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Demateralizing the economy isn’t happening (Hint: All that material is actually hiding in plain sight)

Demateralizing the economy isn’t happening (Hint: All that material is actually hiding in plain sight)

If you are trying to prove something is true and certain facts get in the way, it’s almost always useful to exclude them. This is apparently what technology cheerleader Andrew McAfee has done in his recent book More from Less, which claims that advanced economies have been dematerializing for something like the last 40 years. Simply put, those economies are producing more output with little or no increase in physical resources.

There’s just one little problem as anthropologist Jason Hickel points out in his review of More from Less: McAfee forgot to count the physical resources used in making products imported from other countries by all those advanced economies. McAfee only counts those resources extracted within the boundaries of the advanced countries.

I am highlighting Hickel’s piece not so much as a book review. There are dozens of books making similar ridiculous claims that are contradicted by the facts. I am highlighting the piece because Hickel provides perhaps the clearest, most concise refutation of the nonsense that McAfee and others like him are peddling.

Let me touch on the high points though I encourage you to read the full article:

  1. “There has been zero dematerialization. No green growth. It was all an illusion of accounting.”
  2. Global resource use has actually been accelerating faster than growth in the global economy. We are becoming more resource-intensive, not less.
  3. Ecologists believe human societies are 90 percent over any sustainable rate of resource consumption.
  4. The economy can’t become infinitely more efficient. There are limits on how much efficiency can be taken out of any process as each increment of efficiency in resource use is more costly to implement.

…click on the above link to read the rest of the article…

Material challenges of bicycle manufacturing in a post-growth world

The idea of a world based on active transport, and on cycling in particular, is a recurring theme in thinking on degrowth. This was one of the proposed transformative paths of the Manifesto of the Mouvement québécois pour une décroissance conviviale[1] and this notion also plays an important role in the reflections of the Degrowth.info group, based in Germany[2]. The mainstream media also associate degrowth with cycling.[3]

Most degrowth advocates agree that the bicycle is a useful and desirable tool in a post-growth world, although some favour the promotion of walking.[4] One of the precursors of the philosophy of degrowth, Ivan Illich, describes the bicycle as the ecological machine par excellence:

The bicycle and the motor vehicle were invented by the same generation, but they are symbols of two opposing uses of modern advancement. […] It is a wonderful tool that takes full advantage of metabolic energy to speed up locomotion. On flat ground, the cyclist goes three or four times faster than the pedestrian, using five times less calories.[5]

French engineer Philippe Bihouix, for his part, sees it as an example of a low-tech machine, despite the relative technical complexity involved in  its manufacture. Even a simple model, he points out, contains several hundred technically complex basic parts, which are difficult to produce locally. The processes include metallurgy of alloys and different metals, the machining and fitting of parts, vulcanizing tire rubber, producing anti-corrosion paints, and grease for the chain. Once built, however, “it is clearly possible for ordinary people to fully understand how it works, to tinker with it […] to keep it in good condition for many years, not to say almost indefinitely”[6] (translation).

…click on the above link to read the rest of the article…

The Urgent Case for Shrinking the Economy

The Urgent Case for Shrinking the Economy

Endless growth is destroying the planet. We know how to stop it.

In July 1979, shortly after installing a set of solar panels over the West Wing, Jimmy Carter did something peculiar for a peacetime president. He asked Americans to sacrifice: to consume less, take public transit more, value community over material things, and buy bonds to fund domestic energy development, including solar. From our vantage, this may sound very farsighted and bold. But any prescient, planet-saving leadership seen shimmering through hindsight is a mirage. The speech and the panels advanced a program with the narrow goal of energy independence, not decarbonization. Carter wanted to expand and secure the nation’s economic wheel beyond OPEC’s reach, not question it, shrink it, slow it, or “green” it. “We have more oil in our shale alone than several Saudi Arabias [and] more coal than any nation on earth,” he boasted in the speech. “We have the national will to win this war.”

It’s a different event, buried in the Carter record, that offers a flash of the ecological vision often falsely ascribed to the ’79 energy plan. On the afternoon of March 22, 1977, between meetings with the prime minister of Japan and the National Security Council, Carter sat down in the Oval Office with a British-German economist named E.F. Schumacher. Four years earlier, Schumacher had achieved international fame as the author of Small Is Beautiful, a trenchant critique of the spiritual poverty and delusional frameworks of mainstream economics. His White House visit made him the most radical guest of a sitting president since Warren G. Harding requested an audience with Eugene V. Debs.

