Why stimulus can’t fix our energy problems

11 07 2019

If EVER you needed proof there is no energy transition happening, and that growth in fossil fuels consumption is increasing, or that without de-industrialization there is no way known we’ll avoid catastrophic climate change, then this article by Gail Tverberg is it……..

The years during which the quantities of material resources cease to grow correspond almost precisely to recessionary years.

Furthermore, Gail’s “2% lag” mentioned below proves the global economy is in serious trouble. Here in Australia for instance, car sales have been dropping for fourteen months straight……

Posted on July 10, 2019 by Gail Tverberg

Economists tell us that within the economy there is a lot of substitutability, and they are correct. However, there are a couple of not-so-minor details that they overlook:

  • There is no substitute for energy. It is possible to harness energy from another source, or to make a particular object run more efficiently, but the laws of physics prevent us from substituting something else for energy. Energy is required whenever physical changes are made, such as when an object is moved, or a material is heated, or electricity is produced.
  • Supplemental energy leverages human energy. The reason why the human population is as high as it is today is because pre-humans long ago started learning how to leverage their human energy (available from digesting food) with energy from other sources. Energy from burning biomass was first used over one million years ago. Other types of energy, such as harnessing the energy of animals and capturing wind energy with sails of boats, began to be used later. If we cut back on our total energy consumption in any material way, humans will lose their advantage over other species. Population will likely plummet because of epidemics and fighting over scarce resources.

Many people appear to believe that stimulus programs by governments and central banks can substitute for growth in energy consumption. Others are convinced that efficiency gains can substitute for growing energy consumption. My analysis indicates that workarounds, in the aggregate, don’t keep energy prices high enough for energy producers. Oil prices are at risk, but so are coal and natural gas prices. We end up with a different energy problem than most have expected: energy prices that remain too low for producers. Such a problem can have severe consequences.

Let’s look at a few of the issues involved:

[1] Despite all of the progress being made in reducing birth rates around the globe, the world’s population continues to grow, year after year.

Figure 1. 2019 World Population Estimates of the United Nations. Source: https://population.un.org/wpp/Download/Standard/Population/

Advanced economies in particular have been reducing birth rates for many years. But despite these lower birthrates, world population continues to rise because of the offsetting impact of increasing life expectancy. The UN estimates that in 2018, world population grew by 1.1%.

[2] This growing world population leads to a growing use of natural resources of every kind.

There are three reasons we might expect growing use of material resources:

(a) The growing world population in Figure 1 needs food, clothing, homes, schools, roads and other goods and services. All of these needs lead to the use of more resources of many different types.

(b) The world economy needs to work around the problems of an increasingly resource-constrained world. Deeper wells and more desalination are required to handle the water needs of a rising population. More intensive agriculture (with more irrigation, fertilization, and pest control) is needed to harvest more food from essentially the same number of arable acres. Metal ores are increasingly depleted, requiring more soil to be moved to extract the ore needed to maintain the use of metals and other minerals. All of these workarounds to accommodate a higher population relative to base resources are likely to add to the economy’s material resource requirements.

(c) Energy products themselves are also subject to limits. Greater energy use is required to extract, process, and transport energy products, leading to higher costs and lower net available quantities.

Somewhat offsetting these rising resource requirements is the inventiveness of humans and the resulting gradual improvements in technology over time.

What does actual resource use look like? UN data summarized by MaterialFlows.net shows that extraction of world material resources does indeed increase most years.

Figure 2. World total extraction of physical materials used by the world economy, calculated using  weight in metric tons. Chart is by MaterialFlows.net. Amounts shown are based on the Global Material Flows Database of the UN International Resource Panel. Non-metallic minerals include many types of materials including sand, gravel and stone, as well as minerals such as salt, gypsum and lithium.

[3] The years during which the quantities of material resources cease to grow correspond almost precisely to recessionary years.  

If we examine Figure 2, we see flat periods or periods of actual decline at the following points: 1974-75, 1980-1982, 1991, and 2008-2009. These points match up almost exactly with US recessionary periods since 1970:

Figure 3. Dates of US recessions since 1970, as graphed by the Federal Reserve of St. Louis.

The one recessionary period that is missed by the Figure 2 flat periods is the brief recession that occurred about 2001.

[4] World energy consumption (Figure 4) follows a very similar pattern to world resource extraction (Figure 2).

Figure 4. World Energy Consumption by fuel through 2018, based on 2019 BP Statistical Review of World Energy. Quantities are measured in energy equivalence. “Other Renew” includes a number of kinds of renewables, including wind, solar, geothermal, and sawdust burned to provide electricity. Biofuels such as ethanol are included in “Oil.”

Note that the flat periods are almost identical to the flat periods in the extraction of material resources in Figure 2. This is what we would expect, if it takes material resources to make goods and services, and the laws of physics require that energy consumption be used to enable the physical transformations required for these goods and services.

[5] The world economy seems to need an annual growth in world energy consumption of at least 2% per year, to stay away from recession.

There are really two parts to projecting how much energy consumption is needed:

  1. How much growth in energy consumption is required to keep up with growing population?
  2. How much growth in energy consumption is required to keep up with the other needs of a growing economy?

Regarding the first item, if the population growth rate continues at a rate similar to the recent past (or slightly lower), about 1% growth in energy consumption is needed to match population growth.

To estimate how much growth in energy supply is needed to keep up with the other needs of a growing economy, we can look at per capita historical relationships:

Figure 5. Three-year average growth rates of energy consumption and GDP. Energy consumption growth per capita uses amounts provided in BP 2019 Statistical Review of World Energy. World per capita GDP amounts are from the World Bank, using GDP on a 2010 US$ basis.

The average world per capita energy consumption growth rate in non-recessionary periods varies as follows:

  • All years: 1.5% per year
  • 1970 to present: 1.3% per year
  • 1983 to present: 1.0% per year

Let’s take 1.0% per year as the minimum growth in energy consumption per capita required to keep the economy functioning normally.

If we add this 1% to the 1% per year expected to support continued population growth, the total growth in energy consumption required to keep the economy growing normally is about 2% per year.

Actual reported GDP growth would be expected to be higher than 2%. This occurs because the red line (GDP) is higher than the blue line (energy consumption) on Figure 5. We might estimate the difference to be about 1%. Adding this 1% to the 2% above, total reported world GDP would be expected to be about 3% in a non-recessionary environment.

There are several reasons why reported GDP might be higher than energy consumption growth in Figure 5:

  • A shift to more of a service economy, using less energy in proportion to GDP growth
  • Efficiency gains, based on technological changes
  • Possible intentional overstatement of reported GDP amounts by some countries to help their countries qualify for loans or to otherwise enhance their status
  • Intentional or unintentional understatement of inflation rates by reporting countries

[6] In the years subsequent to 2011, growth in world energy consumption has fallen behind the 2% per year growth rate required to avoid recession.

Figure 7 shows the extent to which energy consumption growth has fallen behind a target growth rate of 2% since 2011.

Figure 6. Indicated amounts to provide 2% annual growth in energy consumption, as well as actual increases in world energy consumption since 2011. Deficit is calculated as Actual minus Required at 2%. Historical amounts from BP 2019 Statistical Review of World Energy.

[7] The growth rates of oil, coal and nuclear have all slowed to below 2% per year since 2011. While the consumption of natural gas, hydroelectric and other renewables is still growing faster than 2% per year, their surplus growth is less than the deficit of oil, coal and nuclear.  

Oil, coal, and nuclear are the types of energy whose growth has lagged below 2% since 2011.

Figure 7. Oil, coal, and nuclear growth rates have lagged behind the target 2% growth rate. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

The situations behind these lagging growth rates vary:

  • Oil. The slowdown in world oil consumption began in 2005, when the price of oil spiked to the equivalent of $70 per barrel (in 2018$). The relatively higher cost of oil compared with other fuels since 2005 has encouraged conservation and the switching to other fuels.
  • Coal. China, especially, has experienced lagging coal production since 2012. Production costs have risen because of depleted mines and more distant sources, but coal prices have not risen to match these higher costs. Worldwide, coal has pollution issues, encouraging a switch to other fuels.
  • Nuclear. Growth has been low or negative since the Fukushima accident in 2011.

Figure 8 shows the types of world energy consumption that have been growing more rapidly than 2% per year since 2011.

