The future's so bright, I need shades

Everything is free and easy

  -Crosby Stills and Young

Its' going to be a bright bright

sunshiney day

    -Jimmy Cliff

Greetings

      We are hearing a lot about how things are finally coming together .  Solar and Wind, will soon take over from fossil fuels, and we will move into the new age of energy plenty.

  Fort instance the Washington post gushes:

 "Despite the skepticism of experts and criticism by naysayers, there is little doubt that we are heading into an era of unlimited and almost free clean energy."

And its true that installation are increasing a rapid rate and costs are coming down.

   But as we see in this post by Rune Likvern, below,  these"green shoots" need a little perspective.  If we only look at solar and wind growth, we may forget the bigger picture.   Despite  hyperbolic growth over the last ten years,According to BP, solar and wind still only amounted to 1.1% of total energy used worldwide.        

      "From 2012 to 2013 global FFs consumption grew more than what total global consumption of solar and wind was in 2013 (this according to data from BP Statistical Review 2014)."

You've come a long way ,baby. 

But you've got a long way to go.

-------

In this post I present a brief perspective spanning two centuries of the history of energy and mainly fossil fuels (FFs) consumption. Then a brief look at the recent years growth in solar and wind (renewables) and how their growth measures up against FFs since 1990.

Figure 1: The chart above shows the developments in the world’s total energy consumption split on sources as from 1800 and into 2013. The chart has been developed in a joint between Dr Nate Hagens and me.

In the early 1800s biomass (primarily wood) were humans’ primary source for exogenous energy. Coal became increasingly introduced into the energy mixture after the successful development and deployment of the steam engine which gave birth to the Industrial Revolution. Coal is a nonrenewable, abundant and a denser energy source than wood.

The growing use of biomass had led to deforestation in those areas serving energy intensive industries like mining and metals. The steam engine and its use of abundant coal as an energy source made it possible to rapidly expand the industrial production, create economic growth, thus the Industrial Revolution was in reality a revolution made possible by fossil fuels.

With the most recent discoveries and introduction of fossil oil and natural gas there appeared to be several abundant sources of volumetric dense energy that could entertain exponential and illusive economic growth.

Fossil fuels represent natures’ legacy stock of dense energy (ancient sunlight) that during some decades has been subject to an accelerated depletion.

Several reports in the media may now leave the impression that we are at the threshold for a smooth transition from FFs to renewables (solar and wind).

However, how does this measure up against hard data?

The Renewables (Solar and Wind)

Figure 2: The stacked areas in the chart above show the developments in the consumption (production) of energy from the renewables (solar [yellow] and wind [turquoise]) from 1990 to 2013.

Perhaps it was from studying a similar chart that a speaker at the recent Offshore Northern Seas 2014 (ONS 2014) in Stavanger, Norway and according to a media headline made the bold statement;”The fossil dinosaurs will go extinct” (in Norwegian).

(With the term “dinosaurs” it is here believed the speaker referred to the fossil fuels industry.)

The speaker will with time be proven right, but demonstrates simultaneously a complete lack of comprehension of what the statement entails and  thus ignorance of the powers of FFs.

I am all for renewable energy (I live in a country that presently gets around two thirds of its energy consumption from hydroelectricity and which is one of the worlds biggest exporters of oil, natural gas, coal, hydroelectricity).

No doubt renewable energy will have a role in our future, but the extent of its role is subject to much (heated) debate.

For those that closely have followed my posts (primarily at The Oil Drum and here at Fractional Flow) will have found that recently I have focused on some recurrent themes;
oil (FF) prices/costs, total global debt levels, interest rates, consumers’ affordability, fossil fuel companies’ financial health, central banks’ policies (most important the Federal Reserve Bank [FRB]), and some more.

By carefully studying the recent years growth in consumption and installations of renewables (solar and wind) one will observe that their growth occured as total global debt grew strongly, interest rates were lowered and kept low (to allow for growth in total debt) and some governments allowed for competitive advantages for renewables.

Despite all the technological improvements for renewables that has brought their costs down (and further improvements are likely to follow), renewables are, like FFs, also at the mercy of consumers’ affordability.

The Race between Fossil Fuels and Renewables

Figure 3: The chart above shows the growth in the world’s consumption of fossil fuels (oil [green], natural gas [red] and coal [dark grey] stacked versus the growth in renewables (solar [yellow] and wind [turquoise]), also stacked and all since 1990 to 2013.

