Dick Smith on growth; emphatically yes…and no

16 08 2017

tedtrainer

Ted Trainer

Another article by my friend Ted Trainer, originally published at on line opinion……

The problems of population and economic growth have finally come onto the public agenda, and Dick Smith deserves much of the credit…but he doesn’t realise what’s on the other end of the trail he’s tugging.

For fifty years a small number of people have been saying that pursuing population and economic growth on a finite planet is a very silly thing to do. Until recently almost no one has taken any notice. However in the last few years there has emerged a substantial “de-growth” movement, especially in Europe. Dick Smith has been remarkably successful in drawing public attention to the issue in Australia. He has done more for the cause in about three years than the rest of us have managed to achieve in decades. (I published a book on the subject in 1985, which was rejected by 60 publishers…and no one took any notice of it anyway.) Dick’s book (2011) provides an excellent summary of the many powerful reasons why growth is absurd, indeed suicidal.

Image result for dick smith

Dick Smith

The problem with the growth-maniacs, a category which includes just about all respectable economists, is that they do not realise how grossly unsustainable present society is, let alone what the situation will be as we continue to pursue growth. Probably the best single point to put to them is to do with our ecological “footprint”. The World Wildlife Fund puts out a measure of the amount of productive land it takes to provide for each person. For the average Australian it takes 8 ha of to supply our food, water, settlement area and energy. If the 10 billion people we are likely to have on earth soon were each to live like us we’d need 80 billion ha of productive land…but there are only about 8 billion ha of land available on the planet. We Australians are ten times over a level of resource use that could be extended to all people. It’s much the same multiple for most other resources, such as minerals, nitrogen emissions and fish. And yet our top priority is to increase our levels of consumption, production, sales and GDP as fast as possible, with no limit in mind!

The World Wildlife Fund also puts the situation another way. We are now using resources at 1.4 times the rate the planet could provide sustainably. We do this by for example, consuming more timber than grows each year, thereby depleting the stocks. Now if 10 billion people rose to the “living standards” we Australians would have in 2050 given the 3% p.a. economic growth we expect, then every year the amount of producing and consuming going on in the world would be 20 times as great as it is now.

Over-production and over-consumption is the main factor generating all the alarming global problems we face is. Why is there an environmental problem? Because we are taking far more resources from nature, especially habitats, than is sustainable. Why do about 3+ billion people in the Third World wallow in poverty? Primarily because the global economy is a market system and in a market resources go to those who can pay most for them, i.e., the rich. That’s why we in rich countries get almost all the oil, the surpluses produced from Third World soils, the fish caught off their coasts, etc. It’s why “development” in the Third World is mostly only development of what will maximise corporate profit, meaning development of industries to export to us. Why is there so much violent conflict in the world? Primarily because everyone is out to grab as many of the scarce resources as they can. And why is the quality of life in the richest countries falling now, and social cohesion deteriorating? Primarily because increasing material wealth and business turnover has been made the top priority, and this contradicts and drives out social bonding.

Dick has done a great job in presenting this general “limits to growth” analysis of our situation clearly and forcefully, and in getting it onto the public agenda. But I want to now argue that he makes two fundamental mistakes.

The first is his assumption that this society can be reformed; that we can retain it while we remedy the growth fault it has. The central argument in my The Transition to a Sustainable and Just World (2010a) is that consumer-capitalist society cannot be fixed. Many of its elements are very valuable and should be retained, but its most crucial, defining fundamental institutions are so flawed that they have to be scrapped and replaced. Growth is only one of these but a glance at it reveals that this problem cannot be solved without entirely remaking most of the rest of society. Growth is not like a faulty air conditioning unit on a house, which can be replaced or removed while the house goes on functioning more or less as before. It is so integrated into so many structures that if it is dumped those structures will have to be scrapped and replaced.

The most obvious implication of this kind is that in a zero growth economy there can be no interest payments at all. Interest is by nature about growth, getting more wealth back than you lent, and this is not possible unless lending and output and earnings constantly increase. There goes almost the entire financial industry I’m afraid (which recently accounted for over 40% of all profits made.) Banks therefore could only be places which hold savings for safety and which lend money to invest in maintenance of a stable amount of capital stock (and readjustments within it.) There also goes the present way of providing for superannuation and payment for aged care; these can’t be based on investing to make money.

The entire energising mechanism of society would have to be replaced. The present economy is driven by the quest to get richer. This motive is what gets options searched for, risks taken, construction and development underway, etc. The most obvious alternative is for these actions to be come from a collective working out of what society needs, and organising to produce and develop those things cooperatively, but this would involve an utterly different world view and driving mechanism.

The problem of inequality would become acute and would not only demand attention, it would have to be dealt with in an entirely different way. It could no longer be defused by the assumption that “a rising tide will lift all boats”. In the present economy growth helps to legitimise inequality; extreme inequality is not a source of significant discontent because it can be said that economic growth is raising everyone’s “living standards”.

How would we handle unemployment in a zero-growth economy? At present its tendency to increase all the time is offset by the increase in consumption and therefore production. Given that we could produce all we need for idyllic lifestyles with a fraction of the present amount of work done, any move in this direction in the present economy would soon result in most workers becoming unemployed. There would be no way of dealing with this without scrapping the labour market and then rationally and deliberately planning the distribution of the (small amount of) work that needed doing.

Most difficult of all are the cultural implications, usually completely overlooked. If the economy cannot grow then all concern to gain must be abandoned. People would have to be content to work for stable incomes and abandon all interest in getting richer over time. If any scope remains for some to try to get more and more of the stable stock of wealth, then some will succeed and take more than their fair share of it and others will therefore get less…and soon it will end in chaos, or feudalism as the fittest take control. Sorry, but the 500 year misadventure Western culture has had with the quest for limitless individual and national wealth is over. If we have the sense we will realise greed is incompatible with a sustainable and just society. If, as is more likely we won’t, then scarcity will settle things for us. The few super privileged people, including Australians, will no longer be able to get the quantities of resources we are accustomed to, firstly because the resources are dwindling now, and secondly because we are being increasingly outmanoeuvred by the energetic and very hungry Chinese, Indians, Brazilians…

And, a minor point, you will also have to abandon the market system. It is logically incompatible with growth. You go into a market not to exchange things of equal value but to make money, to get the highest price you can, to trade in a way that will make you richer over time. There are “markets” where people don’t try to do this but just exchange the necessities without seeking to increase their wealth over time e.g., in tribal and peasant societies. However these are “subsistence” economies and they do not operate according to market forces. The economies of a zero-growth society would have to be like this. Again, if it remains possible for a few to trade their way to wealth they will end up with most of the pie. This seems to clearly mean that if we are to have a zero-growth economy then we have to work out how to make a satisfactory form of “socialism” work, so that at least the basic decisions about production, distribution and development can be made by society and not left to be determined by what maximises the wealth of individuals and the profits of private corporations competing in the market. Richard Smith (2010) points this out effectively, but some steady-staters, including Herman Daly and Tim Jackson (2009) seem to have difficulty accepting it.

Thus growth is not an isolated element that can be dealt with without remaking most of the rest of society. It is not that this society has a growth economy; it is that this is a growth society.

So in my view Dick has vastly underestimated the magnitude of the changes involved, and gives the impression that consumer-capitalist society can be adjusted, and then we can all go on enjoying high levels of material comfort (he does say we should reduce consumption), travel etc. But the entire socio-economic system we have prohibits the slightest move in this direction; it cannot tolerate slowdown in business turnover (unemployment, bankruptcy, discontent and pressure on governments immediately accelerate), let alone stable levels, let alone reduction to maybe one-fifth of present levels.

This gets us to the second issue on which I think Dick is clearly and importantly mistaken. He believes a zero growth economy can still be a capitalist economy. This is what Tim Jackson says too, in his very valuable critique of the present economy and of the growth commitment. Dick doesn’t offer any explanation or defence for his belief; it is just stated in four sentences. “Capitalism will still be able to thrive in this new system as long as legislation ensures a level playing field. Huge new industries will be created, and vast fortunes are still there to be made by the brave and the innovative.” (p. 173.) “I have no doubt that the dynamism and flexibility of capitalism can adjust to sustainability laws. The profit imperative would be maintained and, as long as there was an equitable base, competition would thrive.” (p. 177.)

Following is a sketch of the case that a zero growth economy is totally incompatible with capitalism.

Capitalism is by definition about accumulation, making more money than was invested, in order to invest the surplus to have even more…to invest to get even richer, in a never-ending upward spiral. Obviously this would not be possible in a steady state economy. It would be possible for a few to still own most capital and factories and to live on income from these investments, but they would be more like rentiers or landlords who draw a stable income from their property. They would not be entrepreneurs constantly seeking increasingly profitable investment outlets for ever-increasing amounts of capital.

Herman Daly believes that “productivity” growth would enable capitalism to continue in an economy with stable resource inputs. This is true, but it would be a temporary effect and too limited to enable the system to remain capitalist. The growth rate which the system, and capitalist accumulation, depends on is mostly due to increased production, not productivity growth. Secondly the productivity measure used (by economists who think dollars are the only things that matter) takes into account labour and capital but ignores what is by far the most important factor, i.e., the increasing quantities of cheap energy that have been put into new productive systems. For instance over half a century the apparent productivity of a farmer has increased greatly, but his output per unit of energy used has fallen alarmingly. From here on energy is very likely to become scarce and costly. Ayres (1999) has argued that this will eliminate productivity gains soon (which have been falling in recent years anyway), and indeed is likely to entirely stop GDP growth before long.

Therefore in a steady state economy the scope for continued capitalist accumulation via productivity gains would be very small, and confined to the increases in output per unit of resource inputs that is due to sheer technical advance. There would not be room for more than a tiny class, accumulating greater wealth very gradually until energy costs eliminated even that scope. Meanwhile the majority would see this class taking more of the almost fixed output pie, and therefore would soon see that it made no sense to leave ownership and control of most of the productive machinery in the hands of a few.

But the overwhelmingly important factor disqualifying capitalism has yet to be taken into account. As has been made clear above the need is not just for zero-growth, it is for dramatic reduction in the amount of producing and consuming going on. These must be cut to probably less than one-fifth of the levels typical of a rich country today, because the planet cannot sustain anything like the present levels of producing and consuming, let alone the levels 9 billion people would generate. This means that most productive capacity in rich countries, most factories and mines, will have to be shut down.

I suspect that Dick Smith is like Tim Jackson in identifying capitalism with the private ownership of firms, and in thinking that “socialism” means public ownership. This is a mistake. The issue of ownership is not central; what matters most is the drive to accumulate, which can still be the goal in socialism of the big state variety (“state capitalism”.) In my ideal vision of the future post-capitalist economy most production would take place within (very small) privately owned firms, but there would be no concern to get richer and the economy would be regulated by society via participatory democratic processes.

So I think Dick has seriously underestimated the magnitude of the change that is required by the global predicament and of what would be involved in moving to a zero-growth economy. The core theme detailed in The Transition… is that consumer-capitalist society cannot be fixed. Dick seems to think you can retain it by just reforming the unacceptable growth bit. My first point above is that you can’t just take out that bit and leave the rest more or less intact. In addition you have to deal with the other gigantic faults in this society driving us to destruction, including allowing the market to determine most things, accepting competition rather than cooperation as the basic motive and process, accepting centralisation, globalisation and representative big-state “democracy”, and above all accepting a culture of competitive, individualistic acquisitiveness.

The Transition… argues that an inevitable, dreadful logic becomes apparent if we clearly grasp that our problems are primarily due to grossly unsustainable levels of consumption. There can be no way out other than by transition to mostly small, highly self-sufficient and cooperative local communities and communities which run their own economies to meet local needs from local resources… with no interest whatsoever in gain. They must have the sense to focus on the provision of security and a high quality of life for all via frugal, non-material lifestyles. In this “Simpler Way” vision there can still be (some small scale) international economies, centralised state governments, high-tech industries, and in fact there can be more R and D on important topics than there is now. But there will not be anything like the resources available to sustain present levels of economic activity or individual or national “wealth” measured in dollars.

I have no doubt that the quality of life in The Simpler Way (see the website, Trainer 2011) would be far higher than it is now in the worsening rat race of late consumer-capitalism. Increasing numbers are coming to grasp all this, for instance within the rapidly emerging Transition Towns movement. We see our task as trying to establish examples of the more sane way in the towns and suburbs where we live while there is time, so that when the petrol gets scarce and large numbers realise that consumer-capitalism will not provide for them, they can come across to join us.

It is great that Dick is saying a zero-growth economy is no threat to capitalism. If he had said it has to be scrapped then he would have been identified as a deluded greenie/commie/anarchist out to wreck society and his growth critique would have been much more easily ignored. What matters at this point in time is getting attention given to the growth absurdity; when the petrol gets scarce they will be a bit more willing to think about whether capitalism is a good idea. Well done Dick!

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It’s simple. If we can’t change our economic system, our number’s up

30 04 2017

I occasionally publish articles by George monbiot. At times I have labelled them ‘Monbiot at his best’, even if I disagreed with bits of it….. but this time, he utterly nails it. There’s very little regulars to this site will learn from this, but it is a good piece of writing, and it needs to be shared far and wide, because we truly need this revolution. It’s two years old, but even more relevant now than when he wrote it.

Found on the Guardian’s website…..

'The mother narrative to all this is carbon-fuelled expansion. Our ideologies are mere subplots.'
‘The mother narrative to all this is carbon-fuelled expansion. Our ideologies are mere subplots.’ Photograph: Alamy

Let us imagine that in 3030BC the total possessions of the people of Egypt filled one cubic metre. Let us propose that these possessions grew by 4.5% a year. How big would that stash have been by the Battle of Actium in 30BC? This is the calculation performed by the investment banker Jeremy Grantham.

Go on, take a guess. Ten times the size of the pyramids? All the sand in the Sahara? The Atlantic ocean? The volume of the planet? A little more? It’s 2.5 billion billion solar systems. It does not take you long, pondering this outcome, to reach the paradoxical position that salvation lies in collapse.

To succeed is to destroy ourselves. To fail is to destroy ourselves. That is the bind we have created. Ignore if you must climate change, biodiversity collapse, the depletion of water, soil, minerals, oil; even if all these issues miraculously vanished, the mathematics of compound growth make continuity impossible.

