Can we save energy, jobs and growth at the same time ?

20 05 2018

I apologise in advance to anyone with a short attention span, this is a bit long at almost one and a half hours……  especially as if you are new to limits to growth, you might have to watch it more than once!
If you ever needed proof that economics is an imbecilic proposal, then this is it.

Published on 30 Jan 2018

Jancovici’s conference in ENS School of Paris – 08/01/2018 To download the Presentation : https://fr.slideshare.net/JoelleLecon… The depletion of natural resources, with oil to start with, and the need for a stable climate, will make it harder and harder to pursue economic growth as we know it. It has now become urgent to develop a new branch of economics which does not rely on the unrealistic assumption of a perpetual GDP increase. In this Colloquium, I will discuss a “physical” approach to economics which aims at understanding and managing the scaling back of our world economy. Biography : Jean-Marc Jancovici, is a French engineer who graduated from École Polytechnique and Télécom, and who specializes in energy-climate subjects. He is a consultant, teacher, lecturer, author of books and columnist. He is known for his outreach work on climate change and the energy crisis. He is co-founder of the organization “Carbone 4” and president of the think tank “The Shift Project”. Original video : https://www.youtube.com/watch?v=ey7_F… Facebook page : https://www.facebook.com/jeanmarc.jan… Website : https://jancovici.com/
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Not so renewables

12 05 2018

Lifted from the excellent consciousness of sheep blog…..

For all practical purposes, solar energy (along with the wind, waves and tides that it drives) is unending.  Or, to put it more starkly, the odds of human beings being around to witness the day when solar energy no longer exists are staggeringly low.  The same, of course, cannot be said for the technologies that humans have developed to harvest this energy.  Indeed, the term “renewable” is among the greatest PR confidence tricks ever to be played upon an unsuspecting public, since solar panels and wind (and tidal and wave) turbines are very much a product of and dependent upon the fossil carbon economy.

Until now, this inconvenient truth has not been seen as a problem because our attention has been focussed upon the need to lower our dependency on fossil carbon fuels (coal, gas and oil).  In developed states like Germany, the UK and some of the states within the USA, wind and solar power have reduced the consumption of coal-generated electricity.  However, the impact of so-called renewables on global energy consumption remains negligible; accounting for less than three percent of total energy consumption worldwide.

A bigger problem may, however, be looming as a result of the lack of renewability of the renewable energy technologies themselves.  This is because solar panels and wind turbines do not follow the principles of the emerging “circular economy” model in which products are meant to be largely reusable, if not entirely renewable.

dead turbine

According to proponents of the circular economy model such as the Ellen MacArthur Foundation, the old fossil carbon economy is based on a linear process in which raw materials and energy are used to manufacture goods that are used and then discarded:

 

This approach may have been acceptable a century ago when there were less than two billion humans on the planet and when consumption was largely limited to food and clothing.  However, as the population increased, mass consumption took off and the impact of our activities on the environment became increasingly obvious, it became clear that there is no “away” where we can dispose of all of our unwanted waste.  The result was the shift to what was optimistically referred to as “recycling.”  However, most of what we call recycling today is actually “down-cycling” – converting relatively high value goods into relatively low value materials:

 

The problem with this approach is that the cost of separating small volumes of high-value materials (such as the gold in electrical circuits) is far higher than the cost of mining and refining them from scratch.  As a result, most recycling involves the recovery of large volumes of relatively low value materials like aluminium, steel and PET plastic.  The remainder of the waste stream ends up in landfill or, in the case of toxic and hazardous products in special storage facilities.

In a circular economy, products would be designed as far as possible to be reused, bring them closer to what might realistically be called “renewable” – allowing that the second law of thermodynamics traps us into producing some waste irrespective of what we do:

 

Contrary to the “renewables” label, it turns out that solar panels and wind turbines are anything but.  They are dependent upon raw resources and fossil carbon fuels in their manufacture and, until recently, little thought had been put into how to dispose of them at the end of their working lives.  Since both wind turbines and solar panels contain hazardous materials, they cannot simply be dumped in landfill.  However, their composition makes them – at least for now – unsuited to the down-cycling processes employed by commercial recycling facilities.

While solar panels have more hazardous materials than wind turbines, they may prove to be more amenable to down-cycling, since the process of dismantling a solar panel is at least technically possible.  With wind turbines it is a different matter, as Alex Reichmuth at Basler Zeitung notes:

“The German Wind Energy Association estimates that by 2023 around 14,000 MW of installed capacity will lose production, which is more than a quarter of German wind power capacity on land. How many plants actually go off the grid depends on the future electricity price. If this remains as deep as it is today, more plants could be shut down than newly built.

“However, the dismantling of wind turbines is not without its pitfalls. Today, old plants can still be sold with profit to other parts of the world, such as Eastern Europe, Russia or North Africa, where they will continue to be used. But the supply of well-maintained old facilities is rising and should soon surpass demand. Then only the dismantling of plants remains…

“Although the material of steel parts or copper pipes is very good recyclable. However, one problem is the rotor blades, which consist of a mixture of glass and carbon fibers and are glued with polyester resins.”

According to Reichmuth, even incinerating the rotor blades will cause problems because this will block the filters used in waste incineration plants to prevent toxins being discharged into the atmosphere.  However, the removal of the concrete and steel bases on which the turbines stand may prove to be the bigger economic headache:

“In a large plant, this base can quickly cover more than 3,000 tons of reinforced concrete and often reach more than twenty meters deep into the ground… The complete removal of the concrete base can quickly cost hundreds of thousands of euros.”

It is this economic issue that is likely to scupper attempts to develop a solar panel recycling industry.  In a recent paper in the International Journal of Photoenergy, D’Adamo et. al. conclude that while technically possible, current recycling processes are too expensive to be commercially viable.  As Nate Berg at Ensia explains:

“Part of the problem is that solar panels are complicated to recycle. They’re made of many materials, some hazardous, and assembled with adhesives and sealants that make breaking them apart challenging.

“’The longevity of these panels, the way they’re put together and how they make them make it inherently difficult to, to use a term, de-manufacture,’ says Mark Robards, director of special projects for ECS Refining, one of the largest electronics recyclers in the U.S. The panels are torn apart mechanically and broken down with acids to separate out the crystalline silicon, the semiconducting material used by most photovoltaic manufacturers. Heat systems are used to burn up the adhesives that bind them to their armatures, and acidic hydro-metallurgical systems are used to separate precious metals.

“Robards says nearly 75 percent of the material that gets separated out is glass, which is easy to recycle into new products but also has a very low resale value…”

Ironically, manufacturers’ efforts to drive down the price of solar panels make recycling them even more difficult by reducing the amount of expensive materials like silver and copper for which there is demand in recycling.

In Europe, regulations for the disposal of electrical waste were amended in 2012 to incorporate solar panels.  This means that the cost of disposing used solar panels rests with the manufacturer.  No such legislation exists elsewhere.  Nor is it clear whether those costs will be absorbed by the manufacturer or passed on to consumers.