Figure 8. Natural gas, hydroelectric, and other renewables (including wind and solar) have been growing more rapidly than 2% since 2011. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

While these types of energy produce some surplus relative to an overall 2% growth rate, their total quantity is not high enough to offset the significant deficit generated by oil, coal, and nuclear.

Also, it is not certain how long the high growth rates for natural gas, hydroelectric, and other renewables can persist. The growth in natural gas may slow because transport costs are high, and consumers are not willing/able to pay for the high delivered cost of natural gas, when distant sources are used. Hydroelectric encounters limits because most of the good sites for dams are already taken. Other renewables also encounter limits, partly because many of the best sites are already taken, and partly because batteries are needed for wind and solar, and there is a limit to how fast battery makers can expand production.

Putting the two groupings together, we obtain the same deficit found in Figure 6.

Figure 9. Comparison of extra energy over targeted 2% growth from natural gas, hydroelectric and other renewables with energy growth deficit from oil, coal and nuclear combined. Amounts based on data from BP’s 2019 Statistical Review of World Energy.

Based on the above discussion, it seems likely that energy consumption growth will tend to lag behind 2% per year for the foreseeable future.

[8] The economy needs to produce its own “demand” for energy products, in order to keep prices high enough for producers. When energy consumption growth is below 2% per year, the danger is that energy prices will fall below the level needed by energy producers.

Workers play a double role in the economy:

  • They earn wages, based on their jobs, and
  • They are the purchasers of goods and services.

In fact, low-wage workers (the workers that I sometimes call “non-elite workers”) are especially important, because of their large numbers and their role in buying many items that use significant amounts of energy. If these workers aren’t earning enough, they tend to cut back on their discretionary buying of homes, cars, air conditioners, and even meat. All of these require considerable energy in their production and in their use.

High-wage workers tend to spend their money differently. Most of them have already purchased as many homes and vehicles as they can use. They tend to spend their extra money differently–on services such as private education for their children, or on investments such as shares of stock.

An economy can be configured with “increased complexity” in order to save energy consumption and costs. Such increased complexity can be expected to include larger companies, more specialization and more globalization. Such increased complexity is especially likely if energy prices rise, increasing the benefit of substitution away from the energy products. Increased complexity is also likely if stimulus programs provide inexpensive funds that can be used to buy out other firms and for the purchase of new equipment to replace workers.

The catch is that increased complexity tends to reduce demand for energy products because the new way the economy is configured tends to increase wage disparity. An increasing share of workers are replaced by machines or find themselves needing to compete with workers in low-wage countries, lowering their wages. These lower wages tend to lower the demand of non-elite workers.

If there is no increase in complexity, then the wages of non-elite workers can stay high. The use of growing energy supplies can lead to the use of more and better machines to help non-elite workers, and the benefit of those machines can flow back to non-elite workers in the form of higher wages, reflecting “higher worker productivity.” With the benefit of higher wages, non-elite workers can buy the energy-consuming items that they prefer. Demand stays high for finished goods and services. Indirectly, it also stays high for commodities used in the process of making these finished goods and services. Thus, prices of energy products can be as high as needed, so as to encourage production.

In fact, if we look at average annual inflation-adjusted oil prices, we find that 2011 (the base year in Sections [6] and [7]) had the single highest average price for oil.1 This is what we would expect, if energy consumption growth had been adequate immediately preceding 2011.

Figure 10. Historical inflation-adjusted Brent-equivalent oil prices based on data from 2019 BP Statistical Review of World Energy.

If we think about the situation, it not surprising that the peak in average annual oil prices took place in 2011, and the decline in oil prices has coincided with the growing net deficit shown in Figures 6 and 9. There was really a double loss of demand, as growth in energy use slowed (reducing direct demand for energy products) and as complexity increased (shifting more of the demand to high-wage earners and away from the non-elite workers).

What is even more surprising is that fact that the prices of fuels in general tend to follow a similar pattern (Figure 11). This strongly suggests that demand is an important part of price setting for energy products of all kinds. People cannot buy more goods and services (made and transported with energy products) than they can afford over the long term.

Figure 11. Comparison of changes in oil prices with changes in other energy prices, based on time series of historical energy prices shown in BP’s 2019 Statistical Review of World Energy. The prices in this chart are not inflation-adjusted.

If a person looks at all of these charts (deficits in Figures 6 and 9 and oil and energy prices in general from Figures 10 and 11) for the period 2011 onward, there is a very distinct pattern. There is at first a slow slide down, then a fast slide down, followed (at the end) by an uptick. This is what we should expect, if low energy growth is leading to low prices for energy products in general.

[9] There are two different ways that oil and other energy prices can damage the economy: (a) by rising too high for consumers or (b) by falling too low for producers to have funds for reinvestment, taxes and other needs. The danger at this point is from (b), energy prices falling too low for producers.  

Many people believe that the only energy problem that an economy can have is prices that are too high for consumers. In fact, energy prices seemed to be very high in the lead-ups to the 1974-1975 recession, the 1980-1982 recession, and the 2008-2009 recession. Figure 5 shows that the worldwide growth in energy consumption was very high in the lead-up to all three of these recessions. In the two earlier time periods, the US, Europe, and the Soviet Union were all growing their economies, leading to high demand. Preceding the 2008-2009 Great Recession, China was growing its economy very rapidly at the same time the US was providing low-interest rate rates for home purchases, some of them to subprime borrowers. Thus, demand was very high at that time.

The 1974-75 recession and the 1980-1982 recession were fixed by raising interest rates. The world economy was overheating with all of the increased leveraging of human energy with energy products. Higher short-term interest rates helped bring growth in energy prices (as well as food prices, which are very dependent on energy consumption) down to a more manageable level.

Figure 12. Three-month and ten-year interest rates through May 2019, in chart by Federal Reserve of St. Louis.

There was really a two-way interest rate fix related to the Great Recession of 2008-2009. First, when oil and other energy prices started to spike, the US Federal Reserve raised short term interest rates in the mid 2000s. This, by itself, was almost enough to cause recession. When recession started to set in, short-term interest rates were brought back down. Also, in late 2008, when oil prices were very low, the US began using Quantitative Easing to bring longer-term interest rates down, and the price of oil back up.

Figure 13. Monthly Brent oil prices with dates of US beginning and ending Quantitative Easing.

There is one recession that seems to have been the result of low oil prices, perhaps combined with other factors. That is the recession that was associated with the collapse of the central government of the Soviet Union in 1991.

[10] The recession that comes closest to the situation we seem to be heading into is the one that affected the world economy in 1991 and shortly thereafter.

If we look at Figures 2 and 5, we can see that the recession that occurred in 1991 had a moderately severe effect on the world economy. Looking back at what happened, this situation occurred when the central government of the Soviet Union collapsed after 10 years of low oil prices (1982-1991). With these low prices, the Soviet Union had not been earning enough to reinvest in new oil fields. Also, communism had proven to be a fairly inefficient method of operating the economy. The world’s self-organizing economy produced a situation in which the central government of the Soviet Union collapsed. The effect on resource consumption was very severe for the countries most involved with this collapse.

Figure 14. Total extraction of physical materials Eastern Europe, Caucasus and Central Asia, in chart by MaterialFlows.net. Amounts shown are based on the Global Material Flows Database of the UN International Resource Panel.

World oil prices have been falling too low, at least since 2012. The biggest decreases in prices have come since 2014. With energy prices already very low compared to what producers need, there is a need right now for some type of stimulus. With interest rates as low as they are today, it will be very difficult to lower interest rates much further.

Also, as we have seen, debt-related stimulus is not very effective at raising energy prices unless it actually raises energy consumption. What works much better is energy supply that is cheap and abundant enough that supply can be ramped up at a rate well in excess of 2% per year, to help support the growth of the economy. Suitable energy supply should be inexpensive enough to produce that it can be taxed heavily, in order to help support the rest of the economy.

Unfortunately, we cannot just walk away from economic growth because we have an economy that needs to continue to expand. One part of this need is related to the world’s population, which continues to grow. Another part of this need relates to the large amount of debt that needs to be repaid with interest. We know from recent history (as well as common sense) that when economic growth slows too much, repayment of debt with interest becomes a problem, especially for the most vulnerable borrowers. Economic growth is also needed if businesses are to receive the benefit of economies of scale. Ultimately, an expanding economy can be expected to benefit the price of a company’s stock.

Observations and Conclusions

Perhaps the best way of summing up how my model of the world economy differs from other ones is to compare it to popular other models.

