Big Picture article

14 12 2018

It’s so nice reading an article that joins the dots….  I get so sick of people concentrating on one issue or another, ignoring everything else troubling civilisation.  From Consciousness of Sheep, who else….?

Britain has – apparently – been thrown into crisis overnight.  Meanwhile across the channel, French president Macron is desperately trying to extinguish the flames of another weekend of mass protests that have now spread to Belgium and Holland.  In Eastern Europe the hard-right are gaining support; even undermining the previously untouchable Angela Merkel’s power base in the former East Germany.  Across the Atlantic meanwhile, the lines between deranged Democrats and MAGA nationalists are being drawn in readiness for America’s second civil war.  We are surely living through the greatest crisis in modern history.

Well, yes indeed we are.  But everything set out in the first paragraph is no more than the froth on the beer.  These political spasms are merely the outward manifestation of a human catastrophe that has been decades in the making.

Two far greater symptoms of our predicament have gained at least some public traction this year.  First was an all too visible plastic pollution crisis that is increasingly difficult to ignore now that China has ceased acting as the West’s rubbish dump.  Second is the somewhat less visible insect apocalypse that has seen the near extinction of a raft of pollinating insect species; without which we humans are doomed to starvation.  Interestingly, while these two symptoms are only tenuously related to climate change, they have tended to be included under that shorthand heading.  Plastic certainly damages the environment, but its build up owes far more to the ongoing power of the petrochemicals industry and the myth of recyclingthan to changes in climate.  The same goes for the insects.  While there may have been some climactic impact on migrations and reproduction, the main cause is the vast quantities of chemical insecticides required by an industrialised agriculture tasked with feeding 7.5 billion humans on a planet that could barely feed one seventh of that without fossil fuels and agrochemicals.

In the affected areas, local populations have been stunned by a series of “red tide” events that result in the mass deaths of fish and other marine creatures.  Climate change is indirectly involved in these events because of the increased rainfall from warmer storms.  But once again it is our industrial agriculture that is the primary cause – the giant oxygen-free zones beneath algae and phytoplankton blooms that form because of artificial fertilisers washed off the land when it rains.  When marine creatures stray into these oxygen-free zones (which are pinkish-red in colour due to concentrated hydrogen sulphide) they suffocate before they can swim to safety.

Off most people’s radar is the ongoing sixth mass extinction, as we lose thousands of species every year.  Again, while some of this is directly due to the changing climate, the larger part is due to human activities like agriculture, deforestation and strip mining simply chewing up natural habitats to make way for the creation of the various resources – including food – required to sustain a human population that is projected to reach 10 billion by mid-century.

The use of the term “climate change” to describe these catastrophes is deceptive.  If we were looking at our predicament in totality, we would include these crises alongside climate change as a series of (often interacting) sub-sets of a much greater problem… let’s call it the “human impact crisis.”

Crucially, by focussing solely on a changing climate, we can exercise a form of psychological denial in which human civilisation is able to continue chasing infinite growth on a finite planet while yet-to-be-invented technologies are deployed to magically heal the damage that our over-consumptive lifestyles are having on the human habitat.

The focus on climate change also permits us to avoid any examination of those human activities that increasingly stand in the way of the bright green technological future we keep promising ourselves.  Shortages in a range of key resources, including several rare earths, cobalt, lithium, chromium, zinc, gold and silver are very likely to materialise in the next decade if Western countries get anywhere close to their targets for switching to renewable electricity and electric cars (even though even these are just a fraction of what would be required to decarbonise the global economy).

Energy is an even bigger problem.  For the first time since the dark ages, humanity is switching from high-density energy sources (nuclear, coal, gas and oil) to ultra-low density energy sources (tide, wind, wave and solar).  We are – allegedly – choosing to do this.  However, because we have depleted fossil fuels on a low-hanging fruit basis, it is costing us more in both energy and money to maintain the energy needed to power the global economy.  As more of our energy has to be channelled into energy production (e.g. the hugely expensive Canadian bitumen sands and the US fracking industry) ever less energy is available to power the wider economy. This has forced us into a crisis I refer to as “Schrodinger’s renewables,” in which the technologies being deployed supposedly to wean us off fossil fuels end up merely being added in order to maintain sufficient economic growth to prevent the entire civilisation collapsing.

This, of course, brings us back to the increasingly heated debates in the US Congress, the UK Parliament and the streets of 100 French towns and cities.  Economic growth is the fantasy that almost everyone is buying into as a solution to our predicament.  Sure, some call it “green growth,” but it isn’t.  In reality it is, and always was central bank growth.  Why?  Because every unit of currency in circulation in the West was created with interest attached.  In such a system, we either grow the economy or we inflate the value currency back to something more in line with the real economy.  The former is impossible and the latter is devastating… which is why central bankers around the world have been quietly panicking for the best part of a decade.