…click on the above link to read the rest of the article…

 

The priest, the engineer and the economist

The priest, the engineer and the economist

I was exchanging economist jokes over the holiday and heard this one that seemed apropos both to our resource predicament and the seeming abundance of the holiday season:

A priest, an engineer and an economist were stranded together on a desert island. Given their location, fish seemed to be a logical source of food. So, they discussed how to get some. The priest said that the three of them should pray. The engineer said he thought a better approach would be to fashion a net from materials on the island. The priest and the engineer then turned to the economist for his input. With his hand on his chin, the economist thought for a moment and then looked up and said, “Assume a fish.”

That joke neatly summarizes the problem with the vast majority of economic thinking today. Much of that thinking rests on something called the Cobb-Douglas function which has three terms:

Total production = Labor input X Capital input

What is so obviously missing, of course, are physical resources. Hence, “assume a fish” illustrates the slight of hand which most economists perform when referring to the physical world.

In fact, most economic growth projections simply forecast a certain expected (higher) level of demand for goods and services and then assume that the physical resources to meet that demand will appear. Which reminds me of a quote I shared over Christmas dinner that comes to us from economist John Kenneth Galbraith:

The only function of economic forecasting is to make astrology look respectable.

And, I am reminded of yet another quotation attributed to economist Herbert Stein:

If something cannot go on forever, it will stop.

…click on the above link to read the rest of the article…

Toward an age of low tech for a more resilient and sustainable society

Reaching the End of Early Stimulus – What’s Ahead?

Reaching the End of Early Stimulus – What’s Ahead?

Many people thought that COVID-19 would be gone with a short shutdown. They also thought that the world’s economic problems could be cured with a six month “dose” of stimulus.

It is increasingly clear that neither of these assumptions is correct. Despite the claims of epidemiologists, our best efforts have never been able to reduce the number of newly reported COVID-19 cases for the world as a whole for any significant period of time. In fact, the latest week seems to be the highest week so far.

Figure 1. Chart of worldwide COVID-19 new cases, in chart prepared by Worldometer with data through September 20, 2020.

At the same time, the economy, despite all of the stimulus, is not doing very well. Airlines are doing very poorly. The parts of the economy that are dependent upon tourism are having huge problems. This reduces the “upside” of economic recovery, pretty much everywhere, until it can be corrected.

Another part of the world economy doing poorly is clothing sales. For example, many fewer people are attending concerts, weddings, funerals, out-of-town business meetings and conventions, leading to a need for fewer “dressy” clothes. Also, with air travel greatly reduced, people don’t need new clothing for visiting places with different climates, either. Most clothing is bought by people from rich countries but made by people in poor countries. This cutback in clothing purchases disproportionately affects people who are already very poor. The loss of jobs in these countries may lead to an inability to afford food, for those who are laid off.

Besides these difficult to solve problems, initial programs set up to help mitigate job losses are running out. What kinds of things might governments do, if they are running short of borrowing capacity, and medical solutions still seem to be far away?

…click on the above link to read the rest of the article…

Is the Green Deal a card shuffle trick?

Is the Green Deal a card shuffle trick?

(NOTE; this is not an analysis of the US New Green Deal, it is about the “green growth” narrative with the European Green Deal as the point of departure.)

The European Green Deal is a ”growth strategy that aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use.”

There are reasons to discuss if the vision of the European Green Deal is desirable: why should it be a goal to be “competitive” or ”modern”? But let’s buy into the narrative and ask: is the vision possible? Is ”green growth” as expressed in the Green Deal or the Sustainable Development Goals even possible?