The Peak Oil model says that our energy problem will be an oil supply problem. Some people believe that oil demand will rise endlessly, allowing prices to rise in a pattern following the ever-rising cost of extraction. In the view of Peak Oilers, a particular point of interest is the date when the supply of oil “peaks” and starts to decline. In the view of many, the price of oil will start to skyrocket at that point because of inadequate supply.

To their credit, Peak Oilers did understand that there was an energy bottleneck ahead, but they didn’t understand how it would work. While oil supply is an important issue, and in fact, the first issue that starts affecting the economy, total energy supply is an even more important issue. The turning point that is important is when energy consumption stops growing rapidly enough–that is, greater than the 2% per year needed to support adequate economic growth.

The growth in oil consumption first fell below the 2% level in 2005, which is the year some that some observers have claimed that “conventional” (that is, free flowing, low-cost) oil production peaked. If we look at all types of energy consumption combined, growth fell below the critical 2% level in 2012. Both of these issues have made the world economy more vulnerable to recession. We experienced a recession based on prices that were too high for consumers in 2008-2009. It appears that the next bottleneck may be caused by energy prices that are too low for producers.

Recessions that are based on prices that are too low for the producer are the more severe type. For one thing, such recessions cannot be fixed by a simple interest rate fix. For another, the timing is unpredictable because a problem with low prices for the producer can linger for quite a few years before it actually leads to a major collapse. In fact, individual countries affected by low energy prices, such as Venezuela, can collapse before the overall system collapses.

While the Peak Oil model got some things right and some things wrong, the models used by most conventional economists, including those included in the various IPCC reports, are far more deficient. They assume that energy resources that seem to be in the ground can actually be extracted. They see no limitations caused by prices that are too high for consumers or too low for producers. They do not realize that affordable energy prices can actually fall over time, as the economy weakens.

Conventional economists assume that it is possible for politicians to direct the economy along lines that they prefer, even if doing so contradicts the laws of physics. In particular, they assume that the economy can be made to operate with much less energy consumption than is used today. They assume that we collectively can decide to move away from coal consumption, without having another fuel available that can adequately replace coal in quantity and uses.

History shows that the collapse of economies is very common. Collectively, we have closed our eyes to this possibility ever happening to the world economy in the modern era. If the issue with collapsing demand causing ever-lower energy prices is as severe as my analysis indicates, perhaps we should be examining this scenario more closely.

Note:

[1] There was a higher spike in oil prices in 2008, but averaged over the whole year, the 2008 price was lower than the continued high prices of 2011.





The Greening of The West Leaves Other Countries a Devastated, Toxic Mess

8 07 2019

While the West receives shiny new products with the promise of saving the planet, places like Mongolia and Chile are suffering greatly. From ACH News.

I was driving yesterday and found myself amazed at how many hybrid cars there are now, remembering the “wait list” when the Prius first came out. It’s a booming business just getting started. Solar technology is everywhere. There are “solar farms” to enable entire cities to run off of solar panels. Wind turbines dot landscapes across the country. As climate change is a hot topic now (no pun intended), the West is doing its part by “greening” its energy usage and converting to alternative energy sources, like solar or wind power. Cars are traded in for the newest hybrid. It’s all being done because it’s “renewable” and “carbon neutral”.

As a culture, we are myopic. We only see what we want to see. We only see what the culture wants us to see and in this case, the culture wants us to see how amazing it is to buy a solar panel/hybrid car/wind turbine and do our part to curb global warming. We do it and feel great giving the culture our money, knowing, when we go to bed, we did this incredible, Earth-saving venture.

But what if we were really informed? What if we were given all the information on the creation of this “green” product? What if our “greening” was really, at the core, just more destruction?

Let’s visit a couple of places where minerals are mined for the production of our “alternative, save-the-Earth, green technology”.

Baotou, China, Inner Mongolia
Baotou, China: A toxic lake of mine and refinery tailings stretches for over 3.5 miles from Baogang Iron and Steel Corporation. One ton of rare earth produces 75 ton of acidic waste water, a cocktail of acids, heavy metals, carcinogens and radioactive material at three times background radiation. Photo: Toby Smith/Unknown Fields

Most people have never heard of Baotou, China. The same people probably could not (or would not) want to imagine life without it.

Baotou is one of the world’s largest suppliers of “rare earth” minerals. These are elements that are used in the manufacturing of tech gadgets (smart phones) and also our “green alternative energy”: magnets for wind turbines and parts for electric car motors. China produced 95% of the entire world’s supply of rare earth elements. Minerals are mined at the Bayan Obo Mine, just north of Baotou and processed at Baogang Steel and Rare Earth Complex. The rare earth minerals which come from this plant, primarily neodymium and cerium, are actually not so rare and can be found dispersed all over the planet. The problem lies in the extraction. In an article from BBC Future reporter, Tim Maughan (led by the group, Unknown Fields) says so eloquently,

Rare earth discharge, Baotou, China

The intriguing thing about both neodymium and cerium is that while they’re called rare earth minerals, they’re actually fairly common. Neodymium is no rarer than copper or nickel and quite evenly distributed throughout the world’s crust. While China produces 90% of the global market’s neodymium, only 30% of the world’s deposits are located there. Arguably, what makes it, and cerium, scarce enough to be profitable are the hugely hazardous and toxic process needed to extract them from ore and to refine them into usable products. For example, cerium is extracted by crushing mineral mixtures and dissolving them in sulphuric and nitric acid, and this has to be done on a huge industrial scale, resulting in a vast amount of poisonous waste as a byproduct. It could be argued that China’s dominance of the rare earth market is less about geology and far more about the country’s willingness to take an environmental hit that other nations shy away from.

Google Earth shows us the size of this lake that supports no life.

In a place that was once filled with farms as far as the eye could see, now lies a lake (which are called “tailing ponds), visible from Google Earth, filled with radioactive toxic sludge. The water is so contaminated that not even algae will grow. Maughan describes the chill he felt when he saw the lake: “It’s a truly alien environment, dystopian and horrifying”. Because the reservoir was not properly lined when it was built, waste leaked into the groundwater, killing off livestock, making residents sick and destroyed any chance of farming. In reality, though, farmers have long been displaced by factories. The people that remain are experiencing diabetes, osteoporosis and chest problems. Residents of what is now known as the “rare-earth capital of the world” are inhaling solvent vapors, particularly sulphuric acid (used for extraction), as well as coal dust. But hey, we need wind turbines to save the planet. And the electric car is definitely going to reduce carbon emissions.

I’m sorry to say that there is no amount of “greening” that going to remove this toxic sludge from the lives of those who live in Baotou. We are stealing the Earth from others. Our logic that solar/wind/the electric car is going to save the planet, instead of the most logical action of using far less, is destroying faraway lands and lives. It’s easy for us to sweep it all under the rug since we are not the ones directly affected by this lust for more energy consumption. We are simply sold on the latest and greatest technology that will save the planet and make our insatiable energy consumption a little bit easier to digest.

The public must be made aware of this catastrophe.

We must be willing to change or face the fact that people and earth and animals are dying for our inability to change.

Salar de Atacama, Atacama Desert, Chile

The International Energy Agency forecasts that the number of electric vehicles on the road around the world will hit 125 million by 2030. Right now, the number sits around 3.1 million. In order to support this growth, a lot of lithium is needed for the batteries to run this fleet. It is this lithium extraction that is destroying northern Chile’s Atacama Desert.

Lithium separation ponds, Atacama, Chile

Lithium is found in the brine of the salt flats, located in Chile. To extract the lithium from Salar de Atacama, holes are drilled into the flats to pump the brine to the surface. This allows lithium carbonate to be extracted through a chemical process. The whole process requires a lot of water. So much water in fact that the once life-supporting oasis is now a barren wasteland.

In an interview with Bloomberg, Sara Plaza tells the story heard time and time again: “No one comes here anymore, because there’s not enough grass for the animals,” Plaza says. “But when I was a kid, there was so much water you could mistake this whole area for the sea.” She recalls walking with her family’s sheep along an ancient Inca trail that flowed between wells and pastures. Now, an engine pumps fresh water from beneath the mostly dry Tilopozo meadow. “Now mining companies are taking the water,” she says.

The race for lithium extraction is viewed as a noble one. Electric cars are sold as a ticket to salvation from Climate Change. Electric auto makers want to make it easier and cheaper for drivers to convert to “clean”, battery-powered replacements for “dirty” combustion engines. Rather, they want more money and will sell us the “green” theory.

