Too many of us see it as their divine right to do whatever it needs to still their narcissistic hunger for ever more wealth and power.
The odds are extremely low, almost next to impossible. I am not a really big fan of the ancients, yes there are a few good examples out there about living within your means, but they too were susceptible to vagaries of rise and fall. There are hardly any civilizations which have survived till now, fewer still which have maintained their investments in technology, we had the Arabs and the Chinese, world leaders in technology in their halcyon days, not much to write home about nowadays.
Edit : this was a reply to dohboi
"The odds are extremely low, almost next to impossible."
I agree--I'm just grasping at whatever thin, odds straws there may be out there.
But sudden mass conversions to all sorts of things have happened in the past in various places, and if people really come to see the extreme position we have put ourselves in, all sorts of new (or very ancient!) thinking could potentially take place.
I think your dismissal of earlier societies because they rose and fell betrays a very modern and very unrealistic assumption and expectation--all things in the natural world arise and decay: why should human societies be different. Only plastic and other dead, inert things never die. By desperately trying to create a global society that will be eternal, we are turning the bright blue living orb into something dead and inert.
India, as you know, is particularly blessed with a rich ancient literature, much of it celebrating essentially natural phenomena.
Agni'm ile puro'hitam
yajna'sya deva'm rtvi'jam
...
and all the rest (The beginning of the first hymn in the RgVeda...I used to have more of it by heart...the old mind is going...)
"just how we are to go about recalibrating our egos"
I'm going to leave that one up to you, ofm ;-)
Perhaps a nice little global old fashioned revival meeting is in order!
I'm only partly kidding.
The various "Great Awakenings" of the 19th century could serve as a kind of model, especially the second and third that lead to to abolition movement and the 'Social Gospel' in particular. http://en.wikipedia.org/wiki/Great_Awakening
A more secular model might be the Grange Movement. http://en.wikipedia.org/wiki/Farmers%27_movement
These were all popular movements that spread rapidly without massive budgets and helped improve peoples lives, helped people look beyond their own narrowly defined interest...
Of course, some 'popular movements' can have darker sides to them.
India brings some examples to mind - Bhuddism, and especially Jainism. Hinduism less so. Modern Hindu priests are like many medieval Monks - grown fat and rich on their ascetism.
Unfortunately many peacable Bhuddist societies end up being controlled by brutal military regimes, like Burma. A sort of rock, paper scissors game.
"Heating a home against the winter cold involves a certain amount of thermal energy for a fixed-size home."
No it doesn't. Heating a home is a matter not of size but of heat gain/loss.
Even granting that indefinite growth in energy efficacy (used rather than efficiency to include process change and substitution), is obviously bounded, this only means that the "other" stuff has to comprise the bulk of the economy for the economy to continue to grow. I think your argument descends into handwaving at this point.
Houses built to PassiveHaus standard, need little more than the heat of their occupants, passive solar heating, and waste heat from cooking, lighting etc. to keem them warm through all but the coldest days of European winter.
Reguarding how to build a steady state economical system it's quite easy in theory. Creating a cybernetic system with feed back loops metrics tied directly to the environment would do the trick.
Cybernetics is the science of managing complex system. Applaying it to our society would require to connect every data stream together to build a kind of neural system to manage every economic activity while satysfing the needs of the population.
Yes it should be possible to micro manage almost everything by using the modern power of computers, imagine the huge computing power used by banks to understand the market chaos, instead used to power a dynamically planned economy.
By emboddying our faith in science into a politcal system it could result in a new era for humanity .
Anyway we already are too much involved in our relationship with technology , either we stop using any or we fully go for it by using all the tools created at there maximum potential.
The only try in history flawed by nascent technologies and a "lack of US support " ....
http://en.wikipedia.org/wiki/Project_Cybersyn
The books written by theorist Stafford Beers or Norbert Wiener about the concept of cybernetics are also a mine of information.
The promise to solve complexity and energy problems using computers is the biggest fraud ever perpetrated in science, computing power has roughly grown by twice every one-two years and yet the advances in predicting anything, let alone energy issues has been at best marginal.
Take the stock market algorithms for example, they've become so unpredictable that the code writers themselves don't know what to expect. They cause flash crashes, unpredictable trades and a host of other issues. If you remember a few months back the prices of oil collapsed overnight by 10$ or more without any known external event, experienced traders blamed it on the algos.
Chaos theory tells us that you can only broadly guess the impact of certain conditions on future, something which this article is doing. Initial conditions and small inconsistencies quickly overwhelm the best computer models and can lead to radically different outcomes.
Must have heard of this in nursery
For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
Moral of the story, computers can't predict which nail is going to overwhelm the system.
I don't think you get what I have written above.