In a recent paper in New Political Economy, Jason Hickel and Giorgios Kallis do a good job in illuminating many of the discussions and concepts involved in the Green Growth debate. Their overall conclusion is that ”green growth theory – in terms of resource use – lacks empirical support”.  They note three caveats of their own conclusions. First, it is possible that ”it is reasonable to expect that green growth could be accomplished at very low GDP growth rates, i.e. less than 1 per cent per year”. Second, conclusions are based on the existing relationship between GDP and material throughput, but one might argue that it is theoretically possible to break the existing relationship between GDP and material throughput altogether. Third, the aggregate material footprint indicator obscures the possibility of shifting from high-impact resources to low-impact resources. Meanwhile, Hickel and Kallis also point out that material footprints needs to be scaled down significantly from present levels; to be truly green, green growth requires not just any degree of absolute decoupling, but rapid absolute decoupling.

…click on the above link to read the rest of the article…

Frederick Soddy’s Debt Dynamics

Frederick Soddy’s Debt Dynamics

In the field of ecological economics, Frederick Soddy looms large. Born in 1877, Soddy became a chemist and eventually won a Nobel prize for work on radioactive decay. Then he turned his attention to economics.

Between 1921 and 1934, Soddy wrote four books that looked at how money relates to the physical economy. For his ground-breaking work, Soddy was rewarded with deafening silence. Here’s how ecological economist Eric Zencey puts it:

… Soddy carried on a quixotic campaign for a radical restructuring of global monetary relationships. He was roundly dismissed as a crank.

Although ignored during his life, Soddy’s work would become a central part of ecological economics. Let’s have a look at Soddy’s thinking.

Wealth vs. virtual wealth

Like a good natural scientist, Soddy insisted that human society is constrained by the laws of physics. Humans survive, he noted, by consuming natural resources. Exhaust these resources and we’re done for.

Think of humans (and our economy), says Soddy, like a machine. We transform energy into physical work. Like all machines, we’re bound by the laws of thermodynamics, which say that you can’t get something for nothing. Energy output requires energy input. That means humans are forever dependent on natural resources.

Now comes the problem. Our biophysical stock of resources — what Soddy called ‘wealth’ — is bound by the laws of thermodynamics. But money — which Soddy called ‘virtual wealth’ — is bound only by the laws of mathematics. Money can grow forever. Natural resource extraction cannot. This mismatch, Soddy claimed, is the root of most economic problems.

Cows and virtual cows

Here’s an example of Soddy’s thinking. Suppose that Alice is a would-be cattle farmer. She inherited some land and wants to use it to farm cattle. The problem is she has no money.

…click on the above link to read the rest of the article…

Green economic growth is an article of ‘faith’ devoid of scientific evidence

Green economic growth is an article of ‘faith’ devoid of scientific evidence

Crack team that advised UN Global Sustainable Development Report settle a longstanding debate with hard empirical data

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For years, financial institutions and governments have been focused on the idea of ‘decoupling’ GDP growth from resource use. This has been driven by the recognition that to stay within the ‘safe limit’ of 2 degrees Celsius, we have to dramatically reduce our material consumption.

The goal is to keep our economies growing to sustain prosperity while reducing our actual resource use and material footprint. The bottom line is that without reducing our overall use of planetary resources, we are bound to cross the line into a dangerous climate. But is doing so consistent with the continued increase in economic growth?

The conventional belief has been most recently articulated in a recent book, More From Less, by Andrew McAfee, principal research scientist the MIT Sloan School of Management. Financial and other data, McAfee argued, shows we can actually easily reduce our material footprint while continuing to grow our economies in a win-win scenario.

But new scientific analysis by a group of systems scientists and economists proves that this contention is completely groundless. Far from being based on hard evidence, this sort of claim is instead derived from egregious selective readings of statistical data.

Decades of research on material flows confirm that there are “no realistic scenarios” for such decoupling going forward.

Combing through 179 of the best studies of this issue from 1990 to 2019 further reveals “no evidence” that any meaningful decoupling has ever taken place.

…click on the above link to read the rest of the article…

21 Years Ago: The end of the Bombing of Serbia. And the Start of the Decline of the Western Empire

21 Years Ago: The end of the Bombing of Serbia. And the Start of the Decline of the Western Empire

Nato Bombing of the city of Novi Sad, Serbia, 1999 (image from Wikipedia)

21 years ago, on June 10, 1999, the NATO campaign against Serbia ended after 78 days of bombing. We still don’t know exactly the number of victims, civilian and military, nor the amount of damage and it would be difficult to say who actually “won” the bloody mess. But the bombing of Serbia was a turning point for many reasons.

