The Danger of Inspiration: A Review of On Fire: The (Burning) Case for a Green New Deal

11 09 2019

Naomi Klein’s new book, On Fire: The (Burning) Case for a Green New Deal, has one crippling flaw—it’s inspiring. At this moment in history, inspiring talk about solutions to multiple, cascading ecological crises is dangerous. Republished from the Resilience site……

At the conclusion of these 18 essays that bluntly outline the crises and explain a Green New Deal response, Klein bolsters readers searching for hope: “[W]hen the future of life is at stake, there is nothing we cannot achieve.” It is tempting to embrace that claim, especially after nearly 300 pages of Klein’s eloquent writing that weaves insightful analysis together with honest personal reflection.

The problem, of course, is that the statement is not even close to being true. With nearly 8 billion people living within a severely degraded ecosphere, there are many things we cannot, and will not, achieve. A decent human future—perhaps any human future at all—depends on our ability to come to terms with these limits. That is not a celebration of cynicism or a rationalization for nihilism, but rather the starting point for rational planning that takes seriously not only our potential but also the planet’s biophysical constraints.

Klein’s essays in this volume make it clear that she is well aware of those limits, but the book’s subtitle suggests that she is writing not only to inform but also to mobilize support for Green New Deal proposals. This tension runs throughout the book—when Klein reports on and analyzes the state of the world, the prose challenges readers to face difficult realities, but when making the case for those policy proposals, she sounds more like an organizer rallying supporters.

That’s not a dig—Klein is a writer who doesn’t sit on the sidelines but gets involved with movements and political projects. Her commitment to activism and organizing is admirable, but it can pull a writer in conflicting directions.

This critique should not lead anyone to ignore On Fire, which is an excellent book that should be read cover to cover, without skipping chapters that had been previously published. Collections of essays can fall flat because of faded timeliness or unnecessary repetition, but neither are a problem here. As always, Klein’s sharp eye for detail makes her reporting on events compelling, whether she’s describing disasters (natural and unnatural) or assessing political trends. And, despite the grim realities we face, the book is a pleasure to read.

Before explaining concerns with the book’s inspirational tone, I want to emphasize key points Klein makes that I agree are essential to a left/progressive analysis of the ecological crises:

  • First-World levels of consumption are unsustainable;
  • capitalism is incompatible with a livable human future;
  • the modern industrial world has undermined people’s connections to each other and the non-human world; and
  • we face not only climate disruption but a host of other crises, including, but not limited to, species extinction, chemical contamination, and soil erosion and degradation.

In other words, business-as-usual is a dead end, which Klein states forthrightly:

I feel confident in saying that a climate-disrupted future is a bleak and an austere future, one capable of turning all our material possessions into rubble or ash with terrifying speed. We can pretend that extending the status quo into the future, unchanged, is one of the options available to us. But that is a fantasy. Change is coming one way or another. Our choice is whether we try to shape that change to the maximum benefit of all or wait passively as the forces of climate disaster, scarcity, and fear of the “other” fundamentally reshape us.

On Fire focuses primarily on the climate crisis and the Green New Deal’s vision, which is widely assailed as too radical by the two different kinds of climate-change deniers in the United States today—one that denies the conclusions of climate science and another that denies the implications of that science. The first, based in the Republican Party, is committed to a full-throated defense of our pathological economic system. The second, articulated by the few remaining moderate Republicans and most mainstream Democrats, imagines that market-based tinkering to mitigate the pathology is adequate.

Thankfully, other approaches exist. The most prominent in the United States is the Green New Deal’s call for legislation that recognizes the severity of the ecological crises while advocating for economic equality and social justice. Supporters come from varied backgrounds, but all are happy to critique and modify, or even scrap, capitalism. Avoiding dogmatic slogans or revolutionary rhetoric, Klein writes realistically about moving toward a socialist (or, perhaps, socialist-like) future, using available tools involving “public infrastructure, economic planning, corporate regulation, international trade, consumption, and taxation” to steer out of the existing debacle.

One of the strengths of Klein’s blunt talk about the social and ecological problems in the context of real-world policy proposals is that she speaks of motion forward in a long struggle rather than pretending the Green New Deal is the solution for all our problems. On Firemakes it clear that there are no magic wands to wave, no magic bullets to fire.

The problem is that the Green New Deal does rely on one bit of magical thinking—the techno-optimism that emerges from the modern world’s underlying technological fundamentalism, defined as the faith that the use of evermore advanced technology is always a good thing. Extreme technological fundamentalists argue that any problems caused by the unintended consequences of such technology eventually can be remedied by more technology. (If anyone thinks this definition a caricature, read “An Ecomodernist Manifesto.”)

Klein does not advocate such fundamentalism, but that faith hides just below the surface of the Green New Deal, jumping out in “A Message from the Future with Alexandria Ocasio-Cortez,” which Klein champions in On Fire. Written by U.S. Rep. Ocasio-Cortez (the most prominent legislator advancing the Green New Deal) and Avi Lewis (Klein’s husband and collaborator), the seven-and-a-half minute video elegantly combines political analysis with engaging storytelling and beautiful visuals. But one sentence in that video reveals the fatal flaw of the analysis: “We knew that we needed to save the planet and that we had all the technology to do it [in 2019].”

First, talk of saving the planet is misguided. As many have pointed out in response to that rhetoric, the Earth will continue with or without humans. Charitably, we can interpret that phrase to mean, “reducing the damage that humans do to the ecosphere and creating a livable future for humans.” The problem is, we don’t have all technology to do that, and if we insist that better gadgets can accomplish that, we are guaranteed to fail.

Reasonable people can, and do, disagree about this claim. (For example, “The science is in,” proclaims the Nature Conservancy, and we can have a “future in which catastrophic climate change is kept at bay while we still power our developing world” and “feed 10 billion people.”) But even accepting overly optimistic assessments of renewable energy and energy-saving technologies, we have to face that we don’t have the means to maintain the lifestyle that “A Message from the Future” promises for the United States, let alone the entire world. The problem is not just that the concentration of wealth leads to so much wasteful consumption and wasted resources, but that the infrastructure of our world was built by the dense energy of fossil fuels that renewables cannot replace. Without that dense energy, a smaller human population is going to live in dramatically different fashion.

