After Part 1, Why capitalism always needs growth to manage debt pressure, we come to part 2. Today:
In a prior study (Garrett, 2011), I introduced a simple economic growth model designed to be consistent with general thermodynamic laws. Unlike traditional economic models, civilization is viewed only as a well-mixed global whole with no distinction made between individual nations, economic sectors, labor, or capital investments. At the model core is a hypothesis that the global economy’s current rate of primary energy consumption is tied through a constant to a very general representation of its historically accumulated wealth. Observations support this hypothesis, and indicate that the constant’s value is λ = 9.7 ± 0.3 milliwatts per 1990 US dollar. It is this link that allows for treatment of seemingly complex economic systems as simple physical systems. Source
This graph is from Tim Gerrett’s website and illustrates the relationship λ (lambda) between the world’t total accumulated wealth (C, the integral) and our ever-accelerating energy consumption rate (a, measured in 1021 joules per year). λ = 9.7 ± 0.3 milliwatts per 1990 US dollar. That’s how much energy is required to increase the world’s economic wealth as measured in 1990 dollars. The growth rate 1.87% for energy consumption is an average for the period 1970-2006. The average growth rate for the total accumulated wealth was 1.82% over that period. Note that this an empirical result and thus stands outside any particular theory or framework, although it falls out of Garrett’s hypothesis (thermodynamic model) that some constant like λ must exist.
Simplest interpretation of the graph: We need Energy to sustain our wealth, and we need energy to create new wealth.
If you own a house you still have to put in repairs, maintenance etc. So you have to invest money (=energy) to maintain it.
This is how Dave Cohen puts it:
Bogus claims are made all the time that if we just use energy more efficiently or switch to “renewable” energy sources as we go, the global economy will continue to grow and grow. On the contrary, here is some of the fallout from Tim’s linkage of the economic and physical worlds. This text is from Tim’s website (cited in the text accompanying the graph above). I have reproduced it verbatim.
This is all very bad news for those making standard assumptions about economic growth in the 21st century. However, Garrett’s use of the terms collapse (decay) and hyperinflation should not be understood as they are in textbook economics or in common usage. A “positive inflation-adjusted GDP” is possible in Tim’s model only if energy consumption is rising at a sufficient rate. What would actually happen on the ground if humans fail to grow primary energy at the rate required is not well-defined.
The starting sentence “Bogus claims are made all the time that if we just use energy more efficiently or switch to renewable energy” contains already two statements that we will examine.
Bogus claims are made all the time that if we just use energy more efficiently….
Using a resource “more efficiently” has a surprising effect. The resource gets used much more! It is called Jevons paradox.
In economics, the Jevons paradox occurs when technological progress increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the falling cost of use induces increases in demand enough that resource use is increased, rather than reduced. Governments, both historical and modern, typically expect that energy efficiency gains will lower energy consumption, rather than expecting the Jevons paradox. In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological progress could not be relied upon to reduce fuel consumption.
Bitcoin mining is a highly energy inefficient process. That cryptocurrencies are consuming a lot of energy might be a sign that they are here to stay. In the book What is your most dangerous idea? scientists were asked what their most dangerous/controversial idea is. Scott D. Sampson most dangerous idea was: The purpose of life is to disperse energy.
The purpose of life is to disperse energy. Moreover, evolution is not driven by the machinations of selfish genes propagating themselves through countless millennia. Rather, ecology and evolution together operate
as a highly successful, extremely persistent means of reducing the gradient generated by our nearest star. In my view, evolutionary theory (the process, not the fact of evolution!) and biology generally are headed for a major overhaul once investigators fully comprehend the notion that the complex systems of earth, air, water, and life are not only interconnected, but interdependent, cycling matter in order to maintain the flow of energy.
An interesting idea. But know to the second part of the sentence:
…or switch to “renewable” energy sources as we go.
I don’t want to discuss if renewable is possible or not, since this question is irrelevant. We will take some information from the excellent and brilliant Tom Murphy.