To be clear, since 1980 the western economic system has inflated a series of asset bubbles, each of which has subsumed and outgrown its predecessor.  In the 1980s companies bailed out failing companies to save themselves.  In the 1990s stock markets bailed out companies to save stock markets.  In the 2000s banks bailed out stock markets and then states and central banks bailed out banks.  Next time around it will be states and currencies that need bailing out.  And in the absence of space aliens, it is not clear who is going to be riding to the rescue.  What that means, dear reader, is that everything you depend upon (but didn’t know it) for life support – inter-bank lending systems, letters of credit and freight insurance, international trade arrangements, employment, state pensions, etc.  – is going to go away (at least until some kind of debt-write-off (either directly or via “helicopter money”) and a new currency system can be put into place.

The other legacy from this period of debt-based asset inflation is a series of grossly unequal societies; divided, ultimately, between those who get to spend the (uninflated) debt-based currency first and those (the 99 percent) who only get the currency after its value has been inflated away – primarily those who depend upon a wage/salary from employment rather than an income from shares and other investments.  Most people accept some inequality.  However a lack of economic growth (outside banking and tech) has created deep hostility to those political parties that cling to the pre-2008 neoliberal orthodoxy.  The result has been a growth in populist movements claiming to know how to restore the economy to rates of growth last seen in the 1990s.  Political economist Mark Blyth summed up the difference between the left and right wing variants of populism thus:

  • The right says neoliberalism ruined the economy and immigrants took your jobs
  • The left says neoliberalism ruined the economy and capitalists took your jobs.

Needless to say – as the boy Macron is learning to his cost – now is not a happy time to be a neoliberal politician.  The broader problem, however, is that the proposed solutions from the populists are no more likely to result in another round of economic growth simply because western civilisation is already well past the point of overshoot.  China – the place where most of the jobs went and where most of the stuff we consume is made – already consumes half of the world’s coal, copper, steel, nickel and aluminium.  It also consumes nearly two-thirds of the world’s concrete.  To grow at just 3.5 percent would require that China consume all of the world’s reserves of those resources by 2038 – at which point it would also be consuming a quarter of the world’s oil and uranium and half of the world’s grain harvest.  The impossibility of this is what people mean when they use the word “unsustainable” to describe our situation.

Nevertheless, even supposedly green parties cling to the promotion of economic growth as an electoral strategy.  Rather than admit the impossibility of further growth, however, they reach instead for some mythical “green growth” that will supposedly follow the industrial scale deployment of non-renewable renewable energy harvesting technologies like wind turbines and solar panels that require fossil fuels in their manufacture , and for which the planet lacks sufficient material reserves.  Promising de-growth is, however, politically toxic in the current climate.

Most green growth advocates imagine a switch from extraction and manufacturing to (largely digital) services that will somehow decouple resource and energy growth from GDP.  That is, we can all continue to prosper even as our use of planetary resources falls back to something like the amounts consumed in the 1750s.  Writing in Resilience, Jason Hickel gives the lie to this:

“This sounds reasonable on the face of it. But services have grown dramatically in recent decades, as a proportion of world GDP — and yet global material use has not only continued to rise, but has accelerated, outstripping the rate of GDP growth. In other words, there has been no dematerialization of economic activity, despite a shift to services.

“The same is true of high-income nations as a group — and this despite the increasing contribution that services make to GDP growth in these economies. Indeed, while high-income nations have the highest share of services in terms of contribution to GDP, they also have the highest rates of resource consumption per capita. By far.

“Why is this? Partly because services require resource-intensive inputs (cinemas and gyms are hardly made out of air). And partly also because the income acquired from the service sector is used to purchase resource-intensive consumer goods (you might get your income from working in a cinema, but you use it to buy TVs and cars and beef).”

And, of course, without the income derived from making all of that stuff for service providers to consume, nobody can afford to buy the services and the economy will collapse.  Not that anyone has noticed this for now, as we are descend into the politics of blame in which widening inequality and poverty at the bottom is blamed on one or other of a culture’s preferred out groups – Tories, Democrats, socialists, libertarians, migrants, the banks, the European Union, Israel, Angela Merkel, the Rothschild family, Donald Trump… choose your favourite pantomime villain; but don’t expect to be going anywhere but down.

Politics matter, of course.  In a future of economic contraction it is far better to be governed consensually by people who understand the predicament and who plan a route to deindustrialisation that has as few casualties as possible on the way down… one reason not to keep voting for parties that dole out corporate welfare at the top while driving those at the bottom to destitution.  That road tends to end with guillotines and firing squads.

For all of its passion and drama, however, the role of politics in our current predicament is somewhat akin to the choice of footwear when setting out to climb a mountain.  Ideally you want to choose a pair of stout climbing boots; but nobody is offering those.  For now the choice is between high heels and flip-flops to climb the highest mountain we have ever faced.  If we are lucky, the political equivalent a half decent pair of training shoes might turn up, but while the world is focussed on economic growth; that is the best we can hope for… and we still have to climb the mountain whatever shoes we wear.