Welcome to the third rail of contemporary political life. The question that the multiple, cascading ecological crises put squarely in front of us is, “What is a sustainable human population?” That question has to be split in two: “How many people? Consuming how much?”

It’s no surprise that political candidates ignore these questions, but progressive writers and activists should not back away. Honestly engaging these issues takes us well beyond the Green New Deal.

On the second of those questions—“consuming how much?”—Klein frequently highlights the problem, but with a focus on “profligate consumption.” She stresses the need to:

  • “scale back overconsumption”;
  • identify categories in which we must contract, “including air travel, meat consumption, and profligate energy use”; [I do wish people would get off the back of meat consumption and point the finger at industrial scale agriculture instead…]
  • end “the high-carbon lifestyle of suburban sprawl and disposable consumption”;
  • reject capitalism’s faith in “limitless consumption” that locks us in “the endless consumption cycle”; and
  • make deep changes “not just to our energy consumption but to the underlying logic of our economic system.”

No argument with any of those statements, especially because Klein rejects the notion that simply improving efficiency will solve our problems, a common assumption of the techno-optimists. But challenging “overconsumption by the comparatively wealthy” focuses on the easy target: “The bottom line is that an ecological crisis that has its roots in the overconsumption of natural resources must be addressed not just by improving the efficiency of our economies, but also by reducing the amount of material stuff that the wealthiest 20 percent of people on the planet consume.”

My goal is not to defend rich people or their consumption habits. However, constraining the lifestyles of the rich and famous is a necessary but not sufficient condition for sustainability. Here we have to deal with the sticky question of human nature. Klein rightly rejects capitalism’s ideological claim that people’s capacity to act out of greed and short-term self-interest (which all of us certainly are capable of doing) is the dominant human trait. Human nature also includes the capacity to act out of compassion in solidarity with others, of course, and different systems reward different parts of our nature. Capitalism encourages the greed and discourages the compassion, to the detriment of people and planet.

But we are organic creatures, and that means there is a human nature, or what we might more accurately call our human-carbon nature. As Wes Jackson of The Land Institute puts it, life on Earth is “the scramble for energy-rich carbon,” and humans have gotten exceedingly good at grabbing lots of carbon. Not all cultures go after it with the same intensity, of course, but that scramble predates capitalism and will continue after capitalism. This doesn’t mean we are condemned to make the planet unlivable for ourselves and other creatures, but public policy has to recognize that we not only need carbon to survive but that most people—including most environmentalists—like the work that carbon can do for us when we burn those fossil fuels. And once we get a taste of what that carbon can do, it’s not easy to give it up.

As Klein points out, curbing our carbon-seeking is not merely a test of will power and matter of individual virtue; collective action through public policy is needed. I believe that requires a hard cap on carbon—limits that we can encourage people to accept through cultural advocacy but in the end must be imposed through law. A sensible approach, called “cap and adapt,” has been proposed by Larry Edwards and Stan Cox. In a forthcoming book, Cox will expand on a cap-and-ration strategy that could help in “drawing the human economy back within necessary ecological limits,” a follow-up to, and expansion of, his earlier book that made a compelling case for a rationing.

There’s no simple answer to how much energy and material resources we can consume without undermining the ecosystems on which our own lives depend, but I’m confident in saying that it’s dramatically less that we consume today, and that reducing aggregate consumption—even if we could create equitable societies—will be difficult. But that’s the easy part. Much more difficult is the first question—“how many people?”

On the question of population, On Fire is silent, and it’s not hard to understand, for several reasons. First, the Earth has a carrying capacity for any species but it’s impossible to predict when we will reach it (or did reach it), and failed attempts at prediction in the past have made people wary. Second, some of the most vocal supporters of population control also espouse white supremacy, which has tainted even asking the question. Third, while we know that raising the status of women and educating girls reduces birth rates, it’s difficult to imagine a non-coercive strategy for serious population reduction on the scale necessary. Still, we should acknowledge ecological carrying capacity while pursuing social justice and rejecting anti-immigration projects. Progressives’ unwillingness to address the issue cedes the terrain to “eco-fascists,” those who want to use ecological crises to pursue a reactionary agenda.

There’s no specific number to offer for a sustainable human population, but I’m confident in saying that it’s fewer than 8 billion and that finding a humane and democratic path to that lower number is difficult to imagine. [I’ll offer one, and it’s well below one billion – https://damnthematrix.wordpress.com/2015/03/12/losing-our-energy-slaves/ ]

The fact that these questions are troubling and/or impossible to answer does not mean the questions do not matter. For now, my answer—a lot fewer people and a lot less stuff—is adequate to start a conversation: “A sustainable human presence on the planet will mean fewer people consuming less.” Agree or disagree? Why or why not?

Two responses are possible from Green New Deal supporters: (1) I’m nuts, or (2) I’m not nuts, but what I’m suggesting is politically impossible because people can’t handle all this bad news.

If I am nuts, critics have to demonstrate what is unsound about the argument, without resorting to the cliché that “necessity is the mother of invention” and the faith-based claims of the technological fundamentalists.

If I am not, then those Green supporters face a quandary. When mainstream Democrats tell progressive folks that the Green New Deal is doomed to fail because it is not politically viable at this moment, supporters counter, appropriately, by saying that anything less is inadequate in the face of the crises. Those supporters argue, appropriately, that the real failure is supporting policies that don’t do enough to create sustainable human societies and that we need to build a movement for the needed change. I agree, but by that logic, if the Green New Deal itself is inadequate to create sustainability, then we must push further.

The Green New Deal is a start, insufficiently radical but with the potential to move the conversation forward—if we can be clear about the initiative’s limitations. That presents a problem for organizers, who seek to rally support without uncomfortable caveats—“Support this plan! But remember that it’s just a start, and it gets a lot rougher up ahead, and whatever we do may not be enough to stave off unimaginable suffering” is, admittedly, not a winning slogan.