Since only the oldest solar panels and wind turbines have to be disposed of at present, it might be that someone will figure out how to streamline the down-cycling process.  As far more systems come to the end of their life in the next decade, volume may help drive down costs.  However, we cannot bank on this.  The energy and materials required to dismantle these technologies may well prove more expensive than the value of the recovered materials.  As Kelly Pickerel at Solar Power World concedes:

“System owners recycle their panels in Europe because they are required to. Panel recycling in an unregulated market (like the United States) will only work if there is value in the product. The International Renewable Energy Agency (IRENA) detailed solar panel compositions in a 2016 report and found that c-Si modules contained about 76% glass, 10% polymer (encapsulant and backsheet), 8% aluminum (mostly the frame), 5% silicon, 1% copper and less than 0.1% of silver, tin and lead. As new technologies are adopted, the percentage of glass is expected to increase while aluminum and polymers will decrease, most likely because of dual-glass bifacial designs and frameless models.

“CIGS thin-film modules are composed of 89% glass, 7% aluminum and 4% polymers. The small percentages of semiconductors and other metals include copper, indium, gallium and selenium. CdTe thin-film is about 97% glass and 3% polymer, with other metals including nickel, zinc, tin and cadmium telluride.

“There’s just not a large amount of money-making salvageable parts on any type of solar panel. That’s why regulations have made such a difference in Europe.”

Ultimately, even down-cycling these supposedly “renewable” technologies will require state intervention.  Or, to put it another way, the public – either as consumers or taxpayers – are going to have to pick up the tab in the same way as they are currently subsidising fossil carbon fuels and nuclear.  The question that the proponents of these technologies dare not ask, is how far electorates are prepared to put up with these increasing costs before they turn to politicians out of the Donald Trump/ Malcolm Turnbull stable who promise the cheapest energy irrespective of its environmental impact.





Extinction vs. Collapse: Does it matter?

9 05 2018

Hot on the heels of the Mayer Hillman “we’re doomed” article, and the “collapse or not to collapse” video posted here, along comes this piece with links to a remarkable number of articles posted here over the past few months……. It’s hard to not start feeling that there’s a growing awareness everything’s going pear shaped. Lots of links here to follow up, if you haven’t slashed your wrists.

By 

sam millerClimate twitter – the most fun twitter – has recently been relitigating the debate between human extinction and mere civilizational collapse, between doom and gloom, despair and (kind of) hope. It was sparked by an interview in The Guardian with acclaimed scientist Mayer Hillman. He argues that we’re probably doomed, and confronting the likelihood that we’re rushing toward collective death may be necessary to save us.

The headline alone provoked a lot of reactions, many angered by the ostensible defeatism embedded in Hillman’s comments. His stated view represents one defined camp that is mostly convinced of looming human extinction. It stands in contrast to another group that believes human extinction is highly unlikely, maybe impossible, and certainly will not occur due to climate change in our lifetimes. Collapse maybe, but not extinction.

Who’s more right? Let’s take a closer look.

First, the question of human extinction is totally bounded by uncertainty. There’s uncertainty in climate data, uncertainty in models and projections, and even more uncertainty in the behavior of human systems. We don’t know how we’ll respond to the myriad impacts climate change is beginning to spark, and we don’t know how sensitive industrial civilization will be to those impacts.

We don’t really know if humans are like other apex predators highly sensitive to ecological collapse, or are among the most adaptable mammals to ever walk the earth. One may be inclined to lean toward the latter given that humans have colonized every ecological niche on the planet except Antarctica. That bands of people can survive in and around deserts as well as the Arctic as well as equatorial rainforests speaks to the resilience of small social groups. It’s why The Road is so disturbingly plausible; there could be a scenario in which basically everything is dead but people, lingering in the last grey waste of the world. On the other hand, we’ve never lived outside of the very favorable conditions of the Holocene, and past civilizational and population collapses suggest humans are in fact quite sensitive to climatic shifts.

Famed climate scientist James Hansen has discussed the possibility of “Venus syndrome,” for instance, which sits at the far end of worst case scenarios. While a frightening thought experiment, it is easily dismissed as it’s based on so many uncertainties and doesn’t carry the weight of anything near consensus.

What’s more frightening than potentially implausible uncertainties are the currently existing certainties.

For example:

Ecology

+ The atmosphere has proven more sensitive to GHG emissions than predicted by mainstream science, and we have a high chance of hitting 2°C of warming this century. Could hit 1.5°C in the 2020s. Worst-case warming scenarios are probably the most likely.

+ Massive marine death is happening far faster than anyone predicted and we could be on the edge of an anoxic event.

+ Ice melt is happening far faster than mainstream predictions. Greenland’s ice sheet is threatening to collapse and already slowing ocean currents, which too could collapse.

+ Which also means predictions of sea level rise have doubled for this century.

+ Industrial agriculture is driving massive habitat loss and extinction. The insect collapse – population declines of 75% to 80% have been seen in some areas – is something no one predicted would happen so fast, and portends an ecological sensitivity beyond our fears. This is causing an unexpected and unprecedented bird collapse (1/8 of bird species are threatened) in Europe.

+ Forests, vital carbon sinks, are proving sensitive to climate impacts.

+ We’re living in the 6th mass extinction event, losing potentially dozens of species per day. We don’t know how this will impact us and our ability to feed ourselves.

Energy

+ Energy transition is essential to mitigating 1.5+°C warming. Energy is the single greatest contributor to anthro-GHG. And, by some estimates, transition is happening 400 years too slowly to avoid catastrophic warming.

+ Incumbent energy industries (that is, oil & gas) dominate governments all over the world. We live in an oil oligarchy – a petrostate, but for the globe. Every facet of the global economy is dependent on fossil fuels, and every sector – from construction to supply chains to transport to electricity to extraction to agriculture and on and on – is built around FF consumption. There’s good reason to believe FF will remain subsidized by governments beholden to their interests even if they become less economically viable than renewables, and so will maintain their dominance.

+ We are living in history’s largest oil & gas boom.

+ Kilocalorie to kilocalorie, FF is extremely dense and extremely cheap. Despite reports about solar getting cheaper than FF in some places, non-hydro/-carbon renewables are still a tiny minority (~2%) of global energy consumption and will simply always, by their nature, be less dense kcal to kcal than FF, and so will always be calorically more expensive.

+ Energy demand probably has to decrease globally to avoid 1.5°C, and it’s projected to dramatically increase. Getting people to consume less is practically impossible, and efficiency measures have almost always resulted in increased consumption.

+ We’re still setting FF emissions records.

Politics

+ Conditions today resemble those prior to the 20th century’s world wars: extreme wealth inequality, rampant economic insecurity, growing fascist parties/sentiment, and precarious geopolitical relations, and the Thucydides trap suggests war between Western hegemons and a rising China could be likely. These two factors could disrupt any kind of global cooperation on decarbonization and, to the contrary, will probably mean increased emissions (the US military is one of the world’s single largest consumers/emitters of FF).

+ Neoliberal ideology is so thoroughly embedded in our academic, political, and cultural institutions, and so endemic to discourse today, that the idea of degrowth – probably necessary to avoid collapse – and solidarity economics isn’t even close to discussion, much less realization, and, for self-evident reasons, probably never will be.

+ Living in a neoliberal culture also means we’ve all been trained not to sacrifice for the common good. But solving climate change, like paying more to achieve energy transition or voluntarily consuming less, will all entail sacrificing for the greater good. Humans sometimes are great at that; but the market fundamentalist ideology that pervades all social, commercial, and even self relations today stands against acting for the common good or in collective action.

