Friday, May 11, 2018

EIA energy forecasts also spell economic doom?

The last post looked at the Energy Information Administration (EIA) energy forecasts to conclude that the 1% per year global energy consumption growth rate implied that over the course of the next 40 years we will consume as much energy total as the total we consumed in the past 100 years. Of course, we will consume even more if the growth rate continues at 2% per year, as it has in the past decade. If the past century of environmental destruction is any guide, destruction powered by our energy consumption, then the planet will be rather worse for wear in most of our lifetimes.

But what does it imply economically? Agencies like the World Bank and the International Monetary Fund forecast between 3% and 4% global GDP growth in the coming years. Can this be reconciled with EIA forecasts of just 1% for the fuel that power the economy?


A direct implication of the constant relating energy consumption and historically accumulated wealth that I have described is

GDP growth rate = Energy consumption growth rate  + Growth rate of energy consumption growth rate

So just to show that this isn't totally out to lunch, the respective mean growth rates for the 40 year period between 1970 and 2010 are

3.1%/year = 2.0%/year + 1.4%/year

3.1%/year = 3.4%/year. So not perfect, but pretty close, about 10% error. What we see globally is that GDP has been growing faster than energy consumption, but the difference can be accounted for by the second term on the right hand side above, the growth rate of the growth rate, a term I have been calling innovation since it can be related to improvements in energy efficiency.

So, let's now take a look at what the EIA forecasts imply for the future. If energy consumption has been growing at 2.0%/year, and the EIA projects instead a steady 1%/year, then the equation above for GDP growth would read:

1.0%/year = 1.0%/year + 0% per year

1.0%/year. Isn't that something close to a permanent recession? Keep in mind that 1.0%/year is an average value for the world, and that there will be competition among countries for this global constraint. Developed economies tend to grow more slowly than average, so this doesn't sound particularly rosy for those of us who live there. Really, I'm in no position to say what such an anemic growth rate actually looks like on the global economic stage, but it would seem to be well below what most economists would consider desirable. The last time growth stagnated like this over a long period of time was the 1930s. We know what followed.

And meanwhile, even at 1% per year energy consumption growth, we would still consume enough energy to bring about roughly a doubling of pre-industrial CO2 concentrations in the atmosphere, sufficient to blow well beyond the 2 degrees Celsius cap proposed by the Paris Climate Accords.

It seems we can't win!






13 comments:

  1. Well.... a permanent recession. Bummer, as we say here in California. But at least it's a start on saving the planet, no?

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  3. The "Power Theory of Wealth" (I still like "The Garrett Relation!) can be combined with the "Energy Intensity of GDP" == f(t) == P(t)/G(t) = current power (P) / current global GDP (G) to show that

    1/lambda = df/dt + (f/G)(dG/dt)

    The left side is constant positive. On the right side, the first term is (historically) negative and approximately constant (~linear downward sloping f ). But the 2nd term is nearly always positive. It is negative only during the brief economic recessions when dG/dt is negative. But as we just saw, this is also when df/dt goes to zero, or even slightly positive (as in the '08-'09 recession).
    Averaged over the noisy (and unreported uncertainty limits of the data) brief recession periods, the equation holds true (Garrett 2010).

    But note - If we were to enter a prolonged recession, as seems required for saving the Future, it suggests that we could not simultaneously continue to improve the energy efficiency of global GDP, so that df/dt would have to turn upwards and positive (ignoring lag effects). In fact, we’d be struggling with merely maintaining past growth’s Wealth and current energy consumption we'd see Power growing FASTER than GDP, as hinted in the last recession.
    This sounds grim!

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    1. Very important points. It seems totally counter-intuitive but global GDP can shrink even as overall energy consumption grows.

      This is very hard for many to accept, including those who acknowledge the importance of energy to the economy, because energy consumption and GDP have been tightly correlated. Just looking at the data it seems natural to conclude that a lower GDP means lower energy consumption.

      But this is a case of false attribution, or that correlation does not equal causation. Wealth is what is linked to energy consumption; GDP is linked to energy consumption growth.

      So, even if the world goes into a stage of economic decline, a long-term depression, as long as there is a global economy, energy consumption would still grow. We would still be building the stuff of civilization that requires additional energy consumption to maintain it, on top of all the maintenance energy that is still required to sustain everything that has been built before.

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  4. Tim, you've said you believe that Civilization, in a thermodynamic sense, is deterministic. How far are are you taking that? Do you think human free will is an illusion? I agree with you that human nature as it is, is captured well by the CThERM model, but I see the "decay" term as a natural place where humans could, by empowering wise government (OK, ok, stop the chortling!), could enforce pushing back from the "growth" table even though we still have individual desires to do anything but push back from the table. I've described this in my latest talk with the analogy of a monk manufacturing a chastity belt and failing the will power, takes it to the government with orders to "put these on all of us".