Advertisements




Italy and energy: a case study

22 10 2018

Since discovering Jean Marc Jancovici a couple of months ago, I have been following his work, which is mostly in French; but now and again he publishes something in English, so you guys can benefit from reading this while I prepare to drive my wife’s Suzuki Alto with a full load to Tasmania……  yes I am going to get my life back and get to enjoy sharing the fruits of my labour after a three year wait…..

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

Italy is in trouble. Or more precisely, the country has been “abandonned by growth”. It is one of the few OECD countries that is unable to recover from the “2008 crisis”: its GDP is still lagging below 2007 levels. Would it be the simple result of the unability of the successive governments to make the “appropriate reforms”? It might well be that the explanation lies in something much more different, but much more unpleasant: physics.

First, statistics are unequivocal on the fact that growth has vanished, so far.

Year on year change of the GDP in Italy (or “annual growth rate”) since 1961 (blue curve), average per decade (red curve), and trend on the growth rate (green dotted line). It is easy to see that each decade has been less “successful” than the previous one since the beginning of this series, and that the decade that started in 2010 has an average growth rate which is… negative. Italy has therefore been in recession, “on average”, for the last 7 years.

Primary data from World Bank.

As the two are generally linked in Western countries, the debt on GDP ratio has risen to heights, botbh for public and private debt.

Debt on GDP ratio in Italy since 1995. Primary data from Eurostat.

Households debt on GDP ratio since 1960. Data from Bank for International Settlements.

Credit to the non financial sector on GDP ratio (corporates and households) for Italy. Data from Bank for International Settlements.

All this would not be so annoying – well, from an economic point of view – if growth were to resume, because then the money to repay all this extra debt would be available. But why doesn’t growth come back? Some say that this is due to the lack of reforms. This is due to the lack of reforms, but not the same (reforms), say others.

But what if the true reason is… the lack of energy? In Italy, as elsewhere, the machines that surround us everywhere (rolling mills, chemical plants, trains, fridges, elevators, trucks, cars, planes, stamping presses, drawers, extruders, tractors, pumps, cranes…) have 500 to 1000 times the power of the muscles of the population.

It’s these machines that produce, not men. Today, homes, cars, shirts, vacuum cleaners, fridges, chairs, glasses, cups, scissors, shampoo, books, frozen dishes, and all the other tens of thousands of products that you benefit from are produced by machines. If these machines lack energy, they operate less, production decreases, and so does the monetary counterpart of this production, that is the GDP. And it is probably what happened in our southern neighbor.

First of all, energy is definitely less abundant in Italy today than it was 10 years ago.

Primary energy used in Italy (sometimes called “primary energy consumption”; “primary” refers to the fact that it is the energy extracted from the environment in its raw form – raw coal, crude oil, crude gas, etc, not processed fuels or electricity that come out of the energy industries: refined fuels, electricity, processed gas, etc) since 1965. There was a maximum in 2005, i.e. 3 years before the fall of Lehman Brothers. It is impossible to attribute the decline in consumption to a crisis caused by the bankers’ negligence!

It is interesting to note that maximum of the energy consumption in Italy corresponds to the maximum gas production of Algeria (2005), Italy’s second largest gas supplier after Russia.

Oil and gas production in Algeria since 1965 (oil) and 1970 (gas). Oil production peaked in 2008, and gas production in 2003 so far (monthly data from the Energy Information Agency suggest that the gas production in Algeria is anew on the decline). Primary data from BP Statistical Review.

Italy is a major consumer of gas, because its electricity production relies on it for half of the domestic generation. This maximum (of energy consumption in Italy) also corresponds to the beginning of the stabilization of world oil production that took place between 2005 and 2010, which also led to a decrease in Italy’s import capacity in this precious liquid.

Monthly production of liquids (crude oil and condensates) worldwide. Data from the Energy Information Agency. We can clearly see the “plateau” that runs from 2005 to 2010, before the rise of the American shale oil, which has rekindled global growth and allowed the subsequent economic “rebound”.

Combined together, oil and gas accounted for 85% of Italian energy in 2005 (and accounted for 65% of its electricity production): less oil available on the world market (because a constant production must be shared with a growing importation from the emerging countries), and less gas available in Europe and Algeria led to a decline in supply beforethe beginning of the financial crisis.

In fact, when looking at trends over long periods, we can see that, in Italy as in all industrialized countries, i. e. with machines that produce instead of men, GDP is driven by available energy.

Rate of change (3 year running average) of the energy consumption in Italy (green curve) and rate of change (also 3 year running average) of the Italian GDP. It is noteworthy that the trend is the same for both. Where’s the hen, where’s the egg? For what follows, we just need one valid rule: less energy means less running machines and thus less GDP. And we see that when the energy growth slower, so does the GDP, one to two years later, which supports the idea that when it is energy that is constrained, GDP is forced to be constrained as well.