Economic growth is an artefact of the use of fossil fuels. Before large amounts of coal were extracted, every upswing in industrial production would be met with a downswing in agricultural production, as the charcoal or horse power required by industry reduced the land available for growing food. Every prior industrial revolution collapsed, as growth could not be sustained. But coal broke this cycle and enabled – for a few hundred years – the phenomenon we now call sustained growth.

It was neither capitalism nor communism that made possible the progress and pathologies (total war, the unprecedented concentration of global wealth, planetary destruction) of the modern age. It was coal, followed by oil and gas. The meta-trend, the mother narrative, is carbon-fuelled expansion. Our ideologies are mere subplots. Now, with the accessible reserves exhausted, we must ransack the hidden corners of the planet to sustain our impossible proposition.

On Friday, a few days after scientists announced that the collapse of the west Antarctic ice sheet is now inevitable, the Ecuadorean government decided toallow oil drilling in the heart of the Yasuni national park. It had made an offer to other governments: if they gave it half the value of the oil in that part of the park, it would leave the stuff in the ground. You could see this as either blackmail or fair trade. Ecuador is poor, its oil deposits are rich. Why, the government argued, should it leave them untouched without compensation when everyone else is drilling down to the inner circle of hell? It asked for $3.6bn and received $13m. The result is that Petroamazonas, a company with a colourful record of destruction and spills, will now enter one of the most biodiverse places on the planet, in which a hectare of rainforest is said to contain more species than exist in the entire continent of North America.

Almost 45% of the Yasuni national park is overlapped by oil concessions.
Yasuni national park. Murray Cooper/Minden Pictures/Corbis

The UK oil firm Soco is now hoping to penetrate Africa’s oldest national park, Virunga, in the Democratic Republic of Congo; one of the last strongholds of the mountain gorilla and the okapi, of chimpanzees and forest elephants. In Britain, where a possible 4.4 billion barrels of shale oil has just been identified in the south-east, the government fantasises about turning the leafy suburbs into a new Niger delta. To this end it’s changing the trespass laws to enable drilling without consent and offering lavish bribes to local people. These new reserves solve nothing. They do not end our hunger for resources; they exacerbate it.

Look at the lives of the super-rich, who set the pace for global consumption. Are their yachts getting smaller? Their houses? Their artworks? Their purchase of rare woods, rare fish, rare stone? Those with the means buy ever bigger houses to store the growing stash of stuff they will not live long enough to use. By unremarked accretions, ever more of the surface of the planet is used to extract, manufacture and store things we don’t need. Perhaps it’s unsurprising that fantasies about colonising space – which tell us we can export our problems instead of solving them – have resurfaced.

As the philosopher Michael Rowan points out, the inevitabilities of compound growth mean that if last year’s predicted global growth rate for 2014 (3.1%) is sustained, even if we miraculously reduced the consumption of raw materials by 90%, we delay the inevitable by just 75 years. Efficiency solves nothing while growth continues.

The inescapable failure of a society built upon growth and its destruction of the Earth’s living systems are the overwhelming facts of our existence. As a result, they are mentioned almost nowhere. They are the 21st century’s great taboo, the subjects guaranteed to alienate your friends and neighbours. We live as if trapped inside a Sunday supplement: obsessed with fame, fashion and the three dreary staples of middle-class conversation: recipes, renovations and resorts. Anything but the topic that demands our attention.

Statements of the bleeding obvious, the outcomes of basic arithmetic, are treated as exotic and unpardonable distractions, while the impossible proposition by which we live is regarded as so sane and normal and unremarkable that it isn’t worthy of mention. That’s how you measure the depth of this problem: by our inability even to discuss it.





The Extreme Implausibility of Ecomodernism.

20 07 2016

Another essay by Ted Trainer.

tedtrainer

Ted Trainer

16.3.2016

Abstract: “Ecomodernism” is a recently coined term for that central element in mainstream Enlightenment culture previously well-described as “Tech-fix faith”. The largely taken for granted assumption has been that by accelerating modern technologies high living standards can be achieved for all, while resolving resource and ecological problems.  The following argument is that ecomodernism falls far short of having a substantial, persuasive or convincing case in its support. It stands as a contradiction of the now voluminous “limits to growth” literature, but it does not attempt to offer a case against the limits thesis. Elements in the limits case will be referred to below but the main line of argument will be to do with the reasons why achievement of the reductions and “decouplings” assumed by ecomodernism is extremely implausible. The conservative social and political implications are noted before briefly arguing that the solution to global problems must be sought via The Simpler Way.

What is ecomodernism?.

The 32 page Ecomodernist Manifesto (2015), by 18 authors, is a clear and emphatic restatement of the common belief that technical advance within the existing social structure can or will solve global problems, and there is therefore no need for radical change in directions, systems, values or lifestyles. Thus the fundamental commitment to ever more affluent “living standards”, capital intensive systems, technical sophistication and constantly rising levels of consumption and GDP is sound, and indeed necessary as it is the only way to enable the future technical advance that it is believed will solve global problems. This will enable human demands to be met while resource and ecological impacts on nature are reduced, thus making it possible to set more of nature aside to thrive. Modern agriculture for instance will producer more from less land, enabling more to be returned to nature and freeing Third World people from backbreaking work while moving into urban living.  Thus the fundamental assumption frequently asserted is that economic growth can be “decoupled” from the environment.

These kinds of visions would obviously require vastly increased quantities of energy but renewable sources are judged not to be capable of providing these, so it is no surprise to find late in the document that it is being assumed that nuclear reactors are going to do the job, nor that the pro-nuclear Breakthrough Institute champions the Manifesto.

Unfortunately the Manifesto is little more than a claim.  It provides almost no supporting case apart from giving some examples where technical advance has improved human welfare at reduced resource or ecological impact. It does not deal with the many reasons for thinking that technical advance cannot do what the ecomodernists are assuming it can do.  Above all it does not provide grounds for thinking that that resource demand and ecological damage can be sufficiently decoupled from economic growth. When one of the authors was asked for the supporting case reference was made to the 106 page document Nature Unbounded by Blomqvist, Nordhaus and Shellenberger, (2015.) However this document too is essentially a statement of claims and faith and can hardly be said to present a case that those claims can be realized.

The following discussion is mainly intended to show how implausible and unsubstantiated the general “tech-fix” and decoupling claims are, and that they are contrary to existing evidence.  Most if not all critical discussions of ecomodernism and of left modernization theorists such as Phillips (2015), e.g., by Hopkins (2015), Caradonna et al., 2015, Crist, (2015) and Smaje, (2015a, 2015b), have been impressionistic and “philosophical”. In contrast, the following analysis focuses on numerical considerations which establish the enormity of the ecomodernist claims. When estimates and actual numbers to do with resource demands, resource bases, and ecological impacts are attended to it becomes clear that the task for technical advance set by the ecomodernists is implausible in the extreme.

The basic limits to growth thesis.

The “limits to growth” thesis is that with respect to many factors crucial to planetary sustainability affluent-industrial-consumer society is grossly unsustainable. It has already greatly exceeded important limits. Levels of production and consumption are far beyond those that could be kept up for long or extended to all people.  Present consumption levels are achieved because resource and ecological “stocks” are being depleted much faster than they can regenerate.

But the unsustainable present levels of production, consumption, resource use and environmental impact only begin to define of the problem.  What is overwhelmingly crucial is the universal obsession with continual, never ending economic growth, i.e., with increasing production and consumption, incomes and GDP as much as possible and without limit.  The most important criticism of the ecomodernist position is its failure to grasp the magnitude of the task it confronts when the present overshoot is combined with the commitment to growth.  The main concern in the following discussion is with quantities and multiples, to show how huge and implausible ecomodernist achievements and decouplings would have to be.

The magnitude of the task.

It is the extent of the overshoot that is crucial and not generally appreciated. This is the issue which the ecomodernists fail to deal with and it only takes a glance at the numbers to see how implausible their pronouncements are in relation to the task they set themselves. Their main literature makes no attempt to carry out quantitative examinations of crucial resources and ecological issues with a view to showing that the apparent limits can be overcome.

Let us look at the overall picture revealed when some simple numerical aggregates and estimates are combined.  The normal expectation is for around 3% p.a. growth in GDP, meaning that by 2050 the total amount of producing and consuming going on in the world would be about three times as great as at present. World population is expected to be around 10 billion by 2050.  At present world  $GDP per capita is around $13,000, and the US figure is around $55,000. Thus if we take the ecomodernist vision to imply that by 2050 all people will be living as Americans will be living then, total world output would have to be around 3 x 10/7 x 55,000/13,000 = 18 times as great as it is now.  If the assumptions are extended to 2100 the multiple would be in the region of 80.

However, even the present global level of producing and consuming has an unsustainable level of impact.  The world Wildlife Fund’s “Footprint” measure (2015) indicates that the general overshoot is around 1.5 times a sustainable rate.  (For some factors, notably greenhouse gas emissions, the multiple is far higher.) This indicates that the target for the ecomodernist has to be to reduce overall resource use and ecological impact per unit of output by a factor of around 27 by 2050, and in the region of 120 by 2100. In other words, by 2050 technical advance will have to have reduced the resource demand and environmental impact per unit of output to under 4% of their present levels.

The consideration of required multiples shows the inadequacy of the earlier pronouncements and expectations of the well-known tech-fix optimist Amory Lovins who enthused about the possibility of “Factor Four” or better reductions in materials and energy uses per unit of GDP.  (Von Weisacker and Lovins, 1997, and Hawken, Lovins and Lovins, 1999).If there is a commitment to constant, limitless increase in economic output then the reductions in resource use and environmental damage that can be achieved by such technical advance are soon likely to be overwhelmed.  For instance if use and impact rates per unit of GDP were cut by one-third, but 3% p.a. growth in total output continued, then in about 17 years the resource demands and impacts would be back up to as high as they were before the cuts, and would be twice as great in another 23 years.

This issue of multiples is at the core of the limits and decoupling issues. If ecomodernists wish to be taken seriously they must provide a numerical case showing that in all the relevant domains the degree of decoupling that can be achieved is likely to be of the magnitude that would be required.  There appears to be no ecomodernist text which even attempts to do this.  At best their case refers to a few instances where impressive decoupling has taken place.

Note also the importance here of the Leibig “law of the minimum.” It does not matter how spectacular various technical gains can be if there remains one crucial area where they can’t be made on the required scale.  Plants for instance might have available all the nutrients they need except for one required in minute quantities but if it is not available there will be little or no growth.  High-tech systems often depend heavily on tiny quantities of “mineral vitamins”, notably rare earths which are extremely scarce.

The typically faulty national accounting.

An easily overlooked factor is that in general measures and indices of rich world resource and ecological performance greatly misrepresent and underestimate the seriousness of the situation, because they do not include the large volumes of energy, materials and ecological impact embodied in imported goods.  Rich countries now do not carry out much manufacturing but import most of the goods they consume from Third World plantations and factories.  The implications for resource depletion and ecological impact have only recently begun to be studied. (Weidmann, et al., 2014, 2015, Lenzen, et al., 2012, Wiebe, et al,

2012, Dittrich, et al., 2014, Schütz, et al., 2004.)

An example is given by the conventional measure of CO2 emissions. Australia’s 550 MtCO2e/y equates to a per capita rate of around 25 t/y, which is about the highest in the world. But this does not include the emissions in Third World countries generated by the production of goods imported into Australia.  For Australia and for the UK this amount is actually about as great as the emissions within the country.  (Clark, 2011, Australian Government Climate Change Authority, 2013.)

In addition Australia’s “prosperity” is largely achieved by exporting coal, oil and gas and these contain about three times as much carbon as all the energy used within Australia.  It could be argued therefore that the country’s contribution to the greenhouse gas problem more or less corresponds to five times the official and usually quoted 25 t/pp/y.  The IPCC estimates that by 2050 global emissions must be cut to about 0.3 t/pp/y. (IPCC, 2014.)  This is around one-three hundredth of the amount Australia is now responsible for. Again the centrality of the above magnitude point is evident; how aware are tech-fix optimists of the need for reductions of such proportions?

Assessing the validity of the general “tech-fix” thesis.

Firstly attention will be given to some overall numerical considerations which show the extreme implausibility of the general tech-fix claim, such as the gulf between current “decoupling” achievements and the far higher levels that ecomodernism would require. But that does not take into account the fact that it is going to take increasing effort just to maintain current achievements, for instance as ore grades deteriorate. This what the limits to growth analysis makes clear.  The added significance of this will be discussed later via brief examination of some domains such as energy scarcity, declining ore grades, and deteriorating ecological conditions.

How impressive have the overall gains been?

It is commonly assumed that in general rapid, large or continuous technical gains are being routinely made in crucial areas such as energy efficiency, and will continue if not accelerate.  As a generalisation this belief is quite challengeable. Ayres (2009) notes that for many decades there have been plateaus for the efficiency of production of electricity and fuels, electric motors, ammonia and iron and steel production. His Fig. 4.21a shows no increase in the overall energy efficiency of the US economy since 1960.  He reports that the efficiency of electrical devices in general has actually changed little in a century (2009) “…the energy efficiency of transportation probably peaked around 1960.” This has been partly due to greater use of accessories since then. Ayres notes that reports tend to publicise selected isolated spectacular technical advances and this is misleading regarding long term average trends across whole industries or economies. Mackay (2008) reports that little gain can be expected for air transport.  Huebner’s historical study (2005) found that the rate at which major technical advances have been made (per capita of world population) is declining.  He says that for the US the peak was actually in 1916.

Decoupling can be regarded as much the same as productivity growth and this has been in long term decline since the 1970s. Even the advent of computerisation has had a surprisingly small effect, a phenomenon now labelled the “Productivity Paradox.”

The historical record suggests that at best productivity gains have been modest. It is important not to focus on national measures such as “Domestic Materials Consumption” as these do not take into account materials in imported goods.  Thus the OECD (2015) claims that materials used within its countries has fallen 45% per dollar of GDP, but this figure does not take into account materials embodied in imported goods. When they are included rich countries typically show very low or worsening ratios. The commonly available global GDP (deflated) and energy use figures between 1980 and 2008 reveals only a 0.4% p.a. rise in GDP per unit of energy consumed.   Hattfield-Dodds et al. (2015) say that the efficiency of materials use has been improving at c. 1.5% p.a., but they give no evidence for this and other sources indicate that the figure is too high. Weidmann et al. (2014) show that when materials embodied in imports are taken into account rich countries have not improved their resource productivity in recent years. They say “…for the past two decades global amounts of iron ore and bauxite extractions have risen faster than global GDP.” “… resource productivity…has fallen in developed nations.” “There has been no improvement whatsoever with respect to improving the economic efficiency of metal ore use.”