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  5. Unless a case can be made for anything else in the universe having "free will" what objective measure exists to support that humans should be an exception?

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  6. Do humans individually have "free will"? I believe it's essential to our past survival that we be able to learn and exercise judgment and make choices. stimulus/response can work only so well. The biological energy required to make the mental effort to focus can have different people say "yes" or "no" to exercising their free will. Why some and not others? Why am I so different from anyone else in my family? I admit it may be difficult to "prove" free will because one can always posit that we were destined to believe we have free will because it's so psychologically empowering and comforting. Maybe there's a clever test out there beyond the snap-judgment tests already done, which shed light here. The snap-judgment experiments indeed throw doubt on "free will" in that limited regime, I admit. But when time for deliberation is included I'm not convinced those tests are relevant to the issue.

    But even if we do have individual free will, I agree its certainly shown by history that our collective Civilization-wide free will is more constrained. ...Macroscopic gas vs "free will" of chaotic individual molecules again.

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  7. I think it might be worth asking what the energetic requirements of "free will" are in the brain. As a whole the brain consumes about 20 Watts. Does free will comprise something like 1 Watt of that total? Is the brain as a whole subject to thermodynamic constraints -- hence e.g the observed power law behavior in neuronal activity -- but some smaller "free will" component is energy consuming but independent of larger scale thermodynamic constraints? Or does free will consume no energy? How would this all work?

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  8. Are you suggesting that optimal foraging theory would argue that "free will" is wasteful and disfavor it being retained by future generations? I imagine free will does add to energy consumption, in the same way that I've argued elsewhere that habit-formation is an energy-saving strategy evolved during the vast majority of human evolution when food gathering was difficult. Still, it certainly FEELS like I have free will on ideas I turn over in my mind. How would error-checking ever succeed if all decisions were snap-judgements? Yet, deliberation does seem to be a successful strategy vs snap judgements, at least for complex issues.

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  9. No, not at all. Your feelings are real and presumably helpful to the overall success of the species. The argument instead is that those feelings and the sense of free will must require some degree of energy consumption and dissipation to exist as a process. If so, free will is governed by the same deterministic thermodynamic laws as anything else in the universe. If so, belief in human agency would seem to logically require reconciling the traditional concept of free-will with determinism.

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  10. Certainly, free will and error-checking by the right cingulate cortex requires energy and must conform to thermodyanmics. But optimal foraging only requires that you GET more for that energy expenditure than you have to spend. Brains, as you know, are amazingly energy efficient compared to current computers. Considering the consequences of faulty thought (witness the last election), it would seem a bargain. By the way, several studies show the Right Cingulate Cortex gets extra work from political liberals, and not so much by the conservatives, who save energy there! But they turn around and lose more, it would seem by giving endless exercise to their amygdala (processing fear).
    If free will exists on the individual level, it would not seem impossible we could, as a civilization, climb a potential wall and get down into a better "strange attractor" around organized government helping save a long term future.

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  11. On the subject of free will: according to physics, an object falling towards the Earth at terminal velocity will always impact the ground unless acted upon by a sufficient external force. However, if that object is a bird, it will instead use energy from within to act on the observation that the ground is getting closer and flap its wings to counteract the force of gravity.
    As humans facing the obstacle of Climate Change, is it not possible that we could similarly change our course? Perhaps what's needed is not some hypothetical property of the human mind, but the more mundane ability that most higher lifeforms on Earth possess: to observe changes in the surrounding environment, and respond to them in a way that promotes the survival of that individual organism, and its herd/pack or species.
    Whether or not Humanity, or at least key components of it, is capable of sensing the danger at hand, processing, and carrying out a sufficient response to it, remains to be seen. So while it is entirely possible that those obstacles may prove insurmountable, I for one don't see fit to declare our fate sealed just yet.

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    1. I don't doubt that humanity, like the bird, will work to optimize it's instantaneous ability to dissipate energy. For a rock this is falling. For a bird or a human this is "survival" or "sense of well-being".

      The problem is that optimizing our survival and well-being in the short run is turning out to be incompatible with survival in the long run. Unlike enhancing our sense of well-being and social survival by storing crops to prepare for the winter -- a response embedded within us from aeons of evolution -- there is no obvious precedent for a similar response to climate change. So we focus on contemporary issues that are much too short to relieve us from our predicament.

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