In a cybernetic political system , markets wouldn't exist and computers would be used to do what they are best, managing steady flux of informations, tied to production and energy.
From a logical standpoint markets are inherendly flawed concerning issue like debt, human behavior, or environmental issue so they need to be replaced by something else. And politics is also flawed by human emotions bias which has always screwed us in the last millenia and need to be replaced by something that makes people living conditions good enough for politcs to become a minor issue.
I don't say that it would be the best system ever, just the best system for managing what's left of the planet and the overshoot population on it trough this rough path.
That is, communism with better planning tools. No thanks, I rather go with the market and its aggregated humans "flaws".
No, it's the matrix--makes even the most totalitarian type of communism look like a walk in the park.
Like the matrix ??? Why should it be taken from the "evil" side of the things. Right know your positions trough your phone is known, what you do is also known from your credit card purchase, what food you buy can also be known trough your supermarket cards, etc .... In terms of freedom we have not seen worst since the caveman era so you just have to accept that people will get information about you and control it in some ways, just depends on how well intentioned they are ...
The point is that machines will take over any simple works driving millions out of work destroying the demand in a market type economy...
It's easy to get the point trough example like cashiers being replaced by RFID tags or call center workers being replaced by IBM Watson types machines.
It's been announced for decades that it will come because finally technology has got bad ass enough to do it, and no new sector to transfer people to this time ....
Please do enlighten us of the revolutionary characteristics of this new 'bad-ass' technology? How does it manage our energy use in practice? Would it be attached to power-stations to switch them on and off according to capacity generated or consumed? What would be the consequences of that?
As to the increase in computational power - have you heard of the expression garbage in garbage out. Tell us which sentient being is the one responsible for the input? Or by which algorithm does the machine generate its own input. Who designed the algorithm - and what parameters did he use? (ad infinitum)
And mainly these days it is not the speed of your processor or size of your memory that is the bottleneck - its the algorithm and ultimately the limits of computational theory (mathematics).
Your examples are not illuminating the grand claim of yours: a cashier-till system could just as well be replaced by 1930 punch-card system system. And have you contacted a call-center recently? People are already programmed to follow checklists that supposedly cover every imaginable need.
And guess who deviced the punch-cards, checklists, programmed the RFID-tags and trained the IBM Watson machine. What you are describing are increases in efficiency and scale - not principle.
And its not people that are broken. Its your argument.
I have no cell phone, nor a supermarket card, and rarely use my credit card--so I guess I'm flying under the radar a bit--which probably makes me some sort of subversive '-)
But, yes, information about most everyone is becoming more and more available. You think that this is wonderful; I think it is a cause for concern. Perhaps we should leave it at that?
I brought the subject up but I'm not a expert, still i found interesting the argument made by Beer and Wiener about it.
I don't think they were Crypto communist tyrants trying to impose their system against all logic and human will.Actually given the piece of work left by Beer during the Chilean experiment you can think it was a sensible person trying it's best to deliver something good to the Chilean people. I fail to see why they are considered such evil trying people when their work was overcame by a coup sponsored by the US and replaced by a terrible dictature that left many dead.Given som time they might done some good things and set up an alternative to the market system.
Reguarding the "fact" that their is not enough computing powers to do something about the economy, if there is enough computing power to simulate the world climate given some good programming it might be enough to do something about factories input and output.
The whole organization would be managed under the rule of a Viable system model framework :
http://en.wikipedia.org/wiki/Viable_System_Model
Apart from the noise due to the overwhelming size of the problem we face today i still think the market system is the main problem.
It brought us wer we are today and technological and structural changes will make it even more unstable. It might be by a few percentage points but still efficiency is putting people out out work, adding further to the problem is that we already builded almost everything we needed in the developped countries and maintenance require way less people to be done.
On top of it you have mega corporation fighting to death trough lobbying and mass communication to block any possible changes.
The top of the pile is controlled by financial entities that will never be regulated because there point of existing is actually to deregulate eveything as it is there way of living, and I'm not even mentionning the level of debts ...
And finally reguarding energy i think the market system because of it's structure will use it all in all form possible to maximize growth because that's what capitale does always, it grows or it dies...
Yeah Dohboi we can left it there, i will go back being a sad doomers when i see that people will never give up some of there sacro sant freedom of choice and what to buys in order to get a more fair world ...
Still your on the internet ;-) Except if your using a thor network and no mail i can see some google power users sniffing into your mails to see what's up in your life ;)
Just came out on Zerohedge :
http://www.zerohedge.com/news/chinas-answer-inflation-robots-foxconn-pla...
Even in China they are no transferring from workers to robots ...
Posted on Drumbeat today but fits the subject of this thread perfectly.
The U.S. economy is indeed shrinking
The debate is now over. The economy is shrinking! And as this article suggest, a shrinking oil supply is the culprit. The debate should now switch to how we handle the collapse.