+ There’s basically no government in the world today taking climate change seriously. There are many governments posturing and pretending to take it seriously, but none have substantially committed to a full decarbonization of their economies. (Iceland may be an exception, but Iceland is about 24 times smaller than NYC, so…)

+ Twenty-five years of governments knowing about climate change has resulted in essentially nothing being done about it, no emissions reductions, no substantive moves to decarbonize the economy. Politics have proven too strong for common sense, and there’s no good reason to suspect this will change anytime soon.

+ Wealth inequality is embedded in our economy so thoroughly – and so indigenously to FF economies – that it will probably continue either causing perpetual strife, as it has so far, or eventually cement a permanent underclass ruled by a small elite, similar to agrarian serfdom. There is a prominent view in left politics that greater wealth equality, some kind of ecosocialism, is a necessary ingredient in averting the kind of ecological collapse the economy is currently driving, given that global FF capitalism by its nature consumes beyond carrying capacities. At least according to one Nasa-funded study, the combination of inequality and ecological collapse is a likely cause for civilizational collapse.

Even with this perfect storm of issues, it’s impossible to know how likely extinction is, and it’s impossible to judge how likely or extensive civilizational collapse may be. We just can’t predict how human beings and human systems will respond to the shocks that are already underway. We can make some good guesses based on history, but they’re no more than guesses. Maybe there’s a miracle energy source lurking in a hangar somewhere waiting to accelerate non-carbon transition. Maybe there’s a swelling political movement brewing under the surface that will soon build a more just, ecologically sane order into the world. Community energy programs are one reason to retain a shred of optimism; but also they’re still a tiny fraction of energy production and they are not growing fast, but they could accelerate any moment. We just don’t know how fast energy transition can happen, and we just don’t know how fast the world could descend into climate-driven chaos – either by human strife or physical storms.

What we do know is that, given everything above, we are living through a confluence of events that will shake the foundations of civilization, and jeopardize our capacity to sustain large populations of humans. There is enough certainty around these issues to justify being existentially alarmed. At this point, whether we go extinct or all but a thousand of us go extinct (again), maybe that shouldn’t make much difference. Maybe the destruction of a few billion or 5 billion people is morally equivalent to the destruction of all 7 billion of us, and so should provoke equal degrees of urgency. Maybe this debate about whether we’ll go completely extinct rather than just mostly extinct is absurd. Or maybe not. I don’t know. What I do know is that, regardless of the answer, there’s no excuse to stop fighting for a world that sustains life.


Samuel Miller McDonald: Born and raised in Northern Michigan, Sam is currently pursuing a PhD at University of Oxford in political geography and energy. His background can be found here. Tweet here.





Time to rethink monetary policy

3 05 2018

“But another crisis is brewing; and there are signs that it will be bigger than 2008.  And when that crisis bursts over us, this time around we need to put these changes in place before the economists rally round and persuade our craven politicians that there is no alternative… because there is.”

Lifted from the excellent Consciousness of Sheep blog….

When the first stuffed platypus was presented to European scientists, they dismissed it.  “What we have here,” they opined, “is some unfortunate lutrinae onto which some scoundrel has attached various anatidae parts.”  And so the innocent little platypus, which had been minding its own business until the European explorers arrived, was placed on the same zoological shelf as the Yeti.

The European scientists, you see, had a model.  A map of how the world’s animal species were ordered.  At the apex, predictably, were humans themselves.  Beneath them were anatomically similar apes and monkeys; followed by cats, dogs, pigs, etc.  What all of these “higher” species had in common, however, was that they were all mammals – creatures that carry their young in an internal womb, and that suckle them with milk.  This distinguished them from other, dissimilar species like birds, reptiles, amphibians and insects.

Then along comes this upstart platypus, not just looking like it possesses bird parts, but having the audacity to lay eggs!  For several decades, despite growing evidence that platypuses were real, European scientists continued to dismiss these reported sightings as fake news.  The platypus was an unfortunate intrusion into the scientists’ neatly ordered model of how the world worked.  Despite the philosophy of science demanding that a fact – like the existence of a platypus – that disproves a model is the very essence of falsifiability, the scientists chose to reject the fact rather than deconstruct and rebuild their model.

The same European scientists later – and infamously – rejected evidence for the existence of one of the platypus’s neighbours… the black swan… which brings us to a modern pseudoscience that also famously rejects reality in order to preserve the models that it has spent decades finessing.

Economic models have already proved their – very negative – worth in the worst possible way in the shape of the 2008 financial crash and the ensuing global depression.  This ought to have been enough for the entire economics profession to be given their marching orders and afforded their true place alongside aromatherapists, astrologers and homeopaths.  However, in 2008, governments lacked any acceptable alternative.  So despite knowing that an economic forecast was of equal value to flipping a coin, they put the same economists who had broken the system in charge of fixing it.

The economists did no such thing, of course.  The financial crisis of 2008 was the platypus of our age; something so out of step with the models that it could not reasonably be incorporated into them.  They even used the term “black swan” to describe it.

Any examination of the real economy over centuries, however, demonstrates that cyclical period of boom and bust – frequently punctuated by major financial crashes – are in fact the norm.  It is the so-called “Great Moderation” in the economists’ model that is the aberration… the thing so out of step with reality that it can reasonably be dismissed as fake news.

This, however, is merely the most obvious flaw in an economic model that is based on anomalies.  Most importantly, almost everything that economists are taught about how the economy works is based on what happened in the course of the two decade long mother of all anomalies; the post war boom 1953-1973.  As historian Paul Kennedy explains:

“The accumulated world industrial output between 1953 and 1973 was comparable in volume to that of the entire century and a half which separated 1953 from 1800.  The recovery of war-damaged economies, the development of new technologies, the continued shift from agriculture to industry, the harnessing of national resources within ‘planned economies,’ and the spread of industrialization to the Third World all helped to effect this dramatic change.  In an even more emphatic way, and for much the same reasons, the volume of world trade also grew spectacularly after 1945…”

In other words, economic modelling based on how the economy operated in the decades prior to the First World War might provide a closer fit to the real world in 2018.  The same is true for interest rates. As political economist Mark Blyth has shown, economists have modelled interest rates on the two decades around the historical high point in 1981.  However, for the entire period following the introduction of derivatives by the Dutch in the sixteenth century, the average interest rate is below four percent.

This is no trifling academic issue.  Interest rates have become the primary means by which economists – to whom our politicians have handed the leavers of power – seek to manage the economy.  The aim of “monetary policy” being to raise interest rates sufficiently high to prevent a recurrence of the inflation of the 1970s, while keeping them sufficiently low that they do not trigger or exacerbate a repeat of the 2008 crash.

The problem with this as of 2018 is that despite close to zero percent interest rates – and trillions of dollars, euros, pounds and yen in stimulus packages – the rate of inflation has barely moved.  Indeed, with growth rates stalling in the USUK and Eurozonedeflation is more likely than inflation.  Despite this, the Federal Reserve, Bank of England and European Central Bank remain committed to raising interest rates and reversing quantitative easing… because that is what their model tells them that they should do.

Central to the model is a belief – based on those anomalous decades when we had growth on steroids and interest rates to match – that employment causes inflation.  So with the official rate of unemployment in the USA standing at 4.1 percent and the UK at 4.2 percent, the model is telling the economists at the central banks that inflation is already running out of control… even though it isn’t.  As Constance Bevitt, quoted in the New York Times puts it:

“When they talk about full employment, that ignores almost all of the people who have dropped out of the economy entirely. I think that they are examining the problem with assumptions from a different economic era. And they don’t know how to assess where we are now.”

