#214. Needed – a new model tin-opener

THE LIMITS OF TRANSITION

Logically considered, 2021 ought to have been the place where old assumptions go to die.

In many ways, it is.

Specifically, orthodox, money-based economic interpretation is being debunked. Current events are demonstrating that the economy isn’t, after all, entirely or even primarily a financial system. The proposition that demand produces supply is being discredited, because no amount of stimulus can deliver low-ECoE energy where that energy does not exist. In short, we’re discovering that the economy is an energy system.

Since the start of the Industrial Age, that has meant, overwhelmingly, a fossil fuel energy system. We’re in the process of encountering two constraints to the continuity of an economy built on oil, gas and coal.

The well-known constraint is that we have reached (or passed) the limits to environmental tolerance of our use of fossil fuels.

The second, barely-recognized-at-all constraint is that fossil fuels’ ECoEs – their Energy Costs of Energy – are rising exponentially, in a process that would destroy the fossil-dependent economy even if we were so unwise as to ignore the environmental issue

The consensus answer to this situation is that we must endeavour to transition from reliance on fossil fuels to an economy based on alternative sources of energy.

This, undoubtedly, is a realistic conclusion.

The snag, though, is that the consensus view combines the logical conclusion of transition with the unfounded assumption of an economy which, far from contracting, continues to expand.

A balanced assessment of the issues indicates, rather, that a sustainable economy will also be a smaller one.  

An appraisal of outcomes

At the level of theory, there’s nothing much wrong with the idea of outdated notions undergoing a mass extinction event.

Our understanding, and our ability to plan ahead, can only benefit from the discovery that the economy isn’t, after all, ‘a wholly monetary system, capable of infinite growth’, but is in fact an energy system, limited by the laws of physics as they apply to the Earth’s energy resources.

It is, after all, hard to plan effectively when your base predicates are false.  

In practical terms, though, we’re faced with something that moves beyond an inconvenient truth into what is for most people an almost inconceivable one. This is the proposition that there may be no wholly sufficient replacement for the fossil fuel energy on which the economy of today is based.

Put another way, the desirable – indeed, imperative – de-carbonization of the economy is likely to involve shrinking it as well.  

If you held any leadership position, you’d have to think long and hard before going public on any of this. Your wiser course of action might be to talk up the positives in the current situation whilst preparing, with the greatest urgency, for the new one.

Essentially, this comes down to a probability assessment of two possible outcomes.

The first is that alternative energy sources – primarily wind and solar power, but perhaps with a role for nuclear as well – can provide a complete and timely replacement for fossil fuels.

The second is that no such complete replacement exists, and that we have to plan for a smaller economy.

The latter needn’t be a disaster, so long as we prepare for it, and travel to this destination gradually.

But we have far too many growth-predicated systems and assumptions for any kind of sudden recognition to be manageable.

Needed – a new tin-opener        

A story is told about three experts shipwrecked on a desert island. Their situation seems far from desperate. The island is well-found in fire-wood and fresh water. Washed ashore with them are thousands of tins of baked beans, offering nourishing if monotonous fare. They even have saucepans, plates and cutlery.

The one thing lacking is a tin-opener.

The chemist proposes putting the tins in water which, in due course, will corrode them. Unfortunately, they would starve long before this could happen.

The physicist suggests heating the tins to a temperature at which pressure causes them to explode. This, though, would splatter beans across the island, as well as subjecting the castaways to lethal shrapnel.

Appealed to, the economist has a simple solution – assume a tin-opener

This encapsulates the consensus line as the long era of rising prosperity created by fossil fuels draws to a close. If we assume a replacement for fossil fuels, and further assume perpetual economic growth, our problems are solved.

A hierarchy of challenges

Though an expansion of nuclear energy might help at the margins, the assumed replacement for fossil fuels is electricity from renewable energy sources (REs), principally from wind and solar power.

There are two little snags with this assumption.

The first is that replacing FF with RE energy might not be possible for at least 10-20 years. A great deal – little of it good – can happen over that length of time.

The second is that it might very well not be possible at all.

There’s a hierarchy of challenges to RE transition.

Used as inputs when the wind is blowing and when the sun is shining, wind and solar power can provide electricity at costs which are more or less competitive with traditional methods of generation. The main potential snag is the cost of replacing wind turbines and solar panels when they reach the end of their productive lives, which are somewhere between fifteen and twenty-five years.

In other words, is this transition sustainable, to the point where RE capacity can be maintained and replaced without assistance from fossil fuels?  

The second stage in the hierarchy of challenges is scale. In 2020, and despite the effects of covid-induced reductions in activity, fossil fuels supplied energy totalling 11.2 billion tonnes of oil equivalent (toe), or 82% of the total. Between them, wind and solar power provided only 0.57 bn toe (4.2%). The scaling challenge is largely a matter of accessing vast amounts of raw materials whose supply is – for the foreseeable future – dependent on the use of energy from fossil fuels.

The third challenge in the hierarchy is intermittency. If REs are to move from minor energy contributors to baseload suppliers, vast electricity storage is required. This would make enormous further demands on materials, some of which may not even exist, and would, again, make huge calls on the use of fossil fuels for their supply. Accessing many of these resources would have extremely adverse environmental and ecological consequences.

Even if all of this could be overcome, the cost of storing electricity is roughly 200x that of storing oil, gas or coal. This is why, taking America as an example, whilst fossil fuel inventories are measured in weeks and months, electrical backup is measured in minutes.

This cost differential may narrow, but the physics of storage processes limit quite how far the cost of electricity storage may fall. What this also means is that, to fill storage during periods when the wind is blowing and the sun is shining, generating capacity would need to be far larger – perhaps 60% greater – than the continuity-based equivalent. Costly redundancy, no less than storage capacity, would need to be built in to a system based on intermittent energy.

Next in the hierarchy comes the challenge of density. Oil, in particular, offers a very high ratio of power to weight. This density, which provides easy portability, is what makes today’s cars, commercial vehicles and aeroplanes practical. It’s at least arguable that an insistence on replacing these with battery-powered alternatives raises the power storage problem to ludicrous heights.

The fifth and – for now – final challenge in the hierarchy is adaptability. We might, for instance, find that, whilst grid-scale storage is feasible, self-contained storage is not, making trains and trams viable, but turning mass EV use into a pipe-dream.

Likewise, we might have enough continuous power to run necessary systems, but not to support much of what we now think of as “technology”. It might turn out that essential goods and services can be supported, but that many non-essentials (discretionaries) can’t.

The permutations are endless – but the potential supply of non-fossil energy, most emphatically, is not

As well as assuming the tin-openers of sustainability, scale, continuity and density, then, the idea of seamless and complete transition assumes some resources that cannot be provided, and others that, though they can, would make enormous demands on legacy energy from fossil fuels. All and more of this legacy energy is already accounted for by the continuity requirements of consumption and capital asset replacement. 

A new tin-opener is needed – but technology can’t supply it

Let’s be quite clear about the necessity for transition. As mentioned earlier, continued reliance on fossil fuel energy is a non-starter, for two reasons, both of which are so important that they merit reiteration.

First, there is the undoubted constraint of environmental tolerance.

Second, there’s the equally real issue of the rising ECoEs of oil, gas and coal. As well as wrecking the environment, continued dependency on fossil fuels would – assuredly, and rapidly – wreck the economy. The latter process has already started to happen, albeit thinly disguised, so far, behind increasingly desperate and harmful exercises in financial gimmickry.   

Prophets of seamless transition take refuge in the supposed alchemy of technology – much of it simply extrapolated – whilst ignoring the obvious (though inconvenient) fact that the scope for technological progress is bounded by the limits of physics.

Where wind turbines are concerned, Betz’ law states that wind turbines cannot capture more than 59.3% of the kinetic energy of wind. Current best practice has already reached about 45%, leaving no scope for a quantum (rather than a modest and gradual) increase in efficiency.

Similarly, the Shockley-Queisser limit determines the maximum theoretical efficiency of photovoltaic panels. This limit is 33.7%, not very far ahead of current best practice of about 26%. Again, progress can be made, but no quantum leap in efficiency is possible. Both of these issues are discussed in an instructive article published by the Manhattan Institute, which also explains limitations to the potential capability of batteries.

Not content with assuming resources (and their energy input requirements) which do not exist, then, cornucopian transition theory also requires us to assume that technology facilitates the abolition of the laws of physics.

Nil desperandum

It was a famous dictum of Sherlock Holmes that “[w]hen you have eliminated the impossible, whatever remains, however improbable, must be the truth”.

Objective assessment of the situation suggests that both (a) fossil fuels continuity, and (b) a cornucopian complete replacement of fossil fuels are impossible. What remains is the seemingly-improbable – and in many quarters the almost unthinkable – reality of a smaller economy.

To recap, we’ve noted the imperative of transition – an imperative imposed by environmental considerations and by ECoE trends – but we’ve also noted that there are limits to what transition is capable of delivering.

What this means is that we have to bend every effort to the achievement of transition, but that we must also accept that transition cannot maintain the economy at its current levels of size and complexity.

The energy-based SEEDS economic model produces case-studies which scope the issues involved. 

The central-case assumptions used by the SEEDS economic model project total energy supply 6% higher in 2040 than it was in 2020. Within this total, fossil fuel supply is projected to be lower by 3%, the combined contributions of nuclear and hydro-electric power are expected to increase by 21%, and a 2.4-fold surge in supply from wind and solar generation is anticipated. On this basis, energy supply per person would fall by 10%.

Over the same period, though, ECoEs are expected to rise from 9.0% to 18.1%, meaning that surplus (ex-ECoE) energy availability per capita would slump by 19%. This is reflected in a corresponding decrease in prosperity per person.

Putting practicalities on one side for the purposes of theoretical analysis, the complete replacement of fossil fuels with wind and solar power might deliver an overall 2040 ECoE of, at best, 15%. On this basis, surplus energy supply per person would still decline, but prosperity would fall by only 16%, rather than by the 19% projected under the central case.

Two important conclusions emerge from this assessment.

The first is that accelerated investment in RE capacity can blunt the rate at which prosperity declines.

This underscores the case for transitioning to REs at the fastest practicable rate.

The second is that, however we tackle the energy crisis, prosperity will be lower in 2040 than it is now.

This means that we need to temper commitment to transition with a realistic appraisal of what transition can be expected to accomplish.    

This changes the central question from ‘must we live with less?’ – about which there is no choice – to ‘how can we live with less?’

Re-design – not re-set

The much-vaunted concept of an economic ‘re-set’ is predicated on the idea that an economy which continues to grow can be made both more equitable and more efficient, as well as being made sustainable.

Unfortunately, the essential predicate of growth is fallacious, in that we cannot reasonably expect – still less assume – continuity of growth in a post-fossil economy.

This implies that what we need isn’t re-set, but re-design.

At a later stage we may revisit the taxonomy of de-growth but, for now, we can note that a contracting economy implies a process of de-complexification. The range of products and services available will narrow, and methods of supply will be simplified as producers try to work around the adverse effects of falling utilization rates and the loss of critical mass. The simplification process will involve substantial de-layering.   

The brunt of contraction in the private sector will be borne by sectors providing discretionary (non-essential) goods and services. Over time, we should assume that capital will be diverted towards sectors which supply necessities.

There are likely, also, to be sectors which expand, even as others are contracting. There may be a significant role to be played by venture capital and sovereign wealth funds in identifying and promoting activities whose potential has yet to be recognized by markets which remain fixated on “growth”.

Government activity, too, can be expected to contract, though less rapidly than the private sector. A trend already set in motion by the imperative of transition points towards reduced resources available to government, and a corresponding need to refocus questions of priority.

The critical question for policymakers now might be that of how we ensure that the essentials are available and affordable for everyone.

As so often, though, individuals will be called upon to accomplish much of the change if we’re to move to a system that, whilst being cleaner and more sustainable, is also likely to be smaller than that of today.

At all levels – households, government, business and finance – the challenge will be that of transitioning to an economy that, whilst smaller, need not necessarily be worse than the one built on oil, gas and coal.    

 

543 thoughts on “#214. Needed – a new model tin-opener

  1. ‘……these ideas can produce fuel but always at a much greater cost and complexity than just sucking oil out of the ground and refining it, they’ll never be able to support the size of our current economy.’

    And what is easily forgotten or almost always not mentioned by the MSM is how the population explosion momentum is still rumbling on right now, even if the global average rate is slowing down. If we are ‘burning our resource candle at both ends’ at current population levels, what about the irreversible damage from the overshoot, when the resource pie is shrinking as fast as the % of population over carrying capacity is growing?

    Add that together and the shortfall in standard of living from the disparity is double, so you have a plunge in quality of life. Nobody states the obvious, that most people cannot afford to have more than 1 or 2 children, yet when you see sad clips on the MSM news on some crisis, it’s often ”Poor mrs X, her husband can’t get work and their 6 children are hungry”. Even four surviving children is a doubling of the parental population adding to the whole period when the preceding generations are still around and needing resources until they die.

    If an organisation is judged on the results of what it was designed to achieve, why do we have so many of these massive entities still around after decades with the problem they were supposed to solve bigger than before? Whether UN or private, global or whatever, they’ve all failed and there should be discussion on if the resources could be better used trying another way. Most massive earthly problems have poverty as the root cause and often overpopulation is in turn the cause of that. If I Iearned that at school, it’s not a mystery or complex issue, so we are at a point where we no longer have the luxury of avoiding dealing with social taboos, if people are desperate and can’t support themselves, they can’t afford to reproduce this problem because the planet can’t either. You can be vilified for stating these facts, but it just doesn’t change that it is the inescapable truth.

    • @FI

      You’re quite right about the social taboos relating to population planning and control, but unfortunately billions of people belong to cultures and religions where challenging the taboo could cost you your life. Now that’s a real problem when it comes to the kind of sweeping socio-economic change that’s required.

    • 100% correct. Population denial is as bad as consumption denial and climate denial in my opinion, if not worse, since population is a primary factor of ecological consumption.

      For me, this strikes at the heart of the problem and why poverty/frugality needs to be reassessed within a Degrowth/ energy descent environment.

    • We should keep in mind that the “population problem” is mostly relevant to developed countries and middle income countries where most of the carbon emissions come from. The poor countires of sub-Saharan Africa, which have the highest population growth, have not contributed much at all to atmospheric carbon. Their per capita and total global environmental impact is orders of magnitude below that of North America and Europe.

      China’s population is about to decline rapidly and India now has a population growth rate of 1% (the US is 0.4%). This is good, but not good enough. Rapid population reductions are only really needed in affluent countries. They’re the one’s sucking in energy and resources from around the world at unsustainable rates. At present, the Global South is relatively harmless.

      In sum, the Global South needs to stay poor and stabilize its population and the Global North needs to either get poor rapidly or reduce its population rapidly. Getting poor will be easier than reducing population, but neither is politically popular.

    • Whilst I broadly agree with you Joe and the reason why land grabbing, resource grabbing and forced migration are a direct product of overpopulation in rich nations, when land use change is taken into consideration, population growth in poor nations is a particular problem too considering that each person needs between 5-10 acres to survive.

      https://www.primalsurvivor.net/much-land-need-self-sufficient/

      In my mind this needs to include agricultural land, dwelling land, storage areas, ecosystem services and grey infrastructure.

    • Joe,
      Re: “total global environmental impact is orders of magnitude below that of North America and Europe.”

      Environmental impacts includes biodiversity loss, desertification, river flows and pollution, aquifer decline, monocultures replacing indigenous flora, etc. Nature doesn’t give a hoot about p/capita. Damage is damage.

      The only reason the poor have low throughput is that they can’t manage to increase it. It is involuntary simplicity. If the top 5% of global consumers disappeared tomorrow, the next most able would take their place on the demand side. The blame game isn’t a solution.

