Tag: energy

Challenging times

barryh3 Comments

A recent post by Gail Tverberg explains what many of us suspect, that the world economic/resource/technology/political ‘system’ is running into the buffers. She suggests that this is a problem of the physics of the system, and not something that is easily addressed. Her conclusion makes sobering reading:

“We are dealing with a situation that economists, politicians and central banks are ill-equipped to handle. Raising interest rates may squeeze out a huge share of the economy. The economy was already ‘at the edge.’ We can’t know for certain.

Virtually no one looks at the economy from a physics point of view. For one thing, the result is too distressing to explain to citizens. For another, it is fashionable for scientists of all types to produce papers and have them peer reviewed by others within their own ivory towers. Economists, politicians and central bankers don’t care about the physics of the situation. Even those basing their analysis on Energy Return on Energy Invested (EROEI) tend to focus on only a narrow portion of what I explained in [this post]. Once researchers have invested a huge amount of time and effort in one direction, they cannot consider the possibility that their approach may be seriously incomplete.

Unfortunately, the physics-based approach I am using indicates that the world’s economy is likely to change dramatically for the worse in the months and years ahead. Economies, in general, cannot last forever. Populations outgrow their resource bases; resources become too depleted. In physics terms, economies are dissipative structures, not unlike ecosystems, plants and animals. They can only exist for a limited time before they die or end their operation. They tend to be replaced by new, similar dissipative structures.

While the current world economy cannot last indefinitely, humans have continued to exist through many bottlenecks in the past, including ice ages. It is likely that some humans, perhaps in mutated form, will make it through the current bottleneck. These humans will likely create a new economy that is better adapted to the Earth as it changes.”

We in the West have had the opportunity, since WW2, to live through the best of times, driven by plentiful energy and resources. Now we approach the times of reducing energy and resources, of climate breakdown, of conflict such as we already see today in Ukraine. Our mindsets need to change, and we need a whole new approach to organising the affairs of humankind on earth and its parts, one that is more aligned with the natural world.

The end of civilisations and empires is always a turbulent time, but also one replete with opportunity for renewal. The challenge to all countries and individuals is to ride the waves and emerge in a better place the other side…

But dare any politician say such a thing and get elected?

Featured image of storm clouds by FotoSleuth, via Wikimedia Commons

Energy and economy

barryhLeave a comment

In her post The Next Financial Crisis is not Far Away Gail Tverberg presents an interesting assessment of where the world economy has been, is and is going. It seems to explain a lot of what we see going on.

Gail makes a number of observations, based on extensive research, that appear to look deeper than most so-called economists.

  • our economy is a self-organised system that seems to grow by itself
  • economies can collapse if circumstances are not right cf USSR
  • oil exporting nations can have problems if prices are too low cf Venezuela, whereas oil importing nations can have problems if prices are too high cf Greece
  • energy consumption correlates with and enables economic growth (see Gail’s chart), so cheap energy means high growth cf recent China, India, but not now

world-gpd-growth-has-followed-changes-in-energy-consumption

  • world growth in energy consumption is now negative
  • these factors explain lack of strong Western growth since 2007/8, and corresponding structural problems such as many low-paying jobs resulting in reducing tax take, which generates pressure on public services and so on
  • Likely symptoms of collapse: political parties cannot agree, debt repayment problems, falling international trade, breakdown of higher layers of organisation cf USSR

The point Gail does not really bring out is that economic growth also tends to correlate with negative environmental impacts, so low growth is actually much better for the environment.

We seem to be in a bind: economic growth and social stability versus environment. It is likely that we will always default to the former until the effects of the latter are so disastrous that action is forced upon us.

In a sensible world, we’d be having a big conference to try to work out a better way of managing human affairs that works with the environment, and perhaps decouples perceived benefits from both energy and growth. Which brings us back to the money/debt system, who controls it and who benefits…

In the real world we will just muddle on. And whether Brexit represents a national suicidal impulse or a prescient reading of the runes will not become clear for some time yet! (Its short term negative impact is becoming increasingly clear.)