Extracting Atacama’s lithium means pumping large amounts of water and churning up salty mud known as brine. In Salar de Atacama, the heroic mission of saving the planet through electric cars is leaving another Indigenous community devastated.

If this was really about saving the planet, there would be regulations on single drivers in cars. Public transportation would be at the forefront, not affordable priced electric cars that EVERYBODY can own. Let’s be real here. The people that are poised to benefit the most from “green” energy are companies such as  Albemarle Corp. and Soc. Quimica & Minera de Chile SA, who are responsible for mining most of Chile’s lithium.

Sergio Cubillos, president of Atacama People’s Council, stands on an empty water tank at the village of Peine. Photo: Cristobal Olivares/Bloomberg

The locals, whose families have lived here for thousands of years, are not benefiting.

From Bloomberg: “The falling water levels are felt by local people. Peine, the village closest to the mining, has a license to pump 1.5 liters of water per second to supply 400 residents and a transient population of mine workers that can rise as high as 600. BHP’s Escondida copper mine has a license to pump 1,400 liters per second. Albemarle and SQM, the big lithium miners, have licenses to pump around 2,000 liters per second of brine.”

“We’re fooling ourselves if we call this sustainable and green mining,” says Cristina Dorador, a Chilean biologist who studies microbial life in the Atacama desert. 

Which begs the question: What is “green technology“?

The Earth is green technology. The blade of grass that grows towards the light is green technology. The breath of fresh air that is given to us by the plants on land and the plants in the ocean is green technology. The spring water that rises from the depths, mysteriously and miraculously, is green technology. This fragile environment that surrounds us, the unexplainable, intricately woven web of life that holds us, the environment that is degrading rapidly from our greedy lust for more and more, that is green technology. What we are being sold today from companies who are leading the rat-race of civilization is not green. This green technology that they speak of is actually dark red, almost black, stained with the radioactive, desecrated blood of people and earth.

In closing, from Derrick Jensen:

“There is no free lunch. Actions have consequences, and when you steal from others, the others no longer have what you stole from them. This is as true when this theft is from nonhumans as it is when it’s from humans.

But, as Upton Sinclair said, “It’s hard to make a man understand something when his job depends on him not understanding it.” It’s even harder to make people understand something when their whole way of life depends on them not understanding it.”





A Green New Deal Must Not Be Tied to Economic Growth

7 07 2019

By Giorgos Kallis, originally published by TruthOut

  • March 12, 2019

The Green New Deal bill is an audacious 10-year mobilization plan to move the U.S. to a zero-carbon economy. Bold and ambitious interventions like it are necessary, in the U.S. and elsewhere, if we are to unsettle the current complacency with climate breakdown. Academics like economist Robert Pollin, who kept alive the idea of a Green New Deal in the past years and provided the science to back it up, are to be congratulated for their efforts.

Pollin has for years now proposed his simplified version of a Green New Deal — an investment of between 1.5 to 2 percent of global GDP every year to raise energy efficiency and expand clean renewable energy. This would be the moment for him to celebrate that his cause has been taken up, and contribute to working out the specifics. Instead though, he chooses to focus on the differences between his proposal and a “degrowth agenda,” which he finds “utterly unrealistic” — a waste of time for the Left at best and dangerously anti-social at worst. Whereas this is not the moment to split hairs, Pollin’s insistence on degrowth is inadvertently productive. It lets us see a sore point in the Green New Deal narrative, and this is that it risks reproducing — unless carefully framed — the hegemonic ideology of capitalist growth, which has created the problem of climate change in the first place.

To begin with, Pollin never explains why growth is a necessary ingredient for his proposal. It is not clear why he has to argue that a Green New Deal will be good for growth instead of simply advocating cutting carbon while meeting needs and fostering wellbeing. The only reason he provides for his preference for growth is that “higher levels of GDP will correspondingly mean a higher level of investment being channeled into clean energy projects.” If Pollin seriously means that he shares “the values and concerns of degrowth advocates,” then he could simply tweak his model and come up with a fixed amount of investment (independent of GDP) that would produce the same decarbonization. Higher levels of GDP will not only lead to higher levels of clean investment, but also higher levels of dirty investment — and the majority of investment is dirty. One percent growth in GDP leads to a 0.5 to 0.8 percent increase in carbon emissions, and this is as statistically robust a relation as it gets (clean energy investment has no statistically significant effect on emissions yet, though, of course, this could and should change in the future). If we continue to grow at 3 percent per year, by 2043, the global economy will be two times larger than it is now. It is difficult to imagine creating a renewable energy infrastructure for our existing economy in a short time span, much less doing so for an economy that is two times bigger. The smaller our economic output is, the easier the transition will be.

Pollin may well have chosen to emphasize growth because new deals are about growth. But a Green New Deal does not have to be like the old New Deal. Pollin does not suggest that his investment program should be financed by deficit spending, nor that it should be a short-lived stimulus, repaid by growth. An investment at the level of 2 percent of GDP does not need deficit spending — assuming there is the political will for such a program, it could be financed by replacing dirty or socially useless investments (and there are many, starting with armaments). If there is no extra spending and debt, then there is no need to stimulate growth to pay it back.

Now, at some points in his article for the New Left Review, Pollin seems to suggest that growth is an outcome of his proposal, not a goal or pre-condition. He claims that “for accounting purposes,” growth in renewable energy investments “will contribute towards increasing GDP.” But even in accounting terms, without deficit spending, there is no reason why a clean investment program will cause growth, since the 2 percent that will go to renewables would go to some other investment instead.

The economy moreover is not an accounting convention. We could just as well imagine spending lots of money on digging and filling in holes — this could serve as a temporary stimulus in a period of low liquidity and low demand, but is obviously not a recipe for sustained growth. Pollin writes in his text that “building a green economy entails more labor-intensive activities” and that the private sector does not invest in renewables because they have low profit margins. Shifting financial resources from high-productivity and high-profit sectors to low-productivity ones is not a recipe for growth. The energy productivity of renewables is also lower than that of fossil fuels. An economy of low productivity, low profits and low energy returns is unlikely to be a bigger economy that grows. And this is fine, since our priority right now should be to decarbonize, not grow the economy. But Pollin unnecessarily links the former to the latter.

Maybe Pollin is right, and I am wrong. Maybe a massive clean energy program would end up stimulating growth. However, it would be wrong to sell a program for stabilizing the climate with the promise of growth. What happens if it doesn’t produce growth? Do we abandon decarbonization? And since climate change is not the only problem with growth, there are good reasons why we can’t afford more growth even if it were powered by the sun.

Economists typically justify growth in terms of poverty or stability. Pollin innovates by justifying it in the name of climate change. And this is coming from someone who otherwise sees the irrationality of perpetual growth.

Compound growth is what Marxist scholar David Harvey calls a “bad infinity.” For Harvey, capitalism’s requirement for compound growth is the deadliest of its contradictions. Harvey points to the irrationality of expecting that demand, investment and profits will double every 24 years (this is what a 3 percent growth each year amounts to), quadruple every 48, grow eight-fold every 72, ad infinitum and ad absurdum.

Consider the following: 65 percent of anthropogenic emissions come from fossil fuels. The remaining 35 percent come from things like land-use change, soil depletion, landfills, industrial meat farming, cement and plastic production. Even if the energy mix were to become 100 percent clean and we continued to double the economy every 24 years, we would be back up to our existing emissions levels in short order. This is how irrational the pursuit of compound growth is.

Climate breakdown now threatens to bring this absurdity to an end. But it is not only the climate — biodiversity loss through mass extinction, land-use change and resource extraction are all directly linked to economic growth. Despite his claims to the contrary, there is no prospect of what Pollin calls “absolute decoupling,” or a reduction of these impacts while the economy grows.

It is fanciful to think that there is one type of neoliberal growth that is bad, and another type of growth that could be inclusive, progressive, clean, etc. Growth is an integrated process, and no matter what the ideologues of growth claim, there is no proof that we can grow the economy by selectively growing the “goods” while decreasing the “bads.” Armaments, advertising, fossil fuels, planned obsolescence and waste of all kinds are integral to capitalist growth. Since its beginnings in colonial Britain, growth has been fueled by unequal exchange of labor and resources between imperial centers and internal and external peripheries. Growth requires the investment of surplus for the creation of more surplus. And this surplus is created by exploiting wage-workers and appropriating the unpaid work of women, migrant workers and nature. Shifting of costs in space and time has also been central. Access to low-cost labor and resources is vital for economic growth; if inputs become expensive, the economy slows down.