      Refresher:
      https://www.ecologycenter.us/ecosystem-theory/the-maximum-power-principle.html

  2. @ Steve Gwynne

    The Green Alliance Blog censored my post. It has disappeared. I’m going to blast them on social media and on several lists containing many ecologists, other scientists, and system thinkers. My post was civil and accurate.

    • @houtskool

      Re: “Poor bastard. Maybe you should become ‘more to the point’.”

      If you are addressing me as the poor bastard, you are grossly mistaken. I’m quite comfortable. If you are addressing the author of the article, it would be useful if you would elaborate. Your sentence is meaningless without making that effort.

  3. Tim Jackson (in Britain) on the Carbon Budget for Britain
    “”On a territorial basis, as reported to the IPCC, UK per capita emissions are currently 16% higher than the global average per capita emissions. On a consumption basis, taking into account the emissions embedded in traded goods and those from international aviation and shipping, UK per capita emissions are 70% higher than the global average.”

    “The question of an appropriate remaining carbon budget for the UK depends on both arithmetical assumptions and the ethical position taken in relation to the UK’s current level of emissions, its historical responsibility for greenhouse gas emissions and the rights of the poorest countries in the world to develop their economies and allow their citizens a decent quality of life.”

    https://cusp.ac.uk/themes/s2/zero-carbon-sooner-update/

    I suppose it is necessary for somebody to jump through hoops trying to come up with some metric for carbon reduction which satisfies some rather arbitrary ‘rules’ proposed for the legalistic framework of the United Nations. But this all strikes me as ridiculous. IF fossil fuels are necessary for poor countries to “allow their citizens a decent quality of life”, then why would anyone believe they are not also essential in the UK, which is obviously post-industrial and now makes very little but imports a whole lot of stuff? Is the assumption (which would be clearly mistaken) that installing a post-carbon infrastructure is something permanent, like the pyramids? Looked at objectively, it seems to me that what we have to do is stop the ‘mine and burn’ cycle and substitute a cycle using photosynthesis…which has now operated for a few billion years.

    So my suggestion is to look squarely into the face of a system built on photosynthesis. All else is delusional. As a first approximation, how would Britain fare if all imports ceased? If the answer is that such an assumption is unthinkable, then it is all blah, blah, blah.

    Don Stewart

    • Don. If all imports to Britain ceased, then a third of the population would die, especially within larger cities like London.

      However, I agree there is a strange contradiction/paradox in terms of fossil fuel derived imports from developing nations which are simultaneously good for the developmental needs of the exporting poorer countries but are also bad because Britain is importing them.

      We are entirely blamed for the emissions but are not allowed to take any credit for helping poorer countries develop and nor are poorer countries expected to be accountable for their exported emissions.

      In other words, ecological politics laid bare.

      Probably one of my sophisticated mind maps is in the pipeline because the complexity of overlapping energy paradoxes is simply way way too much for me to process but where does one even start! I’ll need to get hold off lots of A0 sized paper or rolls of cheap wallpaper.

    • @ Don Stewart
      Scale and Timeframes are important. I doubt that Imports will ever cease at some level. International trade has been going on for centuries, well before industrialisation was even seeded.

      However, taking your point as I think it was intended, in simple terms Britain would face more or less immediate collapse if imports were shut down quickly. Forget the cheap trinkets and electronic gizmos, we can do without them. What we can’t do without for more than a few days (if not hours) is the vast amounts of food, and the vast amounts of energy that we import.
      Hell, these days it’s not just coal, oil, and gas we import, but increasing amounts of electricity too. The UK has been expanding its network of electrical interconnectors with the continent to “balance out” supply and demand mismatch with RE expansion.

      For me, it’s a rather ominous and alarming state of affairs. Meanwhile Boris “puffs out his feathers” and boasts about UK leadership in the race for zero emissions. It looks like a race to the bottom.

    • it strikes me that the antithesis of neo-liberal globalisation is autarky,
      I think we need to about face and keep heading in an autarkic direction until we hit sustainability,
      it would be an amazing stimulus to the UK domestic economy,
      if Brexit had been sold on the back of autarky I would have been out in the street with banners and a megaphone!
      if we could get the other Commonwealth countries pursuing autarky but arrange a reciprical agreement to trade that which was impossible to grow or produce in our respective economies then we’d form a pretty slick independent sustainable economic bloc in our own right,

      I think it’d be fun going back to seasonal foods and getting excited because the bitter orange ship was due in and marmalade season was starting,
      365 day a year markets for exotic produce like pineapple and banana have taken all the fun out of it.
      I’ve tried the strawberries from Egypt in mid winter and they’re grim,
      I’d rather have the annual treat of British strawberries in summer and run on strawberry jam for the rest of the year.

    • Lol, I campaigned for Brexit pretty much on that platform. That is, acquiring the necessary independence to create a sustainable, resilient and sufficient future for Britain.
      https://goodlife.leeds.ac.uk/

      I was very active and with the aid of ecological footprint metrics converted many minds.

      With that battle won, in my mind, the big battle has been with the libertarian right. That has been and still is tough but the pandemic has helped to shift the balance towards more national sustainability, resilience and sufficiency.

      The main difficulty lies with national population overshoot and the resulting maze of import dependencies and the economic and ecological cost/benefit calculations arising from these import dependencies alongside the energy equation.

  4. Economic impacts of achieving a net-zero emissions target in the power sector.

    With increasing concerns about climate change, calls for the adoption of net-zero carbon emissions targets are rising. Achieving this target necessitates a radical decarbonisation of the electricity system, including the shut-down of currently operating high-carbon energy infrastructure. In the light of this background, this paper develops a novel system dynamics energy-economy model to explore the long-term macroeconomic effects, and changes in the power system costs of different low-carbon electricity transition scenarios.

    Using the UK as a case study, our simulations demonstrate that there is no win-win policy solution. The paper argues that while the early retirement of a certain amount of brown energy infrastructure is required for the UK to achieve its emissions target, the amount should be determined with care in order to manage the electricity system costs and prices. By using an implicit carbon price, the paper finds that certain trajectories lead to lower power system costs while achieving the net-zero target.

    https://cusp.ac.uk/themes/s2/paper-sh-net-economic-impacts/?mc_cid=49a8181ced&mc_eid=df181d3560

  5. Modelling energy transition risk: The impact of declining energy return on investment (EROI).

    A number of papers in the field of net energy analysis have argued that declines in energy return on investment (EROI) could lead to increasing energy prices and a fall in economic growth. This paper develops a model (TranSim) which can simulate the economic and financial implications of an energy technology transition involving a reduction in EROI, by combining the stock-flow consistent (SFC) approach with an input-output (IO) model.

    The TranSim model has the following key features. First, it includes three firm sectors, that produce energy, capital, and other (non-energy, non-capital) goods. Second, an IO model and an Almost Ideal Demand System are integrated into the SFC model. Third, capital vintages have embedded levels of labour productivity and inter- mediate good requirements that depend on the economic conditions in the period the vintage was produced.

    Simulations are characterised by an initial increase in output (due to higher investment), followed by periods of recession and below trend growth (due to price inflation and changes to the functional income distribution).

    The work shows that the negative effects associated with the transition—recession, stagnation, stagflation, increasing inequality and asset stranding—are positively related to the capital intensity of green energy production and reductions in EROI.

    Policy makers should pay close attention to the overall EROI of the entire energy system when determining energy policy. If significant reductions in EROI are unavoidable, then policy could be used to mitigate some of its negative economic effects.

    https://cusp.ac.uk/themes/s2/paper-aj-tj-energy-transition-risk/

  6. Modelling the macroeconomics of a ‘closing the green finance gap’ scenario for an energy transition.

    Journal Paper by Sarah Hafner, Aled Jones, Annela Anger-Kraavic and IreneMonasterolo
    Environmental Innovation and Societal Transitions, Vol 20 | November 2.

    Summary
    Reaching the UK net-zero emissions target translates into substantial investment requirements into low-carbon energy infrastructure. However, investors are currently not investing sufficiently in renewable energy capacity, leading to the so-called green finance gap. Current energy-economy models generally do not reveal the macroeconomic implications of policies aimed at scaling-up green finance for energy transitions. In light of this background, Sarah Hafner et al extend the energy-economy Green Investment Barrier Model with the insights from a systematic literature review to investigate the macroeconomic implications of a policy scenario designed to close the green finance gap in combination with and without a scenario to decarbonise the power sector.

    https://cusp.ac.uk/themes/s2/green-finance-gap-economics/?mc_cid=49a8181ced&mc_eid=df181d3560

  7. The implications of the declining energy return on investment of oil production
    David J. Murphy
    Published:13 January 2014https://doi.org/10.1098/rsta.2013.0126

    Abstract
    Declining production from conventional oil resources has initiated a global transition to unconventional oil, such as tar sands. Unconventional oil is generally harder to extract than conventional oil and is expected to have a (much) lower energy return on (energy) investment (EROI). Recently, there has been a surge in publications estimating the EROI of a number of different sources of oil, and others relating EROI to long-term economic growth, profitability and oil prices. The following points seem clear from a review of the literature: (i) the EROI of global oil production is roughly 17 and declining, while that for the USA is 11 and declining; (ii) the EROI of ultra-deep-water oil and oil sands is below 10; (iii) the relation between the EROI and the price of oil is inverse and exponential; (iv) as EROI declines below 10, a point is reached when the relation between EROI and price becomes highly nonlinear; and (v) the minimum oil price needed to increase the oil supply in the near term is at levels consistent with levels that have induced past economic recessions. From these points, I conclude that, as the EROI of the average barrel of oil declines, long-term economic growth will become harder to achieve and come at an increasingly higher financial, energetic and environmental cost.

    https://royalsocietypublishing.org/doi/full/10.1098/rsta.2013.0126

  8. Bearing in mind Dr Tim’s view of the future and the Tyee article saying that is the future that is needed, can we now sit back and enjoy the blah blah of all those trying to save the world without realising that Gaia is doing it for us?! And continue to be guided by Tim on what happens next?

    • Thanks Barry, much appreciated.

      As things stand, I’m planning to use the next article to start setting out economic projections using SEEDS and the energy interpretation of the economy.

      We can, of course, always engage in debates about “our” (energy) way of seeing things versus the “orthodox” (money) line on the economy, and there’s a lot to be said for this, especially at a time when the orthodox interpretation is falling apart.

      Ultimately, though, I’m an analyst rather than a campaigner. So I think there’s a case now for prioritizing interpretations of how things can be expected to go from here.

    • Certainly what does need attention (perhaps not as an article but as a debate) and is a particular blindspot in Degrowth literature generally is the economic dynamic between a decreasing wage/income economy with millions becoming unemployed and increasing prices due to supply shortages, widespread debt/mortgage defaults and the collapse of profits in order to maintain existing infrastructure.

      Thus, not only how will widespread poverty, unemployment and possibly homelessness be managed but how will a radical contraction of tax revenues be able to provide a sufficient social security safety net and decent array of public services to support Degrowth via a planned or unplanned energy descent.

      Unfortunately, yet again, these more complex Degrowth problematics are not seriously analysed in the Tyee article other than referring to more human muscle, the use of horses and the deployment of community energy.

    • Steve
      I believe he says that one third of workers will be employed in the food sector. That’s a huge increase in jobs…but not necessarily highly paid jobs. He also doesn’t define any path to take land away from rich landlords and give it to peasants. In his World Made By Hand books, Kunstler gave a place to nobility with estates.
      Don Stewart

    • Thanks Don. Back to the land subsistence living might be a more accurate depiction. Not that I am averse to that since I am already doing it but it is hard tedious work with no income. Any income is derived from gardening or groundwork jobs which either rely on others having an income or the maintenance budget provided by the local authority via our annual allotment rents.

      Presumably, if the economy contracts, all forms of money creation/supply contracts and with a much higher human population, that means a reversion to the 1940s, not the 1960s.

    • @Steve Gwynne
      The 1940s was the best decade ever for me….Seriously, I do think a lot about my very early childhood and the utterly different way we thought about things. For example, we never considered buying a Christmas tree…we went into the woods and cut one. Now we are bombarded by emails advertising 50 percent off on plastic trees. Children routinely wore hand-me-down clothes to school. Now, a lot of children are fashion plates.
      Don Stewart

    • Good points Steve.
      I would also add to that, how the banking system is going to function in a shrinking economy. Where is all the interest on loans going to come from? Bank created money may no longer exist.

      Regarding government tax revenue, I’m a believer in the MMT explanation of government financing, but I can only see MMT working in a growth economy.
      In a contracting and then sustainable economy, government spending would have to be remove by an equivalent amount of tax (to allow for more government spending) or else the “defecit” would cause inflation.

    • Thanks John. I’ve incorporated your viewpoints, especially the MMT points, into my growing list of Degrowth problematics!

      There is no doubt in my mind that societies will be differentiated between low, medium and high impact that is cross referenced with a spectrum between essential and discretionary. Whether this operates within a competitive environment or a cooperative environment remains to be seen.

      The blah blah blah between the green populists and the bright green elites does not bode well for the latter.

      In my mind, without these Degrowth problematics resolved, at least in theory, it is no wonder bright green elites are trying to buy some time with the technological aspirations of Net Zero.

  9. An unavoidably entwined, related problem to energy exhaustion leading civilisational collapse, is freshwater supply exhaustion. We have had a similarly cavalier attitude to our planetary water stocks on a scale that is breathtaking, (look up the Aral Sea, spoiler, it’s no longer a sea) and yet still somehow not big enough for us to learn from those mistakes even when our lives depend on it.

    So most people also are oblivious to the fact that our current numbers as well as way of life depends heavily on fossil water reserves that we plunder as if there was no problem. Now not only are the easiest sources already exhausted, leading to local disasters, but conflated with unaffordable energy, the more difficult sources will become unattainable too. Industrial agriculture is a huge part of how ~7.5 billion people can be alive today and this happens mostly in a few select places in the world totally dependent on massive FF input at every stage, including irrigation.

    https://thesenecaeffect.blogspot.com/2021/04/peak-water-update.html

  10. Well worth a read in my opinion.

    Sumpton lists the criteria that will likely lead to the subtle redefining of democracy into autocracy using climate change as a case study in which he acknowledges that climate change action will inevitably reduce economic prosperity.

    Obviously climate change can be replaced with unplanned energy descent or the adverse impacts of ecological overshoot generally.

    https://unherd.com/2021/11/when-fear-leads-to-tyranny/?tl_inbound=1&tl_groups%5B0%5D=18743&tl_period_type=3&mc_cid=3c5ee311db&mc_eid=e744d92f00

  11. because I feel dismayed I also feel a fool,
    this last chance saloon, minute to midnight, pivotal moment in history, the Glasgow COP26 talks, has fizzled out to nothing with barely a mention on the front pages,

    the Grauniad does have an article pointing out that only 1% of humanity is grossly over consuming energy and materials,

    https://www.theguardian.com/environment/2021/nov/05/carbon-top-1-percent-could-jeopardise-1point5c-global-heating-limit

    yet these 1% are the ones we are supposed to accept cavorting in front of the press and negotiating our futures,
    it truly is the fox in charge of the chicken coop.

    DavCOPos has been a facile pantomime and now it’s back to BAU with nothing changed.

    • But much has already been accomplished. “Before this COP there was a lot of scepticism whether or not it would deliver anything,” said Fatih Birol, head of the International Energy Agency.

      “But I have some very good news: my colleagues calculate that if all the pledges over the last few days are implemented, including methane, the world temperature increase could be limited to 1.8 degrees. This is an achievement to celebrate,” he said.

