Another brilliant exposition by Prof Steve Keen. The wording below is from a LinkedIn post I made tonight, targeted to Megan Woods (NZ Energy Minister) and Tina Schirr (BEC Lead)
Friede Gard Prize Lecture 05 Energy In Production Functions – Both Neoclassical and Post Keynesian economic models have been “energy blind”, as Dr. Steve Keen outlines in this 23 minute talk: https://lnkd.in/gmCn6hzA
(- I’ll update this post with an embed of this video, once it’s available on YouTube.)
Megan Woods – MBIE’s modelling fails to take this reality into account, and you are getting erroneous assurances (the magnitude of risk is massively underestimated, potentially by a factor of 20 or more) on the magnitude of energy supply fluctuation risks, from the SADEM and GEM economic modelling.
Tina Schirr – this line of thinking is fundamental to getting the scenarios in your BEC Energy Scenarios to properly reveal the relative risk to business of energy supply challenges. This is of critical importance, as the current tightening global diesel supply is a huge risk to BAU and the proposed transition scenarios, which your current modelling is failing to identify.
The fundamental risk that this points to is a cascading failure of the financial system, as FEASTA analysed in this report: bit.ly/trdoff. This could easily be triggered by energy supply disruptions, as explored in this article: https://lnkd.in/gtbPP8im
