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The Sower’s way: the path for the future

The Sower’s way: the path for the future

Our paper on “The Sower’s Way” has been published in the IOP Environmental Research Letters journal. It is an attempt to quantify the physical limits of the energy transition from fossils to renewables.

The title of the article takes inspiration from a strategy well known to ancient farmers, the fact that they had to save something from their current harvest for the next one; it is the origin of the common saying “don’t eat your seed corn!”

Starting from this ancient wisdom, we performed a quantitative calculation of how much “seed” we need in the form of fossil fuels in order to have enough energy to build a new “harvest” of renewable energy that can replace the old one. All that without emitting so much CO2 that we would go over the 2°C limit and without anyone being left out. 

Of course, it is a calculation that depends on a lot of debatable parameters, but we did our best to remain within realistic consideration, without asking for technological miracles or drastic reductions in the human population. We just assumed current technologies and that the population curve would follow the UN projections. At the same time, we recognize that perpetual growth is a dream that only madmen or economists can think as possible. We assumed that humankind would gradually move toward a stabilization of the economy and of the population on a level of per capita energy sufficient to survive. 

It is possible, here are the main results from the paper

You can see how we assume a rapid growth of renewable energy, built up in the beginning using fossil energy but, in the later stages of the transition relying on renewable energy to continue the process, while phasing out the fossil fuels which are completely abandoned by around 2060. In this scenario, emissions do not go over the COP21 limit.

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

The story of the fisherman and of the farmer

The story of the fisherman and of the farmer

Image from Daniel Vickers’ “Farmers and Fishermen“, 1994.

As I sit on the podium with the other speakers, I have in front of me about 30 boys and girls. They are not even teenagers, most of them seem to be around 12 years old. They sit while the other speakers tell them of climate change and renewable energies. They are being told what we believe is good for them: that we are in danger, we need to act, we need to recycle our waste, save energy, and reduce emissions. But, at the same time, I can’t avoid thinking that, out there, outside the cozy world of the school and of their teachers, there is a different world. A world where the only tree that has a value is a tree that has been cut down and sold. A world where the measure of success is how much a person can consume. A world where the fragile thing we call “the environment” is always the least important concern. 

Are we doing to these children a favor by telling them what we are telling them? I cannot say, I can only see that they are good boys and good girls and that they are doing their best to listen to the speakers. They seem to understand that what they are being told is important for their future. And some of them seem to understand that it is not obvious that they will have a future. 

As my turn to speak approaches, I try to think. What can I tell to a group of tired (and also a little scared) children? An idea appears in my mind all of a sudden. 
…click on the above link to read the rest of the article…

Eating The Seed Corn—–The Fed’s Horrid Corruption Of Corporate Finance

Eating The Seed Corn—–The Fed’s Horrid Corruption Of Corporate Finance

Central bank financial repression results in the systematic and severe mispricing of financial assets. And that has sweeping consequences far beyond the munificent windfalls it bestows on the thin slice of mankind that frequents the casinos of Wall Street, London, Tokyo and Shanghai.

The fact is, the prices of money, debt, equity, traded commodities and all their derivatives comprise a vast and instantaneous signaling system that cascades through every nook and cranny of the real economy. When these signals are systematically falsified by a few dozen central bankers they cause hundreds of millions ordinary businessmen, workers, investors and entrepreneurs to alter their economic calculus.

And not in a good way. False signals lead to mistakes, excesses, losses and waste. They ultimately reduce economic efficiency and productivity and lower the rate of economic growth and real wealth gains.

Since the Greenspan age of financial repression incepted in the late 1980s, for example, the returns to savings have been obliterated while the rewards for speculation have soared. That’s important because only savings from current production and income generate additional primary capital that can foster future wealth. By contrast, leveraged speculation merely causes existing financial assets to be re-priced and a temporary redistribution of paper wealth from the cautious to the exuberant.

In an honest free market, in fact, there is no excess return to leveraged speculation at all. Natural market makers arbitrage out the spread between the costs of carry and the returns to carried assets such as long-dated futures contracts, term debt and various and sundry forms of equity and other risk assets. 

 

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

Olduvai IV: Courage
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Olduvai II: Exodus
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