      It is almost a miracle.

      https://www.telegraph.co.uk/business/2021/11/05/coal-power-consigned-history-glasgow/

      Global finance is recalibrating as we speak. However what is achievable in terms of energy capacity and the sustainability of discretionary spending is another question. All else will follow!

    • Steve,

      Much has been promised, but when I see the Keeling Curve straighten out I will believe that something has been accomplished. More accomplishment will be evidenced by its leveling off. If we are so fortunate to see that curve turn down, a great deal will have been accomplished indeed. Getting back to 350 ppm will be a miraculous accomplishment.

      Right now we’re still in the “blah, blah, blah” phase. Nothing has been accomplished, yet.

    • Steve,
      the IEA are the people that filled their reports with speculative technology like CCS BECCS CCUS to use as accounting tricks,

      this wasn’t progress, it was bullshit.

    • Matt. The imagination uses multiple pathways in which to explore different options. Some are shown to be cul-de-sacs, others are shown to be worth exploring more deeply with further imaginations.

      Most inventions and their offshoots arise from this process.

    • Steve,
      you need to recognise when a ‘deus ex machina’ is being used to try and resolve an unresolvable problem,

      https://en.wikipedia.org/wiki/Deus_ex_machina

      it’s ok to suspend disbelief and use some improbability to resolve a plot line in a theatrical production that has written itself into a corner,
      but when you do it in real life with real life consequences you are heading for a world of pain.

    • Matt. Since when did humans not try to resolve ‘unresolveable problems’ whilst still remaining grounded in energy-economic realities.

      It is not like we are still operating on the logic of Empires, far from it. Each nation has a responsibility towards itself and the greater whole.

      Are you suggesting ‘we as a species’ doesn’t build out commercially viable renewables and expand and electrify public transit systems whilst investing in the research and development of other alternatives to carbon energy.

      Your so-called ‘deus ex machina’ is simply a species building out an alternative energy system with a yet unknown capacity to renew itself. However in your application of that metaphor you consistently switch from the present to the future without appreciating that future limits to EVs is hard wired into the system.

      What you are witnessing is the democratic mechanics of the Market in operation including expectation management and the intention redirection of investment through regulations and aspirational goals.

      John Michael Greer would call it magic, or the imaginative application of free will
      https://unherd.com/2021/10/will-magic-defeat-americas-elites/?tl_inbound=1&tl_groups%5B0%5D=18743&tl_period_type=3&mc_cid=d123391a31&mc_eid=e744d92f00

      but you seem to take it all very ​literally.

      If you think politics and the operation of the Market should be applied in a hard/autocratic literal way, what do you propose instead?

      Zero carbon and radical degrowth leading to unimaginable economic destabilisation and social unrest 🤔

      The energy/economic/ecological/political reality is that we are caught between the devil and the dark blue sea as a result of a progress trap. We either go backwards towards economic destabilisation and social unrest or go forwards and navigate the myriad of paradoxes whilst recalibrating our societies towards a reduced energy and material capacity in the hope that the economy can remain relatively stabilised and therefore avoid social unrest.

      The hard left actively wants destabilisation and social unrest in order to undermine confidence in capitalism and mobilise a socialist revolution. The hard right and other Full Carbon brown interests will form a unholy alliance with this political tactic in order to undermine confidence in Net Zero.

      I personally have more confidence with the centre of Net Zero than I do with the extremes of Zero Carbon and Full Carbon.

      You might beg to differ. That’s politics!

    • Certainly a good piece and it is good that scientists are speaking above the parapet beyond self-interest. It will help to better educate people about the realities of what we face, especially if technologies are unable to deliver and especially if technologies, such as EVs for example, can only be built out to a limited degree.

      However, their piece doesn’t in itself disqualify Net Zero as a concept or a strategy. It simply argues that the current policy content of Net Zero is flawed. This means their argument is that Net Zero should have more serious policies regarding carbon energy reduction included.

      If however, their position is a political attack on Net Zero in favour of Zero Carbon, then they need to refer to a comprehensive Degrowth strategy that can mitigate against an economic depression, mass unemployment, mass debt defaults and a massive reduction in tax revenues with no prospect of future economic growth to pay back public debt.

      The link they provided offered nothing but the usual climate justice rhetoric.

  12. Food Crisis
    “I’m afraid we’re going to have a food crisis…To produce a ton of ammonia last summer was $110. And now it’s $1,000. So it’s just incredible.”
    –Svein Tore Holsether, Yara CEO

    And so…I suggest that the skeptics need to search out my previous posts on the biology of nitrogen fixation, but society followed the Green Revolution Pied Piper. And all those promoting Perpetual Population Growth need to have a Come to Jesus moment.

    Don Stewart

    • it’s not helpul trying to reduce things to a political football match,

      politics is all about ideology and ideology is mostly about wishful thinking,

      we are dealing with issues that are above and outside of the narrow constraints of politics, they require an apolitical approach,

      we can no longer afford the luxury of ideology.

    • I’d disagree Matt.

      The politics of climate change/net zero/ECoE/EROI/Degrowth deserves as much analysis as climate change/net zero/ECoE/EROI/Degrowth itself.

      In my opinion, denying politics as ideological blah blah is simply a form of politics that seeks to promote one’s own political perspective at the expense of others.

  13. Here are two quotations from Greta Thunberg which neatly encapsulate the difference between advocacy and analysis.

    First, “[t]he people in power can continue to live in their bubble filled with their fantasies, like eternal growth on a finite planet and technological solutions that will suddenly appear seemingly out of nowhere and will erase all of these crises just like that”.
    (My emphasis).
    (source: https://www.bbc.co.uk/news/uk-scotland-glasgow-west-59165781)

    I agree with her, especially on the fallacies of infinite growth and fixes through the magic of technology.

    However, “Thunberg has avoided getting into the detail of what action should be taken, saying “it is nothing to do with me”.”
    (https://www.bbc.co.uk/news/world-europe-49918719)

    As I see it, this “nothing to do with me” approach to ways and means isn’t enough.

    This is why we need analysis as well as advocacy.

    • Indeed; this is a key point and it is disappointing to see her avoiding all the follow-up questions. This is exactly the point of Marga Mediavilla’s Open Letter to Fridays for Future, where Mediavilla states,

      “I think that, as you say, it is time for action in the face of the climatic emergency, but I also think that it is necessary to be very clear about what kind of action is necessary.

      And so, in that sense, there is one thing that worries me. In your speeches on climate change you can find demands for very ambitious decarbonization objectives proposing, for example, the replacement of all fossil fuels by 2050 or 2100. According to my knowledge and according to the studies we are making in our group, such ambitious goals as these would require very drastic measures which go far beyond the usual proposals such as investment in renewable energy, electric vehicles or energy saving and efficiency.

      Therefore, I think we have to be very realistic about the decarbonization objectives and the measures we demand in order to achieve them. If we do not, our leaders can happily silence the protests, by using exclusively technological cosmetic measures that do not solve anything, and the hopes of many young people with good intentions may be frustrated.”

      https://www.15-15-15.org/webzine/2019/12/22/open-letter-to-fridays-for-future-its-time-for-action-but-what-action/

    • Certainly in my mind, advocacy without policy is merely rhetoric which seeks to set a moral background.

      Greta is no doubt counselled to avoid policy because her Zero Carbon rhetoric is not only groundless in the face of energy-economic realities (especially in terms of carbon energy derived non-renewable renewables) but would, in real politics terms, have to be backed up with a comprehensive Zero Carbon Degrowth strategy that included State-centric resolutions for mass unemployment, mass debt defaults, homelessness and widespread poverty and hunger.

      Within this context, the role Greta is playing with her Zero Carbon green populism is to counteract/counterbalance the more business as usual Full Carbon brown neoliberals.

      This makes the centre ground of climate politics Net Zero with maximum carbon reduction and Degrowth positioning itself on the left and gradual carbon reduction and technological fixes positioning itself on the right.

      In this respect, Greta, XR and other radical green perspectives have radically contracted the political space on the left to the extent that even moderate GND policy perspectives are centre and centre right and therefore, like critical race theory and critical gender theory, Zero Carbon climate activism has made the left virtually unelectable.

      Give them enough rope and they will hang themselves is a politically astute conservative strategy.

    • @Steve Gwynne,

      You’re partly right with, this makes the centre ground of climate politics Net Zero with maximum carbon reduction and Degrowth positioning itself on the left and gradual carbon reduction and technological fixes positioning itself on the right, but I see the left promoting Net Zero, the center promoting gradualism/technofixes and the right promoting business as usual.

      If the center had held soon after Limits to Growth, we might have succeeded, but the right has always won enough elections (at least in the US) that gradualism never had a chance. It is now far too late for gradualism.

      “Radical degrowth leading to unimaginable economic destabilisation and social unrest” is now unavoidable, either from deliberate policy changes, from internal failures of our over-complex modern civilization or, in the longer run, from environmental collapse. I continue to hope for internal failure, but it’s more probable that we’ll just muddle along until environmental collapse, which will be worst of all.

      Acknowledging the inevitability rapid economic decline is the first step in mitigating, at least a tiny bit, the worst effects of that energy/economic decline on the general population of the rich world. It’s far to late to save everyone. Extreme overshoot means most people who cannot grow their own food are eventually facing starvation, but there are certainly things that might be done to mitigate collapse.

      Unfortunately, mitigating collapse requires a command economy and policies that are anathema to left, right and center. Extreme rationing is just a start. And avoiding war, even nuclear war, is going to just add to the difficulties. It’s difficult to look realistically at the next few decades without shuddering in fear and then sighing in resignation. No wonder Greta’s upset.

    • Thanks Joe.

      Yes, the Labour Party is wedded to Net Zero 2030
      https://labour.org.uk/manifesto-2019/a-green-industrial-revolution/

      whilst the Conservative Party is wedded to Net Zero 2050
      https://www.gov.uk/government/publications/net-zero-strategy

      These are the centre-left and the centre-right positions.

      The socialist left are Zero Carbon and the libertarian Right are Full Carbon.

      Obviously these are simplistic approximations.

      Unfortunately, the Socialist Left gets more airtime than the more liberal centre left and when Labour do, they only say the government isn’t doing enough without clearly articulating their contrasting Net Zero 2030 position. Hence they are often conflated with the Zero Carbon position.

      That’s my perception anyway.

      Global Net Zero is so far financing over $2 trillion in investments. Unplanned degrowth is not going to happen anytime soon even if the ECoE is rising. Which is why emissions will be going up before they come down.

      Building out renewables and alternatives is going to keep the capitalist machine rumbling on until the next COP at least and quite possibly until 2030.

      This is obviously a concern regarding climate change, biodiversity loss and biospheric degradation but we will just have to see the impact of mitigation measures, especially in terms of nature based solutions, any shifts towards public transport systems, scooters and cycling, remote working, reductions in consumption through product longevity and repairing, long haul flights etc etc.

      Obviously much hangs on heavy coal users like China, India, Poland, Germany, Indonesia, Phillipines and the US decarbonising their economies and whether cultural shifts towards more cooperative frameworks can be activated from the local to the global.

      I’m not sure if renewable technologies were advanced enough when the Limits to Growth was published so would have required a transition towards agricultural livelihoods with a much reduced electricity capacity considering the extent to which coal was being used. At least in Britain.

      Again, reduced carbon energy would have needed an autocratic government to implement a form of neo-feudalism.

      The same pretty much applies today in my opinion but instead it would be a State managed form of corporatised neo-feudalism. Probably a majority of people would prefer a descent into organised chaos rather than revert back to serfdom.

    • Joe,

      It must be great to know the future with such certainty. To know where and when things will break down…I’m a pessimist too. However, not all locations are alike. Geography, demography, technology, climate, biodiversity…vary.

      I can’t convince our son and his wife to let me set them up with a small farm,(15 acres or so) with good spring water, a 10 acre woodlot, and an off the grid capable, super insulated house. Solar and wind technology, sunken greenhouses too. They like their neighborhood…1/3 acre, 3/4 mile from town center of Northampton MA. Maybe they and the grandsons will be fine, and I’m wrong.

      She’s a hospitalist MD, Internal Medicine and Pediatrics, so will have a job as long as the system holds. Our son is a professor of sound engineering, and the Music Dept will likely fold if a real depression arrives. They refuse to be pessimistic about their sons’ future.

  14. Suggestion:
    From the beginning, political leaders in the US and the UK insisted that the IPCC be organized along political lines, with politicians controlling everything. Politicians resemble advertising in the sense that they attempt to find some path through the chaos of opinions, desires, and beliefs which they can use for their own benefit. Asking Nigeria, for example, to come up with some national goals assumes that Nigeria can invent methods of production which don’t rely on fossil fuels. That is ridiculous, and bound to fail, but I think that is what the political leadership in the US and UK wanted…decades of doing nothing except generating PR and modestly subsidizing some favored industries.

    My sense is that we are at the dead end of what is possible. I believe Jancovici hit a lot nails squarely on the head in his talk early this year at MIT in Boston:

    His predictions that this is all going to end up in war seems a likely prospect. Whether it could have ever turned out differently is not now a very productive conversation. The crisis in synthetic nitrogen to grow corn and soy to feed cows which are genetically designed to eat grass to feed an obese nation with an average of 3 or 4 chronic diseases per adult which keeps the fast food industry, the medical industry, and the pharmaceutical industry profitable is a poster child for blindness.
    Don Stewart

    • Thank’s for linking to Jancovici’s video. Very well done and on a par with anything from Bill Rees or Nate Hagens.

  15. Net Zero
    Net Zero is the “Peace In Our Time” (Neville Chamberlain) of our times. An excuse to do nothing.

    I saw thinking like this work its seductive magic in corporations which subsequently hit the iceberg.
    Don Stewart

    • Obviously the other, more citizen based, dimension of Net Zero is the willingness to pay taxes and higher prices to fund it.

      Under 50pc are willing to pay thousands to make homes greener.
      UK remains deeply divided on how domestic green agenda should be funded, polling and focus group research reveals.

      https://www.telegraph.co.uk/politics/2021/11/06/majority-people-will-not-pay-costs-making-homes-greener-reach/

      The survey is being published tomorrow but basically, support for higher taxes and higher prices to pay for the different strands of Net Zero starts at 0-30% support for low incomes and is 30-60% for incomes over £80k.

      How much extra tax and increased prices are you willing to sacrifice Don?

    • Steve, Don’s a pensioner. The fact that you asked Don, who is in his 80s I believe, this as a personal question frankly suggests you are overtaken by plans of “what could be” without any sense of the actual zeitgeist, or a balanced perspective.

      Two democrats in the U.S. Senate just blocked a modest wealth tax on billionaires. We have multi national corporations that pay almost no tax. Isn’t your tax question misdirected? How about you ask them? More, how about you ask them to abandon their profit making model and growth, growth, growth? How about you ask them to stop building products with built-in obsolescence so that they create annuities for themselves?. How about you ask them to stop making non-essential do-dads? This doesn’t cost Don any money.

      More broadly, does labor have to pay taxes so that government has the slush fund to create capital’s infrastructure for capital so that capital can make a profit or has economic incentives “to do the right thing”? How come, in a paroxysm of distemper your first question is to ask labor and retirees to fund the great reset?