Larry Elliott at the Guardian draws a similar conclusion about the UK:

“Britain’s flexible labour market has resulted in the development of a particular sort of economy over the past decade: low productivity, low investment and low wage. Since the turn of the millennium, business investment has grown by about 1% a year on average because companies have substituted cheap workers for capital. Labour has become a commodity to be bought as cheaply as possible, which might be good for individual firms, but means people have less money to buy goods and services – a shortfall in demand only partly filled by rising levels of debt. The idea that everyone is happy with a zero-hour contract is for the birds.

“Workers are cowed to an extent that has surprised the Bank of England. For years, the members of Threadneedle Street’s monetary policy committee (MPC) have been expecting falling unemployment to lead to rising wage pressure, but it hasn’t happened. When the financial crisis erupted in August 2007, the unemployment rate was 5.3% and annual wage growth was running at 4.7%. Today unemployment is 4.2% and earnings are growing at 2.8%.”

This is a very different economy to the one that operated between 1953 and 1973; a time when the workers’ share of productivity rose consistently.  In those days a semi-skilled manual worker had a sufficient wage to buy a home, support a family, run a car and afford a holiday.  In 2018, a semi-skilled manual worker living in the UK depends upon foodbanks and tax credits to remain solvent.

In short, despite mountains of evidence that the economists’ model bears no relation to the real world, like their nineteenth century zoological counter parts, they continue to reject any evidence that disproves the model as fake news.  One obvious reason for this is that all of us – whatever our specialisms – get a sinking feeling of despondency when some inconvenient fact comes along to tell us that it is time to go back to the drawing board.  Understandably, we test the inconvenient fact to destruction before deconstructing our models.  But even when the fact proves sufficiently resilient to be considered to be true, there remains the temptation to sweep it under the proverbial carpet and pretend that nothing is amiss.

There is, however, another reason why so many economists spend so many of their waking hours studiously ignoring reality when it whacks them over the head with the force of a steam hammer.  They simply do not see it.  That is, if you are on the kind of salary enjoyed by a member of one or other monetary policy committee, your lived experience will be so removed from the experience of ordinary working (and not working) people that you simply refuse to believe them when – either by anecdote or statistic – they inform you of just how bad things are down on Main Street.

The two proposed solutions to this latter problem involve the question of diversity.  Among its other work, the campaign group Positive Money has highlighted the race and gender disparity at the Bank of England.  However, were we to just swap some white male mainstream economists for some equivalent BME and female mainstream economists, this is unlikely to have much impact.  A second approach to diversity from radical economists such as Ann Pettifor is to break up the neoclassical economists’ monopoly by bringing in economists from different schools of economics.

Arguably, however, neither of these proposed solutions would be sufficient to solve the problem of economists refusal to allow facts to stand in the way of their models.  For this, something even more radical is required – a complete rethink of the way monetary policy is made.  The 2008 crash and the decade of near stagnation for 80 percent of us that followed has demonstrated that the approach of handing economic policy to technocrats has failed.  The unelected Bank of England or Federal Reserve Chairman can no longer be allowed to be the final authority.  Policy must ultimately reside with elected representatives  whose jobs are on the line if they mess up.

Of course it is entirely reasonable that our representatives base their decisions on the advice and recommendations of experts.  It is here that real diversity is required.  Not merely swapping white male economists for black female ones, or opening the door just wide enough for some token contrarian economists.  Rather, what is needed is for monetary policy committees to encompass a range of specialisms far beyond economics and the social sciences, together with representatives from trades unions, charities and business organisations that are more in touch with the realities of life in the real economy.

None of this is about to happen any time soon; not least because nobody voluntarily relinquishes power and privilege.  But another crisis is brewing; and there are signs that it will be bigger than 2008.  And when that crisis bursts over us, this time around we need to put these changes in place before the economists rally round and persuade our craven politicians that there is no alternative… because there is.





Tesla semis and the laws of physics

23 11 2017

UPDATE

Since posting this, Tesla’s semis have been unsurprisingly shelved…….  white elephant from the start!

Summary

Tesla unveiled the prototype of its Semi to much fanfare in November 2017.

Successive press events and public test drives built the perception that the Semi would enter production in the near term; numerous large companies made preorders.

Yet, during the Q1 2018 earnings call, the Semi received no mention except in response to questions; CEO Elon Musk essentially admitted the project had been put on hold.

Lack of capital to build a manufacturing plant and apparent technological challenges have raised eyebrows since the unveiling; the financing situation has only gotten worse since then.

It appears increasingly certain that the Tesla Semi will never see commercial production.

ANOTHER excellent and well researched article from Alice Friedemann. This pretty well confirms everything I told our mate Eclipse who believes in all this techno crap, because that’s all it is. I find it baffling how people get taken in by such rubbish.  Even if these trucks were going to be built, it would be a HUGE waste of Lithium batteries, because they are needed elsewhere, in things that we need to carry around for doing useful things…….

Loads of interesting links in the references at the bottom

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electric-semi-Nikola-One

Tesla Truck

Preface: Most people think that electric truck makers need to tell us the specs — the battery kWh, price, performance, and so on — before we can possibly know anything about their truck.

But that’s simply not true.  We know what lithium-ion batteries are capable of. And we know the kWh, size, and weight of the battery needed to move a truck of given weight a certain number of miles.  That makes it possible for scientists to work backwards and figure out how many kWh the battery would need to be to go 300 to 500 miles, what it would weigh, and the likely price for the battery needed for a truck at the maximum road limit of 80,000 pounds. [in Australia it’s 40 tonnes – our trucks have more wheels! We also have B doubles, some with 9 axles that can haul 64.5 tonnes https://www.nhvr.gov.au/files/201707-0577-common-heavy-freight-vehicles-combinations.pdf ]

S. Sripad and V. Viswanathan (2017) at Carnegie Mellon have done just that.  They published a paper in the peer-reviewed American Chemical Society Letters at the following link: Performance metrics required of next-generation batteries to make a practical electric semi truck.  Below is my review of their paper along with some additional cited observations of my own.

 — Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick JensenPractical PreppingKunstlerCast 253KunstlerCast278Peak Prosperity , XX2 report

* * *

Authors S. Sripad and V. Viswanathan felt compelled to write their paper because there are so many guesstimates of the likely cost and performance of an electric class 8 semi-truck in the media. But these hasty calculations don’t take into account critical factors like the specific energy density of the battery pack, vehicle weight, drag, rolling resistance, battery kwH to go a given distance, and weight of the batteries given current Li-ion battery technology.

The definition of class 8 trucks is their weight of 33,000 pounds or more.  We can assume electric class 8 trucks would have the same basic truck weight, because building them with light-weight aluminum or carbon fiber is too expensive. And unlike cars, where the average income of an electric car buyer is $148,158 (NRC 2015), and the amount of aluminum needed to light-weight the car is a small fraction of what a truck would require, the trucking industry is a cut throat business with razor thin profits.  Light-weighting them is out of the question.

The maximum weight of a truck allowed on the road is 80,000 pounds, so if the body weight of the truck is the minimum 33,000 pounds, then the maximum amount of cargo that can be carried is 47,000 pounds.