Ron P.
Ron,
The linked article provides no evidence that the economy is shrinking. One incredible statement:
All businesses should start wondering whether their employees could get to work if they couldn’t afford to fill the gas tank. Is your business near a transit network? These are tough questions.
There seem to be many rather simple solutions:
(1)park or sell that low mpg vehicle,and replace with a used high mpg vehicle
(2) car pool with other employees
(3) reduce non work related driving by using mass transit, bicycle, walking or shopping less frequently
(4)get on waiting list to buy a EV or PHEV vehicle.
"Simple." Sure, whatever. Presto! Isn't this the sort of magical thinking that often sidetracks us into the weeds?
(1) maybe, if you're made of money. But who is these days, with real incomes mostly static or falling and costs and government mandates ever escalating? Who's giving away reliable used high mpg vehicles? And many family vehicles are multi-purpose; will the high mpg microbox fulfill the other purposes, or would you be stuck paying two sets of fixed costs (insurance, licensing, deterioration, etc.) instead of just one?
(2) sure, if you've still got a mid-20th century job at a large factory with rigidly timed shift changes, in order that the schedules and locations should match up. Maybe not so much otherwise, especially if you've got a family, or it's otherwise costly to wait around for your carpool partner(s) every time they run late. Or, on an alternative arrangement, not so much if the cost of taking a ruinously expensive cab home every time you need to run late gets to be too much. The trouble is, those old rigidly scheduled factory jobs have mostly been moved to China.
(3) that's probably the driving that's least well substituted. Shopping infrequently by mass transit is almost a non-starter since there's no practical way to lug a significant quantity of anything, such as groceries, home. You'd have to triple or quadruple the number of trips, and considering the slowness and infrequency of most US transit, there wouldn't be enough hours in a week. After all, most transit is geared to take take people to and from nine-to-five weekday-only downtown jobs, and little else except by sheer accident. And - warning - beware of becoming like that woman who famously looks to be incurring jail time over crossing the street.
(4) LOL, run out tomorrow just like that and buy a yuppie car; now we're really talking being made of money. And do you need plug points away from home for it to be economical, and if so do they exist? If you can afford it, might it still be cheaper to just get a high mpg microbox and eat two sets of fixed costs?
Sure, some people will do some of these things. But OTOH, one normally doesn't find $100 bills lying about on the sidewalk - that is, no matter how much wand-waving we might enjoy indulging in, people apparently don't find your list all that "simple", or we'd see more of them doing those things just to save money. But given the incredible length of some of the gas lines in some parts of the world right now, even some people poorer than most Americans must not find it all that "simple" either. Indeed, given the lines here in the 1970s, people back then must not have found the applicable ones (all but 4) to be "simple". So, not saying it's impossible, but it must not be "simple" at all, at least not at any substantial scale.
Oh, and
is not such a "simple" question either. If you're a well-heeled lawyer with prestigious offices in the astronomical-rent district near the downtown courthouse, the answer may very well be "yes", even if by accident. OTOH if you can't charge $1000/hour to help pay astronomical rent, or your business involves activities outlawed or strongly discouraged downtown, such as assembling or manufacturing almost anything, then the answer is probably "no". Or at best the answer is that you're near some peripheral branch of the network, but it would take most folks half a day of waiting around and crawling along circuitous routes to get to or from your location, and never late at night or on Sunday. Even in the expensive overpopulated New York area, a lot of the peripheral stuff runs once an hour - who has that kind of time? - and might not run at all on Sunday. Elsewhere, forget about even that.
In respect to the problems involved in owning and operating motor vehicles:
There are some simple political solutions that probably won't be but could be implemented that would enable us to save quite a bit of fuel at little or no costs.
Consider insurance for instance.I have "parked" my elderly Escort, which if driven gently gets close to forty mpg on the highway and am driving a pickup truck exclusively-because even though the Escort gets far better mileage, I wasn't using it often enough to save enough on gas to pay the insurance.
I can only drive one vehicle at a time-the trivial discount I get on the second vehicle policy means the premium is almost all gravy for the insurance company.This problem could be easily solved by a rewrite of the insurance regulations.If this were to be done, there are probably a few million people out there who would own another ADDITIONAL vehicle-one that gets very good gas mileage used mostly for commuting and running driver only errands.
I would reregister my Escort and thereby save a hundred and fifty to two hundred gallons or more of gasoline a year.Some of my acquaintances would save up to three or four times that amount, but as trhings are, they will just drive thier trucks and suvs exclusively.
A rewrite of property tax regs in favor of owning a second or third commuter vehicle required to get very high mph could also help cut vehicle consumption considerably.