      Yet more broadly, don’t we need a completely different economic system, one not founded on profit at all – at least when it comes to natural resources and essentials? Doesn’t everything that is essential – minerals, oil, gas and coal reserves, forests, mining, extraction, production of oil, gas and coal, electricity production and distribution, waterways, railroads, air-transport, medical care, pharmaceuticals, have to be nationalized and run on a non-profit, non-growth basis to achieve net zero and deal with depletion? When governments take these things over, then they will receive payments which should be less than the amounts the users would have to pay to profit, growth-seeking enterprises, and without the necessity to pay millions to for-profit CEOs and other senior executives, and millions in stock options, and without the short-term focus and incentive of “making the quarter” that is the fixation of profit-seekers. So it’s not so much an increase in taxes as a redirection of payments for these essentials away from private, profit-making, profit-seeking enterprises, to publicly owned enterprises operated for the long-term public good. Right? Or is labor supposed to pay taxes which government uses to create the infrastructure capital needs to keep making money?

      I really don’t get why you think labor handing over more in taxes or that funding more in taxes in the current system where there is as yet no broad based social consensus based on a realistic vision of the future is even the way to begin. The implication of Don’s statement is right – in the current system, at this time, simply handing more over to governments to pursue “net zero” is virtually guaranteed to accomplish nothing more than mal-investment, massive waste and boondoggles.

      As Exhibit A, the U.S. House just approved a $1.2 trillion deficit spending infrastructure bill – so, to be paid out of tax collections, most of which comes out of the hide of labor in this country, so hopefully this partially quenches your thirst for an increased tax burden – but an overview of the bill indicates that a huge portion of the bill is devoted to repairing roads, bridges and tunnels – i.e., the wrong-headed car culture and personal transport fixation here,- airports and airlines, because what’s life without personal air travel?, and billions for Amtrak so that the PMC (professional managerial class) can commute and conveniently travel within the Boston – Washington D.C. megalopolis, but little for repairing or expanding critical freight transport to reduce dependence on trucks. At least they provided some funding for cities to improve prospects for bicycle travel and some for improving waterways for transport.

      Please have a look at summaries of that bill – this is what U.S. leaders currently think moving into our future looks like. Read it and weep – this is where the U.S. governing consensus is at in late 2021.

      Lastly, the Jancovici video that Don posted makes it clear that there are many things that technology – and the capital investment it requires – cannot accomplish. For example, reducing the very significant greenhouse gasses emitted by agriculture depends on drastically reducing meat consumption. We don’t need to pay more in taxes to accomplish that, we need to change our behavior.

    • Tagio. Your reasoning is flawed. A non-profit non-growth economy does not produce the necessary tax revenues to mitigate against the mass unemployment, mass debt defaults and the mass homelessness caused by a radical contraction of the discretionary economy.

      What socialists tend to ignore is the already existing levels of poverty within the current overshoot economy, at both national and global levels.

      As a recent study has shown….

      Would humanity be sustainable if resources were distributed equally among all the people of the world and bringing the impact of each person to the threshold τ needed for a decent quality of life? By analysing data, we found the answer is no, it wouldn’t.

      http://www.pelicanweb.org/solisustv17n11page5.html

      In other words, socialists need to articulate a comprehensive human population degrowth strategy before expecting people to vote for mass unemployment, mass debt default, mass homelessness and socialistic neo-feudalism.

      https://www.spiked-online.com/2021/11/01/serfing-the-planet/?utm_source=The+week+on+spiked&utm_campaign=300a6b8957-EMAIL_CAMPAIGN_2021_11_05_06_11&utm_medium=email&utm_term=0_7e9712ba33-300a6b8957-96314321

    • Tagio and all,

      Re: “reducing the very significant greenhouse gasses emitted by agriculture depends on drastically reducing meat consumption. We don’t need to pay more in taxes to accomplish that, we need to change our behavior.”

      Given available supply, humans opt for protein rich foods (meat, poultry, fish, dairy, eggs…) Garrett Hardin used the term “mutual coercion, mutually agreed upon” to hopefully accomplish reduced fecundity and increased compliance with rules for the common good. It is obvious now that societies that have high degrees of compliance with laws and rules have homogenous populations and/or very strict law enforcement (like Singapore.)

      With failed melting pot demographics in US, UK, much of Europe,…achieving changed behavior for the common good is near impossible without strict enforcement of laws. Right now there are widespread incidences of large scale shoplifting and train robberies in the US. Forget about getting voluntary dietary changes. 😉 We are near chaos here as the stock market makes new highs.

      link to remind you of the universal drive for energy throughput (food included):
      https://www.ecologycenter.us/ecosystem-theory/the-maximum-power-principle.html

    • Steve, my point was that you have to change the for-profit economic model where nothing gets done unless it can generate a profit. If you take away growth, including population growth, then economies of scale fail and the only way to have profits are to reduce costs relative the declining revenues received. Cheaper energy is out, cheaper mineral resources are out, so where is the profit going to come from? We need an entirely different mindset and economic system. My “socialism” example is just that, an example. I am not pro socialism, but as I’ve mentioned numerous times in this site, I also think that highly complex, top down solutions can’t and won’t work. They’re not in the “solution space” to use Nicole Foss’s term, for the numerous reasons she mentions. As I’ve stated many times, “solutions” – really adaptations – are going to be local.

      You also avoid the larger criticism of why you think getting individuals to agree that higher taxes – IN LIGHT OF OUR GOVERNING CLASS’S CURRENT MINDSET AND WITHIN THE CURRENT SYSTEM – is somehow a critical thing to focus on at this point.

    • Tagio. As the law of diminishing energy/material returns deepens, profit is bled out of the Market.

      This naturally reorientates expectations and consumption patterns mediated by regulations, politics and debt.

      My general perspective is that the market is self-rectifying which in itself is a solution.

      State intervention is wholly predicated on the basis of taxes and debt. It is always a critical issue.

  16. @Steve Gwynne
    I think you frame the question badly. Charles Hugh Smith’s note to his patreon subscribers today sets up this scenario and then describes what is wrong with it:
    “One of the pre-pandemic ads on PBS pitched luxury European river cruises to wealthy Americans. In one staged scene, an overfed American couple pulled a tray of fresh-baked rolls from a vintage oven, much to the delight of an attractive young woman in a Bavarian-style uniform. The intent of the scene was obviously to suggest that the Americans who ponied up the thousands of dollars for the cruise would be treated to a taste of traditional crafts and cuisine in quaint European river towns replete with castles, bakeries staffed by attractive young women in Bavarian-style uniforms, etc.”

    Then he describes what an authentic experience looks like in one’s own kitchen, and perhaps using some food one has grown or hunted. With people participating in the adventure.

    One of these scenarios is a hugely expensive way to destroy the world, and the other is a way to possibly save the world…or at least have some authentic good times while it is still possible.

    Don Stewart

    • Don. That still doesn’t articulate a comprehensive plan by which to mitigate the impacts of radically contracting the discretionary economy. Nor does it explain how to degrow the human population in order to avoid widespread global poverty.

  17. @Steve Gwynne
    A demolition of Net Zero from the Club of Rome
    https://www.clubofrome.org/blog-post/nair-carbon-neutrality/
    “Thus politically correct and hopeful slogans replace the hard work of changing societies.”

    Doing what we need to do is going to require the demolition of much of what governments do. For example, governments in the West make and enforce safety regulations which make it difficult to sell prepared food, or even garden produce to one’s neighbors. It is obvious to me that the solution arrived at in Edo Japan, small neighborhood ‘fast food’ places operated informally, is the least capital intensive way to feed people in cities. Charles Smith describes an intermediate scenario where everything is informal and free of government “help”, but is an occasional event rather than “normal”.

    I suggest that finding these small steps is the key to maintaining one’s body and soul in the midst of the chaos…in the presently rich countries. I won’t try to prescribe what makes sense for the rest of the world.
    Don Stewart

  18. Well said Tagio.
    There’s a scene in The Hobbit where the Trolls are kept arguing all night about which dwarf to eat first. Dawn eventually breaks and the trolls are turned to stone. The wizard reveals himself as the one who kept them arguing. I sometimes feel that the reverse is going on here, the wise wizards are being kept arguing by a wily troll.

    • Not exactly a demolition Don, since yet again, Degrowthers provide no comprehensive strategy to mitigate against mass unemployment, mass debt defaults and mass homelessness as Western economies undergo a radical contraction of their discretionary economies alongside a radical contraction of tax revenues.

      Similarly, the article fails to deal with the usual elephant in the room, human population growth.

      As a recent study has shown….

      Would humanity be sustainable if resources were distributed equally among all the people of the world and bringing the impact of each person to the threshold τ needed for a decent quality of life? By analysing data, we found the answer is no, it wouldn’t.

      http://www.pelicanweb.org/solisustv17n11page5.html

      In other words, Degrowthers need to articulate a comprehensive human population degrowth strategy before expecting people to embark on self inflicted mass unemployment, mass debt default, mass homelessness and socialistic neo-feudalism whereby the majority become dependent on the State for their survival.

    • Presumably the troll is a metaphor for the failure to provide a comprehensive plan to mitigate against the impacts of a radically contracted discretionary economy and the failure to provide a comprehensive plan to degrow the human population in order to avoid widespread global poverty.

      Everything else is simply deflection!

    • Steve,
      you are the only person deflecting,
      pretty much everyone accepts degrowth is unavoidable and that we’ll just have to make the best of it,

    • Just to make my own position clear, I’m as sure as I can be that ‘de-growth’ has already commenced. We’ve spent a very long time either trying to prevent it, and/or trying to pretend it isn’t happening, pulling pretty much every monetary lever there is, all to no effect, other than a relentless increase in financial risk.

      There seems to me to be zero chance of this reality gaining recognition, at least until a point has been reached at which it becomes indisputable.

    • I returned to earliest posts I’d missed. Sorry for jumping around. Regarding degrowth already commenced: on a per capita basis I’m as sure as you are. On a gross throughput basis, I’m uncertain. Maybe this is discussed later. If so, sorry. No need to reply.

    • Matt. I’m well aware the law of diminishing energy/material returns is hard wired into the system.

      Degrowth is a set of policies that intentionally contracts the economy and is a political programme.

      What ECoE and ERoI refers to is entropy. Not the political programme of Degrowth.

      Net Zero is a political programme by which to transition from a reliance on carbon energy in order to limit greenhouse gas emissions.

      Your perspective is to generally conflate these discreet dynamics for politically motivated purposes.

      Which ever political economic system is deployed, including Degrowth, it is subject to the entropic effects of ECoE and EROI.

    • @Steve Gwynne,

      I’ve hinted at the roots of what a comprehensive plan for Degrowth would entail, but I’ll add a little more now.

      The first step is to imagine what the “solution space” looks like. What exactly would our human culture be like if it were truly sustainable? To me, a preliminary answer is obvious: start with a foundation that is very similar to what society was like the last time it was based on 100% renewable energy. Start with something like pre-industrial-revolution, pre-fossil-fuels Europe or anywhere else in the world from that era that takes your fancy. Think about life in the 1500’s.

      Most of those cultures were dominated by farming, with about 90% of the population engaged in farm work, and the rest were pastoral or hunter-gatherer. So, a basic comprehensive plan must be geared toward getting 90% of the population of the modern world directly involved in farm labor, typically subsistence farming.

      Since the vast majority of the people in the modern world live in cities, any transition to subsistence agriculture would mean moving almost all of city dwellers to the country, finding or building basic housing for them on land confiscated from large landholders and equiping them with the skills, tools and seed to get started. If the transition period is assumed to be twenty years, then the only people to be left in cities would be those with less than twenty years to live. The elderly people left behind in cities would be tasked with keeping them going as well as possible.

      Food supply would need to be rigorously controlled and rationed if everyone is to be kept supplied with calories while large farms are taken out of conventional production and parceled out to homesteaders. Maximizing the calorie supply while minimizing land use would mean most meat eating would disappear. Growing food crops for fuel would halt immediately. The only people who could eat what they want are the people that grow their own food.

      All manufacturing would need to be diverted to producing housing and equipment for new farmers as well as keeping existing food transportation systems operating well enough to get rationed calories to where they need to go. Anything not directly necessary for life and health would have to go.

      A truly comprehensive plan would take thousands of pages to lay out, but it’s easy to see that no combination of market incentives or regulation of the global market economy could hope to effect such a dramatic change in social organization. Only a command economy could direct things well enough to have a chance to get the job done and it could only happen with the willing cooperation of almost everyone involved.

      Of course, I am under no illusion that anything like this will ever happen voluntarily. It will happen eventually, but only after existing systems have failed utterly and many, many people have died.

      But the best way to keep the fatality rate as low as possible during an overshoot correction will be something like the scenario I have described. I would be grateful to be informed of better solutions as long as they take a realistic consideration of the consequences of overshoot.

    • Thanks Joe. I’ve certainly taken the unofficial action to make this political solution a real time possiblity with my allotment shed living. It can be done and quite comfortably although many see me as an aberration.

      However, I think this political solution is constrained by a nation’s biocapacity and the extent to which a country is in ecological credit or deficit.

      Certainly in the UK we have a massive ecological deficit due to a mixture of consumption overshoot and population overshoot so only a limited number of the population could be provisioned small farm subsistence living. Beyond the ability to self provision for food, energy, water, textiles and timber, the rest would have to continue being imported from another nation’s biocapacity.

      The same applies beyond the necessary reuse economies to provide glass for processed food storage and metals for jar lids. However, embedded cutlery and cooking equipment along with other essential goods within our economies should last a few lifetimes at least.

      To reduce import dependencies may well mean certain segments of the population relocating abroad to ecological credit countries in order to find sufficient land and other provisions.

    • Joe.

      I agree with your plan. I see no other solution.

      It will take a lot of pain before the majority of the public wake up to the reality. The certainly aren’t being told it at the moment!!!

    • Joe Clarkson

      Just read through your post again and it has got me thinking.

      I’ve been wondering what a sustainable/zero growth economy would look like. I can’t see how banking will exist. Interest bearing loans would not work. Where is the interest coming from??? State expenditure would have to exactly match taxation or there will be an ever increasing amount of money in the economy leading to inflation.

      Your suggestion of looking back at the last time we had a sustainable economy may have some answers.
      As I understand it, in pre industrial times, there was relatively little money in the economy. Most people instead built up relationships of credit and debt with eachother. Everyone was both creditor and debtor at the same time. In the UK, tally sticks were used to keep “tally” on who owed what to whom. Everyone had something to offer but also had needs that they could not meet themselves.

      David Gaeber wrote about it in “Debt: The First 5,000 Years.

      Maybe most transactions will take this form with very little money changing hands.
      It would certainly bind communities together and foster mutual dependency. (Perhaps???!!!)

  19. CHS tidbit:
    “we’re borrowing 41% of spending and 70% of tax revenues, no problem, it’s clearly sustainable forever”

    In a session to discuss how to turn our prospects around, I asked, rhetorically, “how many of you are willing to turn over more money to the government if they promise to spend it wisely?” The room was quiet, and then one guy said: “when you ask it that way, I suspect the answer is Nobody”.

    Don Stewart

  20. Why Is the US Spending More Deficit Money on Infrastructure?
    “To compete with China”.

    I suggest that the main theme of this blog is that competing with another country by accelerating the already dizzying pace of debt accumulation is not the royal road to prosperity.

    So…rhetorically, would you give any real asset you have to Joe Biden (or Donald Trump) to use while the government puts you, your children, and your grandchildren ever deeper into the mire of debt?

    Probably not too many of the readers here. But the MMT fans who chime in periodically would agree…because the debt will magically increase output with such an enormous stimulus that repaying the debt will be trivial. Any lurking Nobel economists will sign up enthusiastically.

    Don Stewart

    • Matt
      That is very clever. Thanks for the link. You have brightened my day!
      Don Stewart

    • Don Stewart

      The stimulus package the UK government has injected into the UK economy isn’t really a “debt”. Not a “debt” that will need repaying anyway. The money was created and then lent to the Treasury by the Bank of England.

      If one branch of government lends to another branch of government, is it in debt to itself?
      And why does the Bank of England need paying back???? What does it need the money for ?? It can create money at will.