Back to what I think Klein is right about, and eloquent in expressing:

Because while it is true that climate change is a crisis produced by an excess of greenhouse gases in the atmosphere, it is also, in a more profound sense, a crisis produced by an extractive mind-set, by a way of viewing both the natural world and the majority of its inhabitants as resources to use up and then discard. I call it the “gig and dig” economy and firmly believe that we will not emerge from this crisis without a shift in worldview at every level, a transformation to an ethos of care and repair.

The domination/subordination dynamic that creates so much suffering within the human family also defines the modern world’s destructive relationship to the larger living world. Throughout the book, Klein presses the importance of telling a new story about all those relationships. Scientific data and policy proposals matter, but they don’t get us far without a story for people to embrace. Klein is right, and On Fire helps us imagine a new story for a human future.

I offer a friendly amendment to the story she is constructing: Our challenge is to highlight not only what we can but also what we cannot accomplish, to build our moral capacity to face a frightening future but continue to fight for what can be achieved, even when we know that won’t be enough.

One story I would tell is of the growing gatherings of people, admittedly small in number today, who take comfort in saying forthrightly what they believe, no matter how painful—people who do not want to suppress their grief, yet do not let their grief overwhelm them.

What kind of person wants to live like that? I can offer a real-life example, my late friend Jim Koplin. He once told me, in a conversation about those multiple, cascading ecological crises (a term I stole from him, with his blessing), “I wake up every morning in a state of profound grief.” He was neither depressed nor irrational but simply honest. Jim, a Depression-era farm boy who had been permanently radicalized in the 1960s, felt that grief more deeply than anyone I have known, yet every day he got up to work in his garden and then offer his time and energy to a variety of political, community, and arts groups that were fighting for a better world.

Klein speaks of this grief in On Fire, in what for me were the most moving passages, often involving her young son’s future in the face of this “planetary death spiral”:

There is no question that the strongest emotions I have about the climate crisis have to do with [Toma] and his generation—the tremendous intergenerational theft under way. I have flashes of sheer panic about the extreme weather we have already locked in for these kids. Even more intense than this fear is the sadness about what they won’t ever know. They are growing up in a mass extinction, robbed of the cacophonous company of so many fast-disappearing life forms. It feels so desperately lonely.

The escape from loneliness, for me, starts with recognizing that Jim’s “state of profound grief” was not only wholly rational but also emotionally healthy. When told that even if this harsh assessment is correct, people can’t handle it, I agree. No one can handle all this. Jim couldn’t handle it every waking minute. I don’t handle it as well as he did. At best, we struggle to come to terms with a “bleak and austere” future.

But that’s exactly why we need to engage rather than avoid the distressing realities of our time. If we are afraid to speak honestly, we suffer alone. Better that we tell the truth and accept the consequences, together.





WHO wants change………??

14 08 2019

Hot on the heels of David Attenborough’s climate show, along comes this great article by Tim Watkins……..


Goldsmiths kebab

We learned yesterday that a British university had made a small contribution to addressing a climate emergency that its spokespeople argue is going to kill us all just 12 years from now.  As Katherine Sellgren at the BBC reports:

“A university is banning the sale of [beef] burgers to try to fight global warming.

“Goldsmiths, University of London, is removing all beef products from sale – and charging a 10p levy on bottled water and single-use plastic cups.

“It plans to install more solar panels across its New Cross campus, in south-east London, and switch to a 100% clean energy supplier as soon as possible.

“It will spend money on its allotment and identify other areas where planting could help to absorb carbon dioxide.”

Banning beef burgers and deploying a handful of solar panels (made in China in coal-powered factories and shipped to the UK on oil-powered ships; where their addition to the Grid will increase the risk of power cuts) is little more than a gesture which, in any case, involves no real sacrifice for those making the decision.  Indeed, this was called out by an interviewer on the BBC Radio4 Today programme, who pointed out that the meaningful changes suggested by the IPCC, such as refurbishing buildings to make them energy efficient would make a much bigger impact than a burger ban.  And so a Student Union representative was asked whether they would support such a major refurbishment… even if it meant that students at the college might have to pay additional tuition fees.  The predictable response was, “Oh no.  Students want free education.”

This, of course, gets to the nub of the problem with addressing the growing environmental catastrophe.  Three-quarters of us (outside the USA) accept the science.  Two-thirds of us agree that “something must be done.”  Less than half of us are prepared to vote for anyone who promises to do something.  And less than ten percent of us are prepared to make meaningful sacrifices to lower our carbon footprints – and those who are, are seldom those who can most afford to do so.  As John Michael Greer points out:

“For years now, since that brief period when I was a very minor star in the peak oil movement, I’ve noted a curious dynamic in the climate change-centered end of environmentalism. Almost always, the people I met at peak oil events who were concerned about peak oil and the fate of industrial society more generally, rather than climate change or such other mediacentric causes as the plight of large cute animals, were ready and willing to make extensive changes in their own lives, in addition to whatever political activism they might engage in. Almost always, the people I met who were exclusively concerned with anthropogenic climate change were not.

“I can be even more precise. With vanishingly few exceptions, the people I met who were solely concerned with anthropogenic climate change insisted loudly that what needed to happen was that someone else, somewhere else, had to stop using so much carbon.”

The predictable result is that a host of climate change media stars with carbon footprints the size of small countries descend upon conferences around the planet – most recently the Google event on Sicily – to lecture the rest of us on why we must change our lifestyles to combat climate change; just before they leap back on board their carbon-belching private jets and luxury yachts to be whisked away to the next jolly.

The difference today, however, is that the people aren’t buying it any more.  In part, this is due to the hypocrisy of these media stars.  In large part, however, the people have wised up to the fact that while all of the costs of combatting climate change always seem to land on the shoulders of the poor; all of the benefits go to the same elite that the climate change media stars belong to.  As Greer notes:

“Some of what else is going on came to the surface a few years ago in Washington State when a group of environmental activists launched an initiative that would have slapped a fee on carbon. As such things go, it was a well-designed initiative, and one of the best things about it was that it was revenue-neutral:  that is, the money taken in by the carbon fee flowed right back out through direct payments to citizens, so that rising energy prices due to the carbon fee wouldn’t clobber the economy or hurt the poor.