The authors found that a 900 mile range [to arrive at kms, just multiply by 1.6] is simply not possible with today’s batteries, because the weight of the battery pack required is 54,000 pounds plus 33,000 pounds truck weight, which is 87,000 pounds, well over the maximum road weight limit of 80,000 pounds. And this truck that can not haul cargo will set you back $500,000 to $650,000 dollars for the battery alone.

A 600 mile range isn’t commercial either. For starters, the battery pack would cost $320,000 to $420,000 dollars, and on top of that you’ll need add another $100,000 for the body of the truck. To move a truck 600 miles requires a 36,000 pound battery + 33,000 pound truck weight and the truck can only carry 11,000 pounds, which is 36,000 pounds less than a diesel truck can carry.

Musk claims the range of the truck can be as much as 500 miles.  Based on the figures in Table 1, that means the battery would cost $267,000 to $350,000 (also add on $100,000 for the truck body), and the battery will weigh 30,000 pounds + 33,000 pound truck weight and be able to carry only 17,000 pounds of cargo, which is 30,000 fewer pounds than a diesel truck.

Even if the range is on the low end of 300 miles, the battery will still be very heavy, 18,000 pounds + 33,000 pounds truck weight and and only be able to carry 29,000 pounds of cargo, which is 18,000 pounds less than a diesel truck.

The bottom line according to the authors, is that a 600 to 900 mile range truck will use most or all of their battery power to move the battery itself, not the cargo. The cost of the battery is $160,000 to $210,000 plus $100,000 for the truck body, so overall $260,000 to $310,000, which is $140,00 to $190,000 more than a new $120,000 diesel truck — considerably more than used diesel class 8 truck, which can cost as little as $3,000.

If anyone in the trucking industry is reading this, I’d like to know if a 300 mile range with just 18,000 pounds of cargo is acceptable.  I suspect the answer is no, because the Port of Los Angeles explored the concept of using an all-electric battery drayage (short-haul) truck to transfer freight between the port and warehouses, but rejected these trucks because the 350 kWh battery weighed 7,700 pounds and reduced cargo payload too much. Nor was the 12 hours or more to recharge the battery acceptable. Ultra-fast 30 min recharging was considered too risky since this might reduce battery lifespan, and bearing the cost of replacing these expensive batteries was out of the question (Calstart 2013).

Even if a way has been found to charge a truck in half an hour without reducing battery life, the amount of power needed to do that is huge, so new transmission, voltage lines, upgrading many substations with more powerful transformers, and new natural gas generating power plants will need to be constructed.  Across the nation that’s many billion dollars.  Who will pay for that?

It shouldn’t be surprising that a truck battery would weigh so much.  Car batteries simply don’t scale up — they make trucks too heavy.  The authors calculated that a 900 mile electric class 8 truck would require a battery pack 31 times the size and weight of a 100 kWh Tesla Model S car not only because of weight, but all the other factors mentioned above (aerodynamics, rolling resistance, etc).

If the Tesla Semi or any other truck maker’s prototype performs better than this, there are additional questions to ask.  For example, new diesel trucks today get 7 miles per gallon. But the U.S. Super Truck program has built trucks that get an amazing 12 mpg. But those trucks are not being made commercially.  I don’t know why, but it could be because this achievement was done by making the prototype truck with very light weight expensive materials like carbon fiber or aluminum, costly tires with less rolling resistance, and other expensive improvements that were too expensive to be commercial.

Performance can also be gamed – a diesel truck going downhill or on level ground, with less than the maximum cargo weight, going less than 45 miles per hour with an expert driver who seldom brakes, can probably get 12 mpg even though they’re not driving a Super Truck.

Who’s going to buy the Tesla Semi, Cummins EOS, Daimler E-FUSO, or BYD all-electric semi-trucks?

Most trucking companies are very small and can’t afford to buy expensive trucks: 97% of the 1.3 million trucking companies in the U.S. own 20 trucks or less, 91% have six or fewer. They simply aren’t going to buy an electric truck that costs roughly 2.5 times more than a diesel truck, carries half the weight, just 300 miles (diesel trucks can go 1,800 miles before refueling).

Nor will larger, wealthier trucking companies be willing to invest in electric trucks until the  government pays for and builds the necessary charging stations. This is highly unlikely given there’s no infrastructure plan (Jenkins 2017), nor likely the money to execute one, given the current reverse Robin Hood “tax reform” plan. With less money to spend on infrastructure, charging stations might not even be on the list.

The big companies that have bought (hybrid) electric class 4 to 6 trucks so far only did so because local, state, and federal subsidies made up the difference between the cost of a diesel and (hybrid) electric truck.  The same will likely be true of any company that makes class 8 long-haul trucks.

I constructed Table 1 to summarize the averages of figure 2 in this paper, which has the estimated ranges of required battery pack sizes, weights, cost, and payload capacities of a 300, 600, or 900 mile truck.

Range (miles) Battery kWh required Battery Pack Cost at $160-$210 per kWh Battery Weight kg / tons Max Payload
300 1,000 $160 – 210,000   8,200 /   9 8.5
600 2,000 $320 – 420,000 16,000 / 18 5.5
900 3,100 $500 – 650,000 24,500 / 27 0

Table 1. All electric truck data from figure 2 of Sripad (2017).   A diesel truck Max payload is 23.5 tons.  The max payload (cargo weight) is derived from the max truck road weight of 40 tons, minus battery weight, minus weight of the truck (17.5 tons).

As to whether the Tesla Semi will perform as well as Elon Musk says, it is not certain he will still be in business in 2019, because Musk and other electric car makers are competing for very few potential electric car buyers and with each other as well. There will never be enough electric car buyers because of the distribution of wealth. Sixty-nine percent of the United States population has less than $1,000 in savings (McCarthy 2016). At best the top 10% can afford an electric car, but many of them don’t want an electric car, don’t have a garage, prefer Lyft or mass transit, are saving to buy a house or survive the next financial crash.  And if states or the Trump administration end subsidies that will further dent sales.

Nor will there ever be completely automated cars or trucks, because unlike airplanes, where pilots have 8 minutes of grace before the crash to go back to manual controls, there is only a second for a car or truck driver to notice that an accident is about to occur and override the system.  The better the system is automated, the less likely the driver is to even be paying attention.  So the idea that the poor bottom 90% can order an automated electric car to their doorstep isn’t going to happen.  Nor can it happen with a driver – there is simply too little time to notice and react.

Just imagine if an automatic truck were hacked or malfunctioned, it would be like an attack missile with that much weight and momentum behind it.

Even if the Tesla semis are built in 2019, we won’t know until 2024 if charging in just half an hour, cold weather, and thousands of miles driven reduces driving range and battery life, if the battery can withstand the rough ride of roads, and be certain that lithium is still cheap and easily available.

The only thing going for the Tesla Semi is that electricity is cheap, for now.  But at some point finite natural gas will begin to decline and become very expensive, even potentially unaffordable for the bottom 90%.  As gas decline exponentially continues, all the solar and wind power in the world does no good because the electric grid requires natural gas to balance their intermittent power. There is no other kind of energy storage in sight.  Utility-scale batteries are far from commercial.  Although compressed air energy storage and pumped hydro storage dams are commercial, there are so few places to put these expensive alternatives that they can make little, if any meaningful contribution, ever.