The fact that the “energy intensity” of rich world economies, i.e., ratio of GDP to gross energy used within the country has declined is often seen as evidence of decoupling but this is misleading. It does not take into account the above issue of failure to include energy embodied in imports. Possibly more important is the long term process of “fuel switching”, i.e., moving to forms of energy which are of “higher quality” and enable more work per unit. For instance a unit of energy in the form of gas enables more value to be created than a unit in the form of coal, because gas is more easily transported, switched on and off, or converted from one function to another, etc. (Stern and Cleveland, 2004, p. 33, Cleveland et al., 1984, Kaufmann, 2004,  Office of Technology Assessments, 1990, Berndt, 1990, Schurr and Netschurt, 1960.)

Giljum et al. (2014, p. 324) report only a 0.9% p.a. improvement in the dollar value extracted from the use of each unit of minerals between 1980 and 2009, and that over the 10 years before the GFC there was no improvement. “…not even a relative decoupling was achieved on the global level.” They note that the figures would have been worse had the production of much rich world consumption not been outsourced to the Third World. Their Fig. 2, shows that over the period 1980 to 2009 the rate at which the world decoupled materials use from GDP growth was only one third of that which would have achieved an “absolute” decoupling, i.e., growth of GDP without any increase in materials use.

Diederan’s account (2009) of the productivity of minerals discovery effort is even more pessimistic. Between 1980 and 2008 the annual major deposit discovery rate fell from 13 to less than 1, while discovery expenditure went from about $1.5 billion p.a. to $7 billion p.a., meaning the productivity expenditure fell by a factor in the vicinity of around 100, which is an annual decline of around 40% p.a. Recent petroleum figures are similar; in the last decade or so discovery expenditure more or less trebled but the discovery rate has not increased.

A recent paper in Nature by a group of 18 scientists at the high-prestige Australian CSIRO (Hatfield-Dodds et al., 2015) argued that decoupling could eliminate any need to worry about limits to growth at least to 2050. The article contained no support for the assumption that the required rate of decoupling was achievable and when it was sought (through personal communication) reference was made to the paper by Schandl et al. (2015.)  However that paper contained the following surprising statements, “ … there is a very high coupling of energy use to economic growth, meaning that an increase in GDP drives a proportional increase in energy use.”  (They say the EIA, 2012, agrees.) “Our results show that while relative decoupling can be achieved in some scenarios, none would lead to an absolute reduction in energy or materials footprint.” In all three of their scenarios “…energy use continues to be strongly coupled with economic activity…”

The Australian Bureau of Agricultural Economics (ABARE, 2008) reports that the energy efficiency of energy-intensive industries is likely to improve by only 0.5% p.a. in future, and of non-energy-intensive industries by 0.2% p.a. In other words it would take 140 years for the energy efficiency of the intensive industries to double the amount of value they derive from a unit of energy.

Alexander (2014) concludes his review of decoupling by saying, ”… decades of extraordinary technological development have resulted in increased, not reduced, environmental impacts.”  Smil (2014) concludes that even in the richest countries absolute dematerialization is not taking place. Alvarez found that for Europe, Spain and the US GDP increased 74% in 20 years, but materials use actually increased 85%. (Latouche, 2014.) Similar conclusions re stagnant or declining materials use productivity etc. are arrived at by Aadrianse, 1997, Dettrich et al., (2014), Schutz, Bringezu and Moll, (2004), Warr, (2004), Berndt, (undated), and Victor (2008, pp. 55-56).

These sources and figures indicate the lack of support for the ecomodernists’ optimism. It was seen above that they are assuming that in 35 years time there can be massive absolute decoupling, i.e., that energy, materials and ecological demand associated with $1 of GDP can be reduced by a factor of around 27. But even if the 1.5% p.a. rate Hattfield-Dodds et al. say has been the recent achievement for materials use could be maintained the reduction would only be around a factor of 1.7, and various sources noted above say that their assumed rate is incorrect. There appears to be no ecomodernist literature that even attempts to provide good reason to think a general absolute decoupling is possible, let alone on the required scale.

The overlooked role of energy in productivity growth and decoupling.

Discussions of technical advance and economic growth have generally failed to focus on the significance of increased energy use. Previously productivity has been analysed only in terms of labour and capital “factors of production”, but it is now being recognized that in general greater output etc. has been achieved primarily through increased use of energy (and switching to fuels of higher “quality”, such as from coal and gas to electricity.)  Agriculture is a realm where technical advance has been predominantly a matter of increased energy use. Over the last half century productivity measured in terms of yields per ha or per worker have risen dramatically, but these have been mostly due to even greater increases in the amount of energy being poured into agriculture, on the farm, in the production of machinery, in the transport, pesticide, fertilizer, irrigation, packaging and marketing sectors, and in getting the food from the supermarket to the front door, and then dealing with the waste food and packaging. Less than 2% of the US workforce is now on farms, but agriculture accounts for around 17% of all energy used (not including several of the factors listed above.) Similarly the “Green Revolution” has depended largely on ways that involve greater energy use.

Ayres, et al., (2013), Ayres, Ayres and Warr (2002) and Ayres and Vouroudis (2013) are among those beginning to stress the significance of energy in productivity, and pointing to the likelihood of increased energy problems in future and thus declining productivity. Murillo-Zamorano, (2005, p. 72) says  “…our results show a clear relationship between energy consumption and productivity growth.” Berndt (1990) finds that technical advance accounts for only half the efficiency gains in US electricity generation. These findings caution against undue optimism regarding what pure technical advance can achieve independently from increased energy inputs; in general its significance for productivity gains appears not to have been as great as has been commonly assumed.

The productivity trend associated with this centrally important factor, energy, is itself in serious decline, evident in long term data on EROI ratios. Several decades ago the expenditure of the energy in one barrel of oil could produce 30 barrels of oil, but now the ratio is around 18 and falling. The ratio of petroleum energy discovered to energy required has fallen from 1000/1 in 1919 to 5/1 in 2006. (Murphy, 2010.) Murphy and others suspect  that an industrialised society cannot be maintained on a general energy ratio under about 10. (Hall, Lambert and Balough, 2014.)

The changing components of GDP.

Over recent decades there has been a marked increase in the proportion of rich nation GDP that is made up of “financial” services. These stand for “production” that takes the form of key strokes moving electrons around.  A great deal of it is wild speculation, making risky loans and making computer driven micro-second switches “investments”. These operations deliver massive increases in income to banks and managers, and these have significantly contributed to GDP figures. It could be argued that this domain should not be included in estimates of productivity because it misleadingly inflates the numerator in the output/labour ratio.

When output per worker in the production of “real” goods and services such as food and vehicles, or aged care is considered very different impressions can be gained.  For instance Kowalski (2011) reports that between 1960 and 2010 world cereal production increased 250%, but nitrogen fertilizer use in cereal production increased 750%, and land area used increased 40%. This aligns with the above evidence on steeply falling productivity of various inputs for ores and energy. It is therefore desirable to avoid analysing productivity, the “energy intensity” of an economy, and decoupling achievements in relation to the GDP measure.

Factors limiting the benefits from a technical advance.

There are several factors which typically determine the gains a technical advance actually enables are well below those that seem possible at first.  Engineers and economists make the following distinctions.

“Technical potential”  refers to what could be achieved if the technology could be fully applied with no regard to cost or other problems.

Economic (or ecological) potential”.  This is usually much less than the technical potential because to achieve all the gains that are technically possible would cost too much.  For instance some The Worldwide Fund for Nature quotes Smeets and Faiij (2007) as finding that it would be technically possible for the world’s forests to produce another 64 EJ/y of biomass energy p.a., but they say that the ecologically tolerable potential is only 8 EJ/y.

What are the net gains?  Enthusiastic claims about a technical advance typically focus on the gains and not the costs which should be subtracted to give a net value.  For instance the energy needed to keep buildings warm can be reduced markedly, but it costs a considerable amount of energy to do this, in the electricity needed to run the air-conditioning and heat pumps, and in the energy embodied in the insulation and triple glazing. There are also knock-on effects.  The Green Revolution doubled food yields, but only by introducing crops that required high energy inputs in the form of expensive fertlilzer, seeds and irrigation, and created social costs to do with the disruption of peasant communities.

  • What is socially/politically possible?  There are limits set by what people will accept.  It would be technically possible for many more people in any city to get to work by public transport, but large numbers would not give up the convenience of their cars even if they saved money doing so.
  • The Jeavons or “rebound” effect.  There is a strong tendency for savings made possible by a technical advance to be spent on consuming more of the thing saved, or something else.

Thus it is important to recognise that initial claims usually refer to “technical potential”, but significantly lower savings etc. are likely in the real world.

Now add the worsening limits.

The discussion so far has only dealt with decoupling achievements to date, but the difficulties involved in those achievements are in general likely to have been much less severe than those ahead, as there is continued deterioration in ore grades, forests, soils, chemical pollution, water supplies etc.  It is important now to consider briefly some of these domains, to see how they will make the task for the ecomodernist increasingly difficult.

Before looking at some specific areas the general “low hanging fruit” effect should be mentioned.  When effort is put into dealing with problems, recycling, conserving, increasing efficiency etc. the early achievements might be spectacular but as the easiest options are used up progress typically becomes more difficult and slow. This is so even when there are no problems of dwindling resource availability.

                        Minerals.

The grades of several ores being mined are falling and production costs have increased considerably since 1985. Topp (2008) reports that the productivity for Australian mining has declined 24% between 2000 and 2007. While reserve estimates can be misleading as they only state quantities miners have found to date, and they often increase over time, there is considerable concern about the depletion rate.

Dierderen (2009) says that continuation of current consumption rates will mean that we will have much less than 50 years left of cheap and abundant access to metal minerals, and that it will take exponentially more energy and minerals input to grow or even sustain the current extraction rate of metal minerals. He expects copper, nickel, molybdenum and cobalt to peak before 2035. Deideren’s conclusion is indeed, as his title says, sobering; “The peak in primary production of most metals may be reached no later than halfway through the 2020s.” (p. 23.) “Without timely implementation of mitigation strategies, the world will soon run out of all kinds of affordable mass products and services.”  Such as… “cheap mass-produced consumer electronics like mobile phones, flat screen TVs and personal computers, for lack of various scarce metals (amongst others indium and tantalum). Also, large-scale conversion towards more sustainable forms of energy production, energy conversion and energy storage would be slowed down by a lack of sufficient platinum-group metals, rare-earth metals and scarce metals like gallium. This includes large-scale application of high-efficiency solar cells and fuel cells and large-scale electrification of land-based transport.” Deideren points out that Gallium, Germanium, Indium and Tellurium are crucial for renewable technologies but are by-products currently available in low quantity from the mining of other minerals.  If the latter peak so will the availability of the former.

Scarcities in one domain often have knock-on and negative feedback effects in others.  Diederan says, “The most striking (and perhaps ironic) consequence of a shortage of metal elements is its disastrous effect on global mining and primary production of fossil fuels and minerals: these activities require huge amounts of main and ancillary equipment and consumables (e.g. barium for barite based drilling mud)”. (p. 9.)

The ecomodernist’s response must be to advocate mining poorer grade ores, but this means dealing with marked increases in energy and environmental costs.

  • The quantity of rock that has to be dug up increases. For ores at half the initial grade the quantity doubles, and so does the energy needed to dig, transport and crush it.
  • Poorer ores require finer grinding and more chemical reagents to release mineral components, meaning greater energy demand and waste treatment.
  • Meanwhile the easiest deposits to access are being depleted so it takes more energy to find, get to, and work the newer ones. They tend to be further away, deeper, and smaller.
  • Processing rich ores can be chemically quite different to processing poor ores. Only a very small proportion of any mineral existing in the earth’s crust has been concentrated by natural processes into ore deposits, between .001% and .01%, and the rest exists in common rock, mostly in silicates which are more energy-intensive to process than oxides and sulphides.  To extract a metal from its richest occurrence in common rock would take 10 to 100 times as much energy as to extract if from the poorest ore deposit. To extract a unit of copper from the richest common rocks would require about 1000 times as much energy per kg as is required to process ores used today.

Now consider the minerals situation in relation to the multiples issue. At present only a few countries are using most of the planet’s minerals production.  For instance the per capita consumption of iron ore for the ten top consuming countries is actually around 90 times the figure for all other countries combined. (Weidmann et al., 2013.) How long would mineral supply hold up, at what cost, if 9 – 10 people billion were to try to rise to rich world “living standards”? How likely is it that in view of current ore grade depletion rates and the miniscule decoupling achievement for minerals, the global amount of producing and consuming could multiply by 27, or 120, while the absolute amount of minerals consumed declined markedly?

The ecomodernist cannot hope to deal with the minerals problem without assuming very large scale adoption of nuclear energy, which they are willing to do.

Climate.

Most climate scientists now seem to accept the approach put forward by Meinshausen et al., (2009), and followed by the IPCC (2013) in analyzing in terms of a budget, an amount of carbon release that must not be exceeded if the 2 degree target is to be met.  They estimate that to have a 67% chance of keeping global temperature rise below this the amount of CO2e that can be released between 2000 and 2050 is 1,700 billion tonnes. By 2012 emissions accounted for 36% of this amount, meaning that if the present emission rate is kept up the budget would have been used up by 2033.  Given the seriousness of the possible consequences many regard a 67% chance as being too low and a2 degree rise as too high. (Anderson and Bows, 2008, and Hansen, 2008.)  For an 80% chance the budget limit would be 1,370 billion tonnes.

Few would say there is any possibility of eliminating emissions by 2033. Many emissions come from sources that would be difficult to control or reduce, such as carbon electrodes in the electric production of steel and aluminium. Only about 40% of US emissions come from power generation. Thus power station Carbon Capture and Storage technology cannot solve the problem.

Even the IPCC’s most optimistic emissions reduction scenario, RCP 2.6, could be achieved only if as yet non-existent technology will be able to take 1 billion tonnes of carbon out of the atmosphere every year through the last few decades of this century. (IPCC, 2014.)

Ecomodernists mostly regard the climate problem as solvable by the intensive adoption of nuclear energy. However even the most rapid build conceivable could not achieve the Meinschausen et al. target.

Urbanisation.