The advantage of this strategy is that it would encounter little resistance from the public-whereas raising gasoline taxes is hopeless.
It would also mean the existing stock of larger trucks and cars would last somewhat longer-so that when they are finally scrapped, they will likely be replaced with considerably more efficient models.
PaulS,
Isn't this the sort of magical thinking that often sidetracks us into the weeds?
Most OECD countries pay a lot more for gasoline than the US, they manage using some of the above suggestions.
They may not be painless, but a lot less pain than loosing a job.
Lets look at these simple solutions and you excuses for not using.
(1) replace a low mpg vehicle with a used high mpg vehicle. It doesnt have to be a large vehicle or new or loaded with options. Most small vehicles will still operate for >200,000 miles with moderate repairs. It doesnt have to accommodate 9 people or haul a boat or go off-road.
(2)car pooling can work with close neighbors traveling in same general direction or work mates living in same direction. Lots of options for most workers, most of the time.
(3) shop one every few weeks for heavy items using a vehicle, pick up milk, bread vegetables every few days on way home from work or walk or bicycled to local store.
Almost every country in the world people walk almost every day including school children( except US, )
(4)LOL, run out tomorrow just like that and buy a yuppie car; now we're really talking being made of money.
Not really, high mpg vehicles dont cost more than low mpg vehicles such as SUV's And do you need plug points away from home for it to be economical, and if so do they exist? Home charging using 110v standard outlets is adequate for PHEV vehicles. The average daily commute is <40 miles and even if a few lines have to be covered using gasoline these vehicles get about X2 average mpg(40-50mpg), so gasoline use is minimal.
people apparently don't find your list all that "simple", or we'd see more of them doing those things just to save money.
These solutions are simple, but like dieting, requires some effort, while complaining or blaming government or politicians doesn't require any effort. Those driving monster SUV's seem to be complaining the most about gas prices.
Indeed, given the lines here in the 1970s, people back then must not have found the applicable ones (all but 4) to be "simple"
I lived in the US in 1970's, I car pooled and found reducing gasoline consumption very easy, much easier than parents had with gasoline rationing in WWII.
Another simple response is to drive slower and easier.
I'm with PaulS here.
You "solutions" seem to assume that the person concerned has a reliable job/income, nad back in the 70's, most people did.
Consider your answers in the context of someone in the situation of declining income - they are on reduced hours, have lost their job altogether, of have gone from a two to one income family...
So option (1) may or may not be possible, financially or functionally. The tradesman needs a van/PU, and because of arcane US rules, there are no fuel efficient (i.e. diesel) ones available. Biut assuming they can change from a larger vehicle to a smaller one, sure, but these days you probably pay more for the smaller one than you sell your larger one for - unless you go to an older model, where you may have repairs etc, and are certainly moving down the food chain in terms of car ownership.
For (2), with the number of people that now can work from home/remote locations, the chances of a nearby person, that drives to your work place, at reliable times, that suit you, is getting smaller, not larger. Traffic modelling in large cities has shown that traffic has become more diffuse (and congested in more places and directions) than decades ago when it was predominantly into CBD morning and out evening. With so many people going in so many directions, there are likely fewer going in yours, at your time. Car pooling is not an option, of course, for anyone who has to go to job or client sites regularly (unless they are in one of the handful of US/Cdn cities with effective transit coverage, but even then...)
For (3) shop every few weeks - hmm great way to get fresh veggies! Requires large storage, fridge, freezer, or else you live on lots of canned/dry/pickled products. The walk or bike to the local store usually is an option, though the "local stores" are increasingly being supplanted by the dreaded "convenience stores", and buying even bread and milk there costs more than driving to a real store... This is, unfortunately, the way most US suburbs have become - not right at all, it just is. The areas that have good local shops that you can walk to - are too expensive for average folks to live.
For (4) buying a brand new car is simply not an option for anyone who has had income loss, or has a non secure job. They may no longer have the credit rating to get financing/leasing for any new car, and let alone that insurance on a brand new car will cost much more than insuring the old one - they are unlikely to see a lower monthly cost of ownership.
Your solutions may indeed by "simple" but that doesn't mean they are widely applicable or affordable. Many people are stuck in an income trap where they simply don't have any money to do anything - not buy a new car, move closer to work, etc.
If someone has a stable enough job and/or high enough disposable income that buying a new car is a viable option, then they are in the lucky minority.
The 20% that are "underemployed" are not so lucky
Paul Nash
Your solutions may indeed by "simple" but that doesn't mean they are widely applicable or affordable.