By putting the growth between FFs and renewables into a perspective, it demonstrates how dependent our economies, our wealth and well beings are upon FFs.

Looking at the growth in total FFs versus renewables consumption since 1990 we should now ask ourselves if we truly are prepared to wean ourselves completely of FFs and transition into a life within an energy budget made up from only renewables (refer also figure 1).

In 2013 an estimated 20% of the world’s total energy consumption came from biomass, hydroelectricity, solar and wind.

From 2012 to 2013 global FFs consumption grew more than what total global consumption of solar and wind was in 2013 (this according to data from BP Statistical Review 2014).

It is highly likely that the Earth’s climate has been/is affected from growth in atmospheric concentrations of greenhouse gases (GHG) from an accelerated growth in FF consumption.

That has led some to start looking at the wording for fossil fuel consumption because, and as is well known, words projects a lot of power.

Some alternative references are fossil carbon (which refers to our legacy of fossil/ancient sunlight)….to “fossil f***”.

So there it is in plain sight;

We are likely damned if we pursue historical trajectories of FF consumption and damned if we don’t.

The other side of the post growth economy

You can't always get what you want

   Mick Jagger

We still wave Old Glory down at the courthouse,
And white lightnin's still the biggest thrill of all

    - Merle Haggard

Greetings

     Many of who see the current effects associated with a growing industrial economy look forward to the end of the growth.    Whether the end is brought about by climate related restriction, or the growing expense of  obtaining energy, it is hoped that the end of economic growth will also mean the end of a number of ecological  insults, including the growth of CO2 emissions. 

     Many assume (or hope) that there will be a smooth transition to a "simpler" lifestyle, with less focus of consumption, and more on community, gardening, and family.   This sounds like a big improvement, but one has to wonder whether it  is likely to be the result.  Perhaps it's worth taking a closer  look.

      Below is a nice review of some leading thinkers, including Robert Shiller, Studs Turkel, Richard Hofsteader, and "Yves Smith" of the blog Naked Capitalism  on how people react when the economy slows.

    Shiller in his piece "Parallels to 1937" points out that history shows that in tough economic times the populace generally moves to the right.  There is an increase of  nationalism, intolerance and war..

    As Smith says:

"Economists occasionally point out that societies generally move to the right during periods of sustained low growth and economic stress. Yet left-leaning advocates of low or even no growth policies rarely acknowledge the conflict between their antipathy towards growth and the sort of social values they like to see prevail. While some “the end of growth is nigh” types are simply expressing doubt that 20th century rates of increase can be attained in an era of resource scarcity, others see a low-growth future as attractive, even virtuous, with smaller, more autonomous, more cohesive communities. Perhaps they should be careful what they wish for....

From what I can tell, the proponents of a no-growth future have sorely neglected the doctrinal side of their program. If they are right about where we are headed, they need to heed Shiller’s warning. The inertial path is that 

reactionaries take charge."

A quick review of recent history shows  similar trends

"There’s the rise of anti-immigrant parties in Europe, along with actual crypto-fascist parties in places like Hungary, where the leader has openly disparaged liberal democracy. In Germany, the chancellor is expressing concern about a rising tide of anti-Semitism amid vandalism of Jewish monuments. The Middle East has seen the march of the Islamic State in the wrecked countries of Syria and Iraq, a movement that seeks to bring about a caliphate united under fundamentalist Sharia law. Russia has annexed territory in the Ukraine under Putin, a move not seen since before the Second World War causing fears of a new East/West split. A majority of people in China expect to go to war with Japan. Violent insurgencies continue to roil East Africa. In the United States, the “home of democracy,” police in Missouri shake down poor communities for cash and show up in body armor and APC’s and deploy tear gas when protests break out over the killing of an unarmed teenager. Secession movements are popping up all over due to disgust over political governance and a sense of powerlessness over out-of-control elites. And that’s before we even get to natural phenomena like California’s historic drought, rising sea levels, antibiotic resistant bacteria and the frightening spread of Ebola."

-------

Will a Shrinking Economy Lead to Chaos?

A few years back there was a book published called The Moral Consequences of Economic Growth. You can read a review of that book here. The thesis broadly stated, was that growing economies produce more inclusive social institutions, tolerance for minorities, expansion of democratic rights, lower crime rates, social mobility and justice. In contrast, shrinking economies produce situations where people are angry and fearful and full of distrust. People turn to reactionary politics and look for scapegoats to blame for their reduced circumstances. Social dysfunction occurs as people fight each other over a shrinking economic pie. The undercurrent is that growth has led to better societies in history and is in fact a necessary prerequisite for stable societies and social inclusion.