Meanwhile, this hoopla may drive Musk’s stock up and distract from his lack of meeting the Model 3 goals, but investors have limited patience, and Musk has over $5 billion in debt to pay back.  It may be that Elon Musk is banking on government subsidies, like the $9 million State of California award to the BYD company for 27 electric trucks — $333,000 per truck (ARB 2016), and the Ports of Los Angeles and San Pedro who will subsidize a zero emission truck that can go at least 200 miles.

References

ARB. 2016. State to award $9 million for zero-emission trucks at two rail yards, one freight transfer yard in Southern California. California Air Resources Board.

Calstart. 2013. I-710 project zero-emission truck commercialization study. Calstart for Los Angeles County Metropolitan Transportation Authority. 4.7

Jenkins, A. 2017. Will anybody actually use Tesla’s electric semi truck? Fortune.

McCarthy, N. September 23, 2016. Survey: 69% Of Americans Have Less Than $1,000 In Savings. Forbes.

NRC. 2015. Overcoming barriers to deployment of plug-in electric vehicles. Washington, DC: National Academies Press.

Sripad, S.; Viswanathan, V. 2017. Performance metrics required of next-generation batteries to make a practical electric semi truck.  ACS Energy Letters 2: 1669-1673.

Vartabedian, M. 2017. Exclusive: Tesla’s long-haul electric truck aims for 200 to 300 miles on a charge. Reuters.

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The model is broken…..

22 11 2017

This amazing article was originally published here…….

IS ‘SUSTAINABLE DEVELOPMENT’ A MYTH?

For a long time now, “sustainable development” has been the fashionable economic objective, the Holy Grail for anyone aiming to achieve economic growth without inducing catastrophic climate degradation. This has become the default position for two, very obvious reasons. First, no politician wants to tell his electorate that growth is over (even in countries where, very clearly, prosperity is now in decline). Second, policymakers prepared to invite ridicule by denying the reality of climate change are thin on the ground.

Accordingly, “sustainable development” has become a political article of faith. The approach seems to be to assume that sustainable development is achievable, and use selective data to prove it.

Where this comfortable assumption is concerned, this discussion is iconoclastic. Using the tools of Surplus Energy Economics, it concludes that the likelihood of achieving sustainable development is pretty low. Rather, it agrees with distinguished scientist James Lovelock in his observation that sustainable retreat might be the best we can expect.

This site is dedicated to the critical relationship between energy and economics, but this should never blind us to the huge threat posed by climate change. There seems no convincing reason to doubt either the reality of climate change science or the role that emissions (most obviously of CO²) are playing in this process. As well as counselling sustainable retreat, James Lovelock might be right, too, in characterising the earth as a system capable of self-regeneration so long as its regenerative capabilities are not tested too far.

False comfort

Economics is central to this debate. Here, comparing 2016 with 2001, are some of the figures involved;

Real GDP, 2016 values in PPP dollars:

2001: $73 trillion. 2016: $120tn (+65%)

Energy consumption, tonnes of oil equivalent:

2001: 9.5bn toe. 2016: 13.3bn toe (+40%)

Emissions of CO², tonnes:

2001: 24.3bn t. 2016: 33.4bn t (+37%)

If we accept these figures as accurate, each tonne of CO² emissions in 2001 was associated with $2,990 of GDP. By 2016, that number had risen to $3,595. Put another way, 17% less CO² was emitted for each $1 of GDP. By the same token, the quantity of energy required for each dollar of GDP declined by 15% over the same period.

This is the critical equation supporting the plausibility of “sustainable growth”. If we have really shown that we can deliver successive reductions in CO² emissions per dollar of GDP, we have options.

One option is to keep CO2 levels where they are now, yet still grow the economy. Another is to keep the economy where it is now and reduce CO2 emissions. A third is to seek a “goldilocks” permutation, both growing the economy and reducing emissions at the same time.

Obviously, the generosity of these choices depends on how rapidly we can continue our progress on the efficiency curve. Many policymakers, being pretty simple people, probably use the “fool’s guideline” of extrapolation – ‘if we’ve achieved 17% progress over the past fifteen years’, they conclude, ‘then we can expect a further 17% improvement over the next fifteen’.

Pretty lies

But what if the apparent ‘progress’ is illusory? The emissions numbers used as the denominator in the equation can be taken as accurate, as can the figures for energy consumption. Unfortunately, the same can’t be said of the economic numerator. As so often, we are telling ourselves comforting untruths about the way in which the world economy is behaving.

This issue is utterly critical for the cause of “sustainable development”, whose plausibility rests entirely on the numbers used to calculate recent trends.

And there are compelling reasons for suspecting the validity of GDP numbers.

For starters, apparent “growth” in economic output seems counter-intuitive. According to recorded numbers for per capita GDP, the average American was 6% better off in 2016 than in 2006, and the average Briton was 3% more prosperous. These aren’t big numbers, to be sure, but they are positive, suggesting improvement, not deterioration. Moreover, there was a pretty big slump in the early part of that decade. Adjustment for this has been used to suggest that people are growing more prosperous at rates faster than the trailing-10-year per capita GDP numbers indicate.

Yet the public don’t buy into the thesis of “you’ve never had it so good”. Indeed, it isn’t possible reconcile GDP numbers with popular perception. People feel poorer now than they did in 2006, not richer. That’s been a powerful contributing factor to Americans electing Donald Trump, and British voters opting for “Brexit”, crippling Theresa May’s administration and turning in large numbers to Jeremy Corbyn’s collectivist agenda. Much the same can be said of other developed economies, including France (where no established party made it to the second round of presidential voting) and Italy (where a referendum overwhelmingly rejected reforms proposed by the then-government).

Ground-level data suggests that the popular perception is right, and the per capita GDP figures are wrong. The cost of household essentials has outpaced both incomes and general inflation over the past decade. Levels of both household and government debt are far higher now than they were back in 2006. Perhaps worst of all – ‘though let’s not tell the voters’ – pension provision has been all but destroyed.

The pension catastrophe has been attested by a report from the World Economic Forum (WEF), and has been discussed here in a previous article. It is a topic to which we shall return in this discussion.

The mythology of “growth”

If we understand what really has been going on, we can conclude that, where prosperity is concerned, the popular perception is right, meaning that the headline GDP per capita numbers must be misleading. Here is the true story of “growth” since the turn of the century.

Between 2001 and 2016, recorded GDP grew by 65%, adding $47tn to output. Over the same period, however, and measured in constant 2016 PPP dollars, debt increased by $135tn (108%), meaning that each $1 of recorded growth came at a cost of $2.85 in net new borrowing.

This ratio has worsened successively, mainly because emerging market economies (EMEs), and most obviously China, have been borrowing at rates far larger than growth, a vice previously confined to the developed West.

This relationship between borrowing and growth makes it eminently reasonable to conclude that much of the apparent “growth” has, in reality, been nothing more substantial than the spending of borrowed money. Put another way, we have been boosting “today” by plundering “tomorrow”, hardly an encouraging practice for anyone convinced by “sustainable development” (or, for that matter, sustainable anything).

Nor is this all. Since the global financial crisis (GFC) of 2008, we have witnessed the emergence of enormous shortfalls in society’s provision for retirement. According to the WEF study of eight countries – America, Australia, Britain, Canada, China, India, Japan and the Netherlands – pension provision was deficient by $67tn in 2015, a number set to reach $428tn (at constant values) by 2050.