About half the world’s people now live in cities, and the ecomodernist strongly advocates increasing this markedly, on the grounds that intensification of settlement will enable freeing more space for nature.  This is an area where knock-on effects are significant. Urban living involves many high resource and ecological costs, including having to move in vast amounts of energy, goods, services and workers, to maintain elaborate infrastructures including those to lift water and people living in high-rise apartments, having to move out all “wastes”, having to provide artificial light, heating, cooling, air purification, having to build freeways, bridges, railways, airports, container terminals, and having to staff complex systems with expensive highly trained professionals and specialists.  Little or none of this dollar, energy, resource or ecological cost has to be met when people live in villages (See on Simpler Way settlements below).

The frequent superficiality and invalidity of the Manifesto’s case is illustrated by the following statement. “Cities occupy just 1 to 3 percent of the Earth’s surface, yet are home to nearly 4 billion people. As such, cities both drive and symbolize the decoupling of humanity from nature, performing far better than rural economies in providing efficiently for material needs…” This statement overlooks the vast areas needed to produce and transport food etc. into the relatively small urban areas. If four billion were to live as San Franciscans do now, with a footprint over 7 ha per person, the total global footprint would be almost 30 billion ha, 200% of the Earth’s surface, not 1- 3%. (WWF, 2014.) Urbanisation does not  “decouple humanity from nature”.

Biological resources and impacts.

Perhaps the most worrying limits being encountered are not to do with minerals or energy but involve the deterioration of biological resources and environmental systems. The life support systems of the planet, the natural resources and processes on which all life on earth depends, are being so seriously damaged that the World Wildlife Fund claims there has been a 30% deterioration since about 1970. Steffen et al., (2015) state much the same situation. A brief reference to a number of impacts is appropriate here to again indicate the magnitude of present problems and their rate of growth.

Biodiversity loss.

Species are being driven to extinction at such an increasing rate that it is claimed the sixth holocaust of biodiversity loss has begun. The rate has been estimated at 114 times the natural background rate. (Ceballos, et al., 2015, Kolbert, 2014.) The numbers or mass of big animals has declined dramatically. “… vertebrate species populations across the globe are, on average, about half the size they were 40 years ago.” (Carrington, 2014.) The mass of big animals in the sea is only 10% of what it was some decades ago. The biomass of corals on the Great Barrier Reef is only half what it was about three decade ago. By the end of the 20th century half the wetlands and one third of coral reefs had been lost. (Washington, 2014.)

Disruption of the nitrogen cycle.

Humans are releasing about as much nitrogen via artificial production, especially for agriculture, as nature releases. This has been identified as one of the nine most serious threats to the biosphere by the Planetary Boundaries Project. (Rockstrom and Raeworth, 2014.)

The increasing toxicity of the environment.

Large volumes of artificially produced chemicals are entering ecosystems disrupting and poisoning them.  This includes the plastics concentrating in the oceans and killing marine life.

Water.

Serious water shortages are impacting in about 80 countries. More than half the world’s people live in countries where water tables are falling. Over 175 million Indians and 130 million Chinese are fed by crops watered by pumps running at unsustainable rates. (Brown, 2011, p. 58.) Access to water will probably be the major source of conflict in the world in coming years. About 480 million people are fed by food produced from water pumped from underground. The water tables are falling fast and the petrol to run the pumps might not be available soon. In Australia overuse of water has led to serious problems, such as salinity in the Murray-Darling system. By 2050 the volume of water in these rivers might be cut to half the present amount, as the greenhouse problem impacts.

Fish.

Nearly all fisheries are being over-fished and the global fish catch is likely to go down from here on.  The mass of big fish in the oceans, such as shark and tuna, is now only 10% of what it was some decades ago. Ecomodernists assume that aquaculture will solve the fish supply problem. It is not clear what they think the farmed fish will be fed on.

Oceans.

Among the most worrying effects is the increasing acidification of the seas, dissolving the shells of many ocean animals, including the krill which are at the base of major ocean food chains.  This effect plus the heating of the oceans is seriously damaging corals.  The coral life on the Great Barrier Reef is down 30% on its original level, and there is a good chance the whole reef will be lost in forty years. (Hoegh-Guldberg, 2015.)

Food, land, agriculture.

Food supply will have to double to provide for the expected 2050 world population, and it is increasingly unlikely that this can be done. Food production increase trends are only around 60% of the rate of increase needed. (Ray, et al., 2013.) Food prices and shortages are already serious problems, causing riots in some countries.  If all people we will soon have on earth had an American diet we would need 5 billion ha of cropland, but there are only 1.4 billion ha on the planet and that area is likely to reduce as ecosystems deteriorate, water supply declines, salinity and erosion continue, population numbers and pressures to produce increase, land is used for new settlements and to produce more meat and bio-fuels, and as global warming has a number of negative effects on food production.

Burn, (2015) and Vidal (2010) both report the rate of food producing land loss at 30 million ha p.a. Vidal says, “…the implications are terrifying”, and he believes major food shortages are threatening. Pimentel says one third of all cropland has been lost in the last 40 years. China might be the worse case, losing 600 square miles p.a. in the 1950 – 1970 period, but by 2000 the rate had risen to 1,400 square miles p.a.  For 50 years about 500 villages have had to be abandoned every year due to incoming sand from the expanding deserts. If the estimates by Burn and Vidal are correct then more than 1 billion ha of cropland will have been lost by 2050, which is two-thirds of all cropland in use today.

The Ecomodernist Manifesto devotes considerable attention to the issue of future food production, using it as an example of the wonders technical advance can bring, including liberating peasants from backbreaking work. It is claimed that advances in modern agriculture will enable production of far more food on far less land, enabling much land to go back to nature. There is no recognition of the fact that modern agriculture is grossly unsustainable, on many dimensions.  It is extremely energy intensive, involving large scale machinery, international transport, energy-intensive inputs of fertilizer and pesticides, packaging, warehousing, freezing, dumping of less than perfect fruit and vegetables, serious soil damage through acidification and compaction, carbon loss and erosion, the energy-costly throwing away of nutrients in animal manures, the destruction of small scale farming and rural communities, the loss of the precious heritage that is genetic diversity … and the loss of food nutrient and taste quality (most evident in the plastic tomato.)

On all these dimensions peasant and home gardening and other elements in local agriculture such as ”edible landscapes”, community gardens and commons are superior. The one area where modern agriculture scores better is to do with labour costs, but that is due to the use of all that energy-intensive machinery. Ecomodernists do not seem to realize what a fundamental challenge is set for them by the well-established “inverse productivity relationship”, i.e., the fact that small scale food producers achieve higher yields per ha. (Smaje, 2015a, 2015b.) They are able to almost completely avoid food packaging, advertising and transport costs, to recycle all nutrients to local soils, benefit from overlaps and multiple functions (e.g., geese weed orchards, ducks eat snails, kitchen scraps feed poultry…) Possibly most importantly, local food production systems maximize the provision of livelihoods and are fundamental elements in resilient and sustainable communities.

Again a daunting challenge is set for the ecomodernist. Presumably the far higher yields from far less land will involve energy intensive high-rise greenhouses, water desalinisation, aquaculture, near 100% phosphorus and other nutrient recycling, elimination of nitrogen run-off, restoration of soil carbon levels, synthetic meat, and extensive global transport and packaging systems. Again numerical analyses aimed at showing what the energy, materials  and dollar budgets would be, or that the goals can be met, are not offered. In addition a glance at the tech fix vision for future food supply reveals the many knock on effects that would multiply problems in many other areas, most obviously energy, infrastructure and water provision and the associated demand for materials.

A glance at the energy implications for beef production should again establish the magnitude point. To produce one kg of beef take can take 20,000 litres of water, and it can take 4 kWh to desalinize 1 liter of water. Again it is evident that there would have to be very large scale commitment to nuclear energy.

            Summarising the biological resource situation.

The environmental problem is essentially due to the huge and unsustainable volumes of producing and consuming taking place.  Vast quantities of resources are being extracted from nature and vast quantities of wastes are being dumped back into nature. Present flows are grossly unsustainable but the ecomodernist believes the basic commitment to ever-increasing “living standards” that is creating the problems can and should continue, while population multiplies by 1.5, resources dwindle, and consumption multiplies perhaps by eight by 2100.

The energy implications.

In all the fields discussed it is evident that the ecomodernist vision would have to involve a very large increase in energy production and consumption, including for processing lower grade ores, producing much more food from much less land, desalinisation of water, dealing with greatly increased amounts of industrial waste (especially mining waste), and constructing urban infrastructures. The “no-limits-to-growth” scenario for Australia 2050 put forward by Hattfield-Dodds et al. concludes that present energy use would have to multiply by 2.7, more than most if not all other projections, and their scenarios do not take into account the energy needed to deal with any of the knock-on effects discussed above. (And their conclusion is based on a highly implausible rate of decoupling materials use from GDP growth, i.e., up to 4.5% p.a.)

If 9 billion people were to live on the per capita amount of energy Americans now average, world energy consumption in 2050 would be around x5 (for the US to world average ratio) x10/7 (for population growth) times the present 550 EJ p.a., i.e., around 3,930 EJ. Let us assume it is all to come from nuclear reactors, that technical advance cuts one-third off the energy needed to do everything, but that moving to poorer ores, desalinisation etc. and converting to (inefficient) hydrogen supply for many storage and transport functions counterbalance that gain.  The nuclear generating capacity needed would be around 450 times as great as at present.

Conclusions re the significance of the limits to growth.

This brief reference to themes within the general “limits to growth” account makes it clear that the baseline on which ecomodernist visions must build is not given by presentconditions. As Steffen et al. (2015) stress the baseline is one of not just deteriorating conditions, but accelerating deterioration. It is as if the ecomodernists are claiming that their A380 can be got to climb at a 60 degree angle, which is far steeper than it has ever done before, but at present it is in an alarming and accelerating decline with just about all its systems in trouble and some apparently beyond repair. The problem is the wild party on board, passengers and crew dancing around a bonfire and throwing bottles at the instruments, getting more drunk by the minute. A few passengers are saying the party should stop, but no one is listening, not even the pilots. The ecomodernist’s problem is not just about producing far more metals, it is about producing far more as grades decline, it is not just about producing much more food, it is about producing much more despite the fact that problems to do with water availability, soils, the nitrogen cycle, acidification, and carbon loss are getting worse.  It can be argued that on many separate fronts halting the deteriorating trends is now unlikely to be achieved. Yet the ecomodernist wants us to believe that the curves can be made to cease falling and to rise dramatically, without abandoning the quests for affluence and growth which are responsible for their deterioration.  Stopping the party is not thought to warrant consideration.

            The implications for centralisation, control and power.

The ecomodernist vision would have to involve vast, technically sophisticated, expert-run, bureaucratized and centralized global systems, most obviously for the control of the nuclear sector, e.g., to prevent access to weapons grade material. Both corporate and governmental agencies would have to be very large in scale, and relations between the corporate sector and top levels of government would set problems to do with openness, public accountability, democratic control, and corruption. Most production would be from a relatively few gigantic and automated mines, factories, feed lots, mega-greenhouses and plantations compressed into the relatively few best sites.  How this would provide jobs and livelihoods to perhaps 6 billion Third world poor would need to be explained. The provision of large amounts of capital would probably become much more centralised and problematic than it has been in the GFC era.

A “development” model focused on these massive, centralized, expert-dependent and capital intensive systems is not obviously going to improve the already severe problem of global inequality. Mega corporations will run the automated vertical farms and desal plants, assisted by governments who in the past have had no difficulty legislating to clear the locals out of the way, as when Third World governments enable GDP-raising palm oil plantations, logging, big dams and aquaculture. Thus Smaje regards ecomodernism as a new enclosure movement.

Morgan (2012) and Korrowicz (2012) provide disturbing accounts of the fragility and lack of resilience of highly integrated and complex systems. Tainter, (1988), draws attention to the way increasing system complexity leads towards negative synergisms and breakdown. For instance where two roads cross in a village no infrastructure might be needed but in a city multi-million dollar flyovers can be required. As Rome’s road system grew the effort needed just to maintain them grew towards taking up all road building capacity. Among the chief virtues of the small and local path are its robustness, redundancy and resilience, the capacity for simple repairs to simple systems, as well as its capacity to provide livelihoods to large numbers of people.

Above all the ecomodernist vision stands for the rejection of any suggestion that the economy needs altering, let alone scrapping, or that rampant-consumer culture needs to be replaced.  The problems are defined as purely technical. If minerals are becoming scare the solution is not to reduce use of them but to increase production of them. Thus there is no need to think about giving up consumerism, economic growth, the market system or the capitalist system. Radical thought and action need not be considered. Smaje describes it as “neoliberalism with a green veneer.” These messages are as consoling to the present working class and the precariat as they are to the capitalist class.

The mistaken “uni-dimensional” assumption.

Frequently evident in ecomodernist thinking is the way that development, emancipation, technology, progress, comfort, the elimination of disease and hunger are seen to lie along the one path that runs from primitive through peasant worlds to the present and the future.  At the modern end of the dimension there is material abundance, science and high technology, the market economy, freedom from backbreaking work, complex civilization with high educational standards and sophisticated culture. It is taken for granted that your choice is only about where you are on that dimension. Third World “development” can only be about moving up the dimension to greater capital investment, involvement in the global market, trade, GDP and consumer society. Thus they see localism and small is beautiful as “going back”, and condemning billions to continued hardship and deprivation.  Opposition to their advocacy of more modernism is met with, “…well, what period in history do you want to go back to?”

This world-view fails to grasp several things.  The first is the possibility that there might be more than one path; the Zapatista’s do not want to follow our path.  Another is that we  might opt for other end points than the one modernization is taking us to.  A third is that we might deliberately select desirable development goals rather than just accept where modernization takes us, and on some dimensions we might choose not to develop any further.  Ecomodernism has no concept of sufficiency or good enough; Smaje sees how it endorses being incessantly driven to strive for bigger and better, and he notes the spiritual costs. Many ecovillages are developed enough.

Possibly most important, it is conceivable that we could opt for a combination of elements from different points on the path. For instance there is no reason why we cannot have both sophisticated modern medicine and the kind of supportive community that humans have enjoyed for millennia, and have both technically astounding aircraft along with small, cheap, humble, fireproof, home made and beautiful mud brick houses, and have modern genetics along with neighbourhood poultry co-ops. Long ago humans had worked out how to make excellent and quite good enough houses, strawberries, dinners and friendships. We could opt for stable, relaxed, convivial and sufficient ways in some domains while exploring better ways in others, but ecomodernists see only two options; going forward or backward. They seem to have no interest in which elements in modernism are worthwhile and which of them should be dumped. The Frankfurt School saw some of them leading to Auschwitz and Hiroshima.