Thermodynamic Limits
We can explore more exactly the thermodynamic limits to the problem. Earth absorbs abundant energy from the sun—far in excess of our current societal enterprise. The Earth gets rid of its energy by radiating into space, mostly at infrared wavelengths. No other paths are available for heat disposal. The absorption and emission are in near-perfect balance, in fact. If they were not, Earth would slowly heat up or cool down. Indeed, we have diminished the ability of infrared radiation to escape, leading to global warming. Even so, we are still in balance to within less than the 1% level. Because radiated power scales as the fourth power of temperature (when expressed in absolute terms, like Kelvin), we can compute the equilibrium temperature of Earth’s surface given additional loading from societal enterprise
Total U.S. Energy consumption in all forms since 1650. The vertical scale is logarithmic, so that an exponential curve resulting from a constant growth rate appears as a straight line. The red line corresponds to an annual growth rate of 2.9%. Data source: EIA. Please understand that the left axis (Y) is logarithmic. The growth is exponential!
This post provides a striking example of the impossibility of continued growth at current rates—even within familiar timescales. For a matter of convenience, we lower the energy growth rate from 2.9% to 2.3% per year so that we see a factor of ten increase every 100 years. We start the clock today, with a global rate of energy use of 12 terawatts (meaning that the average world citizen has a 2,000 W share of the total pie). We will begin with semi-practical assessments, and then in stages let our imaginations run wild—even then finding that we hit limits sooner than we might think. I will admit from the start that the assumptions underlying this analysis are deeply flawed. But that becomes the whole point, in the end.
I have always been impressed by the fact that as much solar energy reaches Earth in one hour as we consume in a year. What hope such a statement brings! But let’s not get carried away—yet.
Only 70% of the incident sunlight enters the Earth’s energy budget—the rest immediately bounces off of clouds and atmosphere and land without being absorbed. Also, being land creatures, we might consider confining our solar panels to land, occupying 28% of the total globe. Finally, we note that solar photovoltaics and solar thermal plants tend to operate around 15% efficiency. Let’s assume 20% for this calculation. The net effect is about 7,000 TW, about 600 times our current use. Lots of headroom, yes?
When would we run into this limit at a 2.3% growth rate? Recall that we expand by a factor of ten every hundred years, so in 200 years, we operate at 100 times the current level, and we reach 7,000 TW in 275 years. 275 years may seem long on a single human timescale, but it really is not that long for a civilization. And think about the world we have just created: every square meter of land is covered in photovoltaic panels! Where do we grow food?
Now let’s start relaxing constraints. Surely in 275 years we will be smart enough to exceed 20% efficiency for such an important global resource. Let’s laugh in the face of thermodynamic limits and talk of 100% efficiency (yes, we have started the fantasy portion of this journey). This buys us a factor of five, or 70 years. But who needs the oceans? Let’s plaster them with 100% efficient solar panels as well. Another 55 years. In 400 years, we hit the solar wall at the Earth’s surface. This is significant, because biomass, wind, and hydroelectric generation derive from the sun’s radiation, and fossil fuels represent the Earth’s battery charged by solar energy over millions of years. Only nuclear, geothermal, and tidal processes do not come from sunlight—the latter two of which are inconsequential for this analysis, at a few terawatts apiece.
But the chief limitation in the preceding analysis is Earth’s surface area—pleasant as it is. We only gain 16 years by collecting the extra 30% of energy immediately bouncing away, so the great expense of placing an Earth-encircling photovoltaic array in space is surely not worth the effort. But why confine ourselves to the Earth, once in space? Let’s think big: surround the sun with solar panels. And while we’re at it, let’s again make them 100% efficient. Never-mind the fact that a 4 mm-thick structure surrounding the sun at the distance of Earth’s orbit would require one Earth’s worth of materials—and specialized materials at that. Doing so allows us to continue 2.3% annual energy growth for 1350 years from the present time.
At this point you may realize that our sun is not the only star in the galaxy. The Milky Way galaxy hosts about 100 billion stars. Lots of energy just spewing into space, there for the taking. Recall that each factor of ten takes us 100 years down the road. One-hundred billion is eleven factors of ten, so 1100 additional years. Thus in about 2500 years from now, we would be using a large galaxy’s worth of energy. We know in some detail what humans were doing 2500 years ago. I think I can safely say that I know what we won’t be doing 2500 years hence.