In 1991, the collapse of the Soviet Union marked the end of the “cold war” and gave rise to expectations of a “peace dividend” once the old enemy of the West had folded out. Needless to say, that never happened. It appeared clear with the Serbian campaign that saw the whole Western world allied against a single state of less than 8 million inhabited.

There was nothing special in the Western Empire taking an aggressive posture after the fall of the rival Soviet Empire. It is the way empires work: they are military organizations dedicated to shifting economic resources from the periphery to the center. So, empires last as long as the cost of their huge military apparatus can be paid for by the resources they can control. Since resources are never infinite, they tend to be overexploited and empires suffer of a classic economic problem: diminishing returns. That’s the reason for the cycles of growth and collapse of empires in history.

…click on the above link to read the rest of the article…

Increased Violence Reflects an Energy Problem

Increased Violence Reflects an Energy Problem

Why are we seeing so much violence recently? One explanation is that people are sympathizing with those in the Minneapolis area who are upset at the death of George Floyd. They believe that a white cop used excessive force in subduing Floyd, leading to his death.

I believe that there is a much deeper story involved. As I wrote in my recent post, Understanding Our Pandemic – Economy Predicamentthe problem we are facing is too many people relative to resources, particularly energy resources. This leads to a condition sometimes referred to as “overshoot and collapse.” The economy grows for a while, may stabilize for a time, and then heads in a downward direction, essentially because energy consumption per capita falls too low.

Strangely enough, this energy crisis looks like a crisis of affordability. The young and the poor, especially, cannot afford to buy goods and services that they need, such as a home in which to raise their children and a vehicle to drive. Trying to do so leaves them with excessive debt. If the affordability problem changes for the worse, the young and the poor are likely to protest. In fact, these protests may become violent. 

The pandemic tends to make the affordability problem worse for minorities and young people because they are disproportionately affected by job losses associated with lockdowns. In many cases, the poor catch COVID-19 more frequently because they live and/or work in crowded conditions where the disease spreads easily. In the US, blacks seem to be especially hard hit, both by COVID-19 and through the loss of jobs. These issues, plus the availability of guns, makes the situation particularly explosive in the US.

Let me explain these issues further.

[1] Energy is required for all aspects of the economy.

…click on the above link to read the rest of the article…

Understanding Our Pandemic – Economy Predicament

Understanding Our Pandemic – Economy Predicament

The world’s number one problem today is that the world’s population is too large for its resource base. Some people have called this situation overshoot. The world economy is ripe for a major change, such as the current pandemic, to bring the situation into balance. The change doesn’t necessarily come from the coronavirus itself. Instead, it is likely to come from a whole chain reaction that has been started by the coronavirus and the response of governments around the world to the coronavirus.

Let me explain more about what is happening.

[1] The world economy is reaching Limits to Growth, as described in the book with a similar title.

One way of seeing the predicament we are in is the modeling of resource consumption and population growth described in the 1972 book, The Limits to Growth, by Donella Meadows et al. Its base scenario seems to suggest that the world will reach limits about now. Chart 1 shows the base forecast from that book, together with a line I added giving my impression of where the economy really was in 2019, relative to resource availability.

Figure 1. Base scenario from 1972 Limits to Growth, printed using today’s graphics by Charles Hall and John Day in “Revisiting Limits to Growth After Peak Oil,” with dotted line added corresponding to where the world economy seems to be have been in 2019.

In 2019, the world economy seemed to be very close to starting a downhill trajectory. Now, it appears to me that we have reached the turning point and are on our way down. The pandemic is the catalyst for this change to a downward trend. It certainly is not the whole cause of the change. If the underlying dynamics had not been in place, the impact of the virus would likely have been much less.

…click on the above link to read the rest of the article…

Welcome to the Era of Intensifying Chaos and New Weapons of Conflict

Welcome to the Era of Intensifying Chaos and New Weapons of Conflict

Geopolitics has moved from a slow-moving, relatively predictable chess match to rapidly evolving 3-D chess in which the rules keep changing in unpredictable ways.

A declining standard of living in the developed world, declining growth for the developed world and geopolitical jockeying for control of resources make for a highly combustible mix awaiting a spark: welcome to the era of intensifying chaos and the rapid advance of new weapons of conflict as ruling elites attempt to stamp out dissent and global powers pursue supremacy by whatever means are available.