Though the study covers just eight countries, the latter number dwarfs current GDP for the entire world economy ($120tn PPP). The aggregate eight-country number is worsening by $28bn per day. In the United States alone, the annual deterioration is $3tn, equivalent to 16% of GDP and, incidentally, roughly five times what America spends on defence. Moreover, these ratios seem certain to worsen, for pension gaps are increasing at annual rates far in excess of actual or even conceivable economic growth.

For the world as a whole, the equivalent of the eight-country number is likely to be about $124tn. This is a huge increase since 2008, because the major cause of the pensions gap has been the returns-destroying policy of ultra-cheap money, itself introduced in 2008-09 as a response to the debt mountain which created the GFC. Finally, on the liabilities side, is interbank or ‘financial sector’ debt, not included in headline numbers for debt aggregates.

Together, then, liabilities can be estimated at $450tn – $260tn of economic debt, about $67tn of interbank indebtedness and an estimated $124tn of pension under-provision. The equivalent number for 2001 is $176tn, expressed at constant 2016 PPP values. This means that aggregate liabilities have increased by $274tn over fifteen years – a period in which GDP grew by just $47tn.

The relationship between liabilities and recorded GDP is set out in the first pair of charts, which, respectively, set GDP against debt and against broader liabilities. Incidentally, the pensions issue is, arguably, a lot more serious than debt. This is because the real value of existing debt can be “inflated away” – a form of “soft default” – by governments willing to unleash inflation. The same cannot be said of pension requirements, which are, in effect, index-linked.

113 #1jpg_Page1

Where climate change is concerned, what matters isn’t so much the debt or broader liability aggregates, or even the rate of escalation, but what they tell us about the credibility of recorded GDP and growth.

Here, to illustrate the issues involved, are comparative annual growth rates between 2001 and 2016, a period long enough to be reliably representative:

GDP: +3.4% per year

Debt: +5.0%

Pension gap and interbank debt: +9.1%

To this we can add two further, very pertinent indicators:

Energy consumption: +2.2%

CO2 emissions: +2.1%

The real story

As we have seen, growth of $47tn in recorded GDP between 2001 and 2016 was accompanied – indeed, made possible – by a vast pillaging of the balance sheet, including $135tn in additional indebtedness, and an estimated $140tn in other liabilities.

The only realistic conclusion is that the economy has been inflated by massive credit injections, and by a comparably enormous unwinding of provisions for the future. It follows that, absent these expedients, organic growth would have been nowhere near the 3.4% recorded over the period.

SEEDS – the Surplus Energy Economics Data System – has an algorithm designed to ex-out the effect of debt-funded consumption (though it does not extend this to include pension gaps or interbank debt). According to this, adjusted growth between 2001 and 2016 was only 1.55%. As this is not all that much faster than the rate at which the population has been growing, the implication is that per capita growth has been truly pedestrian, once we see behind the smoke-and-mirrors effects of gargantuan credit creation.

This isn’t the whole story. The above is a global number, which embraces faster-than-average growth in China, India and other EMEs. Constrastingly, prosperity has actually deteriorated in Britain, America and most other developed economies. Citizens of these countries, then, are not imagining the fall in prosperity which has helped fuel their discontent with incumbent governing elites. The deterioration has been all too real.

The second set of charts illustrates these points. The first shows quite how dramatically annual borrowing has dwarfed annual growth, with both expressed in constant dollars. The second sets out what GDP would have looked like, according to SEEDS, if we hadn’t been prepared to trash collective balance sheets in pursuit of phoney “growth”. You will notice that the adjusted trajectory is consistent with what was happening before we ‘unleashed the dogs of cheap and easy credit’ around the time of the millenium.

113 #2jpg_Page1

Flagging growth – the energy connection

As we have seen, then, the very strong likelihood is that real growth in global economic output over fifteen years has been less than 1.6% annually, slower than growth either in energy consumption (2.2%) or in CO² emissions(2.1%). In compound terms, growth in underlying GDP seems to have been about 26% between 2001 and 2016, appreciably less than increases in either energy consumption (+40%) or emissions (+37%).

At this point, some readers might think this conclusion counter-intuitive – after all, if technological change has boosted efficiency, shouldn’t we be using less energy per dollar of activity, not more?

There is, in fact, a perfectly logical explanation for this process. Essentially, the economy is fuelled, not by energy in the aggregate, but by surplusenergy. Whenever energy is accessed, some energy is always consumed in the access process. This is expressed here as ECoE (the energy cost of energy), a percentage of the gross quantity of energy accessed. The critical point is that ECoE is on a rising trajectory. Indeed, the rate of increase in the energy cost of energy has been rising exponentially.

As mature resources are depleted, recourse is made to successively costlier (higher ECoE) alternative sources. This depletion effect is moderated by technological progress, which lowers the cost of accessing any given form of energy. But technology cannot breach the thermodynamic parameters of the resource. It cannot, as it were, ‘trump the laws of physics’. Technology has made shale oil cheaper to extract than shale oil would have been in times past. But what it has not done is transform shales into the economic equivalent of giant, technically-straightforward conventional fields like Al Ghawar in Saudi Arabia. Any such transformation is something that the laws of physics simply do not permit.

According to estimates generated on a multi-fuel basis by SEEDS, world ECoE averaged 4.0% in 2001, but had risen to 7.5% by 2016. What that really means is that, out of any given $100 of economic output, we now have to invest $7.50, instead of $4, in accessing energy. The resources that we can use for all other purposes are correspondingly reduced.

In the third pair of charts, the left-hand figure illustrates this process. The area in blue is the net energy that fuels all activities other than the supply of energy itself. This net energy supply continues to increase. But the red bars, which are the energy cost of energy, are rising too, and at a more rapid rate. Consequently, gross energy requirements – the aggregate of the blue and the red – are rising faster than the required net energy amount. This is why, when gross energy is compared with economic output, the energy intensity of the economy deteriorates, even though the efficiency with which netenergy is used has improved.

113 #3jpg_Page1

Here’s another way to look at ECoE and the gross/net energy balance. Back in 2001, we needed to access 104.2 units of energy in order to have 100 units for our use. In 2016, we had to access 108.1 units for that same 100 units of deployable energy. This process, which elsewhere has been called “energy sprawl”, means that any given amount of economic activity is requiring the accessing of ever more gross energy in order to deliver the requisite amount of net (surplus) energy. By 2026, the ratio is likely to have risen to 112.7/100.

The companion chart shows the trajectory of CO² emissions. Since these emissions are linked directly to energy use, they can be divided into net (the pale boxes), ECoE (in dark grey) and gross (the sum of the two). Thanks to a lower-carbon energy slate, net emissions seem to be flattening out. Unfortunately, gross emissions continue to increase, because of the CO2 associated with the ECoE component of gross energy requirements.

Shot down in flames? The “evidence” for “sustainable development”

As we have seen, a claimed rate of economic growth (between 2001 and 2016) that is higher (65%) than the rate at which CO2 emissions have expanded (37%) has been used to “prove” increasing efficiency. It is entirely upon these claims that the viability of “sustainable development” is based.