In the US approx 6 million cars and 6million light trucks are sold each year which implies another 12million not so old used vehicles are also sold. If most households buy at most one new or used vehicle in one year, that implies that of the 110 million households about 20% have an opportunity to switch to a higher mpg vehicle every year. Unfortunately $4/gallon gasoline is so inexpensive that most of these 24 million purchases do not give high fuel economy a major priority. Those 20 million under employed would also have trouble buying $2 gasoline, but if an employer is worried about having them getting to work the solution is to provide more hours of work.
For the other 80% of the working population there are simple widely applicable options as fuel prices rise, some are taking them, most are not yet.
Assumptions, assumptions, assumptions. You seem to assume that every new-car buyer is releasing a high-mpg used car at a price that almost anyone can afford in today's economy. Highly unlikely. You seem to assume that an employer is going to provide "more hours of work" just because you say so. Highly unlikely. And so on.
And, well, the "simple widely applicable options" bit just takes us right back round to the beginning of the circle by way of more of the weeds. People don't often leave $100 bills on the sidewalk; they fail to do those "simple" things because in real life they're not so "simple" no matter how many times anyone asserts otherwise. More broadly, this sort of thing seems to be an endless source of frustration to our would-be social engineers - and indeed not just here on TOD - who never seem to grasp why the world doesn't just drop everything and do as they say.
Oh, well, whatever, fine and dandy. Just don't expect any of it to make any noticeable difference in the wider world, not until the propounded actions can be seen as widely practical - and in the circumstances under which they would need to be applied, not just under the real or more likely imagined circumstances of someplace else halfway across the world, or under the imagined circumstances of a world that has been magically rebuilt from scratch.
PaulS
You seem to assume that every new-car buyer is releasing a high-mpg used car at a price that almost anyone can afford in today's economy.
No Paul, 12 million new vehicles are being purchased, I was assuming that most of those purchases will replace an existing vehicle that is sold in used market, if that assumption is true, then 24Million opportunities are available for purchases to choose a high mpg vehicle. We know that most do not choose this option,perhaps $4 gas is just not an issue for most purchasers or they think prices will decline. Clearly today those 24 million purchasers could not ALL choose a high mpg vehicle but they could over a period of several years because vehicle manufactures are going to only produce what can be sold.
Moving from a fleet average from 26mpg to 54 mpg in 2025 appears to be now considered practical by government and auto industry. If gasoline increases in price to $10/gallon that will give an extra kick to faster adoption of high mpg vehicles.
You seem to assume that an employer is going to provide "more hours of work" just because you say so. Highly unlikely.
The original article was warning employers that their staff may not be able to afford the gas to get to work if they are not located close to public transport. It seems unlikely that full time staff will have a major problem.
the problem with scientists is that they have no clue how it works in reality.
yes we can have infinite growth in the face of shrinking resources. we can even have growth at 10% indefinitely. and no, we wont boil the planet.
it works like this :
World grows at 2% -> Resources are depleted -> Instant War! -> Some countries continue 2% growth after grabbing resources from their neighbors -> Oops! no more resources -> Instant War! -> Nuts, now we have to rebuild everything -> Find new resource to exploit -> World grows at 2%.
You can have 2% growth indefinitely if you blow up what you have built periodically. A basic bubble scenario which has been around since forever in the USA.
e.g.
housing prices grow at 5% -> more ppl investing in building houses -> whoops! market crash. oversupply. -> housing prices reset to 3 decades ago -> housing prices grow at 5%.
Our wars are getting far more lethal as technology progresses. That also means we can bomb each other back to the stone age. and hey ... technology can grow us from the stone age back to the modern age again. no worries. i preditc after the oil crash and multiple wars nuclear fuels are going to be the next growth bubble.
Think it through more carefully. The wars would cause economic contraction by destroying stored wealth. Houses can not be rebuilt without energy and building materials. A victorious belligerent country can steal the resources of another countries to create growth for itself only so long as they have resources worth stealing. The overall system would still contract. There can be finite localized growth while the entire system contracts.
zurk: Your opening statements were zany enough that I thought you were setting up for a facetious post, and I was having a good chuckle—so thanks for that! I agree that we may indeed see a pattern somewhat like you describe: boom and bust, with pretty devastating busts. But most people don't consider this to be part of the happy "indefinite growth" pattern. Your picture of growth punctuated by major upheavals would be most unsettling to those who think that even the sky is not the limit.
The original post had to entertain the fantasy world of uninterrupted (at least in a major crash sense) growth to show why this would ultimately fail on its own terms, even absent major disruptions. Does this mean that I really think we could smoothly find this limit? No. You're already expectant of major crashes. The post was aimed at the dreamers among us.
As renewables become more important, so will industry become more like farming. Checking wind, sun, wave and rain forecasts before planning energy intensive production runs, checking the market to see if you can make a profit, cautious, unwilling to take a chance, lots of waste, risky...
That's why we'll do nuclear power instead.