Data from BP Statistical Review for energy and World Bank for GDP

This “precedence” of energy over GDP will show up in another presentation of the same data.

Energy used in Italy (horizontal axis) vs. Italian GDP (in constant billions dollars) for the period 1965 to 2017. The curve start in 1965, at the bottom left, and then follows the chronological order upwards to the right

We note that the curve makes a series of “turns to the left” in 1974, 1979, and especially from 2005 onwards. The “turn on the left” means that it is first the energy that decreases, and then the GDP, excluding in fact a sequence that would explain the decrease in the energy consumed by the crisis alone (then the curve should “turn right”).

One can also notice that after the decline in GDP from 2006 to 2014, the line goes back to “normal”, that is going from “bottom left” to “top right”, which reflects a GDP that grows again because of an energy supply that does the same.

Author’s calculation based on BP Statistical Review & World Bank data

And then?

Well, for the moment energy supply is going downwards, but will it continue to do so in the future? For the first 3 components of the energy supply in Italy, things look pretty settled. For coal, all is imported. This fuel is a nightmare regarding logistics: a 1 GW power plant requires between 4000 and 10000 tonnes of coal per day, and this explains why when a country is not a coal producer its coal imports are never massive. Add on top that coal is clearly the first “climate ennemy” to shoot: calling massively on imported coal to compensate for the decline of the rest seems very unprobable.

Consumption (dotted lines) and production (solid line, actually zero all the time!) of coal in Italy. Data from BP Statistical Review.

Then comes oil. Italy imports almost all it uses, and when world production stopped growing in 2005, Italian consumption fell in a forced way – as in all OECD countries – because the emerging countries took an increasing share.

Consumption (dotted lines) and production (solid line) of oil in Italy. Data from BP Statistical Review.

Eventually comes gas. Here too, Italy had to reduce its consumption in a compulsory way after 2005, when Algerian production – which provides about a third of Italian consumption – peaked.

Consumption (dotted lines) and production (solid line) of gas in Italy. Data from BP Statistical Review.

Italy gave up nuclear power after Chernobyl, and so no “relief” can come from this technology. Hydroelectricity has been at its peak for decades, with all or most of the equippable sites having been equipped. In addition, the drying up of the Mediterranean basin due to climate change should also reduce rather than increase this production.

Hydroelectric production in Italy since 1965, in TWh (billion kWh) electricity. Data from BP Statistical Review.

Then remain the “new renewable”, mostly solar, biomass and wind energy, that now represent about the equivalent of hydropower. But solar and wind require a lot of capital to be deployed, and thus the irony is that if the economy “suffers” because of a decline in the supply of fossil fuels, there is fewer money to invest in this supply! Biomass requires a lot of land to become significant because of the biomass that has to be grown.

Non-fossil electricity production in Italy since 1965. We see that the “new renewable” (biomass, wind, solar) do a little more than hydroelectricity, i.e. 20% of the total production (of electricity only, of course). Data from BP Statistical Review.

As these means cannot quickly supply large extra quantities of electricity, and will quickly be limited by storage issues, the energy used in Italy remains massively fossil, and will do so in the short term.

Share of each energy in Italian consumption. Data from BP Statistical Review.

It is therefore likely that Italy will remain massively dependent on fossils fuels in the next 10 to 20 years, and since the supply of these fuels is likely to continue to decrease on average, which means that Italy will have to manage its destiny without a return to growth, or even with a structural recession.

It is to this conclusion that a “physical” reading of the economy leads. And what is happening to our neighbours to the south is, most probably, the “normal” way in which an industrialized country reacts to the beginning of an unexpected energy contraction (and then populists follow, because of promises that coldn’t be fulfiled). As other European countries do not anticipate any better their upcoming energy contraction (that will happen anyway because oil, gas and coal are not renewable), let us look carefully at what is happening in this country. Something similar is likely to happen in France (and in Europe, and in the OECD) too if we do not seriously address the issue of fossil fuels, or more precisely if we do not seriously begin to organise society with less and less fossil fuels, including if it means less and less GDP.





Towards a new operating system……

28 08 2018

Scientists Warn the UN of Capitalism’s Imminent Demise

A climate change-fueled switch away from fossil fuels means the worldwide economy will fundamentally need to change.

Image: Shutterstock

ANOTHER brilliant piece of journalism from Nafeez Ahmed. Originally sighted on MOTHERBOARD….

nafeezCapitalism as we know it is over. So suggests a new report commissioned by a group of scientists appointed by the UN Secretary-General. The main reason? We’re transitioning rapidly to a radically different global economy, due to our increasingly unsustainable exploitation of the planet’s environmental resources.

Climate change and species extinctions are accelerating even as societies are experiencing rising inequalityunemploymentslow economic growthrising debt levels, and impotent governments. Contrary to the way policymakers usually think about these problems, the new report says that these are not really separate crises at all.