But, as we have also seen, reported growth has been spurious, the product of unsustainable credit manipulation, and the unwinding of provision for the future. Real growth, adjusted to exclude this manipulation, is estimated by SEEDS at 26% over that period. Crucially, that is less than the 37% rate at which CO² emissions have grown.

On this basis, a claimed 17% “improvement” in the amount of CO2 per dollar of output reverses into a deterioration. Far from improving, the relationship between CO2 and economic output worsened by 9% between 2001 and 2016. In parallel with this, the amount of energy required for each dollar of output increased by 11% over the same period.

The final pair of charts illustrate this divergence. On the left, economic activity per tonne of CO2 is shown. The second chart re-expresses this relationship using GDP adjusted for the artificial “growth” injected by monetary manipulation. If this interpretation is correct – and despite a very gradual upturn in the red line since 2010 – the comforting case for “sustainable development” falls to pieces.

In short, if growth continues, rising ECoEs dictate that both energy needs, and associated emissions of CO2, will grow at rates exceeding that of economic output.

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We are back where many have argued that we have been all along. The pursuit of growth seems to be incompatible with averting potentially irreversible climate change.

There is a nasty sting-in-the-tail here, too. The ECoE of oil supplies is rising particularly markedly, and there seems a very real danger that this will force an increased reliance on coal, a significantly dirtier fuel. A recent study by the China University of Petroleum predicted exactly such a trend in China, already the world’s biggest producer of CO2. As domestic oil supply peaks and then declines because of higher ECoEs, the study postulates a rapid increase in coal consumption to feed the country’s voracious need for energy. This process is most unlikely to be confined to China.

Where does this leave us?

The central contention here is that the case for “sustainable development” is fatally flawed, because the divergence between gross and net energy needs is more than offsetting progress in greening our energy mix and combatting emissions of harmful gases. “Sustainable development” is a laudable aim, but may simply not be achievable within the laws of physics as they govern energy supply.

If this interpretation is correct, it means that growth in the global economy can be pursued only at grave climate risk. A (slightly) more comforting interpretation might that the super-heated rate of borrowing, and the seemingly disastrous rate at which pension capability is being destroyed, might well crash the system before our obsession with ‘growth at all costs’ can inflict irreparable damage to the environment.





Post Neo-Liberalism… what next?

9 02 2017

The articles coming out in what I consider mainstream media lately – the Conversation in this case – has me astounded……

While this piece is interesting, there is no mention whatever of Limits to Growth……

If Streeck is correct, then we need to anticipate what a post-capitalist world may look like. He thinks it will be terrible. He fears the emergence of a neocorporatist state and close crony-like collaboration between big capital, union leaders, government and the military as the consequence of the next major global financial crisis.

Jobs will disappear, Streeck believes. Capital will be intensely concentrated in very few hands. The privileged rich will retreat into security enclaves dripping with every luxury imaginable.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

It is unfashionable, or just embarrassing, to suggest the taken-for-granted late-modern economic order – neoliberal capitalism – may be in a terminal decline. At least that’s the case in what former Australian prime minister Tony Abbott likes to call the “Anglosphere”.

What was once known as the Chicago school of economics – the neoclassical celebration of the “free market” and “small government” – still closes the minds of economic policymakers in the US and its satellite economies (although perhaps less so in contemporary Canada).

But, in Europe, there has always been a deep distrust of the Anglo-American celebration of “possessive individualism” and its repudiation of community and society. Remember Margaret Thatcher’s contempt for the idea of “society”?

So, it is unsurprising that neoliberalism’s advocates dismiss recent European analyses of local, regional and global economies as the nostalgia of “old Europe”, even as neoliberalism’s failures stack up unrelentingly.

The consequences of these failures are largely unseen or avoided by policymakers in the US and their camp followers in the UK and Australia. They are in denial of the fact that not only has neoliberalism failed to meet its claimed goals, but it has worked devastatingly to undermine the very foundations of late-modern capitalism.

The result is that the whole shambolic structure is tottering on the edge of an economic abyss.

What the consequences might be

Two outstanding European scholars who are well aware of the consequences of the neoliberal catastrophe are French economist Thomas Piketty and German economist Wolfgang Streeck.

Piketty’s 2013 book, Capital in the Twenty-First Century, charts the dangers of socioeconomic inequality in capitalism’s history. He demonstrates how this inequality can be – and has been over time – fundamentally destructive of sustained economic growth.

Most compellingly, Piketty documented in meticulous detail how contemporary neoliberal policies have constructed the worst forms of socioeconomic inequalities in history. His analysis has been underlined by the recent Oxfam report that showed a mere eight multi-billionaires own the equivalent amount of capital of half of the global population.

Despite Piketty’s scrupulous scholarship, Western neoliberal economies continue merrily down the road to nowhere. The foundations of that road were laid by the egregiously ideological policies of Thatcher and Ronald Reagan – and slavishly followed by Australian politicians on all sides ever since.

Streeck’s equally detailed scholarship has demonstrated how destructive of capitalism itself neoliberal policymaking has been. His latest book, How Will Capitalism End?, demonstrates how this neoliberal capitalism triumphed over its opponents (especially communism) by devouring its critics and opponents, obviating all possible alternatives to its predatory ways.

If Streeck is correct, then we need to anticipate what a post-capitalist world may look like. He thinks it will be terrible. He fears the emergence of a neocorporatist state and close crony-like collaboration between big capital, union leaders, government and the military as the consequence of the next major global financial crisis.

Jobs will disappear, Streeck believes. Capital will be intensely concentrated in very few hands. The privileged rich will retreat into security enclaves dripping with every luxury imaginable.

Meanwhile, the masses will be cast adrift in a polluted and miserable world where life – as Hobbes put it – will be solitary, poor, nasty, brutish and short.

What comes next is up to us

The extraordinary thing is how little is known or understood of the work of thinkers like Piketty and Streeck in Australia today.

There have been very fine local scholars, precursors of the Europeans, who have warned about the hollow promises of “economic rationalism” in Australia.

But, like the Europeans, their wisdom has been sidelined, even as inequality has been deepening exponentially and its populist consequences have begun to poison our politics, tearing down the last shreds of our ramshackle democracy.

The time is ripe for some creative imagining of a new post-neoliberal world that will repair neoliberalism’s vast and catastrophic failures while laying the groundwork for an Australia that can play a leading role in the making of a cosmopolitan and co-operative world.

Three immediate steps can be taken to start on this great journey.

First, we need to see the revival of what American scholar Richard Falk called “globalisation from below”. This is the enlivening of international civil society to balance the power of the self-serving elites (multinational managers and their political and military puppets) now in power.

Second, we need to come up with new forms of democratic governance that reject the fiction that the current politics of representative government constitute the highest form of democracy. There is nothing about representative government that is democratic. All it amounts to is what Vilfredo Pareto described as “the circulation of elites” who have become remote from – and haughtily contemptuous of – the people they rule.

Third, we need to see states intervening comprehensively in the so-called “free market”. Apart from re-regulating economic activity, this means positioning public enterprises in strategic parts of the economy, to compete with the private sector, not on their terms but exclusively in the interests of all citizens.

As Piketty and Streeck are pointing out to us, the post-neoliberal era has started to self-destruct. Either a post-capitalist, grimly neo-fascist world awaits us, or one shaped by a new and highly creative version of communitarian democracy. It’s time for some great imagining.