Pollin claims that growth stalled because neoliberalism prioritized the interests of the rich. The brutal cuts of structural adjustment policies and neoliberal austerity, however, were always made in the name of growth. The promise of growth bought the social peace the neoliberal project needed. Even if the real outcome was the concentration of wealth amidst anemic growth rates, this tells us something useful about the dangers of a “growth politics.”

Pollin argues that we can’t afford to dream that another world is possible, not now, because climate change is urgent and “we do not have the luxury to waste time on huge global efforts fighting for unattainable goals.” We are asked to accept that the only game in town is capitalism, and that questioning capitalism and its destructive pursuit of growth is a luxurious waste of time. If not now, then when, one might wonder?

Erik Swyngedouw has warned against the depoliticizing tendency of carbon reductionism — that is, reducing all politics down to a question of their effect on carbon emissions, especially when coupled with claims of urgency. Granted, climate change is a huge problem, but it is not the only problem in whose service we should pause other aspirations. And climate change is not a stand-alone problem with a technical solution — it is symptomatic of the broader system that is producing it. Pollin’s reduction of climate change to a question of an investment fix is appealing because it makes the problem seem manageable. But climate change is not a technical problem. Climate change is a political problem, in the real sense of the word political, meaning a problem involving competing visions of the kind of world we want to live in.

Now, Pollin has a valid concern in that a degrowth agenda would involve a reduction of GDP, which has many problems — not least, rising poverty, inequality, debts, austerity, etc. We would be fools if we were oblivious to those risks. In a capitalist economy bound to grow or collapse, growth is fundamental for the stability of the system. But growth is also exploitative and self-destructive. Should we support capitalism forever, just because a collapsing capitalism is worse for workers than a capitalism that does well?

Those of us who write about degrowth do not advocate an intentional reduction of GDP (we are the first to criticize GDP as it mixes “goods” with “bads” and doesn’t count unpaid work). Perhaps Pollin is confused because we do claim that doing the right things, ecologically and socially, will in all likelihood slow down the economy as measured by GDP. Or because we argue that certain sectors of the current economy that are central to its expansion — armament, advertising, unnecessary consumer goods, speculative financing, etc. — should contract. Given how coupled the capitalist economy is to growth, this raises the question of how, or under what conditions, we could secure human wellbeing and equality without growth. This is a huge research question, involving economic models, historical and ethnographic studies, and an assessment of potential institutional reforms, such as work-sharing, a guaranteed basic income or a maximum income tax. It is also a political agenda for the Left, to build the capacities to decouple wellbeing from growth.

Pollin claims that those of who write about degrowth do not offer a specific program to combat climate change. Speaking for myself, I do not feel I have to add more to the excellent proposals already made by Pollin himself, Naomi Klein and many, many others. The problem with climate change is not that we are short of ideas on what is to be done. The problem is that we are not doing it. What we offer from a degrowth perspective is a different diagnosis of why we are not doing it. We argue that this is because there is a fundamental clash between capitalism’s pursuit of growth and climate mitigation. Good climate policies are not adopted because of their impact on growth, and growth is outstripping the gains made from renewable energy. Our contribution is to open up the debate about alternatives to growth.

In the climate community, people have their pet ideas. Some want a carbon tax, and others want a carbon dividend (a tax returned as basic income). Some want green bonds, others a Green New Deal. It is safe to say that if we are to decarbonize the economy at the unprecedented rate required, all of these ideas will be necessary. But decarbonization is not just a matter of adding solar and wind to the energy mix — it is also a matter of taking fossil fuels out. This requires legislation and political commitment alongside struggle to stop fossil fuel projects and coal mines, and to divest from oil companies.

Pollin suggests that a 2 percent investment in clean energy and efficiency will be sufficient on its own, but there are reasons to be skeptical about such a claim. I would like Pollin to be right, but I’ve read other reputable climate scientists and engineers who are much more reserved than Pollin about the prospect of 100 percent renewables. There are the problems with the intermittency of solar and wind, and their huge storage requirements (one of the principal solutions envisaged, storage as hydroelectric energy, requires a dramatic damming of remaining rivers: an environmental nightmare). There are the emissions involved in fueling a renewable energy transition, which might be enough on their own to overshoot the remaining carbon budget. There are the rare earth minerals necessary for constructing solar panels and batteries, minerals that are scarce and extracted from areas and communities already suffering from our unquenchable hunger for raw materials. There is the question of land use and impact on landscapes. As is common in these technical debates, Pollin prefers data favorable to his argument. But he would agree, I think, that the picture is very complicated and uncertain, to say the least.

I do not like to be a skeptic in the current political context where renewables face an uphill battle against the fossil fuel and nuclear power lobbies. I wish that a 100 percent renewable future were possible and would be as harmless as Pollin thinks. But our experience with previous technological fixes suggests we should be on the side of caution, both because of unfulfilled promises, and because there are always side effects and unforeseen costs. Even if the environmental and social costs of renewable energy are not as high as some skeptics think, they are not insignificant either — and with compound growth, even an insignificant impact quickly grows toward infinity. The lower the level of energy use, and the smaller the economy, the easier it is to decarbonize, and the fewer impacts that will be caused along the way. There is no reason for someone concerned with climate and the environment to advocate economic growth.

Furthermore, Pollin provides no evidence that the scale of investment he proposes will do the job. Granted, there has been no such massive investment in the past, so it is hard to assess its potential effect. On the campaign trail, candidate Obama promised $150 billion over a period of 10 years. In 2009, the American Recovery and Reinvestment Act provided stimulus funding of $90 billion in strategic clean-energy investments and tax incentives to promote job creation and the deployment of low-carbon technologies, promising to leverage approximately $150 billion in private and other non-federal capital for clean energy investments. Fossil fuel emissions decreased 11 percent from 2007 to 2013, but this was not a result of growth in renewables (despite a tripling of wind power and a 30-fold increase in solar power during Obama’s presidency), but mostly an after-effect of the recession, high gasoline prices and to a lesser extent, a shift from coal to natural gas.

In 2009, South Korea announced a Green New Deal Job Creation Plan: $38.1 billion invested over a period of four years dedicated to environmental projects to spur slumping economic growth and create a million jobs. Korea’s emissions were 15 percent higher in 2014 than in 2008. Pollin refers to Germany as “the most successful advanced economy in developing its clean-energy economy.” German emissions in 2014 were almost unchanged since 2009. They had fallen 20 percent since 1992, and following the collapse of industry in East Germany. And even so, in per capita terms, they are 80 percent higher than the world average. If the whole world were to consume as much as the “successful” case of Germany, not only would global carbon emissions not fall, they would almost double.

Naomi Klein wrote that climate change “changes everything.” Pollin tells us that it does not have to change anything, other than 2 percent of GDP. We will keep flying, eating beef, driving cars to suburban homes, flying helicopters and jets — with the only difference being that all this will be powered by clean electricity. I won’t debate the facts and the feasibility of this vision again, so instead I’ll just point out that intuitively this doesn’t make sense to people, and it doesn’t because you don’t have to be a scientist to understand how much our current lifestyle depends on fossil fuels. Those who deny climate change know it and those who fight for climate justice know it, too. To stop climate change, we not only need to clean production, but also to reduce and transform consumption. We need free public transport, new diets, denser modes of living, affordable housing close to where the jobs are, food grown closer to where it is consumed, reduction of working time and commuting, low-energy ways of living and finding satisfaction, curbs on excessive incomes and on ostentatious consumption. It is not as though the Green New Deal is an agenda designed to fight climate change alone — it is a green Left agenda that we should pursue even if there were no climate change. And we have to pursue it independently of whether or not it is “good for the economy,” because we put people before the economy.

The Green New Deal bill goes in the right direction and its differences from Pollin’s narrower proposal are informative and much closer to what I am arguing here. The bill does not only commit funds to renewable energies, but also to health, housing and environmental infrastructures. It has provisions for economic security, akin to job guarantee and basic income schemes — provisions that will be vital if we are to secure wellbeing without growth. Granted, the bill does not talk explicitly about post- or de-growth, and does not challenge head-on prevalent patterns of consumption as much as one like me sitting in an academic chair and not involved in parliamentary politics would have liked — but consumption would surely change too if public services were expanded to the extent foreseen in the bill. Importantly, unlike Pollin, the bill does not emphasize growth or justify the plan in terms of growth.