The last sentence is beautiful: “Thus in about 2500 years from now, we would be using a large galaxy’s worth of energy. We know in some detail what humans were doing 2500 years ago. I think I can safely say that I know what we won’t be doing 2500 years hence.”
Earth surface temperature given steady 2.3% energy growth, assuming some source other than sunlight is employed to provide our energy needs and that its use transpires on the surface of the planet. Even a dream source like fusion makes for unbearable conditions in a few hundred years if growth continues. Note that the vertical scale is logarithmic. The growth is exponential.
Why Single Out Solar?
Some readers may be bothered by the foregoing focus on solar/stellar energy. If we’re dreaming big, let’s forget the wimpy solar energy constraints and adopt fusion. The abundance of deuterium in ordinary water would allow us to have a seemingly inexhaustible source of energy right here on Earth. We won’t go into a detailed analysis of this path, because we don’t have to. The merciless growth illustrated above means that in 1400 years from now, any source of energy we harness would have to outshine the sun.Let me restate that important point. No matter what the technology, a sustained 2.3% energy growth rate would require us to produce as much energy as the entire sun within 1400 years. A word of warning: that power plant is going to run a little warm. Thermodynamics require that if we generated sun-comparable power on Earth, the surface of the Earth—being smaller than that of the sun—would have to be hotter than the surface of the sun!
Thermodynamic Limits
We can explore more exactly the thermodynamic limits to the problem. Earth absorbs abundant energy from the sun—far in excess of our current societal enterprise. The Earth gets rid of its energy by radiating into space, mostly at infrared wavelengths. No other paths are available for heat disposal. The absorption and emission are in near-perfect balance, in fact. If they were not, Earth would slowly heat up or cool down. Indeed, we have diminished the ability of infrared radiation to escape, leading to global warming. Even so, we are still in balance to within less than the 1% level. Because radiated power scales as the fourth power of temperature (when expressed in absolute terms, like Kelvin), we can compute the equilibrium temperature of Earth’s surface given additional loading from societal enterprise.
The result is shown above. From before, we know that if we confine ourselves to the Earth’s surface, we exhaust solar potential in 400 years. In order to continue energy growth beyond this time, we would need to abandon renewables—virtually all of which derive from the sun—for nuclear fission/fusion. But the thermodynamic analysis says we’re toasted anyway.
Stop the Madness!
The purpose of this exploration is to point out the absurdity that results from the assumption that we can continue growing our use of energy—even if doing so more modestly than the last 350 years have seen. This analysis is an easy target for criticism, given the tunnel-vision of its premise. I would enjoy shredding it myself. Chiefly, continued energy growth will likely be unnecessary if the human population stabilizes. At least the 2.9% energy growth rate we have experienced should ease off as the world saturates with people. But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes. The foregoing analysis offers a cute way to demonstrate this point. I have found it to be a compelling argument that snaps people into appreciating the genuine limits to indefinite growth.Once we appreciate that physical growth must one day cease (or reverse), we can come to realize that all economic growth must similarly end. This last point may be hard to swallow, given our ability to innovate, improve efficiency, etc.
The most important sentence in this paragraph:
But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes.
Key takeaways from the last post:
Capitalism requires future growth to pay off huge investments. This is the essence of modern capitalism that uses, besides technology and energy, debt for pre-financing the production of goods. Most public companies drown in debt. This debt can only be repaid with future growth. This is something that is unique to capitalism as seen in the last, give or take 150 years. In contrast, a market economy in the Middle Ages, or one like the Amish, can function without this. A market economy based system on such a low level could be stable forever.
Key takeaways from this post:
Wealth And Energy Consumption Are Inseparable. You can even measure the mW (milliwatt) per US Dollar that is needed to sustain wealth and growth.
Continued growth in energy use becomes physically impossible within conceivable timeframes.
What is your backup plan? Talk to us.