“That, in turn, made it unacceptable to the Democratic Party in Washington State, and they refused to back the initiative, dooming it to defeat. Shortly thereafter they floated their own carbon fee initiative, which was anything but revenue neutral.  Rather, it was set up to funnel all the money from the carbon fee into a slush fund managed by a board the public wouldn’t get to elect, which would hand out the funds to support an assortment of social justice causes that were also helpfully sheltered from public oversight. Unsurprisingly, the second initiative also lost heavily—few Washington State voters were willing to trust their breathtakingly corrupt political establishment with yet another massive source of graft at public expense.”

This is the same phenomenon that caused what should have been a relatively simple increase in the tax on diesel fuel in France to erupt into widespread protest on a scale not seen since the heady days of 1968.  It is also why an Australian Labor Party manifesto that promised radical action on the environment, and that was apparently supported by the majority of Australians, resulted in a “miracle victory” for the pro-fossil fuel Liberal/National coalition at last May’s general election.

In the grossly unequal economies that we have spent the best part of forty years creating, unless the response to the environmental crisis begins at the very top, it isn’t going to begin at all.  And while this may cast ordinary people in the role of Luddites standing in the way of the progress that we supposedly need; the people may actually have a better understanding of the problem than the media celebrities. 

A new documentary Planet of the Humans by Michael Moore and Jeff Gibbs – hardly right-wing climate change deniers – set out to understand how fossil fuel lobbyists and corrupt politicians had thwarted the increasingly urgent transition to a carbon neutral future.  What they found, however – and what the documentary details – is an equally corrupt “green energy” lobby that has no real solutions to the predicament we are in.  As Michael Donnelly at Counterpunch explains:

“The basic conclusion is that we have been following corporate foundation-financed, Democratic Party-tied misleadership and that is why we are where we are.

“The bottom line is that there are: Too many Clever Apes; consuming too much; too rapidly. And ALL efforts on addressing the climate costs are reduced to illusions/delusions designed to keep our over-sized human footprint and out-of-control consumption chugging along without any consumer sacrifices or loss of consumption-based profits…

“Forget all you have heard about how ‘Renewable Energy’ is our salvation. It is all a myth that is very lucrative for some. Feel-good stuff like electric cars, etc. Such vehicles are actually powered by coal, natural gas… or dead salmon in the Northwest.”

Donnelly goes on to list some of the documentary’s “inconvenient truths” such as that the top beneficiaries of solar energy subsidies in the USA turn out to be every leftist’s favourite cartoon villains the Koch Brothers…

“None of these technologies existed, nor could they exist, without fossil fuels. The grid cannot even operate without fossil fuel-derived steam-generated baseloads – in the spring when hydro is surging, the Bonneville Power Administration (BPA) cuts off wind power (and still has to pay its providers after a lawsuit), yet has to keep the Boardman Coal plant (Oregon’s top carbon polluter) running in order to balance the baseload. Even eCon Musk’s famed battery plant in Nevada is powered by…fracked natural gas. The huge bird and desert-destroying Ivanpah Solar array in California also has fracked natural gas as an essential ingredient.”

Worse still, the documentary catches leading stars of the bright green movement admitting in Clintonesque fashion that they have one message for the plebs and an entirely different one for the people who matter:

Planet examines a range of policy influencers/professional environmentalists/opportunists, etc. and even lets them hang themselves. It not only takes on the obvious bad guys like the Kochs, it lets folks like McKibben, Al Gore, Richard Branson, Robert Kennedy, Jr, who are ostensibly on ‘our’ side, hang themselves by showing clips of them speaking to environmentalists and then clips of them speaking to industry about all the profits to be made.

“McKibben is shown twice praising Biomass (they gave him every chance to condemn it), interspersed with a scene of a mountaintop removal operation in his home state of Vermont – for a wind farm!

“Robert Kennedy, Jr. informs his fellow millionaires of all the profits to be made on ‘green’ energy. Al Gore basically admits it’s all about diversion and profits. Branson, like eCon Musk, of course, is solely in it for the money.

“Fellow billionaire Michael Bloomberg got down to it and basically bought the Sierra Club with tens of millions in donations tied to the Club promoting one of his cash cows, Fracked Natural Gas, as the ‘Bridge Fuel to a Green Energy future!’”

None of this comes as a surprise to those of us who regard climate change as merely one element of a broader three E’s – Energy, Environment, Economy – predicament that is itself driven by having roughly 6.5 billion too many humans on Planet Earth.  What is different, however, is that the realisation that the green techno-utopian celebrity crowd are con artists has begun to seep into the consciousness of the leftward end of the body politic in recent months.  As Donnelly notes, despite Moore and Gibbs fearing the reaction of people in the broader environmental movement:

“’Planet of the Humans’ premiered at the gloriously community-restored State Theatre July 31st at the 15th Traverse City, MI Film Festival with three sold-out/standing ovation showings followed by Q & A’s with the creators.”

Greer observes a similar shift at the leftward end of the US media:

“What sets this year’s conference apart from earlier examples of the same sorry type is that this time, the other end of the political spectrum has finally decided to start calling out absurd climate change hypocrisy for what it is. Here’s the redoubtable Rex Murphy of the National Post, for example, giving the Sicily conference and its brightly burnished celebrity attendees a good sound thrashing. You can find other examples easily enough if you step out of the airtight bubble of mainstream popular culture—and these days, the bubble is not quite as airtight as it once was and some of the criticism is starting to slip through.”

Ironically, the green energy snake oil salesmen have probably brought this reaction down upon their own heads.  By backing increasingly urgent messages about our imminent extinction to sell us billions of dollars’ worth of non-renewable renewable energy-harvesting devices; they have caused people to ask serious questions about why – if the emergency is so urgent – these people are not adopting lifestyles in line with their warnings; and why – if green energy technologies are the solution – governments around the planet have failed to adopt them in meaningful quantities.