Pollin’s insistence, then, on accentuating the differences between degrowth and the Green New Deal is outdated and unnecessary. Pollin’s article was titled “Degrowth vs. a Green New Deal.” Maybe it is time to stop inventing more internal “versus” and do the hard work of constructing some new “ands.” What about degrowth and a Green New Deal? The opponent is formidable and what we need are alliances, not divisions.

The author thanks Jason Hickel and David Ravensbergen for their comments and suggestions to an earlier draft of this essay.





Peak Democracy….?

8 06 2019

I’m BacK! Make a coffee and read my grim take on the Australian Electoral scene from 1950 to 2030. (Lonnnng Rave from my friend John Barker)

Trends in Australian Politics Described in 4 Simple Graphs

John Barker PhD

One week on and the explanations of the 2019 Australian Federal election are already getting very detailed and complex. Nick Evershed’s analysis in the Guardian (22May) believable, but is probably only understandable by a few.I’ve tried to boil it down to 4 graphs – 3 are historical, one predictive – which are about as simple as they can be made. Some people shrink away from graphs, so the following description might help.

The axes of the graphs show two major parameters – the “socio-economic index (SOI)” and the percentage at that SOI level. The SOI aggregates a lot of things, but mainly income, education and social status. Broadly, the higher the index, the more wealthy, usually more educated and a greater sense of affluence and social fulfillment. Of course there are many exceptions, but I think that these are the main drivers.

The first graph depicts Australia in and before about 1950. There are two political parties (despite minor issues, the Liberal Party and the Country (National) Party are joined at the hip, so are aggregated as the LNP). The LNP is depicted in blue and has its peak to the right of the median SOI. They are the “bosses, bank managers, shop owners and farmers. In other words, the “SOI better-off” tended to vote LNP, tailing off rapidly to the Left, which has a similar-looking and similar-sized curve for the ALP. In 1950, the ALP voters are mainly the “working class”, ie manual laborers, clerical assistants and shop-assistants. Note that the grey curve, which is the total of all voters, is fairly narrow- that is the difference of affluence between the average LNP voter and the average Labor voter was not great. There are little humps at the far-left and far-right, representing, respectively, the few very wealthy and the few very poor- ie unemployed.

The second graph depicts the scene from about the mid-1950s until about 1980. The famous Labor split of 1955 created the Democratic Labor Party (DLP), with its chief strategist and Tony Abbott-mentor BA Santamaria, which, although it shared some general social justice policies with the ALP, was otherwise staunchly conservative and ant-Left. Its main effect was to appeal to a significant number of poorly-educated “working-class” (ie Labor) voters and deliver its second preferences to the NLP. The graph shows the combined LNP-DLP vote, which was enough to exclude Labor from office until 1972. During this period, Australians, on average (and including Labor voters), grew more affluent- illustrated by the grey overall curve moving to the right, and broadening somewhat- meaning the gap between the more- and less- affluent was widening. The number of very wealthy was growing, as was the number of under- and partly employed. This widening gap- which is more evident in the USA, seems to be the main reason for the resentment of the poorer groups on the mid-left of the next group- the ALP.

The third graph depicts Australia in 2019. The median of the SOI has continued to move to the right- “on average” Australians are wealthier than ever, but many more are further from the average on both sides. The less- affluent and less-well-educated on the left have found a champion in Pauline Hanson and the fairly affluent, inner-city dwellers, with the capacity for social concern, now identify with The Greens. The Greens have taken a sizeable chunk of Labor voters, but generally give their second preference to Labor. The far-right of the grey and blue curves has grown disproportionately, with the top 10% having a very high SOI. What is hard to show on this simple graph is the increased number of “SOI-Elite”, who can direct millions of dollars of their “own” fortunes at whatever cause they wish.

So what? All of this is pretty obvious- at least when it is laid out in a few simple graphs. What we have now is 5 major political groups- the LNP, the ALP, the Greens, the One Nation and the “SOI-Elite”. This last group generally don’t stand for election, but sponsor others to do their bidding- they are the “rent-seekers”. The two smaller groups- the ON and Greens- are essentially extremists or idealists- the ON, comprising about 10%, are being cultivated to blame and resent some visible social groups- Muslims, Asians, African Gangs, etc for their misfortunes and blame the ALP’s globalist, distributive policies for having created these groups as well as having abandoned the “working-class” as they (the ALP) have become more affluent. The Greens imagine an ideal world which they believe can be created in a very short time-frame and decry anyone who is less optimistic- including the ALP. Their idealism has attracted about 10% of the voters and have hardened their views in their endeavor to attract more voters.

The word “elite” has shifted recently from meaning a select group displaying extreme (and usually commendable) attributes – like athleticism, scholarship, bravery or wealth – to become an epithet – an insult implying a group who are indifferent to the well-being of the public-at-large. This shift is not just a semantic quibble- the word has been weaponised by both the Right and the Left. Oddly, the Right, in both the USA and Australia has classified the 10% Greens and probably an equal number of the ALP as “inner-city elites”. Not long ago, no-one would consider a group comprising about 20% of the population as “elite”. But the Right has done just that. On the other hand, the Left has started using “elite” to describe the top 1% of the SOI as “elite”- more technically correct, but as an epithet, not a commendation.

What happens next? The fourth graph predicts Australia in about 2030. It is markedly different from the previous three graphs. The ALP has completely disappeared and One Nation (or something similar) now commands a large chunk of the population, most of which has moved dramatically to the left of the SOI, but with a long tail that goes to the far right of the graph. The LNP has also shrunk, but has moved up in the SOI. There is a small group, which had its origin in the Greens, that is now called “Dissidents” that is just to the right of the middle of the SOI. This graph is essentially what one sees now in most of Africa and Asia and what is clearly happening in the USA. It depicts a totalitarian state- the economy, as we presently know it has collapsed- mainly because oil prices have collapsed due to electric vehicles, coal prices have collapsed through China moving to inland gas and renewables for its electricity and China has withdrawn its full-fee-paying students from Australia (worth $15 billion in 2018) and stopped building apartments in the capitals because of Australia’s craven alliance with the increasingly unfriendly USA. The Indian economy has collapsed under the weight of intense air and land pollution and water shortages due to climate change.The remaining resource industries are fully automated and are controlled by global screen-jockeys. The LNP members are rather like the Soviet “Nomenklatura”- open-followers of the ruling elite, who “manage” the remaining economy and police the large under-employed classes – who vote for the government in sham elections, for fear of further reprisals. The Green/Dissident group is allowed to survive to give the appearance of an open society and so that the government can easily keep an eye on them.

A post-apocalyptic dystopia? Certainly. I have spent most of the past two years travelling across China, Central Asia, Africa and India, with some time in Europe, Cuba, USA and Mexico. It already exists in most of these countries. I cannot see how Australia can avoid this, now that it has confirmed its preferred economic direction as being more “resource intensive”. This is known as the “resource curse” with added features. In many countries, the high export-demand for resources has created unbalanced economies with high currency values, but little or no manufacturing. Fluctuation in resource exports creates a chaotic downward spiral. In Australia’s case, the systemic reduction in demand for its resources (which have become highly automated), together with a dramatic weakening in otherwise-compensating sectors (education, construction and climate change- reduced agriculture) creates a negative economic cascade.

Can it be avoided? Could it have been avoided if Labor had won the 2019 election? Probably not. Australia is – and always has been – hostage to geopolitics. China saved us from the GFC 2008 by its own GFC counter- measures. That won’t happen again. And Australia has little or no “economic resilience” left.





Enjoy the end of the world….

13 05 2019

Presentation by Dr Sid Smith given at Virginia Tech for the Greens at Virginia Tech, March 26th, 2019 that explains all our predicaments very well….. share widely.





Not so good news

16 04 2019

This is Tim Watkins at his best I think….. I wish I had time to write well researched articles like this, but I have a flailing mower arriving today, the double glazed windows at the end of the month, and the front wall to build in preparation of this event. Never a dull moment around here.

Put simply, if you cannot turn on your lights, operate your business or recharge your electric car, because there is no electricity, it is little comfort to learn that on a good day the grid is capable of supplying more electricity than you might need.