This idea is commonly accepted in many quarters. The classic case is the Great Depression, where many European countries turned to authoritarian regimes and engaged in scapegoating, of which the Holocaust is the most tragic example. But periods of economic pain have been associated with state failure in many cases before and since.

This has been weighing on a lot of people’s minds of late. We’ve seen over five years of stagnant economies across much of the world with no end in sight (as some of us predicted), and recently the political situation has seemed to be deteriorating rapidly. The fact that this comes in  2014, the 100th anniversary of the First World War, is especially ironic.

There’s the rise of anti-immigrant parties in Europe, along with actual crypto-fascist parties in places like Hungary, where the leader has openly disparaged liberal democracy. In Germany, the chancellor is expressing concern about a rising tide of anti-Semitism amid vandalism of Jewish monuments. The Middle East has seen the march of the Islamic State in the wrecked countries of Syria and Iraq, a movement that seeks to bring about a caliphate united under fundamentalist Sharia law. Russia has annexed territory in the Ukraine under Putin, a move not seen since before the Second World War causing fears of a new East/West split. A majority of people in China expect to go to war with Japan. Violent insurgencies continue to roil East Africa. In the United States, the “home of democracy,” police in Missouri shake down poor communities for cash and show up in body armor and APC’s and deploy tear gas when protests break out over the killing of an unarmed teenager. Secession movements are popping up all over due to disgust over political governance and a sense of powerlessness over out-of-control elites. And that’s before we even get to natural phenomena like California’s historic drought, rising sea levels, antibiotic resistant bacteria and the frightening spread of Ebola.

If you, like me, believe that the long era of expansion is over and that we face a shrinking of the economy thanks to the limits to growth, this is especially concerning. This topic is dealt with in this recent article by 2013 Bank of Sweden (Nobel) prize winner Robert Shiller for Project Syndicate:

The current world situation is not nearly so dire, but there are parallels, particularly to 1937. Now, as then, people have been disappointed for a long time, and many are despairing. They are becoming more fearful for their long-term economic future. And such fears can have severe consequences. There is a name for the despair that has been driving discontent – and not only in Russia and Ukraine – since the financial crisis. That name is the “new normal,” referring to long-term diminished prospects for economic growth, a term popularized by Bill Gross, a founder of bond giant PIMCO.

The despair felt after 1937 led to the emergence of similar new terms then, too. “Secular stagnation,” referring to long-term economic malaise, is one example. The word secular comes from the Latin saeculum, meaning a generation or a century. The word stagnation suggests a swamp, implying a breeding ground for virulent dangers. In the late 1930s, people were also worrying about discontent in Europe, which had already powered the rise of Adolph Hitler and Benito Mussolini. 

The other term that suddenly became prominent around 1937 was “underconsumptionism” – the theory that fearful people may want to save too much for difficult times ahead. Moreover, the amount of saving that people desire exceeds the available investment opportunities. As a result, the desire to save will not add to aggregate saving to start new businesses, construct and sell new buildings, and so forth. 

Though investors may bid up prices of existing capital assets, their attempts to save only slow down the economy. “Secular stagnation” and “underconsumptionism” are terms that betray an underlying pessimism, which, by discouraging spending, not only reinforces a weak economy, but also generates anger, intolerance, and a potential for violence. 

In his magnum opus The Moral Consequences of Economic Growth, Benjamin M. Friedman showed many examples of declining economic growth giving rise – with variable and sometimes long lags – to intolerance, aggressive nationalism, and war. He concluded that, “The value of a rising standard of living lies not just in the concrete improvements it brings to how individuals live but in how it shapes the social, political, and ultimately the moral character of a people.” 

Some will doubt the importance of economic growth. Maybe, many say, we are too ambitious and ought to enjoy a higher quality of life with more leisure. Maybe they are right. But the real issue is self-esteem and the social-comparison processes that psychologist Leon Festinger observed as a universal human trait. Though many will deny it, we are always comparing ourselves with others, and hoping to climb the social ladder. People will never be happy with newfound opportunities for leisure if it seems to signal their failure relative to others.  

The hope that economic growth promotes peace and tolerance is based on people’s tendency to compare themselves not just to others in the present, but also to what they remember of people – including themselves – in the past. According to Friedman, “Obviously nothing can enable the majority of the population to be better off than everyone else. But not only is it possible for most people to be better off than they used to be, that is precisely what economic growth means.”