Rather, these crises are part of the same fundamental transition to a new era characterized by inefficient fossil fuel production and the escalating costs of climate change. Conventional capitalist economic thinking can no longer explain, predict, or solve the workings of the global economy in this new age, the paper says.

Energy shift

Those are the stark implications of a new scientific background paper prepared by a team of Finnish biophysicists. The team from the BIOS Research Unit in Finland were asked to provide research that would feed into the drafting of the UN Global Sustainable Development Report (GSDR), which will be released in 2019.

For the “first time in human history,” the paper says, capitalist economies are “shifting to energy sources that are less energy efficient.” This applies to all forms of energy. Producing usable energy (“exergy”) to keep powering “both basic and non-basic human activities” in industrial civilisation “will require more, not less, effort.”

“Economies have used up the capacity of planetary ecosystems to handle the waste generated by energy and material use”

The amount of energy we can extract, compared to the energy we are using to extract it, is decreasing “across the spectrum—unconventional oils, nuclear and renewables return less energy in generation than conventional oils, whose production has peaked—and societies need to abandon fossil fuels because of their impact on the climate,” the paper states.

The shift to renewables might help solve the climate challenge, but for the foreseeable future will not generate the same levels of energy as cheap, conventional oil.

In the meantime, our hunger for energy is driving what the paper refers to as “sink costs.” The greater our energy and material use, the more waste we generate, and so the greater the environmental costs. Though they can be ignored for a while, eventually those environmental costs translate directly into economic costs as it becomes more difficult to ignore their impacts on our societies.

And the biggest “sink cost,” of course, is climate change:

“Sink costs are also rising; economies have used up the capacity of planetary ecosystems to handle the waste generated by energy and material use. Climate change is the most pronounced sink cost,” the paper states.

The paper’s lead author, Dr. Paavo Järvensivu, is a “biophysical economist”—an emerging type of economist exploring the role of energy and materials in fuelling economic activity.

The BIOS paper suggests that much of the political and economic volatility we have seen in recent years has a root cause in ecological crisis. As the ecological and economic costs of industrial overconsumption continue to rise, the constant economic growth we have become accustomed to is now in jeopardy. That, in turn, has exerted massive strain on our politics.

But the underlying issues are still unacknowledged and unrecognised by most policymakers.

“We live in an era of turmoil and profound change in the energetic and material underpinnings of economies. The era of cheap energy is coming to an end,” the paper says.

Conventional economic models, the Finnish scientists note, “almost completely disregard the energetic and material dimensions of the economy.”

“More expensive energy doesn’t necessarily lead to economic collapse,” Järvensivu told me. “Of course, people won’t have the same consumption opportunities, there’s not enough cheap energy available for that, but they are not automatically led to unemployment and misery either.”

The scientists refer to the pioneering work of systems ecologist Professor Charles Hall of the State University of New York with economist Professor Kent Klitgaard from Wells College. Earlier this year, Hall and Klitgaard released an updated edition of their seminal book, Energy and the Wealth of Nations: An Introduction to BioPhysical Economics.

Hall and Klitgaard are highly critical of mainstream capitalist economic theory, which they say has become divorced from some of the most fundamental principles of science. They refer to the concept of ‘Energy Return on Investment’ (EROI) as a key indicator of the shift into a new age of difficult energy. EROI is a simple ratio that measures how much energy we use to extract more energy.

“For the last century, all we had to do was to pump more and more oil out of the ground,” say Hall and Klitgaard. Decades ago, fossil fuels had very high EROI values—a little bit of energy allowed us to extract large amounts of oil, gas and coal.

“We face a form of capitalism that has hardened its focus to short-term profit maximization with little or no apparent interest in social good.”

Earlier in August, billionaire investor Jeremy Grantham—who has a track record of consistently calling financial bubbles—released an update to his April 2013 analysis, ‘The Race of Our Lives.’

The new paper, ‘The Race of Our Lives Revisited,’ provides a bruising indictment of contemporary capitalism’s complicity in the ecological crisis. Grantham’s verdict is that “capitalism and mainstream economics simply cannot deal with these problems,” namely, the systematic depletion of planetary ecosystems and environmental resources:

“The replacement cost of the copper, phosphate, oil, and soil—and so on—that we use is not even considered. If it were, it’s likely that the last 10 or 20 years (for the developed world, anyway) has seen no true profit at all, no increase in income, but the reverse,” he wrote.

Many experts believe we’re moving past capitalism, but they disagree on what the ultimate outcome will be. In his book Postcapitalism: A Guide to Our Future, British economics journalist Paul Mason theorises that information technology is paving the way for the emancipation of labour by reducing the costs of knowledge production—and potentially other kinds of production that will be transformed by AI, blockchain, and so on—to zero. Thus, he says, will emerge a utopian ‘postcapitalist’ age of mass abundance, beyond the price system and rules of capitalism.