From the truly amazing Consciousness of Sheep website…

Protesters today intend bringing central London to a standstill by blockading several major arterial roads into the capital.  For once, this has nothing to do with Brexit.  Instead, it concerns the increasingly urgent call for government to “do something” about climate change.  Exactly what that “something” is that must be done is a little less clear, since current environmental concerns are almost always pared down to concern about the carbon dioxide emitted by cars and power stations.  Although how exactly this relates to the mass die-off of species resulting from industrial agriculture and deforestation, or growing oceanic dead zones and plastic islands, is far from clear.

Protesting environmental concerns involves a high degree of denial and self-deception; as it is based on two gross errors.  The first is the irrational belief that governments have the means to respond to the predicament we find ourselves in.  As a corrective to this, just look at the dog’s breakfast that the current British government has managed to make out of what is a simple (by comparison) trade negotiation.  Anyone who seriously thinks these clowns are going to do anything positive (save for by accident) for the environment is displaying almost clinical levels of delusion.   The second error is in believing the often unspoken conspiracy theory that insists that the only thing standing between us and the promised zero-carbon future is corrupt politicians and their corporate backers, who insist on putting the needs of the fossil fuel industry ahead of life on planet earth.

To maintain these deceits, a large volume of propaganda must be put out in order to prove that the zero-carbon future is possible if only the politicians would act in the way the people want.  So it is that we are treated to a barrage of media stories claiming that this town, city, country or industry runs entirely on “green” energy (don’t mention carbon offsetting).  Indeed, left to their own devices, we are told, the green energy industry is already well on the way to building the zero-carbon future we asked for; we just need the politicians to pull their fingers out and we could easily get there in just a few years’ time.  For example, Joshua S Hill at Green Technica tells us that:

“Renewable energy sources now account for around a third of all global power capacity, according to new figures published this week by the International Renewable Energy Agency, which revealed 171 gigawatts (GW) of new renewable capacity was installed in 2018…

“This brings total renewable energy generation capacity up to a whopping 2,351 GW as of the end of 2018, accounting for around a third of the globe’s total installed electricity capacity. Hydropower remains the largest renewable energy source based on installed capacity, with 1,172 GW, followed by wind energy with 564 GW and solar power with 480 GW.”

Stories like these play into the fantasy that we are well on our way to reversing climate change, and that all we need now is some “green new deal” mobilisation to replace the final two-thirds of our energy capacity with non-renewable renewable energy-harvesting technologies to finish the job.  If only it was that simple.

Notice the apparently innocuous word “capacity.”  This is perhaps the least important information about electricity.  Far more important is the amount that is actually generated.  The US Energy Information Administration explains the difference:

Electricity generation capacity is the maximum electric output an electricity generator can produce under specific conditions. Nameplate generator capacity is determined by the generator’s manufacturer and indicates the maximum output of electricity a generator can produce without exceeding design thermal limits….

Electricity generation is the amount of electricity a generator produces over a specific period of time. For example, a generator with 1 megawatt (MW) capacity that operates at that capacity consistently for one hour will produce 1 megawatthour (MWh) of electricity. If the generator operates at only half that capacity for one hour, it will produce 0.5 MWh of electricity…

Capacity factor of electricity generation is a measure (expressed as a percent) of how often an electricity generator operates during a specific period of time using a ratio of the actual output to the maximum possible output during that time period.”

In terms of understanding where we are and where we are heading, “electricity generation” is far more important than “capacity”; which only tells us how wind, wave, tide and solar technologies would perform if it were possible (it isn’t) for them to generate electricity all day (and night) every day.  Put simply, if you cannot turn on your lights, operate your business or recharge your electric car, because there is no electricity, it is little comfort to learn that on a good day the grid is capable of supplying more electricity than you might need.  From a planning point of view, knowing the capacity factor for various generating technologies matters because it gives an insight into how efficient they are.  A nuclear or fossil fuel power plant that runs more or less continuously for more than 60 years is likely to require far fewer inputs and far less land area than, say, vast solar farms (which have to be replaced every 10-20 years) that can only generate electricity when the sun is shining.

So where do non-renewable renewable energy-harvesting technologies stand when it comes to electricity generation?  According to the latest BP Statistical Review of World Energy, in 2017 human civilisation generated 25551.3 Terawatt hours (TW/h) of electricity.  Of this:

  • Non-renewable renewable energy-harvesting technologies provided 2151.5 TW/h (8.4%)
  • Nuclear provided 2635.6 TW/h (10.3%)
  • Hydroelectric dams provided 4059.9 TW/h (15.9%)
  • Fossil fuels provided 16521.7 TW/h (64.7%).

What this tells us is that far more non-renewable renewable energy-harvesting capacity has to be installed than the electricity that it can actually generate – it has a low capacity factor.  Indeed, Hill’s “around a third” figure includes the much larger capacity of hydroelectric dams (which have environmental issues of their own) for which there is little scope for further installation.  Only by adding in nuclear power can we get to a third of electricity generation from low-carbon sources.

Even this, however, misleads us when it comes to environmental impacts.  The implicit assumption is that non-renewable renewable energy-harvesting technologies are still valuable despite their inefficiency because they are replacing fossil fuels.  But this is not why countries like the UK, Saudi Arabia and (for insane reasons) Germany have been deploying them.  In the first two cases, the deployment of non-renewable renewable energy-harvesting technologies is primarily to maximise the amount of fossil fuels available for export.  In Germany’s case, renewables that might otherwise have weaned the economy off coal were deployed instead as a replacement for nuclear; leaving the economy overly-dependent upon often dirty (lignite) brown coal; and forcing them to turn to Russian gas as a future substitute for coal.  These states are not, however, where most of the world’s largely fossil fuelled industrial processes take place.  Asia accounts for the majority of global industry, and Asian economies use non-renewable renewable energy-harvesting technologies to supplement fossil fuels rather than to replace them; although Hill does not clarify this when he tells us that:

“Specifically, solar energy dominated in 2018, installing an impressive 94 GW… Asia continued to lead the way with 64 GW — accounting for around 70% of the global expansion last year — thanks to dominant performances from China, India, Japan, and South Korea.”

While, of course, electricity generated from wind, wave, sunlight and tide is energy that might otherwise have come from fossil fuels, the impact should not be exaggerated.  According to the 2019 edition of the BP Energy Outlook, in 2017:

  • Non-renewable renewable energy-harvesting technologies provided 4 percent of global primary energy
  • Nuclear provided 4 percent
  • Hydroelectric 7 percent
  • Gas 23 percent
  • Coal 28 percent
  • Oil 34 percent.

Just our additional energy demand since 2015 has been sufficient to account for all of the non-renewable renewable energy-harvesting technologies deployed to date.  That is, if we had simply accepted 2015 levels of consumption, we need not have deployed these technologies at all.  And, of course, if we had stabilized our energy consumption a couple of decades ago we could have left the bulk of the fossil fuels we now consume in the ground:

World Energy Consumption 2017
Source: Global carbon emissions 2007-17

What is really at issue here is that – to quote the late George H.W. Bush – “The American way of life is not up for negotiation.”  That is, we can have any energy transformation we like, so long as it does not involve any limitation on our continued exploitation and consumption of the planet we live on.  The too-big-too-fail banks must havepermanent economic growth and that, in turn, means that we have no choice other than to keep growing our energy consumption.

The trouble is that infinite growth on a finite planet is impossible.  Worse still, as the energy return on investment (aka Net Energy) declines, the increased energy and monetary cost of energy production causes the energy and monetary value available to the wider (non-energy) economy to decline.  In the first two decades of the century, this has caused an intractable financial crisis coupled to a massive decline in prosperity across the developed economy (resulting in the collapse in consumption of the “retail apocalypse”) which is beginning to generate political instability.  In the 2020s the crisis is set to worsen as the energy cost of producing a whole range of mineral resources raises their market price above that which can be sustained in the developed states (where most of the consumption occurs).  The result – whether we like it or not – is that we face a more or less sharp drop in consumption in the next couple of decades.

This raises questions about the purpose to which we deploy non-renewable renewable-energy harvesting technologies.  For several decades, people in the green movement have engaged in private arguments about whether they should spell out the likely localised and de-materialised economies that giving up or running out of accessible fossil fuels necessarily entails.  Since this would be politically toxic, most have chosen to promote the lie that humanity can simply replace coal, gas and oil with some combination of wind, wave, tide and sunlight without economic growth even needing to pause for breath.  This, in turn, has allowed our young people to believe that intransigence is the only thing preventing our political leaders from de-carbonising our economies.