      The government may need to tax(destroy) some of the stimulus money if there is too much money sloshing around chasing too few resources, to prevent inflation, but that is different to “paying back” the debt.

      Going forward, in a zero growth economy, non of this trickery is going to work, but then again neither is money or the whole banking sector.

  21. One More Rhetorical Question
    “If spending this debt money on infrastructure of the type which is authorized is such a good idea, why not issue revenue bonds?”

    And I think at the bottom of that deep well you will find the reserve currency and the petro dollar enforced by the US military.

    I suggest that there would be few takers at high interest rates for revenue bonds. But the fact is that if the US dollar continues to be the reserve currency, then foreigners will foot the bill.

    Another angle is that if the States issue the debt, they cannot inflate it away with money printing…although some would attempt to make it go away with perpetually increasing debt.

    Does this sound like a sustainable plan?
    Don Stewart

  22. Steven Gwynne
    I have said more than enough about what I see as the path ahead to infuriate most of the readers of this blog. I won’t try to regurgitate it here.
    Don Stewart

  23. Dr Tim,
    I notice Harrod’s financial results are not positive so is this the start of decline in discretionary spend?

  24. Things are getting quite heated on here!

    I’m trying to follow the lines of argument but am a bit confused. Not really sure what’s being debated.

    The way I see it is that because of ECoE, “de-growth” is inevitable. Whether that is “market” lead or “State” lead is kinda secondary. The economy is unsustainable at it present sizes and a zero growth economy is the only viable long term future (other than the “other” one of course).
    How we get to de-grow is the question I guess.
    The “market” route will lead to the poorest being the first and worst hit and lots of people having a very shit time of it. Social unrest is a real danger.

    I think only the “State” can guarantee that everyone gets 2,500 calories a day and that resources are distributed more or less evenly.

    I think there is a role for “local” provisioning and that an overpowering “Centre” trying to control all aspects of distribution would be a bad thing. A balance between the two will be required. I think that the “State” has a major roll to play but if it begins to fail, things will fragment to a local level. Maybe that will be the eventual outcome. The “State” taking a leading roll but it’s influence waining as local communities are better able to organise and provision themselves.

    I don’t see the “State” having a central role as being “Socialist”. (I don’t see the UK government between 1939-1945 as being Socialist)
    I think that the old political framing isn’t really very helpful. Capitalists and Socialist both believe/believed in a growth economy. How growth was to be achieved may differ, but growth was central to both. We are moving away from a growth economy, so I’m not sure that the old terminology is relevent going forward.

    On population growth. I was under the impression that the global population is going to peak in 2060. This may be too late but the trend is downwards but there is a lag. Got to wait for the “Boomers” to all die off!!!!
    Birth rates in much of the developed world is below 2.1 now. I think the UK is 1.7 (children per woman, average).

    I still think that a semi controlled transition to zero growth is a real challenge. Huge challenge.
    If I was a gambling man, my money would be on what I see as the most likely option which is collapse and chaos with a breakdown in the “state” and things getting very nasty.
    Not a very optimistic outlook but I am open to hope🙂.

    • John. As I understand it, the conversation turned towards the perceived merits and dismerits of different political economy solutions to the problematic of systemic entropy (especially in the form of ECoE), ecological overshoot and global warming.

      Obviously, how system entropy will be managed will be a political decision taken by the demos whether entropy is an overt consideration or not. I guess the general consensus here is that entropy ought to be articulated as a priority consideration within high politics, in order to better educate the demos towards more realistic expectations regarding the political rhetoric of economic growth.

      It is then but a short jump to criticisms of economic growth and in particular, capitalistic growth, as the main cause of ecological overshoot and thereafter climate change, biodiversity loss and biospheric degradation.

      However, how system entropy is actually managed is a political unknown but trends indicate to me that the UK demos will tend towards maintaining global inequalities using military force if necessary in order to preserve existing standards of living and lifestyles. Certainly from perception, the demos is willing to make some adjustments and is tolerant to some degree regarding the increased costs associated with system entropy and Net Zero policies but will seek to divert any significant reductions in standards of living to unknown peoples abroad whether in the form of internecine conflicts over resources, famine or other forms of impoverishment.

      From this point of view, for anyone expecting global equality will be sorely disappointed.

    • Steve.

      Thanks for the summary.

      I agree that the prospects aren’t looking good.

      I still think that the population needs to be told the facts though. That is the starting point.
      Deferring the inevitable is not a long term fix and people need to be aware of it. Maybe then, people will start focusing on what a managed transition will look like. All far too overwhelming for present politicians or the MSM to talk about.

      Events will overtake politics. Whether it will be too late by then is the question.
      I think the first thing to go will be the economy.
      That’s hopefully when the debate will start.

      With ECoE increasing all the time, overseas military campaigns are going to be costly and eventually not even possible. War machines will grind to a halt without oil.

    • I guess a lot depend on what is perceived to be the end goal John, especially in terms of managing system entropy.

      I’m sure most people understand that nothing lasts forever so some are more attracted to the party until you drop approach and others are more mindful of future generations and species longevity.

      That is at least my perception from conversations I’ve had with friends and colleagues who span the political spectrum.

      In this respect, it might be worth analysing different trajectories between the planned management of system entropy and unplanned management trajectories rather than committing analysis to a single one including its associated political economy solutions.

      Ultimately nothing can overcome entropy but presumably it be slowed down or sped up but it seems that we can translate and align these political choices with the political choices associated with ecological overshoot.

      I haven’t yet thought that much about that but I’d suspect consumption/throughput rates would be one important dimension to consider alongside equality/inequality levels.

      However, I should warn against automatically associating greater levels of equality with reduced consumption, since equality can build up consumption expectations especially if the material benchmark of equality is set too high on the socioeconomic ladder. Consumption expectations become a particular problem if the goal is to eradicate current conceptions of relative poverty with food banks being a particular marker.

      There is also similar problematics associated with inequality, especially the problematic of status consumption.

      Thus, as said, it depends on what is the political goal whilst trying to manage or not manage system entropy. To sustain 10bn at a decent standard of living which will require a huge deployment of resources within historically unprecedented cooperative frameworks that may well shorten species longevity or allow limited concentrations of energy/materials consumption at more national levels.

      In other words, the framework of high impact, medium impact and low impact can be applied globally with some competitive/cooperative agreement of the balance between the three or else there is a highly cooperative global framework whereby impact is distributed relatively equally.

      History/evolution seems to be taking us towards the former rather than the latter which may well be explained by the maximum power principle and the fact that Europeanised nations happened to be the first cultures to develop technologies that were able to exploit carbon energy at an industrial scale.

      Either way, system entropy will limit human growth including the extent of non-renewable renewables but in terms of political solutions, the question of longevity can only really be actioned by the middle classes and the upper classes since the working classes are already operating within per capita limits.

      From what I can tell, whether on the left or the right, the middle classes for example have no intention whatsoever in reducing their discretionary consumption rates down to working class levels since this would mean the end of ‘high culture’, the entertainment industry and ‘extracurricular activities’ which only the middle and upper classes can predominantly access and/or afford.

      I for one look forward to a science based class analysis of ecological overshoot and a science based class analysis of the required sacrifices needed to contract the discretionary economy (including second homes and holiday homes) in order to accommodate systemic entropy.

    • Thanks John.

      There are times when I too can find it hard to follow some directions of the debate. I think your summary is a good one.

      As I see it, current events are going a long way towards demonstrating that the economy is indeed an energy system. The credibility of orthodox economics is failing in real-time. Nobody has any really persuasive reasons why transition from fossil fuels to renewables, essential though this is, won’t leave us with a smaller economy.

      Perhaps I can put it no more strongly than this:

      Economy.

      Based on the current consensus, the average person is expected to be about 60% better off (that’s GDP per capita) in 2040 than he or she was in pre-covid 2019. The SEEDS view is that prosperity per person will be 21% lower by the same year.

      Financial system.

      I’ve been doing some calculations of global liabilities, comprising debt, shadow banking and similar, plus unfunded pension promises. Data isn’t complete, but my rough-and-ready number is $890 trillion as of end-2020. Compared with the end of 2007, that number has increased by $395tn (real). GDP increased by only $40tn over that same period. These trends cannot possibly be described as sustainable.

    • The kindest possible landing from the fall in quality of life would be at least the lowest level of inequality, for practical reasons alone, that is best for preventing violence and chaos. To do that though, the biggest problem is always the first step, how to convince the masses to change their behaviour because that is the only thing that will make a difference. Once the masses are focused, the violence the elite will surely unleash to defend their grip on the remaining wealth still wont work.

      And the important thing that is easy to forget is that right now under (un)regulated neoliberal control, the decades-long trend has been rapid impoverishment generally, with ‘tech’ currently eviscerating the middle classes for the first time. So given there is no indication this trend would change if the system doesn’t, we were on track to go back to feudalism anyway. If people understood this, they would accept that they now have nothing to lose by making total lifestyle changes to transition to a sustainable way of life with the remaining FF. The incentive would be to avoid bloodshed and leave a world worth living in, for their children’s sakes.

      What’s the likelihood of that happening? Poor, the propaganda is so strong and people so susceptible to it, we’re all cakeists at heart. (Want cake and eat it too)

    • the ambitious plans to rapidly roll out alternative energy generation infrastructure at a scale that can replicate the current legacy fossil fuel infrastructure seem doomed by the step up in ECoE that shifting methods imply,

      re reading the lead article Tim posits going from a current ECoE of 9% to a future one of 18.1%
      this is somewhat like going from conventional oil to fracking, you still get your energy but you don’t make any money in the process,

      if you add further ambitious technology on top of this like capturing CO2 from the air and synthesising aviation fuel, you’ll get the fuel, but at such an eye watering cost no one will afford to be able to use it,

      the global debt liabilities have already ballooned since the GFC, throwing money at alternative energy and technological carbon capture seems likely to either burn capital, like fracking did,
      or if new money is created by central banks to do it, there will be little likelihood of earning enough to pay off that new debt and the global liabilities will balloon further.
      on paper it all looks like a “folorn hope”

    • Steve,
      I didn’t mention that document but if you prefer to select it as an example; it is riddled with questionable assumptions about the performance of speculative technology,

      before even opening the document the details say:

      Last year, the Prime Minister set out his 10 point plan for a green industrial revolution, laying the foundations for a green economic recovery from the impact of COVID-19 with the UK at the forefront of the growing global green economy.

      the green economy might grow but the overall economy will have to shrink to accomodate the higher ECoE and the increased complexity,

      every speculative scheme in the document is an attempt to replace ‘like for like’ just using a different energy carrier,

      an ambition for a 5GW hydrogen capacity seems to ignore the cost of making the hydrogen,

      5 MtCO2/year DAC is entirely speculative, 1 metric tonne of air contains 415 grammes of CO2,
      the chosen method of absorbtion is amine beds, it will require passing 12 billion tonnes of air over the amine beds to absorb 5MT of CO2,
      this is over 9 trillion cubic metres, this CO2 has to be extracted from the amine beds and sequestered in some manner,
      or will it be used to make the mythical green jet fuel as implied by CCUS, at further complexity and energy expenditure and then re-released into the atmosphere?

      with your rose tinted spectacles you see NetZero2050,

      with my critical appraisal I see; Folorn Hope Leading to Bankruptcy,

      this national report is no doubt very similar to every western national report which are all cookie cutter cribs from the IEA Future report which we scrutinised months if not years ago.

      we are looking at a future economy that puts so much effort into producing energy it’s likely to produce very little else,
      expect a world rather similar to being a slave labourer working at a German Fischer Tropsch synthetic fuel plant trying to keep a doomed war machine going.

      the report doesn’t explicitly state this, I think it’s fairly obvious why.

      most people don’t fancy working in the lithium mines of Mordor for a handfull of rice a day so that Sauron can ride around in an EV.

    • Matt. The basis of the UK net zero strategy is not to overcome or accommodate systemic entropy.

      It is a strategy to mitigate and adapt to climate change with the main emphasis being to reduce greenhouse gas emissions by way of a transition to noncarbon technologies.

      As of yet, there isn’t a UK strategy to mitigate against systemic entropy. However you seem to think that the UK net zero strategy is one! It isn’t.

    • thanks Steve,
      a 77th level reply was what I was expecting and confirms I’m right over the target.

    • Still not quite sure what the “beef”/debate is around the UK government Net Zero policy?????

      I’m not going to worry too much on it though. If it’s coming from government, it is usually PR and spin.

      I think the crunch will come with the next financial crash. Then hopefully the debate will start.
      What’s left to try if it all goes “tits up”? Injecting more QE into the economy?
      When faced with the realities of mass unemployment, the government will have to act.
      Furlough was unimaginable 2 years ago, but it happened and neoliberal orthodoxy was quietly shelved. Government will have to act in ways it instinctively doesn’t want to. The alternative will be collapse.

      Assets will become worthless, especially the financial kind.
      As the old saying goes, “you can’t eat money” especially the digital kind.

    • Hi John Adams,
      no doubt the next financial crash will be beyond glossing over,
      what amazes me is that they’ve kept it going for so long.

  25. There is a lot of flaws with this Degrowth study, in that it does not address the challenges of a contracted discretionary economy, the entropic effects of ECoE or assess the required energy cost in its overall ‘final energy’ calculations but it does at least attempt to calculate what level of everyday energy is required to live within planetary boundaries.

    https://www.sciencedirect.com/science/article/pii/S0959378020307512

    As an emerging field, energy economics is yet to decide on standardized terminology for the different stages of energy consumption but at least we are moving in the right direction.

  26. @Steve Gwynne
    ….“Not that I am averse to that since I am already doing it but it is hard tedious work with no income. “
    Have you read “Small Farm Future” by Chris Smaje?
    It provides less grimm picture of the “subsistence economy”

    • Thanks Jura.

      I am actually doing low impact subsistence living so know from experience. It is a labour of love with little scope for income depending on land availability, energy availability, technological availability and material availability.

      Yes I am familiar with Chris Smaje’s work and have debated with him at length (to no avail) with how a radically contracted discretionary economy will support tax revenues and a wide array of public services, how land is accessed at scale, how to encourage the middle classes in particular to adopt low impact subsistence living. He is also supportive of open borders immigration and so I’ve also questioned how to square that with the UK’s massive ecological deficit and therefore the increased need for import dependencies, especially in the short term.

      In sum, there is the ecological science dimension to Degrowth, there is the political science dimension to Degrowth and there is the politics of Degrowth which are often conflated by activists with inconvenient ecological facts replaced with political rhetoric.

      In my opinion, it is better to follow government backed initiatives for more objective appraisals, IE
      https://www.gov.uk/government/publications/sustainable-farming-incentive-scheme-pilot-launch-overview/sustainable-farming-incentive-defras-plans-for-piloting-and-launching-the-scheme

      Also it is worth following organisations like the Ecological Land Coop who are actually demonstrating what a small farm sector might look like with appraisals published annually.
      https://ecologicalland.coop/

  27. this is filmed at one of the side events at COP26, the subject is adaption,
    between minute 30 and minute 35 Kevin Anderson gives his appraisal of the progress being made at COP.

  28. @Steve Gwynne,

    If I may reply for Matt, the intention to “rapidly roll out alternative energy generation infrastructure at a scale that can replicate the current legacy fossil fuel infrastructure” is clearly expressed by PM Johnson in the introduction to the Net Zero document at the link you posted.

    Johnson says that UK residents will be happy “with most of our electricity coming from the wind farms of the North Sea or state-of-the-art British nuclear reactors” because the cost of electricity will be cheaper than from fossil fuels. He also asserts that this carbon-free electricity will also allow the changeover to electric vehicles and the phasing out of gas heat for homes.