The issue here is not with the seriousness of the crisis, but with the way just one solution is on offer; and it just happens to be the one that makes the rich even richer and the poor even poorer.  As Greer puts it:

“It’s as though your house was on fire and someone pounded on your door, insisting that you had to sign a contract giving him your property so he could fight the fire. You shouldn’t sign the contract, and the reasons he brandishes to try to talk you into signing it are bogus, but that doesn’t change the fact that your house really is on fire.”

The BBC too, seemingly, is beginning to grasp some of this cultural shift; and thus is prepared to kebab the “feel good” Goldsmiths story as little more than a futile gesture at someone else’s expense.  Gone are the joyous days of spring, when climate campaigners had the support of most of the media.  From here on in, even those outlets on “our” side are going to be casting a critical eye over environmental policies that will very likely be found wanting.

The stark reality, of course, is that as we slide ever further along the downslope of the industrial age, and as our ability to repair the damage wrought by the global weirding of our climate, higher education itself will be going away.  The lifestyles we are going to be living – whether we choose to adopt them ourselves or whether mother nature forces them upon us – are going to be far less consumptive, far more localised, and far more focused on the production of basic necessities… like food.  And in the near future, those Goldsmiths folk may well find themselves pining for one of those burgers they just banned.





Changing course

3 08 2019

I’m a great fan of Jack Alpert’s, having published his videos here before……

However, I’m less than optimistic about this scheme of his, because it’s been shown people are not swayed by facts.… After all, I’ve been trying unsuccessfully for years..!





Rethinking Renewable Mandates

1 08 2019

Posted on July 31, 2019, another terrific post by Gail Tverberg

Powering the world’s economy with wind, water and solar, and perhaps a little wood sounds like a good idea until a person looks at the details. The economy can use small amounts of wind, water and solar, but adding these types of energy in large quantities is not necessarily beneficial to the system.

While a change to renewables may, in theory, help save world ecosystems, it will also tend to make the electric grid increasingly unstable. To prevent grid failure, electrical systems will need to pay substantial subsidies to fossil fuel and nuclear electricity providers that can offer backup generation when intermittent generation is not available. Modelers have tended to overlook these difficulties. As a result, the models they provide offer an unrealistically favorable view of the benefit (energy payback) of wind and solar.

If the approach of mandating wind, water, and solar were carried far enough, it might have the unfortunate effect of saving the world’s ecosystem by wiping out most of the people living within the ecosystem. It is almost certain that this was not the intended impact when legislators initially passed the mandates.

[1] History suggests that in the past, wind and water never provided a very large percentage of total energy supply.

Figure 1. Annual energy consumption per person (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Tony Wrigley, Cambridge University.

Figure 1 shows that before and during the Industrial Revolution, wind and water energy provided 1% to 3% of total energy consumption.

For an energy source to work well, it needs to be able to produce an adequate “return” for the effort that is put into gathering it and putting it to use. Wind and water seemed to produce an adequate return for a few specialized tasks that could be done intermittently and that didn’t require heat energy.

When I visited Holland a few years ago, I saw windmills from the 17th and 18th centuries. These windmills pumped water out of low areas in Holland, when needed. A family would live inside each windmill. The family would regulate the level of pumping desired by adding or removing cloths over the blades of the windmill. To earn much of their income, they would also till a nearby plot of land.

This overall arrangement seems to have provided adequate income for the family. We might conclude, from the inability of wind and water energy to spread farther than 1% -3% of total energy consumption, that the energy return from the windmills was not very high. It was adequate for the arrangement I described, but it didn’t provide enough extra energy to encourage greatly expanded use of the devices.

[2] At the time of the Industrial Revolution, coal worked vastly better for most tasks of the economy than did wind or water.

Economic historian Tony Wrigley, in his book Energy and the English Industrial Revolution, discusses the differences between an organic economy (one whose energy sources are human labor, energy from draft animals such as oxen and horses, and wind and water energy) and an energy-rich economy (one that also has the benefit of coal and perhaps other energy sources). Wrigley notes the following benefits of a coal-based energy-rich economy during the period shown in Figure 1:

  • Deforestation could be reduced. Before coal was added, there was huge demand for wood for heating homes and businesses, cooking food, and for making charcoal, with which metals could be smelted. When coal became available, it was inexpensive enough that it reduced the use of wood, benefiting the environment.
  • The quantity of metals and tools was greatly increased using coal. As long as the source of heat for making metals was charcoal from trees, the total quantity of metals that could be produced was capped at a very low level.
  • Roads to mines were greatly improved, to accommodate coal movement. These better roads benefitted the rest of the economy as well.
  • Farming became a much more productive endeavor. The crop yield from cereal crops, net of the amount fed to draft animals, nearly tripled between 1600 and 1800.
  • The Malthusian limit on population could be avoided. England’s population grew from 4.2 million to 16.7 million between 1600 and 1850. Without the addition of coal to make the economy energy-rich, the population would have been capped by the low food output from the organic economy.

[3] Today’s wind, water, and solar are not part of what Wrigley called the organic economy. Instead, they are utterly dependent on the fossil fuel system.

The name renewables reflects the fact that wind turbines, solar panels, and hydroelectric dams do not burn fossil fuels in their capture of energy from the environment.

Modern hydroelectric dams are constructed with concrete and steel. They are built and repaired using fossil fuels. Wind turbines and solar panels use somewhat different materials, but these too are available only thanks to the use of fossil fuels. If we have difficulty with the fossil fuel system, we will not be able to maintain and repair any of these devices or the electricity transmission system used for distributing the energy that they capture.

[4] With the 7.7 billion people in the world today, adequate energy supplies are an absolute requirement if we do not want population to fall to a very low level. 

There is a myth that the world can get along without fossil fuels. Wrigley writes that in a purely organic economy, the vast majority of roads were deeply rutted dirt roads that could not be traversed by wheeled vehicles. This made overland transport very difficult. Canals were used to provide water transport at that time, but we have virtually no canals available today that would serve the same purpose.

It is true that buildings for homes and businesses can be built with wood, but such buildings tend to burn down frequently. Buildings of stone or brick can also be used. But with only the use of human and animal labor, and having few roads that would accommodate wheeled carts, brick or stone homes tend to be very labor-intensive. So, except for the very wealthy, most homes will be made of wood or of other locally available materials such as sod.