I'm just a middle-aged farmboy, and nuk-u-lar power is going to go just as far as I can throw the reactor.
In other words, small reactors that I can retrofit into a car, tractor, or spacecraft will be everywhere.
Big reactors that take billions of dollars of capital and trillions in government money to clean up the messes will not happen.
The smart money is on high frequency trading, which works quite nicely for us farmboys with Cray's as HFT makes for amusing market swings that smart farmers will leverage. (I.e. buy options to hedge when the programs trigger a 'flash crash', and sell real product, but only when the 'evil speculators' bid the price up too much)
"Big reactors that take billions of dollars of capital and trillions in government money to clean up the messes will not happen."
Oh, but they will. You'll see.
This post is a playground for people who are serious about wasting their time.
Roger that. My rule for not wasting time reading TOD is simple. I read articles and Drumbeats of interest. When I get to comments, I watch the vertical lines on the left. If there are one or two lines, I scan the comments. When it gets to three or more lines, comments are ignored.
So I take it you didn't read it?
Economic growth has been following a logistic function and we are now in the saturation stage. You can see this by plotting the consumption that an hour of work by the average worker will buy. From 1900 at about $3/hr to 1990 at $22/hr it was a straight line. That means the percent growth was constantly decreasing. This is typical of a logistic function.
Economic growth initially came from productivity, meaning lower inputs to achieve the same output. There are limits to the amount of manpower, energy and materials savings that can be achieved, and we are near those limits.
Around 1900 machines started replacing hand methods in industry. The glass bottle blowing machine ca. 1900 replaced skilled glass blowers and their helpers (child labor) and dramatically increased overall production, greatly lowering cost and creating huge demand for glass bottles. This type of mechanization (replacing hand methods) occurred throughout industry in the period from 1900 to 1930 when factories were electrified.
A famous example is Ford’s assembly line (ca. 1914), which was supplied with parts made by 36,000 machine tools powered by individual electric motors and carried to assembly points on conveyors or gravity slides. Trucks soon appeared and after 1919 the population of horses and mules began falling. By the mid 1920s horses were still used in building roads but internal combustion powered machinery was rapidly replacing horses. Power shovels replaced hand shovels in mining after 1900, and most coal was being mechanically undercut by 1925, but still loaded with hand shovels. Tractors began being mass produced in 1917 (Fordson).
Mechanized equipment began being used for materials handling after 1900. Conveyors, electric trucks, forklifts and overhead cranes handled goods in factories, lumber yards and in coal distribution. Coal in mines began being handled by self loading conveyors in the 1920s.
Replacing horses and mules freed up from between one sixth and one quarter of farmland because of reduced need for feed.
Between 1919 and 1929 the amount of coal required to produce a kW of electricity decreased 47% as efficient steam turbine central utilities were built.
A structural deflation caused by falling real inputs of labor, energy and transportation costs was a feature of the economy from the 1870s through the depression. Workers incomes grew at the same time prices fell. Increasing discretionary income created an economic boom in the 1920s. The business cycle peaked in 1923 and unemployment slowly rose going into the start of the depression. Productivity continued to rise through the depression. The discovery of the East Texas Oil Field ca. 1930 resulted ten cent per barrel oil.
Markets for most goods were oversupplied through the depression. Food took almost 30% of disposable income at the time of WW II. Immediately after the war came the continuation of agricultural mechanization, high yield varieties of the green revolution and cheap fertilizers. Crop yields rose by a factor from three (soybeans) to four (corn). Food costs fell to less than 10% of income, including meals away from home.
The productivity boom was exhausted by 1973. The economy dematerialized, with per capita steel consumption falling by half, and remaining well below the 1973 peak to this day. Almost all physical labor had been replaced by machines. The efficiency of electrical generation plateaued in the early 1960s, being at the limiting temperature of turbine blades, which has not increased for 70 years.
Ever since mass production, labor has never been a limiting factor. We can oversupply almost any commodity goods. Economic growth now has to come from new products to offset declining productivity growth in the production and distribution of necessities.
Economic growth continued; however, it was not through earnings but through borrowing 6% of GDP annually from 1980 to 2007. Growth also came from an aging population requiring expensive health care, which grew from 6% of GDP to 18% in the last 20 years. The financial sector grew from 2-3% of GDP to 6-7% during the housing bubble. We did continue to have some productivity gains; however, we had some losses, such as through higher extraction costs of oil, gas and other minerals.
For the last several decades productivity increases have not led to lower costs of necessities, and without more discretionary income, the jobs being lost are not being replaced by new jobs in new industries. As someone told a top economists "I cant eat an Ipad".
http://online.wsj.com/article/SB1000142405274870489360457619911345271927...