    • That’s the strategy Joe/Matt!

      strategy
      noun
      1.
      a plan of action designed to achieve a long-term or overall aim.

      In order to achieve the UK’s NDCs, until the next election, which gives you both a bit of time to convince the UK population to adopt Degrowth and small farm subsistence living with no carbon energy or no noncarbon energy because systemic entropy makes the adoption of any technological energy system futile in the long run.

      I wonder what the ECoE of a horse is? 😊

    • Steve,

      As I noted in a previous comment, I don’t think that the population of any industrialized nation will accept Degrowth (deliberate economic contraction) and a return to basing human energy supply on photosynthesis (even though that is the only proven long-term source). I’m certainly not wasting any time trying to push Degrowth on the body politic, but I’m sympathetic with those who try. I’ve always had kind feelings for Sisyphus.

      I don’t know what the ECoE for a horse is, but it’s probably more than the ECoE endured by traditional hunter-gather, which has been estimated at 10% (EROI of 10:1). Draft animals do allow higher instantaneous power applications though.

    • I fully agree that the public (and decision-makers) aren’t going to accept voluntary de-growth, and neither – which is more pertinent – are they going to accept the reality of involuntary de-growth, until this reality becomes inescapable.

      My view on this is that both the economy as an energy system, and the consequent ending and reversal of growth, are moving from theory to reality. To this extent, we don’t need to advocate our point of view, because the result of this debate is no longer in doubt.

      For as long as denial continues, however, there will remain a frightening lack of reality-based analysis. Take the ‘assumption of growth’ out of government and private planning, and what remains? Almost every government and business is now committed to “sustainable growth“, “green growth” or some variation on that theme.

      I feel that, if we have to define a “role” now, it is that of providing the analysis that simply doesn’t exist. Less Sisyphus than Atlas?

    • My only concern with this whole system approach is that it fails to differentiate between different sectors, different industries and different firms from the local to the global.

      Thermodynamic trends will always means that surplus energy contracts as systemic entropy deepens. This applies from components to industries to systems.

      In other words, systemic entropy is a fact of life and is built into the system with increasing ECoE reflected as higher costs and reducing profits.

      In this respect, the Market selects out firms that cross an entropic threshold that is no longer affordable.

      If however the good or service is essential, then that entropic threshold is higher with higher costs compensated for by a contraction in discretionary spending.

      Thus any entropic crisis point is only really realised when essentials are no longer affordable.

      In this respect, the current entropic problematic is the effects of a contracting discretionary economy which I presume will largely effect the growth of developing countries and their exports especially if for example, much of the goods and services produced in the UK are essential. I’m sure this is not the case but if economic contraction was occurring, then I’d assume any job losses would be associated with discretionary imports as you have regularly pointed out.

      At present, there does not seem to be any indications of economic contraction in the UK which may be the result of a myriad of factors associated with increased investment and increased debt so at present one can only assume that growth is occurring albeit supported by credit.

      However, this does not detract from the fact that the ECoE will be different for different sectors, different industries and different firms and those that are able to limit entropic costs will tend to succeed whilst those that don’t will fail.

      Hence the long term costs associated with green hydrogen production will be different across different global regions depending on the availability of solar energy, the level of upfront material costs, running costs and the availability of investments accrued from profits from other sectors and other global regions.

      In this respect, all that a whole system ECoE analysis can achieve is predominantly descriptive and one that describes how global economic slowdown and secular stagnation will mean that undeveloped countries will not be able to adequately develop, the continued development of developing countries will be limited and developed countries will continue using their market advantage to exploit the rest whilst reshoring the production of essential goods and services or forming strong alliances to ensure the longevity of these essential things.

      This obviously then takes us to the global politics of systemic entropy and ECoE with ECoE being experienced differently across different sectors, different industries and different firms from the national to the global levels.

    • I’d take issue with one point here, which is the lack of evidence of economic contraction in the UK. There’s been enormous expansion in debt just to deliver very low amounts of “growth”.

      The cost of essentials is rising, as are general inflation and the cost of energy. Growing numbers are ‘just about managing’, and food banks are becoming ever more important.

      Rates are still pegged at 0.1%, and even a rise to 0.25% would leave them deeply negative in real terms. The economy is propped up the “wealth effect” of artifically inflated property prices, which (a) give support to household borrowing, (b) are detrimental to younger people and labour mobility, and (c) tie up capital unproductively. This is an economy which can’t even afford to clean up its rivers, or pay for the removal of hazardous cladding.

      Other economies have problems too, of course, and the US has enormous weaknesses masked by horrendous dependency on stimulus and inflated asset prices. But a UK economy dependent both on imports and on foreign capital inflows, which has a tiny manufacturing sector, huge numbers in an insecure, poorly-paid “gig economy”, and which sees property price inflation as an economic strategy, is the antithesis of resilient.

    • Thanks Tim.

      Surely debt is an integrated aspect of any modern economy with systemic entropy eroding the multiplier potential of debt as ECoE increases.

      Of course, if there was an economic depression, the economic system would recalibrate itself along with the system’s politics.

      Overall, absolute poverty has been decreasing in the UK whereas relative poverty has increased slightly. Which is unsurprising considering the rates of immigration from SE Asia.

      https://commonslibrary.parliament.uk/research-briefings/sn07096/

      Of course, systemic entropy means that the cost of living will progressively rise. This is generally considered a fact of life despite the rhetoric of politicians and political commentators.

      In this respect, politics tends to be bound up with perceptions of competence around economic management and the use of taxes along with efforts to manipulate those perceptions.

      Of course, only increased taxes or higher energy/water bills would be able to adequately expand the sewerage/grey water infrastructure to accommodate UK population growth and avoid the need to release sewerage when preparing the system for likely flood events.

      Lastly, yes the UK is highly dependent on imports due to population overshoot and the need for foreign investment to pay for our balance of trade deficit. Of course, Brexit served to limit EU immigration so the next step is in limiting nonEU immigration in order to make the UK system more resilient in the long term.

    • With respect, there are at least two things that you’re missing out here.

      First, the UK is an intensely financialized economy. Even with imported goods and commodities added to very modest domestic production, a disproportionate share of the economy consists of moving money around. The British economy is structured to function by selling financial services, both to each other and to people overseas. There’s a debate to be had, to put it moderately, about the real value generated by this kind of activity.

      Second, this is reflected in exposure to the global financial system. I, for one, find it impossible to believe that another GFC can be prevented, or even put off for much longer. My calculations suggest that, globally, we’ve been adding nearly $10 of forward obligations for each $1 of reported “growth”. This time, gimmicks like QE and ZIRP – remember how those were sold to the public as “temporary”? – won’t enable us to dodge a second GFC bullet.

      In that situation, the UK and GBP are extremely vulnerable.

    • Thanks Tim. I’m beginning to have growing concerns with this narrative.

      I certainly don’t have the financial expertise to make an informed opinion but on the one hand, we’ve now been waiting for a couple of years for GFC 11 to happen and on the other, if it does happen, isn’t that a good thing. At least it will recalibrate the financial economy with the real economy.

      With the former perspective, I’m assuming QE and ZIRP is being sufficiently absorbed into the global economy with relatively ‘cheap’ imports having a deflationary effect. Maybe that will change if the global energy crunch and supply chain disruptions continue to have inflationary effects.

      Regarding the latter perspective, the discretionary economy will slump as will energy demand, material demand and demands on the environment via waste and resource grabbing. This will provide political opportunities for Degrowth as the middle classes are hollowed out with increased expectations for the State to protect the poor with transfers from the rich. Of course, the more likely course of action is yet more QE and bailouts depending on who is in government at the time.

      More austerity is likely since most public services have already been cut back to statutory obligations so either these statuary obligations would need to be changed by law or affected States would have to deploy MMT measures with the expectation that the economy will grow following an economic depression.

      However, with so much Market potential arising in terms of Net Zero investment opportunities, I’m not sure a financial crash is going to happen anytime soon, even if that means energy costs rising due to rising ECoE. I say this because I don’t think carbon energy prices are not going to decrease anytime soon and so incrementally we are going to be seeing inflation rates normalise around 2-3% for the foreseeable future. Thus, the main problematic will be whether firms can afford incrementally higher wages to compensate. If not, we are slowly but surely going to see the steady erosion of the discretionary economy which will no doubt inhibit Chinese growth and hopefully curb their carbon emissions.

      To be fair, my fundamental concern isn’t in relation to a deficit of human ingenuity and the failure of humans to adapt but a surplus of human ingenuity and the success of humans to adapt that will enable humans to continue plundering the Earth until we irreversibly hit an ecological crunch.

      This paints me as an optimist in terms of human growth but to counterbalance that, deep down I am much more pessimistic about nonhuman growth and so politically I am far more concerned about protecting wild Nature from human Nature.

      What I have learnt from you Tim, is that to some extent systemic entropy is partially doing that job for me and perversely, if I want to limit human growth then the best implementable strategy is to encourage and support real Net Zero (not pretend Net Zero) and continue to see the ECoE rise so that human reproduction becomes a more and more expensive endeavour.

      This perhaps isolates me as an ecocentrist within a field of anthropocentrists but so be it. In this regard, I am happier with a poverty crunch than I am with an ecological/nonhuman crunch.

    • I find myself thinking of some lines from Harold Pinters 2005 Nobel Lecture,

      https://www.nobelprize.org/prizes/literature/2005/pinter/25621-harold-pinter-nobel-lecture-2005/

      “It never happened. Nothing ever happened. Even while it was happening it wasn’t happening. It didn’t matter. It was of no interest.”

      Adam Curtis in his 2016 Film used the term Hypernormalisation,

      https://www.adbusters.org/articles-coded/what-is-hypernormalization

      Adam Curtis

      “HyperNormalisation” is a word that was coined by a brilliant Russian historian who was writing about what it was like to live in the last years of the Soviet Union. What he said, which I thought was absolutely fascinating, was that in the 80s everyone from the top to the bottom of Soviet society knew that it wasn’t working, knew that it was corrupt, knew that the bosses were looting the system, know that the politicians had no alternative vision. And they knew that the bosses knew that they knew that. Everyone knew it was fake, but because no one had any alternative vision for a different kind of society, they just accepted this sense of total fakeness as normal. And this historian, Alexei Yurchak, coined the phrase “HyperNormalisation” to describe that feeling.”

      Dimitry Orlov has written of the parallels between the collapse of the Soviet Union and what appears to be happening in the West,

      I guess we will really have to suspend our disbelief now as we live degrowth whilst stridently being assured by the authorities that it isn’t happening,
      we’ll cycle to work at the wind turbine factory whilst loudspeakers blare announcements of record production figures for EV’s
      housewives will queue for their bread ration whilst reading in the paper of record of record wheat harvests,

      I can see why the Russians often drank themselves to death, I wonder if some of us will too.

  29. Re the above comment

    ‘most people don’t fancy working in the lithium mines of Mordor for a handfull of rice a day so that Sauron can ride around in an EV.’

    maybe more should read the book ‘COVID-19 and the Great Reset’ by Klaus Schwab who founded the World Economic Forum ~50 years ago, i.e. ‘the Davos crowd’. Or better, read others’ comments scattered around on the web and buy the book 2nd hand, to avoid rewarding him.

    He said on French TV in 2016 that all human beings need to be microchipped within ten years. As far as I can see, beneath the ‘spin’ his future is best summed up as a digital, dystopian hell on earth – present-day China plus a bit more technology to keep the serfs in line.

    The UK government is a partner’ of the WEF and its website proposes a ‘4th. industrial revolution’. That seems to be much the same thing.

    *

    BTW I really don’t like the sound of small modular reactors plus risk of industrial collapse. Nuclear reactors are ‘fail dangerous’. As seen at Fukushima, they melt down if something goes wrong. (Fossil fuel or biomass plants fail safe; in, say, a flood, the flame just goes out.)

    • I think I tend to live 6 months behind the curve, when that Schwab book emerged I thought some people were rather over reacting,

      some wag stated that the difference between a conspiracy theory and the truth these days tends to be about 6 months,

      again I thought the person was being witty, but now I’m not so sure,

      I’m healthily wary of nuclear power, no sane person would keep a tiger as a pet and not be wary,
      I was caught by the idea of floating nuclear power plants because they float, land based ones definately don’t float and you might wish they did in 60 years,

      I also thought that in a worst case scenario you could tow a floating nuclear power plant out into the ocean and scuttle it, far from ideal but better than having to live next to a land based nuclear disaster.

      when options are limited there often is no ideal solution, just the least worse one.

      we live in un-nerving times.

    • “I also thought that in a worst case scenario you could tow a floating nuclear power plant out into the ocean and scuttle it…”
      Matt, you have reminded me of this:

      If only all bad things could be moved “ouside the environment”.

    • thanks Martyn,
      that’s very Australian, I wonder if they’ll tender to build my floating nuclear power plant?
      my suggestion was based on a pretty extreme scenario, at the point we can only manage to scuttle power plants to get rid of them the ocean is probably already a dead zone clogged with plastic, jelly fish and sewage,
      plan for the worst, hope for the best I guess.

    • on reflection it must have seemed a pretty appalling suggestion of mine, the video lampoons it brilliantly,
      but as a context that might have biased me, did you know the Royal Navy still hasn’t even started decomissioning the nuclear subs it took out of service in the 1980’s?
      they sit there, hooked up to the electric at the docks while they dither around trying to come up with a workable disposal strategy,
      we can’t afford or are too bureaucratically ineffective to deal with this stuff now,
      heaven knows how capable or competent we will be in 50 years time.

  30. Some Observations on Culture and Political Change (Degrowth or otherwise)
    A couple of perceptive articles have just been published:

    Click to access Preprint-US-political-failure-1.pdf

    “A dangerous gulf exists between Americans’ concerns about their lives, their country and their future, and the proclivities and pre-occupations of the country’s politics and media.”

    https://braveneweurope.com/wolfgang-knorr-if-you-still-want-1-5-think-twice-and-think-deeply

    “what we are being made to believe is that net zero is the solution, and that it will deliver the Paris Agreement’s goal of limiting warming to “well below 2 degrees, aiming for 1.5 degrees Celsius”. In the case of the pandemic, the expectation has been that once vaccines have been developed and rolled out, we would stop the spread of the virus and end the pandemic. Both are essentially technological measures that promise solutions without the need for any systemic change. No questioning of the need for a rapidly expanding globalised, ever growing economy, no fundamental change in behaviour.”

    The first essay above quotes statistics that a pretty sizable majority of people in the ‘advanced’ economies, including the US, believe that fundamental change is necessary. One of the points of the article is that neither political party is offering anything in terms of fundamental change. I am unsure. If a political party did offer fundamental change, would people look at the offering and consign that party to the dustbin of history?

    As I see it, the public does perceive that fundamental change is required, but they have little conception of what a sustainable system looks like. It is no surprise that the Democratic National Committee, which consists of large donors, is not about to allow fundamental change. The Republican Party has a looser leadership, but their consensus is strongly in terms of Neo-liberalism…which is what we need to change.

    Don Stewart

    • I read both these pieces, it was a pleasure, a pleasure to see many of my private thoughts are also occuring to others,
      I’m reading and not thinking “oh well I know that”
      I’m reading and thinking “oh my, you think that too!”
      it makes you wonder quite how many people are starting to think in similar ways to those expressed in these articles.

  31. New Political Poll in US
    I am sure a search will turn up lots of hits. But here is one take-home…the most popular message with working class swing voters (those who sometimes vote Democrat and sometimes vote Republican):

    “This country belongs to all of us, not just the superrich. But for years, politicians in Washington have turned their backs on people who work for a living. We need tough leaders who won’t give in to the millionaires and the lobbyists, but will fight for good jobs, good wages, and guaranteed health care for every single American.”