Wrigley’s analysis shows that before coal was added to the economy, human labor productivity was very low. If, today, we were to try to operate the world economy using only human labor, draft animals, and wind and water energy, we likely could not grow food for very many people. World population in 1650 was only about 550 million, or about 7% of today’s population. It would not be possible to provide for the basic needs of today’s population with an organic economy as described by Wrigley.

(Note that organic here has a different meaning than in “organic agriculture.” Today’s organic agriculture is also powered by fossil fuel energy. Organic agriculture brings soil amendments by truck, irrigates land and makes “organic sprays” for fruit, all using fossil fuels.)

[5] Wind, water and solar only provided about 11% of the world’s total energy consumption for the year 2018. Trying to ramp up the 11% production to come anywhere close to 100% of total energy consumption seems like an impossible task.

Figure 2. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

Let’s look at what it would take to ramp up the current renewables percentage from 11% to 100%. The average growth rate over the past five years of the combined group that might be considered renewable (Hydro + Biomass etc + Wind&Solar) has been 5.8%. Maintaining such a high growth rate in the future is likely to be difficult because new locations for hydroelectric dams are hard to find and because biomass supply is limited. Let’s suppose that despite these difficulties, this 5.8% growth rate can be maintained going forward.

To increase the quantity from 2018’s low level of renewable supply to the 2018 total energy supply at a 5.8% growth rate would take 39 years. If population grows between 2018 and 2057, even more energy supply would likely be required. Based on this analysis, increasing the use of renewables from a 11% base to close to a 100% level does not look like an approach that has any reasonable chance of fixing our energy problems in a timeframe shorter than “generations.”

The situation is not quite as bad if we look at the task of producing an amount of electricity equal to the world’s current total electricity generation with renewables (Hydro + Biomass etc + Wind&Solar); renewables in this case provided 26% of the world’s electricity supply in 2018.

Figure 3. World electricity production by type, based on data from 2019 BP Statistical Review of World Energy.

The catch with replacing electricity (Figure 3) but not energy supplies is the fact that electricity is only a portion of the world’s energy supply. Different calculations give different percentages, with electricity varying between 19% to 43% of total energy consumption.1 Either way, substituting wind, water and solar in electricity production alone does not seem to be sufficient to make the desired reduction in carbon emissions.

[6] A major drawback of wind and solar energy is its variability from hour-to-hour, day-to-day, and season-to-season. Water energy has season-to-season variability as well, with spring or wet seasons providing the most electricity.

Back when modelers first looked at the variability of electricity produced by wind, solar and water, they hoped that as an increasing quantity of these electricity sources were added, the variability would tend to offset. This happens a little, but not nearly as much as one would like. Instead, the variability becomes an increasing problem as more is added to the electric grid.

When an area first adds a small percentage of wind and/or solar electricity to the electric grid (perhaps 10%), the electrical system’s usual operating reserves are able to handle the variability. These were put in place to handle small fluctuations in supply or demand, such as a major coal plant needing to be taken off line for repairs, or a major industrial client reducing its demand.

But once the quantity of wind and/or solar increases materially, different strategies are needed. At times, production of wind and/or solar may need to be curtailed, to prevent overburdening the electric grid. Batteries are likely to be needed to help ease the abrupt transition that occurs when the sun goes down at the end of the day while electricity demand is still high. These same batteries can also help ease abrupt transitions in wind supply during wind storms.

Apart from brief intermittencies, there is an even more serious problem with seasonal fluctuations in supply that do not match up with seasonal fluctuations in demand. For example, in winter, electricity from solar panels is likely to be low. This may not be a problem in a warm country, but if a country is cold and using electricity for heat, it could be a major issue.

The only real way of handling seasonal intermittencies is by having fossil fuel or nuclear plants available for backup. (Battery backup does not seem to be feasible for such huge quantities for such long periods.) These back-up plants cannot sit idle all year to provide these services. They need trained staff who are willing and able to work all year. Unfortunately, the pricing system does not provide enough funds to adequately compensate these backup systems for those times when their services are not specifically required by the grid. Somehow, they need to be paid for the service of standing by, to offset the inevitable seasonal variability of wind, solar and water.

[7] The pricing system for electricity tends to produce rates that are too low for those electricity providers offering backup services to the electric grid.

As a little background, the economy is a self-organizing system that operates through the laws of physics. Under normal conditions (without mandates or subsidies) it sends signals through prices and profitability regarding which types of energy supply will “work” in the economy and which kinds will simply produce too much distortion or create problems for the system.

If legislators mandate that intermittent wind and solar will be allowed to “go first,” this mandate is by itself a substantial subsidy. Allowing wind and solar to go first tends to send prices too low for other producers because it tends to reduce prices below what those producers with high fixed costs require.2

If energy officials decide to add wind and solar to the electric grid when the grid does not really need these supplies, this action will also tend to push other suppliers off the grid through low rates. Nuclear power plants, which have already been built and are adding zero CO2 to the atmosphere, are particularly at risk because of the low rates. The Ohio legislature recently passed a $1.1 billion bailout for two nuclear power plants because of this issue.

If a mandate produces a market distortion, it is quite possible (in fact, likely) that the distortion will get worse and worse, as more wind and solar is added to the grid. With more mandated (inefficient) electricity, customers will find themselves needing to subsidize essentially all electricity providers if they want to continue to have electricity.

The physics-based economic system without mandates and subsidies provides incentives to efficient electricity providers and disincentives to inefficient electricity suppliers. But once legislators start tinkering with the system, they are likely to find a system dominated by very inefficient production. As the costs of handling intermittency explode and the pricing system gets increasingly distorted, customers are likely to become more and more unhappy.

[8] Modelers of how the system might work did not understand how a system with significant wind and solar would work. Instead, they modeled the most benign initial situation, in which the operating reserves would handle variability, and curtailment of supply would not be an issue. 