Exactly what our politicians are told about our predicament is a matter of conjecture.  Most, I suspect, are as clueless as the population at large.  Nevertheless the permanent civil services across the planet have produced a raft of reports into the full spectrum of the catastrophe facing us, from the damage we are doing to the environment to the rapidly depleting stocks of key mineral resources and productive agricultural land, and the more imminent collapse in the global financial system.  And the more they become aware of this predicament, the more they realise just exactly what the word “unsustainable” actually means.  One way or another, six out of every seven humans alive today is going to have to go – either by a planned de-growth or via a more or less rapid collapse of our (largely fossil-fuelled) interconnected global life support systems.

With this in mind, there is something truly immoral about perpetuating the myth that we can maintain business as usual simply by swapping non-renewable renewable-energy harvesting technologies for fossil fuels.  This is because maintaining the myth results in precisely the kind of misallocation that we already witnessed in those states that are using renewable electricity to bolster fossil fuel production and consumption.  The more we keep doing this, the harder the crash is going to be when one or other critical component (finance, energy or resources) is no longer widely available.

There is a place for renewable energy in our future; just not the one we were promised.  As we are forced to re-localise and de-grow both our economies and our total population, the use of non-renewable renewable-energy harvesting technologies to maintain critical infrastructure such as health systems, water treatment and sewage disposal, and some key agricultural and industrial processes would make the transition less deadly.  More likely, however, is that we will find the technologies we need to prevent the combination of war, famine and pestilence that otherwise awaits us will have been squandered on powering oil wells, coal mines, electric car chargers, computer datacentres and cryptocurrencies (none of which are edible by the way).

At this stage, all one can say to the climate protestors and to the “green” media that encourage them is, “be careful what you wish for… it might just come true!”





The need for a new Matrix…

9 04 2019

How many years have I been saying jobs are unsustainable? Here’s Tim Watkins explaining it better than me…

The (other) economic madness of the green new deal

Remind me again why you go to work in the morning?  Is it because you are so committed to the mission of your corporate employer that you would willingly work for nothing if they asked you to?  Does your job provide you with so high a degree of life-meaning and personal satisfaction that you would gladly do it in exchange for the minimum income required to feed and clothe yourself? 

No, I thought not.

For almost all of us, work is a means of obtaining money; and money is merely the means by which we are able to consume the goods and services we desire.

Now let me ask you a multiple choice question: why do you think that the oceans are currently so full of plastic that it has polluted the entire marine food chain?  Is it (a) because evil petrochemical companies simply dump plastic into the sea; or is it (b) because it is the inevitable product of mass consumption by 7.5 billion humans (especially those of us in developed states)?

Plastic pollution, along with all of the other fallouts from the globalised industrial economy, is the end consequence of our collective consumption of the goods and services that we desire.

The various versions of green new dealism that have hit the headlines recently have no alternative but to avoid both of these questions.  Instead, they reduce a human impact crisis – aka “the Anthropocene” or “the overshoot” crisis – to the single dimension of greenhouse gas emissions.  They then reduce the greenhouse gas emission crisis to a carbon dioxide crisis; which is further reduced to only the carbon dioxide emitted in the course of electricity generation.

The proposed solution – the mass deployment of non-renewable renewable energy-harvesting technologies like wind turbines and solar panels (and, tacitly, the grid infrastructure to support them) – has the primary aim of pulling the global economy out of the post-2008 doldrums by creating millions of new jobs.  Exactly how many new jobs has yet to be determined, although at least some proponents argue for a mobilisation on a par with the Second World War or landing humans on the Moon.  As Brian Murray at Forbes notes:

“Commentators have frequently compared the GND’s potential deployment to two examples from twentieth-century U.S. history that involved dramatic, rapid shifts: 1) the decision to send astronauts to the moon and 2) World War II.”

“The speed of progress toward the moonshot was staggering—and the effort was highly targeted, focusing on the specific technologies necessary to transport a single vehicle to and from the lunar landscape 240,000 miles away while keeping the occupants alive. At the height of the moon effort in 1966, relevant spending amounted to 0.7% of GDP.  In today’s dollars, that would be $150 billion.”

“By contrast, World War II consumed 35.8% of GDP at its peak (1945), an amount equal to $7.4 trillion today. The massive undertaking involved virtually every aspect of the economy. Over 17 percent of the work force was deployed in the armed forces and nearly five million women entered the work force (a 40 percent increase), many in place of men deployed overseas, to bolster domestic production to support war efforts.”

Murray argues that any attempt to implement the green new deal is likely to be closer to the Moon shot than the war.  Nevertheless, we are still talking about billions of dollars and millions of new construction jobs.  For Murray, the key economic problem here is that wind turbines and solar panels require very little labour to operate and maintain.  As a result, any jobs created would necessarily be temporary.  This, however is a secondary concern and is easily counter-critiqued by the proponents of green new dealism – the additional demand created in the wider economy by the new deal workers spending their wages will create a wider economic boom that will generate new jobs to employ these workers as the construction phase comes to an end.

Let us now revisit those awkward questions I posed at the beginning of this post.  What proportion of several millions of green new deal workers will be offering their labour for free?  What proportion will work in exchange for meals, clothing and a bed for the night?  Most will expect to be paid at least the minimum wage.  And if the promises of the green new dealers are to be realised, a large proportion of the jobs created will need to be high-skilled and high-paid.

Most workers do not simply save their wages every month.  Indeed, one of economist John Maynard Keynes’ observations which informed the original new dealism in the 1930s was that ordinary workers had a far greater propensity to spend than wealthier people.  That is, if someone who is currently only able to eat because of food stamps or a package from a foodbank is given a job at the current average wage – $56,500 (US) £28,600 (UK) – they are likely to spend almost all of it; whereas if the same average wage were given to the CEO of an international bank, they would be far more likely to save it.  So, from a demand point of view, creating lots of relatively well-paid jobs for people who are currently unemployed, underemployed or eking out a living on the minimum wage makes absolute economic sense.

Environmentally, not so much.  The technologies that the new jobs are created to deploy are intended to be greener than the technologies they replace – although they still necessarily involve fossil fuels in their manufacture, transportation, deployment and maintenance.  Nor – at least for now – are these technologies recyclable; indeed, solar panels contain toxic chemicals that prevent either recycling or landfill disposal.  And, of course, in the absence of seasonal grid-scale storage technologies nuclear baseload and gas stand-by capacity will continue to be needed to smooth out intermittency.  These, though, are again secondary problems.

The main issue that any green new deal has to overcome if it is to have any credibility is how we go about preventing millions of new workers from actually spending their additional income.  For all of its many flaws, one of the environmental benefits of quantitative easing since 2008 is that very little of the newly printed currency has seeped out into the real economy.  Most has been used for corporate share buy-backs or investment in various derivatives that do little to increase demand for goods and services across the real economy.  Indeed, this is one of the central criticisms of the current policies levelled by green new dealers.  Any green new deal, in contrast would be increasing global consumption of goods and services by billions – if not trillions – of dollars worldwide.  But mass consumption is precisely the cause of our environmental crisis in the first place.  Millions of new wage labourers are no less likely to purchase such things as single-use plastic containers, corn-fed beef, petrol cars and international travel than any of the current workforce.  The result is that as fast as the electricity generating industry is curbing carbon dioxide emissions, the manufacturing, transportation and industrialised agriculture sectors will be ramping up their emissions – and using up the planet’s remaining resources – to satisfy the new demand.

Far from being a means of sustaining a global economy built upon fossil fuels, a green new deal that creates new jobs and stimulates economic growth amounts to little more than a final blow-out binge before our once-and-done global economy comes crashing down around our ears.  The only means – assuming any is possible at this late stage – of mitigating the environmental catastrophe that is gathering pace around us is to engage in a managed process of de-growth (which may include some deployment of non-renewable renewable energy-harvesting technologies) to create far smaller, localised and less consumptive economies than we have had for many decades.  By necessity, the process would also require a shrinking of the human population to a level in accordance both with what is sustainable and with the standard of living we consider acceptable – i.e., the more consumptive our lifestyles, the lower our life expectancy/birth rate will have to be.

This is not, of course, anything that is going to win votes at an election.  But any detailed examination of the environmental impact of millions of new workers spending their new wages on even more of the same patterns of consumption that have already brought our planet to the edge of extinction should – in any sane world – be no less acceptable.  It is a tribute to our propensity for denial that so many people regard green new dealism as an environmental good rather than the catastrophe it is likely to become.