The decades long housing bubble is actually a land price bubble. The labor and materials costs of building a house were constant in real dollars. Government policy on housing was a terrible mistake because the rise in land prices cut the discretionary income of borrowers.
Eventually we may have autonomous machines, that is, machines that run themselves. But as was recently said "robots don't buy cars".
The productivity boom was exhausted by 1973.
Manufacturing productivity has continued to grow in the US by roughly 5% per year over the last 40 years.
For the last several decades productivity increases have not led to lower costs of necessities.
Sure they have. We don't recognize it because our expectations have risen, but the cost of necessities adjusted for features and quality have dropped dramatically.
For improving cars.
Besides more efficient engines (opposing piston, turbines etc...)
Cars can be made far lighter.
http://nextbigfuture.com/2010/07/edison-2-appears-to-have-won-automotive...
Edison 2 car weighs 750 pounds and can hold 4 people and has safety of a regular car.
More advanced technology can have superlight transportation. Instead of moving one person and 5000 pounds of car
have only 1% of the weight added to the person for the future mobility system. Progressing to molecular nanotechnology.
For Galactic civilization though cars are irrelevant and the energy to move people around will be tiny fraction of the energy budget.
Computation will be the big thing. Super efficient calculation.
http://nextbigfuture.com/2009/01/type-iii-kardashev-civilization.html
The performance per unit power of ordinary irreversible computing (which does an irreversible storage operation with every logic-gate operation) will start to level off, at a maximum level of at most 3.5 X 10**22 irreversible bit-operations per second in a 100 W computer that disposes displaced entropy into a room-temperature (300 K) thermal reservoir. This rate is about a million times higher than the maximum rate of bit operations in a ~30-million-gate, 1 GHz processor or 100,000 times more than an average computer now.
So instead of 3.5 X 10*20 per watt for irreversible.
A likely minimum reversible computing capability for an advanced civilization is 10**29 operations per watt. Plus that civilization definitely could have figured out more tricks to go a lot higher.
10**69 reversible operations per second.
10**19 ops/second likely level of one uploaded human mind.
The Type III civilization has a lower end of 10**50 simulated human mind equivalents.
What would be the GDP of 10**50 simulated minds ?
That is the direction to where a galactic civilization would be going for its economy.
Your approach is like talking about a coconut and rock trading economy of a caveman projected
onto a global civilization.
A reversible computing Arithmetic logic unit has been designed.
http://nextbigfuture.com/2011/07/reversible-arithmetic-logic-unit.html
Here is a superconductor and antimatter harvesting bootstrap to space
http://nextbigfuture.com/2010/03/superconductor-and-antimatter-bootstrap...
Post falls apart here
"Admittedly, the argument that economic growth will stop is not as direct a result of physics as is the argument that physical growth will stop, and as such represents a stretch outside my usual comfort zone. But besides physical limits, I think we must also apply notions of common sense and human psychology. The artificial world that must be envisioned to keep economic growth alive in the face of physical limits strikes me as preposterous and untenable. It would be an existence far removed from demonstrated modes of human economic activity. Not everyone would want to participate in this whimsical society, preferring instead to spend their puffy paychecks on constrained physical goods and energy (which is now dirt cheap, by the way, so a few individuals could easily afford to own all of it!). "
No support for "preposterous and untenable" or "bizarre" and plenty of evidence to the contrary. What do you think the internet economy is? We can comfortably grow our economy inside our computers for quite awhile.
Food is already "dirt cheap", farms could become more automated, the decoupling of the economy from the production of physical goods and thus energy requirements is well underway
Note I'm not saying anything about peak energy, I'm just saying "Virtual economies are weird to me and thus impossible" is not an argument.
Also note the numbers change significantly if you adjust the growth rate. If you fix the physical part of the economy to a 0.5% grwoth for isntance and let the virtual part grow at 2% your time horizon shifts dramatically
Virtual economies are just that, virtual. It certainly is preposterous that growth can continue only in non-physical things. How do you envisage the rest of the economy doing? You know, like producing stuff, offering services, anything that requires resources? As Tom Murphy says, "It would be an existence far removed from demonstrated modes of human economic activity." Where is your plenty of evidence to the contrary? The internet isn't an economy, it's a part of the economy. An economy includes all of the stuff that people need and want. Do you imagine an economy where there is no growth anywhere except in virtual realities, with no computer company trying to sell you faster and better machines, no telecoms company trying to convince you that you need a faster and bigger pipe for all of this virtual stuff?
No, a real economy in the real world deals with stuff, not dreams. Our present economy in predicated on growth and you propose to have that growth only in virtual things? Surely that is preposterous and untenable.
Farms can't become "more automated" in an era of declining energy, not to mention declining soil health and environmental degradation.