Various modelers attempted to figure out whether the return from wind and solar would be adequate, to justify all of the costs of supporting it. Their models were very simple: Energy Out compared to Energy In, over the lifetime of a device. Or, they would calculate Energy Payback Periods. But the situation they modeled did not correspond well to the real world. They tended to model a situation that was close to the best possible situation, one in which variability, batteries and backup electricity providers were not considerations. Thus, these models tended to give a far too optimistic estimates of the expected benefit of intermittent wind and solar devices.

Furthermore, another type of model, the Levelized Cost of Electricity model, also provides distorted results because it does not consider the subsidies needed for backup providers if the system is to work. The modelers likely also leave out the need for backup batteries.

In the engineering world, I am told that computer models of expected costs and income are not considered to be nearly enough. Real-world tests of proposed new designs are first tested on a small scale and then at progressively larger scales, to see whether they will work in practice. The idea of pushing “renewables” sounded so good that no one thought about the idea of testing the plan before it was put into practice.

Unfortunately, the real-world tests that Germany and other countries have tried have shown that intermittent renewables are a very expensive way to produce electricity when all costs are considered. Neighboring countries become unhappy when excess electricity is simply dumped on the grid. Total CO2 emissions don’t necessarily go down either.

[9] Long distance transmission lines are part of the problem, not part of the solution. 

Early models suggested that long-distance transmission lines might be used to smooth out variability, but this has not worked well in practice. This happens partly because wind conditions tend to be similar over wide areas, and partly because a broad East-West mixture is needed to even-out the rapid ramp-down problem in the evening, when families are still cooking dinner and the sun goes down.

Also, long distance transmission lines tend to take many years to permit and install, partly because many landowners do not want them crossing their property. In some cases, the lines need to be buried underground. Reports indicate that an underground 230 kV line costs 10 to 15 times what a comparable overhead line costs. The life expectancy of underground cables seems to be shorter, as well.

Once long-distance transmission lines are in place, maintenance is very fossil fuel dependent. If storms are in the area, repairs are often needed. If roads are not available in the area, helicopters may need to be used to help make the repairs.

An issue that most people are not aware of is the fact that above ground long-distance transmission lines often cause fires, especially when they pass through hot, dry areas. The Northern California utility PG&E filed for bankruptcy because of fires caused by its transmission lines. Furthermore, at least one of Venezuela’s major outages seems to have been related to sparks from transmission lines from its largest hydroelectric plant causing fires. These fire costs should also be part of any analysis of whether a transition to renewables makes sense, either in terms of cost or of energy returns.

[10] If wind turbines and solar panels are truly providing a major net benefit to the economy, they should not need subsidies, even the subsidy of going first.

To make wind and solar electricity producers able to compete with other electricity providers without the subsidy of going first, these providers need a substantial amount of battery backup. For example, wind turbines and solar panels might be required to provide enough backup batteries (perhaps 8 to 12 hours’ worth) so that they can compete with other grid members, without the subsidy of going first. If it really makes sense to use such intermittent energy, these providers should be able to still make a profit even with battery usage. They should also be able to pay taxes on the income they receive, to pay for the government services that they are receiving and hopefully pay some extra taxes to help out the rest of the system.

In Item [2] above, I mentioned that when coal mines were added in England, roads to the mines were substantially improved, befitting the economy as a whole. A true source of energy (one whose investment cost is not too high relative to it output) is supposed to be generating “surplus energy” that assists the economy as a whole. We can observe an impact of this type in the improved roads that benefited England’s economy as a whole. Any so-called energy provider that cannot even pay its own fair share of taxes acts more like a leech, sucking energy and resources from others, than a provider of surplus energy to the rest of the economy.

Recommendations

In my opinion, it is time to eliminate renewable energy mandates. There will be some instances where renewable energy will make sense, but this will be obvious to everyone involved. For example, an island with its electricity generation from oil may want to use some wind or solar generation to try to reduce its total costs. This cost saving occurs because of the high price of oil as fuel to make electricity.

Regulators, in locations where substantial wind and/or solar has already been installed, need to be aware of the likely need to provide subsidies to backup providers, in order to keep the electrical system operating. Otherwise, the grid will likely fail from lack of adequate backup electricity supply.

Intermittent electricity, because of its tendency to drive other providers to bankruptcy, will tend to make the grid fail more quickly than it would otherwise. The big danger ahead seems to be bankruptcy of electricity providers and of fossil fuel producers, rather than running out of a fuel such as oil or natural gas. For this reason, I see little reason for the belief by many that electricity will “last longer” than oil. It is a question of which group is most affected by bankruptcies first.

I do not see any real reason to use subsidies to encourage the use of electric cars. The problem we have today with oil prices is that they are too low for oil producers. If we want to keep oil production from collapsing, we need to keep oil demand up. We do this by encouraging the production of cars that are as inexpensive as possible. Generally, this will mean producing cars that operate using petroleum products.

(I recognize that my view is the opposite one from what many Peak Oilers have. But I see the limit ahead as being one of too low prices for producers, rather than too high prices for consumers. The CO2 issue tends to disappear as parts of the system collapse.)

Notes:

[1] BP bases its count on the equivalent fossil fuel energy needed to create the electricity; IEA counts the heat energy of the resulting electrical output. Using BP’s way of counting electricity, electricity worldwide amounts to 43% of total energy consumption. Using the International Energy Agency’s approach to counting electricity, electricity worldwide amounts to only about 19% of world energy consumption.

[2] In some locations, “utility pricing” is used. In these cases, pricing is set in a way needed to provide a fair return to all providers. With utility pricing, intermittent renewables would not be expected to cause low prices for backup producers.





Eight essential steps to transform our economy

30 07 2019

We’re running out of time. There’s spreading awareness of the institutional failure that is driving humans toward self-extinction, and related calls for a deep transformation of our economy. This is happening in every quarter, from college campuses to the Vatican to the U.S. presidential debates. Everywhere we hear calls for an economy that serves the well-being of people and Earth.

David Korten wrote this opinion piece for YES! Magazine as part of his series of biweekly columns on “A Living Earth Economy.” David is co-founder and board chair of YES! Magazine and president of the Living Economies Forum. Follow him on Twitter @dkorten and on Facebook. As do all YES! columnists he writes here in his personal voice.