Gordon Long and I discuss these dynamics in a new video The New Weapons of Conflict (28:30) that explores the drivers of increasing global chaos and a permanent state of intensifying conflict in both domestic (internal) and global (external) affairs.

Domestic conflict is erupting and intensifying across the globe: political polarization and populism, driven by soaring wealth/income inequality and the decay of the social contract and the erosion of standards of living, and social disunity and disorder as cooperation has failed to fix what’s broken.

Geopolitical conflicts are now expanding across a vast spectrum from endless wars in contested regions to cyber-meddling in other nation’s domestic affairs, cyber-warfare via theft of intellectual property and targeting essential digital infrastructure, economic sanctions and currency-based warfare, along with a wide array of disruptive military technologies, including “first strike”-enabling hypersonic weaponry, anti-missile technologies and space-based weaponry.

The relative stability of the Cold War has given way to a multi-polar world in which nations are competing with a host of other nations, including erstwhile allies and economic/trade rivals. Geopolitics has moved from a slow-moving, relatively predictable chess match to rapidly evolving 3-D chess in which the rules keep changing in unpredictable ways.

There’s much more in the program; click on either graphic to go to the video:

…click on the above link to read the rest of the article…

Renewables Are Dead

Renewables Are Dead

Gustave Courbet The man made mad by fear 1844

If I’ve said once that those among us who tout renewable energy should pay more attention to the 2nd law of Thermodynamics, I must have said it a hundred times. But I hardly ever get the impression that people understand why. And it seems so obvious. A quote I often use from Herman Daly and Ken Townsend, when I talk about energy, really says it all:

“Erwin Schrodinger (1945) has described life as a system in steady-state thermodynamic disequilibrium that maintains its constant distance from equilibrium (death) by feeding on low entropy from its environment – that is, by exchanging high-entropy outputs for low-entropy inputs. The same statement would hold verbatium as a physical description of our economic process. A corollary of this statement is that an organism cannot live in a medium of its own waste products.”

Using energy produces waste. Using more energy produces more waste. It doesn’t matter -much- what kind of energy is used, or what kind of waste is produced. The energy WE use produces waste, in a medium of which WE cannot survive. The only way to escape this is to use less energy. And because we have used such an enormous amount of energy the past 100 years, we must use a whole lot less in the next 100.

We use about 100 times more energy per person, and a whole lot more in the west, than our own labor can produce. We use the equivalent of what 500 billion people can produce without the aid of fossil fuel-powered machines. We won’t solve this problem with wind turbines or solar panels. There really is one way only: cut down on energy use.

 …click on the above link to read the rest of the article…

Vaclav Smil. Making the modern world: materials and dematerialization

Vaclav Smil. Making the modern world: materials and dematerialization

Preface.  I can’t believe I read this book, it is just a long litany of the  gigantic amounts of materials we exploit, with no analysis, implications, or the meaning of what impact this will have on the planet.

I certainly don’t expect anyone to read even this shortened version of his book, but it might be worthwhile to skim for an idea of how much material we’re consuming.

As I point out in my review of the United Nations 2016 report Global material flows and resources productivity” here, in order to accommodate an additional 2 billion people in 2050, material consumption will need to nearly triple to 180 billion tonnes of materials, almost three times today’s amount. If 180 billion tonnes grows in the future at a 5% compound rate, in 497 years the entire earth will be consumed, all 5.972 x 1021 tonnes of it, and we’ll be floating in outer space.

After reading this book, it’s hard to believe there’s anything left to exploit, though here it is 5 years later and the earth is still being pillaged.  But from Smil’s gargantuan numbers and the exponential exploitation of just about everything, clearly this will end badly.  The issue of peak sand has been in the news more frequently lately, which is essential for civilization to make concrete, computer chips, solar PV, and fracking.

Smil covers a wide range of materials that are essential to civilization that you may not have thought much about, and all the myriad uses of silicon, plastics, nitrogen, aluminum, steel, hydrogen, ammonia, cement, and more.  All of them made possible by oil.  All of them essential for civilization, so if one fails….(Liebig’s law of the minimum).

 …click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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