It sounds peachy, but Mason completely ignores the colossal, exponentially increasing physical infrastructure for the ‘internet-of-things.’ His digital uprising is projected to consume evermore vast quantities of energy (as much as one-fifth of global electricity by 2025), producing 14 percent of global carbon emissions by 2040.

Toward a new economic operating system

Most observers, then, have no idea of the biophysical realities pointed out in the background paper commissioned by the UN Secretary-General’s IGS—that the driving force of the transition to postcapitalism is the decline of what made ‘endless growth capitalism’ possible in the first place: abundant, cheap energy.

The UN’s Global Sustainable Development Report is being drafted by an independent group of scientists (IGS) appointed by the UN Secretary-General. The IGS is supported by a range of UN agencies including the UN Secretariat, the UN Educational, Scientific and Cultural Organization, the UN Environment Programme, the UN Development Programme, the UN Conference on Trade and Development and the World Bank.

The paper, co-authored by Dr Järvensivu with the rest of the BIOS team, was commissioned by the UN’s IGS specifically to feed into the chapter on ‘Transformation: the Economy.’ Invited background documents are used as the basis of the GSDR, but what ends up in the final report will not be known until the final report is released next year.

“No widely applicable economic models have been developed specifically for the upcoming era”

Overall, the paper claims that we have moved into a new, unpredictable and unprecedented space in which the conventional economic toolbox has no answers. As slow economic growth simmers along, central banks have resorted to negative interest rates and buying up huge quantities of public debt to keep our economies rolling. But what happens after these measures are exhausted? Governments and bankers are running out of options.

“It can be safely said that no widely applicable economic models have been developed specifically for the upcoming era,” write the Finnish scientists.

Having identified the gap, they lay out the opportunities for transition.

In this low EROI future, we simply have to accept the hard fact that we will not be able to sustain current levels of economic growth. “Meeting current or growing levels of energy need in the next few decades with low-carbon solutions will be extremely difficult, if not impossible,” the paper finds. The economic transition must involve efforts “to lower total energy use.”

Key areas to achieve this include transport, food, and construction. City planning needs to adapt to the promotion of walking and biking, a shift toward public transport, as well as the electrification of transport. Homes and workplaces will become more connected and localised. Meanwhile, international freight transport and aviation cannot continue to grow at current rates.

As with transport, the global food system will need to be overhauled. Climate change and oil-intensive agriculture have unearthed the dangers of countries becoming dependent on food imports from a few main production areas. A shift toward food self-sufficiency across both poorer and richer countries will be essential. And ultimately, dairy and meat should make way for largely plant-based diets.

The construction industry’s focus on energy-intensive manufacturing, dominated by concrete and steel, should be replaced by alternative materials. The BIOS paper recommends a return to the use of long-lasting wood buildings, which can help to store carbon, but other options such as biochar might be effective too.

But capitalist markets will not be capable of facilitating the required changes – governments will need to step up, and institutions will need to actively shape markets to fit the goals of human survival. Right now, the prospects for this look slim. But the new paper argues that either way, change is coming.

Whether or not the system that emerges still comprises a form of capitalism is ultimately a semantic question. It depends on how you define capitalism.

“Capitalism, in that situation, is not like ours now,” said Järvensivu. “Economic activity is driven by meaning—maintaining equal possibilities for the good life while lowering emissions dramatically—rather than profit, and the meaning is politically, collectively constructed. Well, I think this is the best conceivable case in terms of modern state and market institutions. It can’t happen without considerable reframing of economic-political thinking, however.”





Primary Energy

27 08 2018

The internet is constantly bombarded with articles about how we need to go (or even ARE going) 100% renewable energy and get rid of fossil fuels…… now don’t get me wrong, I completely agree, it’s just that these people have no idea of the repercussions, nor of the size of the task at hand….)

Renewable energy zealots even believe that as more and more renewables are deployed, fossil fuels are being pushed out of the way, becoming irrelevant. Seriously.

Nothing of the sort is happening. In a recent article, Gail Tverberg wrote this…:

Of the 252 million tons of oil equivalent (MTOE) energy consumption added in 2017, wind ADDED 37 MTOE and solar ADDED 26 MTOE. Thus, wind and solar amounted to about 25% of total energy consumption ADDED in 2017. Fossil fuels added 67% of total energy consumption added in 2017, and other categories added the remaining 8%. [my emphasis on added…]

To put this in a graphic way, look at this…..

primary energy

Primary energy consumption has almost trebled since 1971, and renewables still only account for 2%…… while oil coal and gas has grown as a total percentage at the expense of nuclear. And…..  surprise surprise, OIL! Nothing to do with Peak Oil I suppose……

There is simply no way renewables will ever replace fossil fuels. California, with the aim of going 100% renewables doesn’t even have the necessary land available for the purpose according to some recent research…….