The inability to think in other than uni-dimensional terms is most tragic with respect to Third World “development”.  Conventional-capitalist development theory can only promise a “growth and trickle down” path, which if it continues would take many decades to lift all to tolerable conditions while the rich rise to the stratosphere, but which cannot continue if the limits to growth analysis of the global situation is correct. Yet The Simpler Way might quickly lift all to satisfactory conditions using mostly traditional technologies and negligible capital. (Trainer, 2012, 2013a, 2013b, Leahy, 2009.)

In his critique of Phillips (2014) Smaje (2015b) sees the Faustian bargain here, the readiness to suffer, indeed embrace, the relentless discontent, struggle, disruption and insecurity that modernism involves, without realizing that we might opt to take the benefits of modernism while dumping the disadvantages and designing ways of life that provide security, stability, a relaxed pace and a high quality of life for all.

A radically alternative vision; The Simpler Way.

Until the last decade or so there was no alternative to the dominant implicit ecomodernist world view, but now significant challenges have emerged, most evidently in the overlapping Eco-village, Degrowth, Transition Towns and localism movements. The fundamental beginning point for these is acceptance of the “limits to growth” case that levels of production, consumption, resource use and ecological impact are extremely unsustainable and that the resulting global problems cannot be solved unless there are dramatic reductions.  The core Simpler Way vision claim is that these reductions can be made while significantly improving the quality of life, even in the richest countries, but not without radical change in systems and lifestyles.  Following is a brief indication of some of the main elements in this vision. (For the detailed account see Trainer, 2011.)

The basic settlement form is the small scale town or suburb, restructured to be a highly self-sufficient local economy running mostly on local resources and requiring a minimal amount of resources and goods to be imported from further afield.  State and national governments would still exist but with relatively few functions. There would be extensive development of local commons such as community watersheds, forests, edible landscapes, workshops and windmills etc. and cooperatives would provide many goods and services. Extensive use could be made of high tech systems but mostly relatively low technologies would be used in small firms and farms, especially earth building, hand tool craft production, Permaculture, community gardening and commons. Leisure committees would maintain leisure rich communities, and other committees would manage orchards, woodlots, agricultural research, and the welfare of disabled, teenage, aged and other groups. Local economies would dramatically reduce the need for vehicles and transport, enabling conversion of many roads to community food production.

These settlements would have to be self-governing via thoroughly participatory procedures, including town meetings and referenda. Citizens are the only ones who can understand local conditions, problems and needs, and they would have to work out the best policies for the town and to own the decisions arrived at. Centralised states could not govern them at all effectively, especially given the much diminished resources that will be available to states.  More importantly the town would not meet its own needs well unless its citizens had a strong sense of empowerment and control and responsibility for their own affairs.

Systems, procedures and the overriding ethos would have to be predominantly cooperative and collective, given the recognition that individual welfare would depend heavily on how well the town was functioning. It would not be likely to thrive unless there was an atmosphere of inclusion and care, solidarity and responsibility.

An entirely new kind of economy would be needed, one that did not grow, rationally geared productive capacity to social need, had per capita levels of production, consumption, resource use and GDP far below current levels, was under public control, and was not driven by market forces, profit or competition. However, there might also be a large sector made up of privately owned small firms and farms, producing to sell in local markets, but operating under careful guidelines set by the town to ensure optimum benefit for the town. The transition period would essentially be about slowly establishing those enterprises, infrastructures, cooperatives, commons and institutions (Economy B) whereby the town developed its capacity to make sure that what needs doing is done, within the exiting mainly fee enterprise system (Economy A.) Over time experience would indicate the best balance between the two, and whether there was any need for the market sector.

There would be many free” goods from the commons, a large non-cash sector involving sharing, giving, helping and voluntary working bees, and almost no finance sector. Small public banks with elected boards would hold savings and arrange loans for maintenance or restructuring.  Some people might pay all their tax by extra contributions to the community working bees. Communities would ensure that there was no unemployment or poverty, no isolation or exclusion, all felt secure, and that all had a livelihood, a worthwhile and valued contribution to make to the town. Because the goal would be material lifestyles that were frugal but sufficient, involving for instance small and very low cost earth built houses, on average people might need to work for money only two days a week. It can be argued that the quality of life would be higher than it is for most people in rich countries today. Lest these ideas seem fanciful, they describe the ways many thousands now live in ecovillages and Transition Towns.

Beyond the town or suburban level there would be regional and national economies, and larger cities containing universities, steel works, and large scale production, e.g., of railway equipment, but their activities would be greatly reduced, and re oriented to provisioning the local economies. There would be little international trade or travel. The termination of the present vast expenditure on wasteful production would enable the amount spent on socially useful R and to be significantly increased.

A detailed analysis of an Australian suburban geography (Trainer, 2016) concludes that technically it would be relatively easy to carry out the very large reductions and restructurings indicated, possibly cutting in energy and dollar costs by around 90%.

It is obvious that the Simpler Way vision could not be realised unless there was enormous “cultural” change, especially away from competitive, acquisitive, maximising individualism and towards frugality, collectivism, sufficiency and responsible citizenship. Fortunately there is now increasing recognition that pursuing ever greater material wealth and GDP is not a promising path to greater human welfare. In a zero-growth settlement there could be no concern with the accumulation of wealth; all would have to be content with stable and secure circumstances, to enjoy non-material life satisfactions, and to be aware that their “welfare” depended not on their individual monetary wealth but on public wealth, i.e., on their town’s infrastructures, systems, edible landscapes, free concerts, working bees, committees, leisure resources, solidarity and morale.

Thus from The Simpler Way perspective the solution to global problems is not a technical issue; it is a value issue. We have all the technology we need to create admirable societies and idyllic lives. But this can’t be done if growth and affluence remain the overriding goals.

At present there would seem to be little chance that a transition to The Simpler Way will be achieved, but that is not central here; the issue is whether this vision or that of the ecomodernist makes more sense.

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“But Can’t Technical Advance Solve the Problems?”

16 07 2016

More from Ted Trainer…..

tedtrainer

Ted Trainer

Ted Trainer.

9.4.16

The “limits to growth” analysis argues that the pursuit of affluent lifestyles and economic growth are the basic causes of the many alarming global problems we are running into.  We have environmental destruction, resource depletion, an impoverished Third World, problems of armed conflict and deteriorating cohesion and quality of life in even the richest countries…essentially because the levels of producing and consuming going on are far too high.  There is no possibility of these levels being maintained, let alone spread to all the world’s people. We must shift to far lower levels of consumption in rich countries. (For the detail see Trainer, 2011.)

The counter argument most commonly raised against the limits case is that the development of better technology will solve the problems, an enable us to go on living affluently in growth economies.  Almost everyone seems to hold this belief. It has recently been reasserted as “Ecomodernism.” (For the main statements see Asaef-Adjaye, 2016, and  Blomqvist, Nordhaus Shellenbeger, 2015. For a detailed critique see Trainer 2016a.)

It is not surprising that this claim is regarded as plausible, because technology does constantly achieve miraculous breakthroughs, and publicity is frequently given to schemes that are claimed could be developed to solve this or that problem.  However there is a weighty case that technical advance will not be able to solve the major global problems we face.

The Simpler Way view is that technical advances cannot solve the big global problems and therefore we must change to lifestyles and social systems which do not generate those problems.  This could easily be done if we wanted to do it, and it would actually enable a much higher quality of life than most of us have now in consumer society.  But it would involve abandoning the quest for affluent lifestyles and limitless economic growth…so it is not at all likely that this path will be taken.

The problems are already far too big for technical advance alone to solve.

Most people have little idea how serious the main problems are, or how far beyond sustainable levels we are. Here are some indicators of how far we have exceeded the limits to growth.

  • The 2007 IPCC Report said that if greenhouse gas emissions are to be kept to a “safe” level they must be cut by 50-80% by 2050, and more after that. The 50% figure would mean that the average American or Australian would have to go down to under 5% of their present per capita emission rate. Some argue that all emissions should cease well before 2030. (Anderson and Bows, 2009, Hansen, 2008, Spratt, 2014.
  • By 2050 the amount of productive land on the planet per capita will be 0.8 ha (assuming we will stop damaging and losing land.)  The present amount required to give each Australian their lifestyle is 8 ha.  This means we are 10 times over a sustainable amount, and there is not the slightest possibility of all the world’s people ever rising to anywhere near our level.
  • Australians use about 280 GJ of energy per capita p.a.  Are we heading for 500 GJ/person/y by 2050?  If all the world’s expected 9.7 billion people were to live as we live world energy supply would have to be around 4,500 EJ/y…which is 9 times the present world energy production and consumption.
  • Almost all resources are scarce and dwindling. Ore grades are falling, and there have been food and water riots. Fisheries and tropical forests are in serious decline. Yet only about one-fifth of the world’s people are using most of these; what happens when the rest rise to our levels?
  • Many of the world’s ecosystems are in alarmingly rapid decline.  This is essentially because humans are taking so much of the planet’s area,  and 40% of the biological productivity of the lands.  We are causing a holocaust of biodiversity die-off mainly because we are taking the habitats other species need.  Of about 8 billion ha of productive land we have taken 1.4 billion ha for cropland, and about 3.5 billion ha for grazing.  We are depleting most of the fisheries.  The number of big fish in the oceans is down to 10% of what it was. We are destroying around 15 million ha of tropical forest every year.  And if all 9 billion people expected are going to live as we do now, resource demands would be about 10 times as great as they are now.  There are many other environmental impacts that are either past the limits biologists think are tolerable, or approaching them, including the rate of nitrogen release, ozone destruction, chemical poisoning of the earth and atmospheric aerosol loads. (Rockstrom, 2009.)
  • The World Wildlife Fund estimates that we are now using up resources at a rate that it would take 1.5 planet earths to provide sustainably. (WWF, 2014.) If 9.7 billion are to live as we expect to in 2050 we will need more than 20 planet earths to harvest from.

These are some of the many ways in which we have already greatly exceeded the planet’s capacity to meet human demands, and they define the task the tech-fix believer is faced with.  So ask the tech-fix optimist, “If technology is going to solve our problems, when is it going to start?  Just about all of them seem to be getting worse at present.”

Now add the absurdity of economic growth.

These and many other facts and figures only indicate the magnitude of the present problems caused by over-production and over-consumption.  To this alarming situation we must now add the fact that our society is committed to rapid and limitless increases in “living standards” and GDP; i.e., economic growth is the supreme goal.

If we Australians have 3% p.a. economic growth to 2050, and by then all 9.7 billion people will have come up to the “living standards” we will have by then, the total amount of economic production in the world each year will be about 20 times as great as it is now.  The present amount of production and resource use is grossly unsustainable, yet we are committed to economic system which will see these rates multiplied 20 times by 2050.

And note that most of the resources and ecosystems we draw on to provide consumer lifestyles are deteriorating. The WWF’s Footprint index tells us that at present we would need 1.5 planet Earth’s to provide the resources we use sustainably. So the Tech-fix advocate’s task is to explain how we might cope with a resource demand that is 20×1.5 = 30 times a currently sustainable level by 2050…and twice as much by 2073 given 3% p.a. growth.

Huge figures such as these define the magnitude of the problem for technical-fix believers.  We are far beyond sustainable levels of production and consumption; our society is grossly unsustainable, yet its fundamental determination is to increase present levels without limit.  If technical advance is going to solve the problems caused by all that producing and consuming it must cut resource use and impacts by a huge multiple…and keep it down there despite endless growth.  Now ask the tech-fix believer what precisely he thinks will enable this.

Faith-based tech-fix optimism.

At this point we usually find that the belief in tech–fix is nothing but a faith, and one that has almost no supporting evidence.   Because technology has achieved many wonders it is assumed that it will come up with the required solutions, somehow.  This is as rational as someone saying, “I have a very serious lung disease, but I still smoke five packs of cigarettes a day, because technical advance could come up with a cure for my disease.”  This argument is perfectly true… and perfectly idiotic.  If you are on a path that is clearly leading to disaster the sensible thing is to get off it.  If technology does come up with solutions then it might make sense to get back on that path again.

The tech-fix optimist should be challenged to show in detail what are the grounds for us accepting that solutions will be found, to each and every one of the big problems we face.  What precisely might solve the biodiversity loss problem, the water shortage, the scarcity of phosphorus, the collapse of fish stocks, etc., and how likely are these possible beak-throughs?   Does it not make better sense to change from the lifestyles and systems that are causing these problems, at least until we can see that we can solve the resulting problems?

It should be stressed that the argument here is not to deny or undervalue the many astounding advances being made all the time in fields like medicine, astronomy, genetics, sub-atomic physics and IT, or to imply that these will not continue. The point is that technical advance is very unlikely to come up with ways that solve the resource and environmental problems being generated by affluent lifestyles.  The argument is that when the magnitude of the task (above) and the evidence on the significance of technical advance for resource and ecological problems is considered (below), tech-fix faith is seen to be extremely unwarranted … and the solutions have to be sought in terms of shifting to a Simpler Way of some kind.

Amory Lovins and Factor 4 or 5 reductions.

For decades Amory Lovins has been possibly the best known of several people who argue that technical advances could cut resource use per unit of GDP considerably.  He says we could in effect have 4 times the output with the same impact.  (Von Weizacher and Lovins, 1997).  But the above numbers make it clear that this is far from sufficient.  If by 2050 we should cut ecological impact and resource use in half (remember footprint and other indices show this is far from enough), but we also increase economic output by 20, then we’d need a factor 40 reduction, not Factor 4…and resource demand would be twice as high in another 23 years if 3% growth continued.

The factors limiting what technical advance can do.

It is important to keep in mind that there are several factors which typically determine the gains a technical advance actually enables are well below those that seem possible at first.  Engineers and economists make the following distinctions.