    Don Stewart

  32. Steve Gwynne
    on November 1, 2021 at 2:21 pm said:
    “the following by way of an indepth synthesis. Any glaring faults??? … In this regards, if the UK for example is going to democratically choose net zero and a stable climate over the illusion of perpetual growth …”

    No-one that wants to shrink the economy of any country will ever be put in charge for 2 reasons:
    First, the idea that any voters will choose to vote for anyone that wants to implement de-growth is just silly. If you go to Gallup.com you will find a list of issues that people find important. Environmental issues are always way, way down the list, meanwhile economic growth and full employment is always number one. Only people that promise more growth will ever be elected.
    Second and more importantly, the US is very nearly an oligarchy, and I’m sure the UK is at least as close. The wishes of the 99% mean nothing to the politicians and oligarchs and the corporations who own them and as you probably know corporations exist to increase stockholder wealth. Profit is all that matters, therefore, they will always seek growth.

    The world economies will fall into a depression that will never end. GDP will decrease, and the population will decrease until it is in balance with the few remaining resources available (an end population of zero is very possible). The diagnosis is “undeniable” (LOL). I recommend that people start doing the psychological/spiritual work of coming to terms with the facts.

    I have anger, and I get a little down sometimes, but most of the time, I am at peace with reality.

    Denial
    Guilt
    Bargaining – Mr. Gwynne you seem to be here
    Anger
    Depression
    Acceptance

    • Gwynne is optimistic, or at least hopeful, that some critical mass will have epiphanies and opt for voluntary simplicity as he has done.

      Given that 6.65 of the 7.8 billion humans live in Asia, Africa,and Latin-Caribbean, and most of them are already in INvoluntary simplicity , that seems a real long shot to steer humanity to a calm decline in throughput.

    • Lol. Actually Steven my approach is to categorise economic activities into high, medium and low impact and create a sustainable balance between the three by incentiving low impact activities with incremental ecological/carbon offsetting payments from medium and high impact activities in order to means test and help low impacters to set up and maintain any low impact infrastructure including land purchases. This would also include a low impact smallholding planning route with hutting building regulations.

      The purpose of this approach is to acknowledge that some high impact industries are required such as recycled steel for ironmongery, tools, kitchenware, bicycles etc etc. Industries for glass for food storage. Transportation. Electricity production. In other words, a sufficiency economy.

    • Pintada.

      Or maybe acceptance and you’re not quite there yet so don’t recognize it. Lol ☺️

      As I understand it, psychological/spiritual work means learning to work with the flow of energy, not against it.

      From this point of view, your perspective assumes humans will deliberately/somehow override self preservation instincts despite arguably being apex predators or at least historically being apex predators.

      https://www.sciencedirect.com/science/article/abs/pii/S2352249615300203

      https://onlinelibrary.wiley.com/doi/10.1002/ajpa.24247

      In this regard, it could be argued that Net Zero Strategies are part of a broad continuum of self preservation strategies.

    • I cycle through anger/depression/acceptance, but now and then I have to stop and laugh at the sheer ridiculousness of it all,

    • Quite so, and you could have added other terms to that cycle. My additions might include despair, frustration and, odd as it might seem, opportunity.

      The situation, as I see it, is that the economy as an energy system, and the existence of constraints which debunk the notion of ‘growth in perpetuity’, are moving rapidly from theory to fact.

      The chances of this being accepted, whether by politicians or the general public, are somewhere between nil, zip, nada and zilch.

      We have a surfeit of advocacy, and a severe deficiency of analysis.

    • I’d agree with you here Tim.

      Much much more analysis is required regarding the web of paradoxes that inhabit the precursor zone.

      I watched Black Black Oil last night

      https://www.bbc.co.uk/programmes/m00118sk

      and the only paradox that was explored (for less than 30 secs) was carbon entanglement. The rest was advocacy from the usual perspectives. The only thing of real analytical interest was that the competing perspectives highlighted the many paradoxes that need to be resolved.

      In this respect, whilst politicians are accused of kicking the can down the road, the reality is that the activist scientists, the activist media and the activist citizenry are doing exactly the same by not confronting and analysing these paradoxes so that we can, through reasoned debate, come to a consensus.

      Maybe, in addition to materialism and individualism, another human trait that we need to address is politically motivated bickering.

    • Given our situation, (there is no need to rehash the evidence), and without inventing things to be hopeful about even though they are impossible. ( “The chances of this being accepted, whether by politicians or the general public, are somewhere between nil, zip, nada and zilch.” ). One if faced with the question, “How can I live a good life with the time remaining?”

      Fight:
      Been there, done that. Environmental activism from 1980 to ~1995, then I realized that people want jobs and corporations want profits, the environment be d^&mned. Then, starting in 2005 I built a homestead: Plenty PV power, solar thermal, artesian fossil water, good land with soil that can be fixed, etc.. But guess what? I got old. The only way my back will take hard work now is if I get a laminectomy to fix it, and at my age the recovery time is too long. Still, I just finished re-glazing the solar thermal, and last year I modernized the PV (new batteries, new inverter).

      Be a better person:
      I’m trying. I keep my anger in check, and try not to bore people with these issues. I started meditating again to build the acceptance side of my internal dialogue. More cannabis, less booze. At this juncture, I can only recommend this approach.

      Regarding degrowth (as defined as a purposeful reduction or enforced leveling of GDP and population), i think it has happened in only two places and times, present day North Korea, and Europe during the dark ages. In both cases absolute, and brutal repression was required.

    • Thanks Pintada.

      Wise words.

      I’ve been on a quite a philosophical journey over the last year.

      The penny finally dropped for me after reading Small Farm Future.
      There is no fix. The future looks “difficult”.
      Renewables aren’t going to save us.
      Finding out about ECoE was the final nail.

      But I’ve also realized how lucky I am/have been to live through and witness this time in human history.

      My forefathers and decedents would/will not believe the world we inhabit now.

      I’ve flown through the sky, breathed underwater, seen other countries, experienced other cultures, crossed oceans. Owned a car. I can talk to someone on the other side of the world through a box of tricks that I can hold in my hand!!!!! Truly magical (or witchcraft!?)
      I’ve never gone a day without food. Had a diet that comes from around the globe.
      Had good health care.
      Had a good education and don’t live in fear and superstition.
      Avoided war.
      The fact that all of this will come to an end and quite soon is sad. They are wonders that my grandchildren may never experience and I worry for my children’s futures.

      But all things come to pass, I guess. We all have to come to terms with our mortality on a personal level at some point. I worry for my kids but then they are mortal too and will be here for a relatively short time. (But, to worry about the kids is just part of the deal of being a parent🙂)
      The bigger picture is no different. We all have to come to terms with the end of the world as we know it. The fall from our lofty heights of achievement will be sharp and almost unimaginable, but to witness it!!!! Wow!!!! What a crazy time to be alive.

      I’ve decided to chill out a bit and marvel and enjoy the time I find myself living through. All the wonders that we have created. I don’t intend to just consume like crazy but just take time to pause and achnowledge all the wonders of this crazy world. Worrying about the future stops me living in the present.

      To my ancestors and decedents I say
      ” I’ve seen things you people wouldn’t believe……….”

    • I’m with you, John. Son is nearly 49. Grandsons 9 & 6. Son and wife professionals with no interest in a farm set up to survive grid failures, food shortages, fuel shortages….

      I simply must chill and hope I’m wrong. At 76. although fit, am too old to set it up now if the family isn’t helping. My wife has no interest in living in more rural circumstances now. So I enjoy fine wines, excellent home cooking, comfortable home, and decent amenities in the area.

      To have the knowledge and money to set it up makes it frustrating.

    • Steven.

      Maybe your son, stepdaughter and wife have it right.

      “Prepping” for the fall seems to be a bit of a waste of time. Not sure that buying a farm is going to improve ones chances when the shit hits the fan. Lots of guns in the US I hear?

      Live life now whilst it’s good. Nothing, we as individuals can do, will prevent what is coming humanities way. Enjoy the fruits of this crazy time. After all, we may be hit by a bus tomorrow never mind the collapse of civilization.

    • Mr Adams;
      Thank you for your kind words.

      As you say, we have lived better (more comfortably, more free, more and better everything) than any generation that existed in the past, and that will ever exist in the future.

      My small mind boggles every time I think about it.

  33. A New Book from Post Carbon Institute

    I’m excited to announce the release of our newest book, Energy Transition and Economic Sufficiency: Food, Transportation and Education in a Post-Carbon Society, edited by Bart Hawkins Kreps and Clifford Cobb.

    In this compilation of essays you’ll read about the challenges we would face in running modern industrial society entirely on renewable energy. You’ll also find, as the authors have, that lessons from history and certain aspects of contemporary technology will be immensely helpful in the “sufficient economy” of the future.

    The essays in Energy Transition and Economic Sufficiency demonstrate that renewable energy can’t save our always-on, constantly growing, high-energy-demand economy. But if we share the wealth to produce only what we really need, renewable energy can power a sustainable civilization. These authors will show you that sufficiency—not growth—must be the focus of the new economy.

    Don Stewart

    • Regarding the capability of RE doing the job, and 8B cooperating in voluntary simplicity (HA HA)
      I’ve already posted more than once the article about The Maximum Power Principle. There have been no rebuttals. It is not an absolute given the exceptions of voluntary simplicity and suicide.

      Here is a paper (open access) co-authored by William (Bill) Rees, developer of the Ecological Footprint on why RE can’t do the job:

      https://www.mdpi.com/1996-1073/14/15/4508/htm

    • @Steven Kurtz
      First, renewables WILL do the job, but that may well be a photosynthesis based economy…which our ancestors lived with for a few hundred thousand years.
      Second, the Maximum Power Principle is only one aspect of the overall goal of “flourishing”. While few people will turn down the offer of “more power” (because more power always increases the available options), doing what is necessary to gain more power is just like everything else…diminishing returns. An example of diminishing returns is eating more calories…yes, more available power, but also obesity and chronic disease and poor physique…so Americans spend billions on diet regimes.

      I suggest that the Maximum Power Principle was in its prime during the time when additional power was there fore the taking…at least that’s what people thought back in Eisenhower’s Atoms For Peace era. Now we are flopping around like fish out of water looking for the next big thing…but not finding very much. What happens next will be interesting to watch. Grab your popcorn.
      Don Stewart

    • Sadly, Don, you don’t grasp the MPP as a universal principle of living systems. Thriving requires adequate nutrient/energy. Species seek that, as well as replication and expanding niches. If overshoot occurs, dieback does the rebalancing. Stuffing your face isn’t an example of thriving, as it reduces your health and resilience. It’s not eat till you burst. It’s having throughput to the point of maximum species expansion.

      You folks will be happy to have me drop out of this merry-go-round, as I’m not learning much save a few links in the melange. I’ll not be checking the box to receive emails after the next posted essay. I’ll scan the comments to glean a gem here or there. You folks rewind the tape incessantly, and have yet to rebut the two links I gave today.

      Cheers on the Downslope of the plague species!

    • I must admit Steven, it would be far more interesting to me and perhaps others if you could use the maximum power principle to map and analyse the socio-biological effects of systemic entropy rather than just quoting it.

      Similarly, rather than just critiquing renewable energy as an inadequate alternative to the current carbon energy system, could you provide an analysis of alternative energy pathways and any paradoxes that might be encountered.

    • So sorry to leave you unsatisfied, SG. Experts far smarter and better informed than I am have done what you desire. I direct readers to checkout the references I give. Why anyone would prefer to have me, a retired dilettante, attempt to teach the fine points of specialized complex systems is beyond my comprehension. Meanwhile, carry on trying to save the plague species. I prefer focusing on reduction of the impact of it which is deteriorating planetary health and resilience. Population reversal is the surest way to accomplish that in my view.

    • Thanks, Martin, I see we’re interjecting the Bible here, love it. Here’s one for the ages:
      Luke 6:46: “And why call ye me, Lord, Lord, and do not the things which I say?”

    • Useful input Mr. Kurtz. I agree wholeheartedly that debating endlessly the number of angels on the head of this particular pin can get tedious. There are facts that obviate a given conclusion. Once one ignores one or more of the facts … well, a lot of time can be wasted.

      “Meanwhile, carry on trying to save the plague species.” Indeed.

      They used to say that, “Whoever has the most toys wins.” I recently realized that the concept is nearly true …. I have a set of “facts” in my head. One or more of those “facts” may be completely bogus, but I have no way of determining which one or why except through real world testing. I think that the number of “true” things that are actually true in my head vastly outnumber the ideas that seem true but will bite me later. Every day, I see people in person and on line who’s set of “truths” are going to make them very sad eventually. Yup, whoever has the most true truths wins.

    • I found this ebook very informative with regards to much of the discussion/debate on this blog.

      It’s the most comprehensive assessment of where we are up to I have read to date.

      Apologies if this is all old hat to those of you who are better read than me.

      Hope the link works too!!!

      https://escholarship.org/uc/item/9js5291m

  34. @ Dr T., Your assessment of the UK’s dire economic situation is impressively accurate for someone currently decamped to another island that is not covered in it’s own waste. (sewage, an apt indicator of how things are turning out) Being fully sovereign now, the rulers have tweaked the law to let the water companies flush sewage into every river and off every coast because of brexit caused problems in the supply of treatment chemicals. (You might want to avoid eating any UK-origin seafood over there if some does manage to still get exported) Funnily enough, making just one page in an encyclopedia of sleaze, water companies are saving money on costs while still paying out billions in dividends to (mostly foreign) investors for ‘running’ a monopoly service people need to live. And this is a symbol of independence.

    Nothing will change here though until we hit the buffers, because a couple of the generations still alive and old enough to vote can’t see past their bigotry as to why their country is being sold out from under their feet with the property ponzi scheme. As long as there are people they can see who are different to them to blame, the perpetrators of the corruption and incompetence have a free pass, because they will accept creeping impoverishment by a 1000 cuts as a price worth paying. How did your country become bankrupt? Two ways, gradually, then suddenly.

    • @FI,

      I’ve been following the sewage scandal on mainstream news but not come across some of the aspects you raise (e.g. tweaking the law, supply problems with treatment chemicals). Do you have any links to your reference sources?

    • When water companies’ sewerage infrastructure is overwhelmed by sewage and rainwater, it is dumped into rivers and on to beaches via combined sewer overflow pipes, rather than allowing it to back up and cause flooding.

      In many cases it’s not illegal because the Environment Agency issues the firms with permits allowing the discharges on condition that it only happens under “exceptional circumstances” when there is heavy rainfall – and only then if the water company is already treating a specified volume of sewage.

      https://www.theguardian.com/commentisfree/2021/nov/01/sewage-england-rivers-seas-outcry-tories-effluent-dumping-companies

      Sewage is discharged into rivers across the UK and Ireland on a daily basis. This isn’t an isolated problem; it occurs up and down the country, affecting urban city centre rivers and pristine chalk streams alike.

      https://www.theriverstrust.org/key-issues/sewage-in-rivers

      In other words, yet more politically motivated reasoning with no acknowledgement whatsoever of the constraints/limits of the existing infrastructure.

    • @ Neil61, I first noticed the spiralling sewage issue following a documentary livestreamed by George Monbiot on the dire state of the UK’s rivers. It was quite thorough, showing multiple sources of pollution, from industrialised agriculture (new US-style, mega chicken raising warehouses) in rural areas as well as fertiliser runoff from fields within the watershed. If I remember correctly, they stated the water companies self-reported ‘accidental releases’ and happily paid nominal fines annually that were dwarfed by profits. The environmental watchdog was handicapped to the point of being ineffective by budget cuts, so played catchup.