Last year, global solar capacity totaled about 219,000 megawatts. That means an all-renewable California would need more solar capacity in the state than currently exists on the entire planet. Sure, California can (and will) add lots of new rooftop solar over the coming decades. But Jacobson’s plan would also require nearly 33,000 megawatts of concentrated solar plants, or roughly 87 facilities as large as the 377-megawatt Ivanpah solar complex now operating in the Mojave Desert. Ivanpah, which covers 5.4 square miles, met fierce opposition from conservationists due to its impact on the desert tortoise, which is listed as a threatened species under the federal and California endangered species acts.

Wind energy faces similar problems. The Department of Energy has concluded in multiple reports over the last decade that no matter where they are located — onshore or offshore — wind-energy projects have a footprint that breaks down to about 3 watts per square meter.

To get to Jacobson’s 124,608 megawatts (124.6 billion watts) of onshore wind capacity, California would need 41.5 billion square meters, or about 16,023 square miles, of turbines. To put that into perspective, the land area of Los Angeles County is slightly more than 4,000 square miles — California would have to cover a land area roughly four times the size of L.A. County with nothing but the massive windmills. Turning over even a fraction of that much territory to wind energy is unlikely. In 2015, the L.A. County Board of Supervisors voted unanimously to ban large wind turbines in unincorporated areas. Three other California counties — San Diego, Solano and Inyo — have also passed restrictions on turbines.

Last year, the head of the California Wind Energy Assn. told the San Diego Union-Tribune, “We’re facing restrictions like that all around the state…. It’s pretty bleak in terms of the potential for new development.”

Don’t count on offshore wind either. Given the years-long battle that finally scuttled the proposed 468-megawatt Cape Wind project — which called for dozens of turbines to be located offshore Massachusetts — it’s difficult to imagine that Californians would willingly accept offshore wind capacity that’s 70 times as large as what was proposed in the Northeast.

To expand renewables to the extent that they could approach the amount of energy needed to run our entire economy would require wrecking vast onshore and offshore territories with forests of wind turbines and sprawling solar projects. Organizations like 350.org tend to dismiss the problem by claiming, for example, that the land around turbines can be farmed or that the placement of solar facilities can be “managed.” But rural landowners don’t want industrial-scale energy projects in their communities any more than coastal dwellers or suburbanites do.

The grim land-use numbers behind all-renewable proposals aren’t speculation. Arriving at them requires only a bit of investigation, and yes, that we do the math.

“Without coal we won’t survive”. Yet coal will/could kill us all. It’s the difference between a problem and a predicament…. problems have solutions, predicaments need management. Here’s a trailer of a movie soon to be released….




The physics of energy and resulting effects on economics

10 07 2018

Hat tip to one of the many commenters on DTM for pointing me to this excellent video…. I have featured Jean-Marc Jancovici’s work here before, but this one’s shorter, and even though it’s in French, English subtitles are available from the settings section on the toutube screen. Speaking of screens, one of the outstanding statements made in this video is that all electronics in the world that use screens in one way or another consume one third of the world’s electricity…….. Remember how the growth in renewables could not even keep up with the Internet’s growth?

If this doesn’t convince viewers that we have to change the way we do EVERYTHING, then nothing will….. and seeing as he’s presenting to politicians, let’s hope at least some of them will come out of this better informed……

Jean-Marc Jancovici, a French engineer schools politicians with a sobering lecture on the physics of energy and the effects on economics and climate change





Earth Battery

2 07 2018

I don’t know how this podcast ever flew under the radar, but it’s ‘must listen to’ material….. two of my favourite peakniks, Chris Martenson and Tom Murphy, discuss our predicaments in the clearest possible way.

The standout for me was Tom calling our fossil fuels sources a gigantic solar battery in which millions of years of solar energy was stored, only to be virtually short circuited to be discharged in what is the blink of an eyelid in geological terms……

 





A question too obvious…

25 04 2018

Every now and again someone poses a question so obvious that you wonder why nobody asked it before.  When that happens, it is usually because it reveals an unconscious narrative that you have been following.  It is precisely because it jars with what you thought you knew that it is so unsettling.  And, of course, most people will seek some means of avoiding the ramifications of the question; such as questioning the motives of the person asking it.

So it is that Time Magazine “Hero of the Environment,” Michael Shellenberger poses just such an apparently innocuous question:

“If solar and wind are so cheap, why are they making electricity so expensive?”

Image result for grid renewables

There are clearly merits to this question.  The spiralling cost of electricity played a major role in the recent Australian election.  In Britain, even the neoliberal Tory government has been obliged to introduce legislation to cap energy prices; while the Labour opposition threatens to dispense with the private energy market altogether.  Across the USA prices are spiralling ever upward, making Trump’s pro-fossil fuel stance popular for large numbers of Americans:

“Over the last year, the media have published story after story after story about the declining price of solar panels and wind turbines.  People who read these stories are understandably left with the impression that the more solar and wind energy we produce, the lower electricity prices will become.