  • “Technical potential.”  This is what the technology could achieve if fully applied with no regard to cost or other problems.
  • Economic (or ecological) potential”.  This is usually much less than the technical potential because to achieve all the gains that are technically possible would cost too much.  For instance it is technically possible for passenger flights to be faster than sound, but it is far too costly.  It would be technically possible to recycle all lead used, but it would be much too costly in dollars and convenience to do so. Some estimate that it would be technically possible to harvest 1,400 million ha for biomass energy per year, but when ecologically sensitive regions are taken out some conclude that the yield could only be 250 million ha or less. (World Wildlife Fund, 2010, p. 181.)  The WWF study quotes Smeets and Faiij (2007) as finding that it would be technically possible for the world’s forests to produce another 64 EJ/y of biomass energy p.a., but Field, Campbelo and Lobell (2007) conclude that only 27 EJ/y can be obtained, under 2 per cent of the Smeets and Faiij figure.
  • What are the net gains?  Enthusiastic claims about a technical advance typically focus on the gains and not the costs which should be subtracted to give a net value.  For instance the energy needed to keep buildings warm can be reduced markedly, but it costs a considerable amount of energy to do this, in the electricity needed to run the air-conditioning and heat pumps, and in the energy embodied in the insulation and triple glazing.

The WWF Energy Report (2010) claims that big savings can be made in building heating and cooling, but their Figs. 3 – 11 and 3 – 12 show that although their measures would reduce heat used in buildings by 90%, electricity used would increase c. 50% (and there is no reference to what the embodied energy cost of manufacturing the equipment and insulation might be.)  The graphs don’t seem to show any net reduction in building energy use.

The Green Revolution doubled food yields, but only by introducing crops that required high energy inputs in the form of expensive fertilizers, seeds and irrigation.  One result was that large numbers of very poor farmers went out of business because they couldn’t afford the inputs.

Similarly, it is possible to solve some water supply problems by desalination, but only by increasing the energy and greenhouse problems.

  • What is socially/politically possible?  Then there are limits set by what people will accept.  It would be technically possible for many people in Sydney to get to work by public transport, but large numbers would not give up the convenience of their cars even if they saved money doing so.  The energy efficiency of American cars is much lower than what is technically possible, and in fact lower than it was decades ago … because many people want energy-intensive vehicles.  Australians are now building the biggest and most energy wasteful houses in the world.  A beautiful, tiny, sufficient mud brick house could be built for less than $10,000…but most people would not want one.  These examples make it clear that the problems of over-consumption in many realms are mainly social rather than technical, and that they can’t be solved by technical advance.  The essential tech-fix issue is to do with whether or not the problems can be solved by technical advances which allow us to go on living and consuming as we were before, or whether we must change to values and behaviour that don’t cause problems.
  • The Jevons or “rebound” effect.  Then there is the strong tendency for savings made possible by a technical advance to be spent on consuming more of the thing saved or something else.  For instance if we found how to get twice the mileage per litre of petrol many would just drive a lot more, or spend the money saved on buying more of something else.  The Indians have recently developed a very cheap car, making it possible for many more low income people to drive, consume petrol and increase greenhouse gases.

So it is always important to recognise that an announced technical miracle breakthrough probably refers to its technical potential but the savings etc. that it is likely to enable in the real world will probably be well below this.

Some evidence on technical advance in the relevant fields.

Again the focus here is on fields which involve high resource or ecological impacts and demands, not on the many advances being made in fields like medicine or particle physics. It should not be assumed that in general rapid, large or continuous technical gains are being routinely made in the relevant fields, especially in crucial areas such as energy efficiency. Ayres (2009) notes that for many decades there have been plateaus for the efficiency of production of electricity and fuels, electric motors, ammonia and iron and steel production.  The efficiency of electrical devices in general has actually changed little in a century (Ayres, 2009, Figs. 4.1 and 4.19, p. 127.)  “…the energy efficiency of transportation probably peaked around 1960”.  (p. 126), probably due to increased use of accessories.  Ayres’ Fig. 4.21a shows no increase in the overall energy efficiency of the US economy since 1960. (p. 128.)  He notes that reports tend to publicise particular spectacular technical advances and this can be misleading regarding long term average trends across whole industries or economies.

We tend not to hear about areas where technology is not solving problems, or appears to have been completely defeated.  Not long ago everyone looked forward to super-sonic mass passenger flight, but with the demise of Concorde this goal has been abandoned.  It would be too difficult and costly, even without an energy crunch coming up.  Sydney’s transport problems cannot be solved by more public transport; more rail and bus would improve things, but not much because the sprawling city has been build for the car on 70 years of cheap oil.  Yes you could solve all its problems with buses and trains, but only at an infinite cost.   The Murray-Darling river can only be saved by drastic reduction in the amount of water being taken out of it.  The biodiversity holocaust taking place could only be avoided if humans stopped taking so much of nature, and returned large areas of farmland and pasture to natural habitat. (For an extremely pessimistic analysis of what future technology might achieve, see Smith and Positrano, 2010.)

Most indices of technical progress, efficiency and productivity show long term tapering towards ceilings.  “But what about Moore’s law, where by computer chip power has followed a steep upward curve?”  Yes in some realms this happens, for a time, but the trend in IT is highly atypical.  (By the way, the advent of computers has not made much difference at all to the productivity of the economy; indeed in recent decades productivity growth indices for national economies have fallen.  This is identified as “The Productivity Paradox.”)

There are two important areas where recent trends seem to run counter to this argument; the remarkable fall in the costs of PV panels and the advent of new batteries. However the significance of these is uncertain. The PV cost is largely due to latge subsidies, very cheap labour, and the general failure of the Chinese economy to pay ecological costs of production. (On the enormous difference the last factor makes see Smith, 2016.)  Thus the real cost, and that which we will have to pay in future is likely to be much higher.  (… the EIA thinks costs will probably rise before long.), The significance of the new battery technology is clouded by the fact that costs would have to fall by perhaps two-thirds before they could be used for grid storage without greatly increasing the cost of power, and it is not likely that there is enough Lithium to enable grid level storage of renewable energy.

The crucial “decoupling” issue.

The fundamentally important element in the tech-fix or ecomodernist position is the belief/claim that resource demand and ecological impact can be “decoupled” from economic growth, that is, that new ways will enable the economy to keep growing and “living standards”, incomes and consumption to continue rising without increasing resource use or environmental damage (or while keeping these down to sustainable levels.) The following passages deal with considerable evidence on decoupling and show this belief to be extremely implausible, to put it mildly.

What about the falling “energy intensity” of the economy?”

The fact that the “energy intensity” of rich world economies, i.e., ratio of GDP to gross energy used within the country has declined is often seen as evidence of decoupling but this is misleading. It does not take into account the large amounts of energy embodied in imports, i.e., energy use we benefit from but does not show up in our national accounts.  (below.) Possibly more important is the long term process of “fuel switching”, i.e., moving to forms of energy which are of “higher quality” and enable more work per unit. For instance a unit of energy in the form of gas enables more value to be created than a unit in the form of coal, because gas is more easily transported, switched on and off, or converted from one function to another, etc. (Stern and Cleveland, 2004, p. 33, Cleveland et al., 1984, Kaufmann, 2004,  Office of Technology Assessments, 1990, Berndt, 1990, Schurr and Netschurt, 1960.)

What about productivity increases?

It is commonly thought that the power of technology is evident in the constantly improving productivity of the economy.  Again this is misleading, firstly because productivity gains have been low and decreasing in recent decades and this is a constant concern and puzzle among economists and politicians. Even the advent of computerisation has had a surprisingly small effect, a phenomenon now labelled the “Productivity Paradox.”

The overlooked role of energy in productivity growth and decoupling.

Most of the productivity growth that  has taken place now seems to have been due not to technical advance but to increased use of energy. Previous analyses have not realized this but have analysed only in terms of labour and capital input “factors of production”. Agriculture is a realm where technical advance has been predominantly a matter of increased energy use. Over the last half century productivity measured in terms of yields per ha or per worker have risen dramatically, but these have been mostly due to even greater increases in the amount of energy being poured into agriculture, on the farm, in the production of machinery, in the transport, pesticide, fertilizer, irrigation, packaging and marketing sectors, and in getting the food from the supermarket to the front door, and then dealing with the waste food and packaging. Less than 2% of the US workforce is now on farms, but agriculture accounts for around 17% of all energy used (not including several of the factors listed above.) Similarly the “Green Revolution” has depended largely on ways that involve greater energy use.

Ayres, et al., (2013), Ayres, Ayres and Warr (2002) and Ayres and Vouroudis (2013) are among those beginning to stress the significance of energy in productivity, and pointing to the likelihood of increased energy problems in future and thus declining productivity. Murillo-Zamorano, (2005, p. 72) says “…our results show a clear relationship between energy consumption and productivity growth.” Berndt (1990) finds that technical advance accounts for only half the efficiency gains in US electricity generation. These findings caution against undue optimism regarding what pure technical advance can achieve independently from increased energy inputs; in general its significance for productivity gains appears not to have been as great as has been commonly assumed.

The productivity trend associated with this centrally important factor, energy, is itself in serious decline, evident in long term data on EROI ratios. Several decades ago the expenditure of the energy in one barrel of oil could produce 30 barrels of oil, but now the ratio is around 18 and falling. The ratio of petroleum energy discovered to energy required has fallen from 1000/1 in 1919 to 5/1 in 2006. (Murphy, 2010.) Murphy and others suspect  that an industrialised society cannot be maintained on a general energy ratio under about 10. (Hall, Lambert and Balough, 2014.)

So when we examine the issue of productivity growth we find little or no support for the general tech-fix faith.  It is not the case that technical breakthroughs are constantly enabling significantly more to be produced per unit of inputs. The small improvements in productivity being made seem to be largely due to changes to more energy-intensive ways, and energy itself is exhibiting marked deterioration in productivity (ie, as evident in its EROI.) Some analysts (e.g., Ayres, 2009, Ayres et al., 2013) believe that any gains occurring now will probably disappear with coming rises in energy scarcity and cost.

Lets examine ewhere materials are used; not general GDP

Evidence on low past and present decoupling achievement.

The historical record suggests that at best rates of decoupling materials and energy use from GDP have been very low or less than zero; i.e., some important measures show materials or energy use to be increasing faster than GDP. It is important not to focus on national measures such as “Domestic Materials Consumption” as these do not take into account materials in imported goods.  For example the OECD (2015) claims that materials used within its countries has fallen 45% per dollar of GDP, but this figure does not take into account materials embodied in imported goods. When they are included rich countries typically show very low or worsening ratios. The commonly available global GDP (deflated) and energy use figures between 1980 and 2008 reveals only a 0.4% p.a. rise in GDP per unit of energy consumed.   Tverberg () reproduces the common plot for global energy use and GWP, showing an almost complete overlay; i.e., no tendency for energy use to fall away from GWP growth.

Weidmann et al. (2014) show that when materials embodied in imports are taken into account rich countries have not improved their resource productivity in recent years. They say “…for the past two decades global amounts of iron ore and bauxite extractions have risen faster than global GDP.” “… resource productivity…has fallen in developed nations.” “There has been no improvement whatsoever with respect to improving the economic efficiency of metal ore use.”

Giljum et al. (2014, p. 324) report only a 0.9% p.a. improvement in the dollar value extracted from the use of each unit of minerals between 1980 and 2009, and that over the 10 years before the GFC there was no improvement. “…not even a relative decoupling was achieved on the global level.” Their Fig. 2, shows that over the period 1980 to 2009 the rate at which the world decoupled materials use from GDP growth was only one third of that which would have achieved an “absolute” decoupling, i.e., growth of GDP without any increase in materials use. It must be stressed here that, as they point out, these findingss would have been worse had the production of much rich world consumption not been outsourced to the Third World (that is, had energy embodied in imports been included.)

Diederan’s account (2009) of the productivity of minerals discovery effort is even more pessimistic. Between 1980 and 2008 the annual major deposit discovery rate fell from 13 to less than 1, while discovery expenditure went from about $1.5 billion p.a. to $7 billion p.a., meaning the productivity expenditure fell by a factor in the vicinity of around 100, which is an annual decline of around 40% p.a. Recent petroleum figures are similar; in the last decade or so discovery expenditure more or less trebled but the discovery rate has not increased.

A recent paper in Nature by a group of 18 scientists at the high-prestige Australian CSIRO (Hatfield-Dodds et al., 2015) argued that decoupling could eliminate any need to worry about limits to growth at least to 2050. The article contained no support for the assumption that the required rate of decoupling was achievable and when it was sought (through personal communication) reference was made to the paper by Schandl et al. (2015.)  However that paper contained the following surprising statements, “ … there is a very high coupling of energy use to economic growth, meaning that an increase in GDP drives a proportional increase in energy use.”  (They say the EIA, 2012, agrees.) “Our results show that while relative decoupling can be achieved in some scenarios, none would lead to an absolute reduction in energy or materials footprint.” In all three of their scenarios “…energy use continues to be strongly coupled with economic activity…”

The Australian Bureau of Agricultural Economics (ABARE, 2008) reports that the energy efficiency of energy-intensive industries is likely to improve by only 0.5% p.a. in future, and of non-energy-intensive industries by 0.2% p.a. In other words it would take 140 years for the energy efficiency of the intensive industries to double the amount of value they derive from a unit of energy.

Alexander (2014) concludes his review of decoupling by saying, ”… decades of extraordinary technological development have resulted in increased, not reduced, environmental impacts.”  Smil (2014) concludes that even in the richest countries absolute dematerialization is not taking place. Alvarez found that for Europe, Spain and the US GDP increased 74% in 20 years, but materials use actually increased 85%. (Latouche, 2014.) Similar conclusions re stagnant or declining materials use productivity etc. are arrived at by Aadrianse, 1997, Dettrich et al., (2014), Schutz, Bringezu and Moll, (2004), Warr, (2004), Berndt, (undated), and Victor (2008, pp. 55-56).

A version of the decoupling thesis is the “Environmental Kuznets Curve”, i.e., the claim that as economic development takes place environmental impacts increase but then decrease. The evidence on this thesis indicates that it is not correct. Greenhouse gas emissions give us a glaring example. Alexander concludes his review, (2014),  “If the EKC hypothesis sounds too good to be true, that is because, on the whole, it is false.”

These sources and figures indicate the apparently total lack of support for the ecomodernists’ optimism. They are assuming that there can be massive absolute decoupling, i.e., that by 2050 energy, materials and ecological demand associated with $1 of GDP can be reduced by a factor of around 30. There appears to be noecomodernist literature that even attempts to provide good reason to think a general absolute decoupling is possible, let alone on the required scale. (I have made about five attempts to have such evidence sent to me from the leading ecomodernist authors, without receiving any.)