Pope Francis has spoken of the social and environmental failures of an economy devoted to the idolatry of moneyWorkers and their unions are joining in with the wrenching observation that, “There are no good jobs on a dead planet.”

There is a related rising awareness of the need for a serious update to how we study and think about economics and prepare our future leaders. With few exceptions, economics, as it’s taught in universities, relies on the same badly flawed theories and ethical principles that bear major responsibility for the unfolding crisis. It values life only for its market price; uses GDP growth as the defining measure of economic performance; assures students that maximizing personal financial return benefits society; recommends policies that prioritize corporate profits over human and planetary well-being; and ignores the natural limits of a finite planet.

Here are eight guiding principles for a reformed economic theory to guide our path to a new economy for the 21st century.

Principle 1: Evaluate the economy’s performance by indicators of the well-being of people and planet; not the growth of GDP.

Growing GDP serves well if our goal is only to increase the financial assets of the rich so they can claim an ever-growing share of the remaining real wealth of a dying Earth. If our priority is to meet the essential needs for food, water, shelter, and other basics for all the world’s people, then we must measure for those results so that we can get the outcomes we really want.

Principle 2: Seek only that which benefits life; not that which harms life.

We should seek to eliminate war, financial speculation, consumption of harmful or unnecessary products, and industrial agriculture that pollutes the soil, air, and water and produces food of questionable nutritional value. We can eliminate most driving by designing infrastructure to support people living close to where they work, shop, and play. We can eliminate most global movement of people and goods by keeping production and consumption local, using recycled materials, and substituting electronic communication for global business travel.

The labor and resources thus freed up can be redirected to raising and educating our children, caring for the elderly, restoring the health and vitality of Earth’s regenerative systems, rebuilding the social infrastructure of community, and rebuilding physical infrastructure in ways that reduce dependence on fossil fuels and simultaneously strengthen our beneficial connections with one another and nature.

Principle 3: Honor and reward all who provide beneficial labor, including nature; not those who exploit it to get rich.

Life depends on the labor of nature and people. Too often, the current economic system rewards those claiming ownership rather than those performing useful labor. Instead we should follow the model set by traditional societies, in which we earn our share in the surplus of the commons through our labor in service of it. Much of the current economy’s dysfunction can be overcome by eliminating the division of society between owners and workers—a problem corrected throughworker ownership combined with an ethical frame that recognizes our well-being depends on much more than just financial return.

Principle 4: Create society’s money supply through a transparent public process to advance the common good; not through proprietary processes that grow the profits of for-profit banks.

In a modern society, those who control the creation and allocation of money control the lives of everyone. It defies reason to assume that society benefits from giving this power to global for-profit banks dedicated to maximizing profits for the already richest among us. The system of money creation and allocation must be public, transparent, and accountable to the people. It must reside in democratic governments and be administered by public banks supplemented by individual community-owned, cooperative banks whose lending supports local home and business ownership.

Principle 5: Educate for a lifetime of learning in service to life-seeking communities; not for service to for-profit corporations.

Most university economics courses currently promote societal psychopathology as a human ideal and give legitimacy to institutions that serve only to make money, without regard for the common good. We must prepare youth for future leadership that builds on a moral foundation that recognizes our responsibility for one another and Earth, favors cooperation over competition, and prioritizes life over money and community well-being over corporate profits.

No one knows how to get where we now must go, and education cannot provide us with answers we do not have. Education can, however, prepare us to be lifelong learners, skilled in asking the right questions and in working together to find and share answers.

Principle 6: Create and apply technology only to serve life; not to displace or destroy it.

Technology must be life’s servant. Deciding how to apply technology based solely on what will produce the greatest short-term financial return is madness. Humans have the right and the means to assure that technology is used only to serve humanity as a whole, such as by eliminating destructive environmental impacts, restoring the regenerative capacity of Earth systems, facilitating global understanding, and advancing social justice, cooperation, and learning.

Principle 7: Organize as cooperative, inclusive, self-reliant, regenerative communities that share knowledge and technology to serve life; not as incorporated pools of money competing to grow by exploiting life.

We can meet our needs through constant cyclical flows of resources. That was our standard way of living until less than 100 years ago. We can do it again. Urban and rural dwellers can rediscover their interdependence as cities source food, timber, fiber, pulp, and recreational opportunities from nearby rural areas and rural areas regenerate their soils with biowastes from nearby urban areas and enjoy the benefits of urban culture. Suburbs can convert to urban or rural habitats.

Principle 8: Seek a mutually beneficial population balance between humans and Earth’s other species; not the dominance of humans over all others.

The health of any natural ecosystem depends on its ability to balance the populations of its varied species. This means maintaining free access to reproductive health care options and removing barriers to women in education and the workplace. Only starting from this point can we both maintain a free society and manage our population size.

The basic frame of 21st century economics contrasts sharply with that of the 20th century economics it must now displace. The new frame is far more complex and nuanced. Yet most people can readily grasp it because it is logical, consistent with foundational ethical principles, and reflects the reality that most people are kind, honest, find pleasure in helping others, and recognize that we all depend on the health of our Mother Earth.

This article was first published in YES! Magazine.





Why stimulus can’t fix our energy problems

11 07 2019

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

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

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

Posted on July 10, 2019 by Gail Tverberg

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The situations behind these lagging growth rates vary:

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

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

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

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

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

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

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

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

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

Workers play a double role in the economy:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Observations and Conclusions

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

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

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

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

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

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

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

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

Note:

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





A reality check on Renewable Energy

23 10 2018

Hat tip to my friend Shane who put me onto this TedX lecture…….  well worth sharing with your ecotopian friends! It does show how Australia – and Canada –  with very low population densities, are in not a bad position, except of course for the fact they are nowhere near the places with high densitity populations. You can’t beat arithmetics and physics…….

How much land mass would renewables need to power a nation like the UK? An entire country’s worth. In this pragmatic talk, David MacKay tours the basic mathematics that show worrying limitations on our sustainable energy options and explains why we should pursue them anyway. (Filmed at TEDxWarwick.) Lesson by David MacKay.