“And yet that’s not what’s happening. In fact, it’s the opposite.

“Between 2009 and 2017, the price of solar per watt declined by 75 percent while the price of wind declined by 50 percent.  And yet — during the same period — the price of electricity in places that deployed significant quantities of renewables increased dramatically.”

According to Shellenberger, countries and states that have led the green energy charge have also led the charge to higher electricity prices.  Denmark has seen a 100 percent price increase, Germany 51 percent and California 24 percent.  At face value, these electricity price increases flatly contradict the narrative that we – and especially our governments – have been sold: that ever cheaper renewable energy technologies are the solution to our energy security and climate change problems.

Since the price of coal and gas has also fallen, we cannot point to fossil fuels as the cause of increasing energy prices.  That is, rushing to replace “dirty” fossil fuel power stations with even more “cheap” wind turbines and solar panels is unlikely to halt the rise in energy prices.

This brings us back to the apparently cheap renewables.  Could there be something about them that has caused prices to rise?

Once again, challenging the narrative helps expose the problem.  As with the term “renewable” itself, the problem is with our failure to examine the whole picture.  While to all intents and purposes, sunlight and wind are inexhaustible sources of energy, the technologies that harness and convert that energy into useful electrical energy are not – both are highly dependent on oil-based global supply chains.  In the same way, while the cost of manufacturing and deploying wind turbines and solar panels has dropped sharply in the past 20 years, the opposite is true of the deliverable electricity they generate.

For all the talk about this or that organisation, city or country generating 100 percent of its electricity from renewables, the reality is that the majority of their (and our) electricity is generated from gas together with smaller volumes of nuclear and coal.  Just because a company like Apple or Google pays extra for us to pretendthat it doesn’t use fossil fuels does not change the reality that without fossil fuels those companies would be out of business.  And that isn’t going to change unless someone can find a way of making the sun shine at night and the wind to blow 24/7/365.

The economic problem that Shellenberger points to is simply that the value of renewable electricity is in inverse proportion to its availability.  That is, when the wind isn’t blowing and the sun isn’t shining, additional electricity is at a premium.  When the sun is blazing and the wind is blowing on the other hand, there is often more electricity than is needed.  The result is that the value of that electricity falls.  In both circumstances, however, the monetary costs fall on the fossil fuel and nuclear generators that provide baseload and back-up capacity.  When there is insufficient renewable electricity, they have to be paid more to increase their output.  When there is too much renewable electricity, they have to be paid more to curtail their output.  Those additional monetary costs are then added to the energy bills of their consumers.

In these circumstances, the falling cost of the renewable electricity technology is almost irrelevant.  According to Shellenberger:

“Part of the problem is that many reporters don’t understand electricity. They think of electricity as a commodity when it is, in fact, a service — like eating at a restaurant.

“The price we pay for the luxury of eating out isn’t just the cost of the ingredients most of which, like solar panels and wind turbines, has declined for decades.

“Rather, the price of services like eating out and electricity reflect the cost not only of a few ingredients but also their preparation and delivery.”

Even if the price of renewable technologies fell to zero, the cost of supplying electricity to end users would continue to rise.  Indeed, paradoxically, if the cost fell to zero, the price would spiral out of control precisely because of the impact on the wider system required to move that renewable electricity from where it is generated to where and when it is required.  In short, and in the absence of cheap and reliable storage and back-up technologies that have yet to be invented, the more renewable electricity generating technologies we deploy, the higher our electricity bills are going to rise.

This may, of course, be considered (at least among the affluent liberal classes) to be a price worth paying to reduce our carbon emissions (although there is little evidence that this is happening).  But it has potentially explosive political consequences.  As the UK government’s energy policy reviewer, Dieter Helm pointed out:

“It is not particularly difficult to set out what an efficient energy system might look like which meets the twin objectives of the climate change targets and security of supply. There would, however, remain a binding constraint: the willingness and ability to pay for it. There have to be sufficient resources available, and there has in a democracy to be a majority who are both willing to pay and willing to force the population as a whole to pay. This constraint featured prominently in the last three general elections, and it has not gone away.” (My emphasis)

Energy poverty and discontent is a growing phenomenon across Western states, as stagnating real wages leave millions of families struggling to cover the cost of basics like food and energy that have risen in price far faster than official inflation.  This has already translated into the disruptive politics of Brexit, Donald Trump and the rise of the European far right and far left parties.  In acknowledging this constraint, Helm points to the true depths of our current trilemma – we have simultaneous crises in our environment, our energy and resource base and our economy.

Thus far, “solutions” put forward to address any one arm of the trilemma – economic growth, renewable energy, hydraulic fracturing – impact negatively on the other arms; ultimately rendering the policy undeliverable.  Until we can drop our illusory narratives, grasp the full implications of the trilemma, and begin to develop policy accordingly, like the rising price of supposedly cheaper renewable electricity, things can only go from bad to worse.