            The changing components of GDP.

There is another consideration that makes the situation much worse. Over recent decades there has been a marked increase in the proportion of rich nation GDP that is made up of “financial” services. These stand for “production” that takes the form of key strokes that move electrons around.  A great deal of it is wild speculation, making risky loans and making computer driven micro-second switches in “investments”. These operations deliver massive increases in income to banks and managers, commissions, loans, interest, consultancy fees.  These make a big contribution to GDP figures. In one recent year 40% of US corporate profits came from the finance sector. It could be argued that this domain should not be included in estimates of productivity because it misleadingly inflates the numerator in the output/labour ratio.

This means that the most significant measures will be to do with industries that use material and ecological inputs.  The crucial question is, in those industries that are causing the pressure on resources and ecosystems is significant decoupling taking place? However when output per worker in the production of “real” goods and services such as food and vehicles, or aged care is considered we do not seem to find reassuring evidence of decoupling.  Again agricultural industry provides some of the best examples. Over the last 50 years there has been a huge increase in energy used in fuel, pesticides, fertilizers, transport, packaging, marketing and waste treatment. Kowalski (2011) reports that between 1960 and 2010 world cereal production increased 250%, but nitrogen fertilizer use in cereal production increased 750%. Between 1997 and 2002 the US household use of energy on food increased 6 times as fast as use for all household purposes. (Canning et al., 2010.)

The enormous implications for energy demand.

The main ecomodernist texts make clear that if the technical advances envisaged could not take place unless there was extremely large scale increase in the amount of energy produced.  They look forward to shifting a large fraction of agriculture off land into intensive systems such as high rise greenhouses and acquaculture, massive use of desalination for water supply, processing lower grade ores, dealing with greatly increased amounts of industrial waste (especially mining waste), and constructing urban infrastructures for billions to live in as they propose shifting people from the land to allow more of it to be returned to nature.  They do not think renewable energy sources can provide these quantities of energy, so their proposals would have to involve very large numbers of fourth generation nuclear reactors (which run on plutonium). How large?

If 9 billion people were to live on the per capita amount of energy Americans now average, world energy consumption in 2050 would be around x5 (for the US to world average ratio) x10/7 (for population growth) times the present 550 EJ p.a., i.e., around 3,930 EJ. The nuclear generating capacity needed would be around 450 times as great as at present.

And the baseline is deteriorating…

The general “limits to growth” analysis of the global situation makes it clear that the baseline on which ecomodernist visions must build is not given by present conditions such as resource availability. As Steffen et al. (2015) and many others stress the baseline is one of not just deteriorating conditions, but accelerating deterioration.

It is as if the ecomodernists are claiming that their A380 can be got to climb at a 60 degree angle, which is far steeper than it has ever done before, but at present it is in an alarming and accelerating decline with just about all its systems in trouble and some apparently beyond repair. The problem is the wild party on board, passengers and crew dancing around a bonfire and throwing bottles at the instruments, getting more drunk by the minute. A few passengers are saying the party should stop, but no one is listening, not even the pilots. The ecomodernist’s problem is not just about producing far more metals, it is about producing far more as grades decline, it is not just about producing much more food, it is about producing much more despite the fact that problems to do with water availability, soils, the nitrogen cycle, acidification, and carbon loss are getting worse.  It can be argued that on many separate fronts halting the deteriorating trends is now unlikely to be achieved. Yet the ecomodernist wants us to believe that the curves can be made to cease falling and to rise dramatically, without abandoning the quests for affluence and growth which are responsible for their deterioration.  Stopping the party is not thought to warrant consideration.

This is not an argument against technology.

Research and development and improving things are obviously important and in The Simpler Way vision we would have more resources going into technical research than we have now despite a much lower GDP, because we would have phased out the enormous waste of resources that occurs in consumer-capitalist society.  But it is a mistake to think that the way to solve our problems is to develop better technology.  That will not solve the problems, because they are far too big, and they are being generated by trying to live in ways that generate impossible resource demands. The big global problems have been caused by our faulty social systems and values.  The solution is to develop ways and systems that don’t generate the problems, and this requires movement away from affluent, high energy, centralised, industrialised, globalised etc., systems and standards. Above all it requires a shift from obsession with getting rich, consuming and acquiring property. It requires a willing acceptance of frugality and sufficiency, of being content with what is good enough.

Hundreds of years ago we knew how to produce not just good enough but beautiful food, houses, cathedrals, clothes, concerts, works of art, villages and communities, using little more than hand tools and crafts.  Of course we should use modern technologies including computers (if we can keep the satellites up there) where these make sense.  But we don’t need much high-tech to design and enjoy high quality communities.

Some of our most serious problems are to do with social breakdown, depression, stress, and falling quality of life.  These problems will not be solved by better technology, because they derive from faulty social systems and values.  Technical advances often make these problems worse, e.g., by increasing the individual’s capacity to live independently of others and community, and by enabling machines to cause unemployment. Especially worrying is the fact that ecomodernist dreams would involve massive globally integrated professional and corporate run systems involving centralised control and global regulatory systems (e.g., to prevent proliferation of radioactive materials from all those reactors.  Firstly this is not a scenario that will have a place for billions of poor people.  It will enable a few super-smart techies, financiers and CEOs to thrive, making inequality far more savage, and it will set impossible problems for democracy because there will be abundant opportunities for those in the centre to sdrure their own interests, to be corrupt and secretive. (See Richard Smith’s disturbing account of China today: 2015.)

(For a detail account of The Simpler Way vision of a sustainable and satisfactory society see The Simpler Way website,  thesimplerway.info and  in particular thesimplerway.info/THEALTSOCLong.htm

—————————————

ABARE, (2008), Australian Energy Projections to 2029-30.  http://www.abare.gov.au/publications_html/energy/energy_10/energy_proj.pdf

Anderson, K., and A.  Bows, (2009), “Radical reframing of climate change agenda”, Tyndall Centre, Manchester University, http://sites.google.com//com/sitt/cutcarbonemissions80by2020/drs-kevin-anderson-aclice-bows-tyndall-centre-re-uk-radical-reforming-of-climate-change-agenda

Asafu-Adjaye, J., et al., (2015), An Ecomodernist Manifesto, April, http://www.ecomodernism.org

Ayres, R. U., The economic Growth Engine, Cheltenham, Elgar, 2009.

Ayres, R. U., et al., 2013, ”The underestimated contribution of energy to economic growth”, Structural Change and Economic Dynamics, 27, 79 – 88.

Berndt, E. R., (1990), “Energy use, technical progress and productivity growth: a survey of economic issues”, The Journal of Productivity Analysis, 2:, pp.  67-83.

Blomqvist, L., T. Nordhaus and M. Shellenbeger, (2015), Nature Unbound; Decoupling for Conservation, Breakthrough Institute.

Canning, P. et al., (2010), Energy Use in the US Food System, USDA.

Cleveland, C. J., R. Costanza, C. A. S. Hall, and R. K. Kaufmann “Energy and the U.S. economy: A biophysical perspective.” Science, 225: (1984), pp., 890-897.

Field, C.B., Campbell, J.E. and Lobell, D.B. (2007), “Biomass energy: the scale of the potential resource”, Trends in Ecology and Evolution, Vol. 13 No. 2, pp. 65-72.

Hansen, J., et al., (2008), “Target atmospheric CO2; Where Should humanity aim?”, The Open Atmospheric Science Journal, 2, 217 – 231.

  1. K. Kaufmann, (2004), “A biophysical analysis of the energy/real GDP ratio: implications for substitution and technical change”, Ecological Economics , 6: pp. 35-56.
  2. K. Kaufmann, (2004), “The mechanisms for autonomous energy efficiency increases: A co-integration analysis of the US energy/GDP ratio”, Energy Journal , 25(1), pp.  63-86.

Office of Technology Assessment, (1990), Energy Use and the U.S. Economy, US Congress, OTA-BP-E-57, U.S. Government Printing Office, Washington DC.

Rockstrom, J., (2009) “A safe operating space for humanity”, Nature, 461:24 (Sept.), pp. 472 – 476.

  1. Schurr, and B. Netschert, (1960), Energy and the American Economy, 1850-1975, Baltimore, Johns Hopkins University Press.

Smeets, E., and A. Faaij, (2007), “Bioenergy potentials from forestry in 2050 —  An assessment of the drivers that determine the potentials”, Climatic Change, 8, 353 – 390.

Smith, R., (2015), China’s communist-capitalist ecological apocalypse”, Real-world Economic Review, 71.

Spratt, D., (2014),The real budgetary emergency and the myth of ‘burnable carbon”, Climate Code Red, 22 May.

Stern, D. and C. J. Cleveland, (2004), “Energy and Economic Growth”, in C. J. Cleveland (ed.), Encyclopedia of Energy. San Diego: Academic Press.

Trainer, T, (2011), The Simpler Way; Outline of Our Perspective, http://thesimplerway.info/TSWmain.htm

Trainer, T., (2016a), The extreme implausibility of Ecomodernism, (This critique overlaps considerably with this argument against the Tech Fix position.)

Von Weizacker, E. and A. B. Lovins, (1997), Factor Four : Doubling Wealth – Halving Resource Use : A New Report to the Club of Rome, St Leondards, Allen & Unwin.

World Wide Fund for Nature, (2011), The Energy Report, WWF and Ecofys.





Dmitry Orlov at his very best

26 03 2015

I suppose many (most?) of you already follow Orlov’s great blog and have already read this piece.  As far as I’m concerned, it’s one of the very best analyses of the predicaments we face all wrapped up in a concise and easy to understand piece of journalism.
 Originally published here.

Financial Feudalism

Once upon a time—and a fairly long time it was—most of the thickly settled parts of the world had something called feudalism. It was a way of organizing society hierarchically. Typically, at the very top there was a sovereign (king, prince, emperor, pharaoh, along with some high priests). Below the sovereign were several ranks of noblemen, with hereditary titles. Below the noblemen were commoners, who likewise inherited their stations in life, be it by being bound to a piece of land upon which they toiled, or by being granted the right to engage in a certain type of production or trade, in case of craftsmen and merchants. Everybody was locked into position through permanent relationships of allegiance, tribute and customary duties: tribute and customary duties flowed up through the ranks, while favours, privileges and protection flowed down.

It was a remarkably resilient, self-perpetuating system, based largely on the use of land and other renewable resources, all ultimately powered by sunlight. Wealth was primarily derived from land and the various uses of land. Here is a simplified org chart showing the pecking order of a medieval society.

Feudalism was essentially a steady-state system. Population pressures were relieved primarily through emigration, war, pestilence and, failing all of the above, periodic famine. Wars of conquest sometimes opened up temporary new venues for economic growth, but since land and sunlight are finite, this amounted to a zero-sum game.

But all of that changed when feudalism was replaced with capitalism. What made the change possible was the exploitation of nonrenewable resources, the most important of which was energy from burning fossilized hydrocarbons: first peat and coal, then oil and natural gas. Suddenly, productive capacity was decoupled from the availability of land and sunlight, and could be ramped up almost, but not quite, ad infinitum, simply by burning more hydrocarbons. Energy use, industry and population all started going up exponentially. A new system of economic relations was brought into being, based on money that could be generated at will, in the form of debt, which could be repaid with interest using the products of ever-increasing future production. Compared with the previous, steady-state system, the change amounted to a new assumption: that the future will always be bigger and richer—rich enough to afford to pay back both principal and interest.

With this new, capitalistic arrangement, the old, feudal relationships and customs fell into disuse, replaced by a new system in which the ever-richer owners of capital squared off against increasingly dispossessed labour. The trade union movement and collective bargaining allowed labour to hold its own for a while, but eventually a number of factors, such as automation and globalization, undermined the labour movement, leaving the owners of capital with all the leverage they could want over a demoralized surplus population of former industrial workers. In the meantime, the owners of capital formed their own pseudo-aristocracy, but without the titles or the hereditary duties and privileges. Their new pecking order was predicated on just one thing: net worth. How many dollar signs people have next to their name is all that’s necessary to determine their position in society.

But eventually almost all the good, local sources of hydrocarbon-based energy became depleted, and had to be replaced using lower-quality, more remote, harder-to-produce, more expensive ones. This took a big bite out of economic growth, because with each passing year more and more of it had to be plowed right back into producing the energy needed to simply sustain, never mind grow, the system. At the same time, industry produced a lot of unpleasant byproducts: environmental pollution and degradation, climate destabilization and other externalities. Eventually these started showing up as high insurance premiums and remediation costs for natural and man-made disasters, and these too put a damper on economic growth.

Population growth has its penalties too. You see, bigger populations translate to bigger population centers, and research results show that the bigger the city, the higher is its energy use per capita. Unlike biological organisms, where the larger the animal, the slower is its metabolism, the intensity of activity needed to sustain a population center increases along with population. Observe that in big cities people talk faster, walk faster, and generally have to live more intensely and operate on a tighter schedule just to stay alive. All of this hectic activity takes energy away from constructing a bigger, richer future. Yes, the future may be ever more populous (for now) but the fastest-growing form of human settlement on the planet is the urban slum—lacking in social services, sanitation, rife with crime and generally unsafe.

What all of this means is that growth is self-limiting. Next, observe that we have already reached these limits, and have in some cases gone far beyond them. The currently failing fad of hydraulic fracturing of shale deposits and steaming oil out of tar sands is indicative of the advanced state of depletion of fossil fuel sources. Climate destabilization is producing ever more violent storms, ever more severe droughts (California now has just a year’s worth of water left) and is predicted to wipe out entire countries because of rising ocean levels, failing monsoon seasons and dwindling irrigation water from glacial melt. Pollution has likewise reached its limits in many areas: urban smog, be it in Paris, Beijing, Moscow or Teheran, has become so bad that industrial activities are being curtailed simply so that people can breathe. Radioactivity from the melted-down nuclear reactors at Fukushima in Japan is showing up in fish caught on the other side of the Pacific Ocean.

All of these problems are causing a very strange thing to happen to money. In the previous, growth phase of capitalism, money was borrowed into existence in order to bring consumption forward and by so doing to stimulate economic growth. But a few years ago a threshold was reached in the US, which was at the time still the epicenter of global economic activity (since eclipsed by China), where a unit of new debt produced less than one unit of economic growth. This made borrowing from the future with interest no longer possible.