Parallels to 1937 (Project Syndicate)

Schiller’s article is discussed in this important post from Yves Smith of Naked Capitalism, Are Advanced Economies Mature Enough to Handle No Growth? It asks some very important questions about the ramifications and potential outcomes of a no-growth economy:

Economists occasionally point out that societies generally move to the right during periods of sustained low growth and economic stress. Yet left-leaning advocates of low or even no growth policies rarely acknowledge the conflict between their antipathy towards growth and the sort of social values they like to see prevail. While some “the end of growth is nigh” types are simply expressing doubt that 20th century rates of increase can be attained in an era of resource scarcity, others see a low-growth future as attractive, even virtuous, with smaller, more autonomous, more cohesive communities. Perhaps they should be careful what they wish for....

From what I can tell, the proponents of a no-growth future have sorely neglected the doctrinal side of their program. If they are right about where we are headed, they need to heed Shiller’s warning. The inertial path is that reactionaries take charge.

The article makes some important points. We are much less self-sufficient than we used to be under the old agricultural economy, with ownership much more concentrated. Now we have an economy where people are dependent upon the labor market for jobs, but the labor market cannot provide enough jobs for everyone. And market fundamentalism holds that everything must be paid for individually in the market out of your own pocket rather than public goods made available collectively to all even as incomes for the vast majority of people are shrinking dramatically. Things like income and life expectancy have actually started to reverse for most people outside the technocratic elite. I'm sure the comments to the article are well worth reading in full.

This article from FireDogLake, Letting the Rich Keep All the Money, makes reference to both of the above posts, and adds:

Shiller talks about Ukraine and Russia, but it works here as well, and may make even more sense. The middle class has been deteriorating for decades, and lately the deterioration is increasing, as the 2013 Survey of Consumer Finances makes clear. Stagnation and insecurity, and the rising cost of things that matter most, food, education and medical care, make people unhappy. Mental doors long closed by social opprobrium reopen, allowing the expression of racism, virulent sexism, and loathing for the poor.

We get a similar approach in the norm-based economics described by George Akerloff in his 2007 Presidential Address to the American Economic Association:

    "Studs Terkel’s Working (1972) captures in a single volume much of the ethnographic findings summarized by Hodson. Terkel interviews people from many different occupations about their feelings about their jobs and concludes that people “search for daily meaning as well as daily bread.” (1972, p. xi). Some of the interviewees are successful in this search: like the stone mason, who cruises his Indiana county and basks in pride as he not infrequently passes his past work. At the opposite extreme is an Illinois steelworker, whose work denies him the dignity he seeks. He takes out his frustration at work by being disrespectful, and, in after hours, by getting into tavern brawls. Most workers are somewhere between these extremes, but in all cases, following Terkel, they have a feeling for how they should behave at work. It’s not just about the money; it is also about living up to an ideal about who they think they should be."

 For further reading, let me suggest this 1985 essay by Alan Brinkley, Richard Hofstadter’s The Age of Reform: A Reconsideration, which examines populism and progressivism, looking at the reactionary content of the former, and Hofstadter’s suggestion that the progressive elites were motivated by a loss of status in the aggressively money-centered capitalism that emerged from the 19th Century.

Taking the two extremes Akerloff describes, the stonemason and the steel worker, it’s easy to see how the miserable state of labor in the US today might tilt many people towards the steelworker’s responses. We can see a huge rise in racism in the responses to Ferguson, where the killer cop raised thousands of dollars to enable him to stay in hiding, and the comments about his activities ranged from acceptance to praise. Liberals rapidly ran away from the overt racism that dominates the lives of African-Americans in St. Louis to a discussion of police militarization which might affect them if their protests moved off Twitter and into action, and the use of courts to fill up municipal coffers with traffic fines, which might affect any of us in our own communities.

The most obvious thing about Akerloff and Shiller is that neither discusses the role of raw economic and political power in the creation of the current morass, not just here but around the world. The interests of the rich have always dominated, but from time to time, their rapacity was tempered to some extent by the forces of democracy or in earlier times, by noblesse oblige. That has rotted away. The justifications for obscene wealth and capture of all of the profits from production have been stripped away as well. Who thinks Lloyd Blankfein is doing God’s Work? Who thinks the jackasses who run any business are doing anything beyond lining their own pockets at the expense of everyone else? Who thinks the toads in Congress care about the day to day interests of the regular people of this country? Who thinks the Supreme Court is anything but a bunch of political hacks bent on protecting the rich at the expense of everyone else? And worse, the status of liberal academics and intellectuals is falling, especially as measured by their pay. If Hofstadter is right, the setting is ripe for trouble.