Lastly, you talk about 0.5% growth in the non-real economy shifting the time horizon dramatically. So I guess you think that so long as "normal" growth can go on for, say, your lifetime, then who cares about future generations? Growth, no matter what the rate, is unsustainable. You do realise that, don't you?
Excellent post. Economists should be forced to explain how they plan to carry on exponential growth forever.
I would propose a semi-graphical method for demonstrating why infinite growth is not desirable, far less possible. This is similar to methodology used for constructing the Laffer Curve.
On the basis that no economic activity has zero associated energy consumption, polution or waste, an infinite amount of growth in any economic activity would result in infinite pollution, energy consumption and temperatures. Given the argument that you have developed for efficiency limits, it is clearly impossible for these vectors to approach zero for any activity. The way to keep it going for longest would be to lock yourself into an entirely simulated Matrix type world, where the only limits were those imposed by the capabilities of the computers. Even here there wouldn't be limitless boundaries for growth and it would raise profound questions about the 'meaning of life'.
What ultimately everyone wants is quality of life (QOL) and personnal satisfaction. At zero GDP, QOL is zero, because there are insufficientr goods to survive. At infinite GDP, QOL is zero, because we all boil to death in a singularity of infinite mass and temperature. As GDP increases, total human QOL if pushed upwards by increasing personal utility; as the negative effects of GDP increase (pollution, waste heat, etc), total human QOL is forced downward. GDP is subject to diminishing returns anyway - 'the third Ferrari matters less'. But this argument suggests that ultimately the returns must actually become negative on the whole, for all of humanity.
This suggests that a graph can be plotted for total average GDP vs average QOL and that graph would rise on a curve to a maximum, beyond which QOL would actually decline with increasing GDP. Beyond this point, further GDP growth becomes absolutely pointless and there is no justification for doing it.
By definition, this point must be reached long before further growth becomes physically impossible. If one takes into account how resource limits may impact future generations, then economic growth may already by a zero sum game - i.e we are enjoying life at the expense of our children.
Economists should be forced to explain how they plan to carry on exponential growth forever.
Simple answer - economists don't have such a plan. OECD economies are already at the point where people have enough "stuff", and their services will grow to the point where they have enough healthcare, education, art, entertainment, etc.
Then it will stop growing, and leisure time will grow. Heck, France is pretty close to that point right now.
This is the first well rounded, realistic and thought out article I have seen in this venue for a long time. It is not about money for a change and money to oil to politics to 'growth' to social control using the Price System.
Fascinating, and well done.
As to a model look here http://www.archive.org/details/TechnocracyStudyCourseUnabridged
This is the source on the thinking of energy economics or biophysical non market thermoeconomics ideas... and where the well known 'names' in that field got their original information.
So... since the 1930's a proposal to go to a resource based, steady state, non political system has existed. Now that you know please inform others Mr. Euan Mearns and Mr. Murphy.
No, technocrats no longer exist as a social movement. Just their information remains which was so far ahead of its time that ... that time may have finally caught up.
The technocrats... M. King Hubbert and Howard Scott and others were only an educational group anyway with no assumption to power ideas.
Society may have to adopt their science social design if it wants to survive.
I'm late to the party, but this is one of the best, and easiest to understand, key posts I've ever read!
I have not read all comments above, but many of the thermal electricity plants here in Sweden (not nuclear though) have a lower electricity efficiency, hence the water coming out of the condenser after the turbine will be warm enough to heat buidlings. Most of Sweden's cities have a district heating network, although far from all buildings are attached to it. Typically appartment buidlings, offices in the city centre etc. are connected to the hot water grid, individual houses are normally not, but that happens too.
I don't have the exact figures but transfer losses are typically 10%. One has to settle for an electricity efficiency of maybe 30%, so altogether roughly 90% of the energy is utilized; 30% electricity, 60% heat, 10% losses. Waste, biomass and natural gas imported from Denmark are the fuels used. About 7% of our electricity, 10 TWh, is generated in these district heating power plants. Correspondingly about 30-40 TWh of heat is distributed through the grids. These grids/powerplants are typically owned by the municipalities, and of course there is a debate concerning poor competition, monopoly etc. but currently, the cost for heating a building from the district heating grid, is still competitive compared to the alternatives. Obviously no point in building district heating grids where there's no demand for heat, but in Northern US, Canada, northern Europe, Russia etc. I would guess there is still potential for this.
Here's a pdf describing one of the gas turbine/steam turbine combined heat/power plant.
http://www.goteborgenergi.se/Files/dok/Informationsmaterial/Broschyrer/T...
This particular technology, a gas turbine produces electricity, the outlet gas boils steam that is run through a steam turbine has the highest electricity efficiency; toward 50%. It has to run on oil/natural gas though. The biomass/waste boilers I would guess have an electricity efficiency of typically 30%.