Whereas before money was borrowed in order to produce growth, now it had to be borrowed, in ever-larger amounts, simply to prevent financial and industrial collapse. Consequently, interest rates on new debt were reduced all the way to zero, in something that came to be known as ZIRP, for Zero Interest Rate Policy. To make it even sweeter, central banks accepted the money they loaned out at 0% interest as deposits, which earned a tiny bit of interest, allowing banks to make a profit by doing absolutely nothing.

glutUnsurprisingly, doing absolutely nothing proved to be rather ineffective, and around the world economies started to shrink. Many countries resorted to forging their statistics to paint a rosier picture, but one statistic that doesn’t lie is energy consumption. It is indicative of the overall level of economic activity, and it is down across the entire world. A glut of oil, and a much lower oil price, is what we are currently witnessing as a result. Another indicator that doesn’t lie is the Baltic Dry Index, which tracks the level of shipping activity, and it has plummeted too.

And so ZIRP set the stage for the latest, most queer development: interest rates have started to go negative, both on loans and deposits. Good bye, ZIRP, hello, NIRP! Central banks around the world are starting to make loans at small negative rates of interest. That’s right, certain central banks now pay certain financial institutions to borrow money! In the meantime, interest rates on bank deposits have gone negative as well: keeping your money in the bank is now a privilege, for which one must pay.

But interest rates are certainly not negative for everyone. Access to free money is a privilege, and those who are privileged are the bankers, and the industrialists they fund. Those who have to borrow to finance housing are less privileged; those who borrow to pay for education even less so. Those not privileged at all are those who are forced to buy food using credit cards, or take out payday loans to pay rent.

The functions which borrowing once played in capitalist economies have been all but abandoned. Once upon a time, the idea was that access to capital could be obtained based on a good business plan, and that this allowed entrepreneurship to flourish and many new businesses to be formed. Since anybody, and not just the privileged, could take out a loan and start a business, this meant that economic success depended, at least to some extent, on merit. But now business formation has gone in reverse, with many more enterprises going out of business than are being formed, and social mobility has become largely a thing of the past. What is left is a rigidly stratified society, with privileges dispensed based on hereditary wealth: those at the top get paid to borrow, and get to surf on a wave of free money, while those at the bottom are driven ever further into debt servitude and destitution.

Can NIRP underpin a new feudalism? It certainly cannot reverse the downward slide, because the factors that are putting limits on growth are not amenable to financial manipulation, being physical in nature. You see, no amount of free money can make new natural resources spring into existence. What it can do, however, is freeze the social hierarchy among the owners of capital—for a while, but not forever.

Everywhere you care to look, the ever-shrinking economy eventually results in populist revolt, war and national bankruptcy, and these cause money to stop working in a number of ways. There is usually devaluation, bank failures, inability to finance imports, and the demise of pensions and of the public sector. The desire to survive causes people to focus on getting direct access to physical resources, distributing them among friends and family.

In turn, this causes market mechanisms to become extremely opaque and distorted, and often to stop functioning altogether. Under these circumstances, how many dollar signs someone has next to their name becomes rather a moot point, and we should expect the social hierarchy among the owners of capital to become unstable and capsize. A few among them have the talents to become warlords, and these few fleece the rest out of existence. But overall, in a situation where financial institutions have failed, where factories and other enterprises are no longer functioning, and where real estate holdings have been overrun by marauding mobs and/or invaded by squatters, one’s net worth becomes rather difficult to compute. And so we should expect the org chart of the post-capitalist society, in spreadsheet terms, to look like this. (“#REF!” is what Excel displays when it encounters an invalid cell reference in a formula.)

A good, precise term for this state of affairs is “anarchy.” Once a new, low level of steady-state subsistence is reached, the process of aristocratic formation can begin anew. But unless a new source of cheap fossil fuels is somehow magically discovered, this process would have to proceed along the traditional, feudal lines.





Limits to growth on ‘Mainstream Media’

14 02 2015

KerrynBeach photo ed

Dr Kerryn Higgs

I know not everyone would consider the ABC ‘Mainstream Media’, but all the same, the subject of Limits to growth and that evil Club of Rome crowd appearing there feels like some sort of breakthrough…..  you can listen to the podcast at the above link, or read the transcript below if you prefer……

Australian writer Dr Kerryn Higgs (a Tasmanian no less…) has written a book called Collision Course – Endless Growth On A Finite Planet, in which she examines how society’s commitment to growth has marginalized scientific findings on the limit of growth, calling them bogus predictions of imminent doom.

Transcript

Robyn Williams: Growth or no growth? You may have heard Dick Smith on Breakfast a couple of weeks ago saying that unlimited growth is impossible and we must do something else. But what? There is, of course, a way of improving what we do more efficiently and stopping waste. Peter Newman from Perth gave an example on Late Night Live late last year: If we used trains instead of trucks for freight, it would halve the costs and save many, many lives. We don’t do it because we always do what we’ve always done. Kerryn Higgs, who’s with the University of Tasmania, has just brought out a book called Collision Course – Endless Growth on a Finite Planet, published by MIT Press and she has recently been appointed a Fellow of the International Centre of the Club of Rome.

Kerryn Higgs: I came across The Limits to Growth quite by accident in 1972, just when it was published. It was commissioned by the Club of Rome and written by a team of researchers at MIT, led by Donella and Dennis Meadows. The book changed the way I thought about Nature, people, history, everything. It persuaded me that physics matters, and that the idea of ever-expanding economic growth is a delusion. Up to then, I was a mainstream humanities person, history being my main discipline, and writing my passion. I did grow up in the countryside and loved the natural world, but I had no real intuition of an impending environmental crisis. And here was this little book suggesting that if we carried on with our exponential expansion, our system would collapse at some point in the middle of the 21st century.

Although galloping economic growth already seemed normal to most younger people living in the developed world in 1972, the growth that took off after WW2 was not normal. It is absolutely unprecedented in all of history. Nothing like it has ever occurred before: large and rapidly growing populations, accelerating industrialisation, expanding production of every kind. All new. The Meadows team found that we could avoid collapse if we slowed down the physical expansion of the economy. But this would mean two very difficult changes— slowing human population growth and slowing the entire cycle of physical production from material extraction through to the disposal of waste. The book was persuasive to me and I expected its message to have an impact on human affairs. But as the years rolled by, it seemed there was very little—and then, even less. In fact, I gradually became aware that most people thought “the Club of Rome got it wrong” and scorned the book as an ignorant tract from “doomsters”, an especially common view among economists. I want to point out, though, that recent research from Melbourne University’s Graham Turner, shows that the Meadows team did not get it wrong. Their projections for what would happen if we carried on business as usual tally almost exactly with what has actually occurred in the 40 years since 1972.

But while scientists from Rachel Carson onwards sounded alarm about numerous problems associated with growth, this was not the case in our govern­ments, bureaucracies, and in public debate, where economic growth was gradually being entrenched as the central objective of collective human effort. This really puzzled me.

How come the Club of Rome got such a terrible press?

How did scientists lose credibility? When I was young, science was almost a god. A few decades later, scientists were being flippantly brushed aside.

How did economists displace scientists as the crucial policy advisers and the architects of public debate, setting the criteria for policy decisions?

How did economic growth become accepted as the only solution to virtually all social problems—unemployment, debt and even the environmental damage growth was causing?

And how did ever-increasing income and consumption become the meaning of life, at least for us in the rich world? It was not the meaning of life when I was young.

Answering these questions took me back through human history. A few developments were especially decisive.

Around 1900, the modern corporation emerged. Over just a decade or two, many of the current transnationals came into being in the US (with names like Coca Cola, Alcoa and DuPont). International Harvester amalgamated 85% of US farm machinery into one corporation in just a few years. Adam Smith’s free enterprise economy was being transformed into something very different. A process of perpetual consolidation followed and by now, frighteningly few corporations control the majority of world trade and revenue, giving them colossal power. The new corporations of the early 20th century banded together into industry associations and business councils like the immensely influential US Chamber of Commerce, which was formed out of local chambers from across the country in 1912. These organisations exploited the newly emerging Public Relations industry, launching a barrage of private enterprise propaganda, uninterrupted for more than a century, and still very healthy today. Peabody coal, for example, recently signed up one of the world’s PR giants, Burson-Marsteller, for a PR campaign to convince leaders that coal is the solution to poverty.

Back in 1910 universal suffrage threatened the customary dominance of the business classes, and PR was an excellent solution. If workers were going to vote, they’d need the right advice. No-one expressed it better than Edward Bernays, Freud’s nephew, who is credited with founding the PR industry. Bernays was candid:

The conscious and intelligent manipulation of the… masses is an important element in democratic society (he wrote). Those who manipulate this unseen mechanism … constitute an invisible government which is the true ruling power of our country… It is they who pull the wires which control the public mind.

PR became an essential tool for business to consolidate its power right through the century, culminating in the 1970s project to “litter the world with free market think tanks”. By 2013, there were nearly 7,000 of these, all over the world; the vast majority were conservative, free market advocates, many on the libertarian fringe, and financed by big business. They cultivate a studied appearance of independence, though one think tank vice-president came clean. “There is no such thing as a disinterested think tanker,” he said. “Somebody always builds the tank, and it’s usually not Santa Claus or the Tooth Fairy.” Funding think tanks is always about “shaping and reshaping the climate of public opinion”.

Nonetheless, the claim to independence has been so successful that most think tanks have tax-free charity status and their staff constantly feature in the media as if they were independent and peer-reviewed experts.

Another decisive development was the “bigger pie” strategy. Straight after World War 2, governments took on a new role of fostering growth. The emphasis increasingly fell on baking a bigger pie, so the slices could get bigger but the pie would not have to be divided up any more equitably. Growth could function as an alternative to fairness. Thorny problems like world poverty were designated growth problems and leaders in the decolonising world often embraced a growth-oriented version of development, a version that rarely helped their poor majorities. Growth allowed the privileged to maintain and even extend their opulence, while professing to be saving the world from poverty. It’s frequently claimed that growth is lifting millions out of poverty. But, apart from China, this is not really the case. China has indeed decreased the numbers of its extreme poor, though this has been achieved with disastrous environmental decline and increasing inequality.

Meanwhile, progress is patchy elsewhere. After 70 years of economic growth, with the world economy now 8 to 10 times bigger than it was in 1950, there are still 2 and a half billion people living on less than $2 a day, more than a third of the people on earth, and about the same number as in 1981. Growth has not been shared. Underlying the popularity of growth, there’s a great clash of values between mainstream economics and the physical sciences.

Economists see the human economy as the primary system—odd when you consider that the planet’s been here for about 4.6 billion years, and life for something like 3.8 billion.  The human era is less than a whisker on this timescale, but for economists Nature is just the extractive sector of their primary system, the economy. For scientists and ecological economists, the primary system is the planet – and it’s self-evidently finite. The human economy with its immense material extraction and vast waste, exists entirely within the earth system. Self-evident as these boundaries might seem, they remain invisible or contested in mainstream economics and are of little concern to politicians or citizens in most countries. Hardly a news bulletin goes by without stories of growth expected, growth threatened, or growth achieved. Growth is the watchword of both major parties here and around the world and remains the accepted solution to poverty, pollution and debt.

And yet, however necessary growth is to our current economic arrangements, and however desirable from the point of view of our expectations of material well-being and comfort, it’s hardly a practical aim if it’s based on a misperception of reality.

While we assume that a high and increasing level of material consumption is normal and desirable, we ignore the peculiarity of our times and the encroaching threats to us and our planet.

We are well into dangerous territory in three areas:

Firstly, species are going extinct 100 to 1000 times faster than the background rate.

Secondly, the nitrogen cycle is completely disrupted. In nature, nitrogen is largely inert in our atmosphere. Today, mainly through making fertiliser, nitrogen is flooding through our rivers, groundwater and continental shelves, fuelling algal blooms that lead to dead zones and fish kills.

And thirdly we are on the way to a very hot planet. Unless we change rapidly in the extremely near future, we risk an increase of 4 degrees Centigrade by 2100. So far, an increase of less than 1 degree is melting the West Antarctic icesheet, glaciers nearly everywhere and even the massive Greenland icecap.

Meanwhile, the rate of carbon dioxide and methane emissions continues to rise. In fact, right through the decade it took to write my book, I was staggered as these emissions defied all protocols and agreements, and rose faster and faster every year, setting a new record in 2013. Four degrees may be a bridge too far, and yet our culture is cheerfully crossing it.

I started out as a student of human history and ended up studying the intersection between human history and natural history. Humans have had local effects for thousands of years but on a global scale, the collision is new. Humans were a flea on the face of the earth for most of our history and it’s probably true to say this is the very first time one species—ours—has taken over the entire planetary system for its own sole use. In human-focused terms, this may seem perfectly reasonable. In planetary terms, it’s weird and completely impractical.

While our best agricultural land, last remnants of white box woodland and the Great Barrier Reef are put at risk for the extraction of gas and coal, which we should aim to stop burning anyway if we want a liveable world, it seems that only citizen revolt is left to counter it.

Let’s hope we succeed.

The ground of our being is at stake.

Robyn Williams: Kerryn Higgs. She’s with the University of Tasmania and her book, published by MIT Press, is called Collision Course – Endless Growth on a Finite Planet. Kerryn has recently been appointed a Fellow of the International Centre of the Club of Rome. Next week I shall introduce the proud Professor who’s just moved into that crumpled brown paper bag designed by Frank Gehry for the University of Technology, Sydney: Roy Green on innovation in Australia and what’s not right.  





Still on Track for the Collapse of Modern Civilization

15 10 2014

Originally posted on Collapse of Industrial Civilization:

BeFunky_null_u1.jpg

Two recent pieces of scientific evidence really hammer home the predicament of modern industrial civilization, and they have to do with the fact that our globalized, just-in-time economic model is hopelessly wed to carbon-based energy. Once one understands this, then there can be no delusions about why we are on such a catastrophic trajectory of greenhouse gas emissions. As was explained in a previous post, GDP is fundamentally and directly linked to CO2 emissions. Below, two graphs(click to go to source) illustrate this fact:

C02 emissions since 1850 (red); exponential growth (blue); cuts to hit climate target (dashed).

Graphic_PE_CoalUseIncreased

It’s not really about evil fossil fuel companies, although they do certainly exert enormous political clout and do conspire to protect their business model by doing such things as spreading doubt on climate change science, but as with all corporations, externalizing social and environmental costs is endemic to the profit system and the coercive forces of competition in capitalist markets.

Firstly, there is the graph submitted by…

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