Hard working decent people can’t make a living, can’t get ahead, don’t benefit from the labor and loss of time that go into work, have no sense of security in their jobs or in their health, and don’t see how their children will have better lives. They want to blame someone, and the social barriers that kept the collective id behind bars have dropped, leaving them free to blame those they’ve always blamed: the poor and sick, the immigrant, and the liberal intellectuals who reject their values and their beliefs. The airwaves are full of Fox News and worse encouraging these prejudices. If Hofstadter is wrong, and economic woes are the moving factor, the setting is ripe for trouble.

Finally, here are some related comments from an interview with KMO of the C-Realm podcast on the Agroinnovations podcast:

Frank Aragona (host): "One thing that I picked up on and you haven't really mentioned this in a while...a while back you were making the comment, and it was almost in passing in some cases that the people who are wealthy in this society, in the United States and elsewhere around the world, are perfectly happy for people like you and I to choose poverty because then we basically become marginalized figures. We don't really have any impact on policy or economics or land management, or anything of significance."

"And so this idea that you're going to drop out and have a Permaculture farm in the middle of nowhere, while it's a lifestyle that many people choose, and I don't think it's a bad choice, it also seems like there are some advantages to that lifestyle for people who are controlling the means of production."

KMO: "Absolutely. I mean if you give up your demand that you maintain the quality of life that your parents enjoyed during the height of the petroleum-fueled expansion, that makes it a lot easier on the people at the top of the pyramid. If you are very vocal in insisting that you do notice the fact that your circumstances are greatly diminished and that you're not happy about it and that you demand that the people in charge or the people with resources do something to correct the situation, and you make a pain of it, you become a pain for them. Well, they would much rather have you go and be a happy voluntary peasant someplace."

They discuss the prevalence of the "walk away from society" attitude in some areas of the Permaculture community and why Frank Aragona thinks it may be not the most constructive attitude to take. Frank asks KMO about the fragmented future we seem to be facing.

KMO: "...In the United States in particular, we have a very strong well-funded, well organized movement to make people stupid. To make them completely ignorant, to put them into a reality tunnel that is really really at odds with the available evidence but because it is tied to people's self-worth and their cultural identities and to some extent their racial identities, they're encouraged to believe it and they're strongly motivated to believe it. And it seems like the longer this goes on the harder it is to remedy, because you get just deeper and... particularly as people become more impoverished and more immiserated they're going to cling to comforting stories which seem to validate their lifestyles and their choices and their cultural traditions and in general it just seems..."

"Like, there's this notion, and this is something that I think you'll encounter in the sort of secessionist people [with a] secessionist mindset, the people who think, 'I'm just going to go start my Permaculture farm, I'm going to drop out of the system, I'm going to radically reduce my expectations in terms of my material standard of living.' There's also an accompanying notion that says, 'the worse things get materially for the bulk of the people, the better that is for those of us trying to prompt some sort of positive transformation.' Marxists sometimes think this. But also somebody who has no affinity whatsoever with Marxism, they just think, you know, we need to transition to renewable energy, we need to transition to sustainable agriculture, we need to transition to a more enlightened mode of just being in the world; they think that as long as the middle class is comfortable that they're never going to make any change. But once they become uncomfortable, once they become deprived, then there's an opportunity for people who are pushing a positive agenda to really get their message across and have more people take it up."

"So there's this idea that as the economy gets worse, as jobs become more scarce, that this is all really good, that this is driving some positive development. And it doesn't really work that way historically. Revolutions tend to come in time of risingexpectations. And the labor movement was strongest when the economy was at its best and jobs were well-paying and there were plenty of them."

"So I think it's almost a truism, it's almost not worth saying, but the worse things get, the worse things get, I think. I see a lot of people mobilizing to make change, but as I say in a huge population, a population of 300 million people, a tiny fraction of them, a statistically insignificant faction of them, still is a lot of people and you can immerse yourself in that culture...there are a lot of examples that you can draw from a statistically insignificant fragment of the population."

http://hipcrime.blogspot.com/2014/09/will-shrinking-economy-lead-to-chaos.html