      Then I think it was Guardian articles that explained there was a proposed law going through parliament to force the water companies to be accountable for their damage, but this was being blocked. I suggest that you do a quick search of your own, that way you’ll be sure of its veracity, all this stuff is pretty open since so many practices that used to be regarded as scandalous are almost always legal now. (A very practical way of dealing with illegality problems is just make it legal)

    • It is momentous that we finally have an Environment Act, so what now?

      https://greenallianceblog.org.uk/2021/11/09/it-is-momentous-that-we-finally-have-an-environment-act-so-what-now/

      The act includes important legally binding targets, including a 2030 target to halt species decline and a target to tackle air pollution from particulate matter (PM2.5). Crucially, there is now a legal targets framework covering nature, water, air and waste.

      It gives the government the ability to set long term environmental improvement targets on air, water, nature and waste. The first set of targets are expected by the end of 2022, and specific action is promised on tackling particulate air pollution and species decline. As governments prefer to maintain as much flexibility as possible, the targets are not set out in detail in the act.

      The expected public consultation on the targets, planned for February 2022, will therefore be a major test of the government’s ambition. Given the huge public interest in solving the crises of toxic air, sewage pollution, plastic waste and endangered wildlife, it’s clear that there is only one direction of travel that will satisfy the court of public opinion.

      ….

  35. every time I think I’ve had some bright insight I do a little research and walk slap bang into Ecclesiastes 1:4-11 “there is nothing new under the Sun”

    is mans folly ‘to get over excited and forget to respect limits’ a modern phenomena?
    well apparently not as the story of Icarus suggests, a tale from Greek mythology, possibly older than written language,
    this, a tale I’ve known since childhood, yet conveniently forget until circumstance retrieves it from my deep memory, is truly a warning from the ancients that we ignore at our peril.

    a brief search finds a fine mind already considering this in connection with business and leadership,

    https://knowledge.insead.edu/blog/insead-blog/the-icarus-syndrome-execs-who-fly-too-close-to-the-sun-11851

    Net Zero 2050 is a desperate scheme, born of despair, that aims to fly even higher to escape our woes,
    our fear is one of collapse, where we swoop too low and plunge into the sea and drown,

    but there still remains a world of boundless opportunity, where we can fly forever, if we remain between those limits.

    • Matt. Any chance of not cluttering up this shared blog with your subjective political rants. Perhaps find a different forum to process your grief. Thanks.

      In terms of analysis, for me, we need to identify and analyse the web of paradoxes that are emerging as entropic effects deepen within our current energy system along with the web of paradoxes associated different energy transition pathways.

    • Whoops! Posted this above in the wrong chain:
      Martin, I see we’re reverting to the Bible – love it. Here’s one for the ages:
      Luke 6: 46: “And why call ye me, Lord, Lord, and do not the things which I say?”

  36. Alice Friedemann on the likely catastrophe of ‘electric everything’. See not only an analysis of the Texas failure but also Pedro Prieto’s comments:

    https://energyskeptic.com
    “In trying to move to a 100% full electric society, we are moving fast forward to the perfect storm”

    Don Stewart
    PS. This fits in with recent comments about the average temperature being of lesser importance, and the excursions outside the range favorable to life being of greater importance. How different would the conversation in the US be if days of extreme wet bulb stress were at issue, rather than 1.5C vs. 2C? Or, for the nerdy, nights where temperatures do not fall enough to favor plant survival?

    • Don, the Jancovici presentation you linked to is fantastic. Saved to bookmarks. Good for sending to others.

    • Alice is one of the experts (like Bill Rees) who are on a small list I co-own. She agrees with my assessment that RE is highly unlikely to replace FFs. If you think solar photosynthesis via plant growth for gathering edibles and biomass fuels is a ‘solution’, I suggest that civilization like we know it will be long gone before that is the rule.

    • Steven.

      Out of curiosity, can you ask Alice what fraction of the current carbon energy system (approximately) can be plausibly replaced by REs.

      Similarly, can you ask her if she is making that assertion on the basis of a Zero Carbon energy system (which obviously isn’t the strategy being adopted by any country with the possible exception of Bhutan).

      Or is she making that assertion on the basis of a Net Zero energy system. If the latter, can you ask her why it is necessary to replace ALL fossil fuels with REs when Net Zero, as a strategy, specifically allows for a reduced level of fossil fuel use.

      Thanks.

    • Alice has a list of experts on her website. See the category “Experts” Her opinions, like mine, are influenced by these people’s views. She would, I think, be giving educated guesses to answer your questions.

      https://energyskeptic.com/category/expert-biophysical/

      One aside, I can’t imagine how Bhutan or any country could succeed in a zero carbon economy.

      If you still want to query her after perusing her blog, let me know privately and I’ll ask her if she is interested in responding.

    • @Steven Kurtz
      I suggest rereading Jim Kustler’s World Made By Hand books. If you decide that suicide is preferable to the world he describes, I wouldn’t try to talk you out of it. To each his own.
      Don Stewart

  37. Dr. Tim – thank you for your continuing analysis. Your observations on the situation in the UK reminded me that after reading Ray Dalio’s Five Phase Models of Country Development I had a go at writing Phase Six to capture the situation that I believe applies to Great Britain.
    Phase Six: In the final, last phase a country appears to be rich, yet is in total denial about its effective bankruptcy.
    By this stage the country is wholly dependent on inward capital from overseas to maintain its standard of living. Increasing amounts of assets – property and companies – fall into foreign ownership. The national debt increases at a rate that is faster than growth in GDP. A large proportion of consumption is funded through credit. The central bank is unable to normalise interest rates, which remain heavily negative continuing the process of distorting capital allocation and returns, while destroying savings. The net foreign income account becomes negative as larger amounts of dividend payments and interest are remitted to foreign entities. The currency continues to depreciate. Citizens find that they are working harder for a declining standard of living. Employees earn more, but the claim of money upon goods and services diminishes. The standard of living is now remorselessly in decline. National cohesion begins to fracture. Government, in an act of ideological desperation, dispose of more public assets into foreign ownership; and the central bank runs down the national gold reserve – the nation is effectively being sold from under the feet of the citizenry. Initially, the on-going transformation of the country into a nation of ‘sharecroppers’ is ignored by mainstream political parties and fails to register with the bulk of the citizenry, but in time – and when it’s far too late – a majority of people come to the realisation that their country has been ‘asset stripped’ and they have been delivered into a new form of feudalism.
    Mainstream economists may respond: Let’s assume non bankruptcy!

    • Don’t you think, Kevin, that this is already happening? Seems to me it is. Just been to a meeting with an accountant friend of mine, who was telling me that he started a meeting with clients at 17:30 yesterday and they only finished at 22:00 (which is why he looked shattered). A substantial part of his clients business was being liquidated, with 28 people losing their job. the fundamental problem, as I understand it, was that in 2020 government-sponsored loans were taken and, now that a semblance of normalcy has started, the firm can’t service this and other debt, as they have inadequate cashflow.
      The accountant told me some months ago that the “great unlocking” of the UK economy would pose often insurmountable cashflow and debt servicing crises for many small businesses and, unfortunately, this is beginning to happen, even in a superficially wealthy city.
      I had a meeting yesterday with a couple in their mid-70’s who are the income beneficiaries of a trust fund; there is hardly any income available anymore (thankfully, they can get by on their various pensions). The lack of income, rather than lack of capital, is what is throttling people in my experience, and this will only get worse as and when the equity market ‘corrects’, the bond market ‘corrects’, the cost of living rises (6.2% inflation in the USA, I see), pension schemes face having to offer ‘haircuts’ to their pensioners, and taxes go up, as they are, significantly from April 2020.
      This goes back to Dr Morgan’s point about the extreme financialization of the economy here in the UK; a toxic brew for us and our children.

    • this sounds like the UK I see before me,
      have you ever seen “The Bed Sitting Room” a play by Spike Milligan adapted for the screen,
      it’s an absurdist, post-apocalyptic,satirical black comedy with the few survivors of a nuclear war wandering around Britain trying to Keep Calm and Carry On.

      we seem to be in the process of bombing ourselves back to the stone age yet calling it progress.

    • Mark, yes. I penned the piece some years ago. My thought then was that realisation of the catastrophe would come too late, and that appears to be coming true. Those organs of the MSM that promoted privatisation and de-mutualisation are now complaining about foreign ownership of vital UK infrastructure etc!
      On the issue of pensions, I cannot help but think that a period of higher inflation while real interest rates move into deeper negative territory could well be the final nail in the coffin.
      If the proportion of pensioners is small, then the state and DB pension schemes can afford to grant inflation protection. A combination of a large cohort of pensioners, fewer payers – on pay-as-you-go systems – and returns crushed suggests that there’s going to be further serious upheavals ahead.
      I see existing inflation protections coming under very great strain. The USS is a case in point, where the DB element is curtailed and inflation protection is being capped.
      I would be interest to read your thoughts on my observation.

  38. Post Carbon Institute and Sufficiency Economy
    You can find a link to download the book for less than 10 dollars US, or look for free at a pretty thorough introduction which will give you a good idea what the authors are thinking. The editors admit that the focus is on the Western World, and they did not have time to give the Global South equal attention. Their focus is on the physical adaptation, not the potential chaos created by an over leveraged financial system.
    https://www.postcarbon.org/publications/energy-transition-and-economic-sufficiency/

    Don Stewart

  39. Interesting development.

    Legal activists are forcing decarbonisation in a decade.

    Green warriors weaponise human rights laws to force net zero this decade.
    https://www.telegraph.co.uk/business/2021/11/10/green-warriors-weaponise-human-rights-laws-force-net-zero-decade/

    As Ambrose points out, as a practical matter, the world’s $186 trillion economy runs on fossil energy, nitrogen fertilisers, etc.

    While renewables are already cheaper on pure cost in many regions – and will over time become much cheaper – you cannot replace the legacy infrastructure overnight.

    Milieudefensie’s lawyer Roger Cox (a legal activist) said his Shell case has already raised the market borrowing cost for the whole fossil complex, and it has pinned an asbestos tail-risk warning on their backs. He is right. Big Money will no longer fund Big Oil.

    This has created an annual investment deficit of $600bn or more in the energy system. We are therefore careening straight into a fuel crunch over the early 2020s. This autumn’s squall has been a picnic compared to what is coming.

    • Are renewables really cheaper? Are there any wind farms built today entirely and only using the energy from a wind farm? Including mining and shipping the raw materials, processing the raw materials into forms that can then be manufactured into the parts of a wind turbine, and the ongoing maintenance costs?

      I thought we mostly agreed on this blog that the ECOE of wind farms is far less than the heyday of oil. So surely the current apparently cheaper cost of renewables is effectively subsidised by the better ECOE of even our current fossil fuel industry, let alone back 50 years when extraction was so much easier?

    • You are of course right Richard

      https://www.forbes.com/sites/jamesconca/2015/02/11/eroi-a-tool-to-predict-the-best-energy-mix/?sh=75d7e12ca027

      and the life cycle energy return is much higher for coal for example. In this respect, EROI is an energy measurement.

      When renewables are promoted as cheaper
      https://www.independent.co.uk/climate-change/electricity-generation-cheaper-renewable-energy-b1891326.html
      this is the financial cost of every unit of energy (usually electricity) consumed. Hence renewable electricity is cheaper because the primary energy source is free, such as wind and solar, along with lower running and maintenance costs.

      Comparison of electricity prices are always relative in that renewable electricity is often cheaper when coal market prices increases.

      The EROI is important because of the varying energy density of inputs and outputs. Coal with a much higher EROI means the equivalent output would mean a solar farm that covers a huge area of land along with the extra materials to build them. Thus EROI is more interested in efficient resource use and the energy productivity of the energy plant.

      What Ambrose is referring to is simply the output price whigh to be honest isn’t the main point of the article. The main point is that the required annual investment to sustain the global economy is currently in deficit by half. If this persists, then deficient carbon and noncarbon energy will mean renewables can’t be built out, agricultural productivity will collapse, there will be energy shortages and blackouts and the global economy will dramatically contract.

      Whether this is intentional on the part of legal activists or is done in ignorance of carbon entanglement and other system entropy paradoxes is an unknown.

    • I keep an eye on this site to see where our daily electricity is really coming from,

      http://gridwatch.templar.co.uk/

      we’ve already got quite a few wind turbines and they don’t seem to be doing much,
      luckily we still have that other renewable biomass, aka burning trees, it seems to be doing better than wind today, but I thought we were supposed to stop cutting trees down?

    • A cynic might argue that cutting down trees creates more scope for planting new ones, thus forwarding the supposed objective of “net zero”………..

    • Trees in general will be prone to a kind of net zero logic. In other words, in the UK for example, as a general rule for any tree that is cut down another one needs to be planted.

      Obviously we still need timber for construction and furniture for example. But burning trees for energy is obviously highly contentious. As is cutting them down for bioethanol and biodiesel plantations and beef production.

      The COP agreement was to acknowledge that tree cover in general sequesters carbon and therefore trend global tree cover needs to increase by 2030.

      Hence, the UK government has set a target of trebling tree planting rates in England to 7,000ha each year by May 2024 as part of its new England Trees Action Plan.

      https://www.fwi.co.uk/business/payments-schemes/environmental-schemes/england-to-treble-tree-planting-rate-to-meet-net-zero-target#:~:text=The%20government%20has%20set%20a,new%20England%20Trees%20Action%20Plan.

    • I know everyone is pursuing ‘Net Zero’ but I’m unsure what they are trying to reduce to zero,
      their capital? the biosphere? the population?

      if the GFANZ investors are going to pour $100-150 trillion into the global economy over the next 3 decades, are they ever going to see it again?

      it all seems like a ‘send me $10 and I’ll send you a $1’ scheme.

    • According to the investment broker on Black Black Oil, returns on carbon energy have now reduced to 5% and returns on renewables have increased to over 10%.

      Obviously risk is built into the investment sector.

  40. @Steven Kurtz
    I’m very serious about the suicide comment. Orlov puts the Russian figure at 10 million, following the collapse of the Soviet Union. And if the electric grid collapses, as Alice Friedemann expects, things could be a lot harder than they were in the Soviet Union, where the electric grid continued to function.
    Don Stewart

    • a clarification, I think you mean a ‘collective suicide’ as a metaphor,
      it’s an emotive word and we ought to be careful it’s not misconstrued.

    • Don,

      You were addressing me. Personal advice is not kosher on this blog. In any case, the past % of global population who were suicides was tiny. “Prediction is difficult, particularly about the future.” Niels Bohr, Yogi Berra, and others.

    • Steven, Don,
      I agree with both of you, because you both look at the same thing but different angles,
      Locusts are actually Grasshoppers,
      Don see’s Grasshoppers, this is when they are in the solitary or gregarious phase of their lifecycle,
      but in the right climatic conditions, when a bloom of vegetation appears and their numbers and density rise, their behaviour changes and they can swarm and become a plague of Locusts,
      Steven see’s the Locust side of the Grasshopper behaviour,

      we humans were perfectly innocent and unthreatening as Grasshoppers during our solitary phase, (hunter gatherers)
      as we grew in numbers we moved into the gregarious phase, (agrarian civilisations)
      but the discovery and utilisation of fossil fuels has catapaulted us into the swarming phase,(industrial civilisation)
      after swarming regionally we have linked up into a plague phase, (globalised industrialised civilisation) and truly deserve the moniker Locusts,

      ‘Locusts’ is the pejorative name given to too many bloody Grasshoppers,

      what happens now is our plague devours everything in our path until we’ve consumed everything and we mostly die off,
      then the remnants settle down as Grasshoppers again,

      I’d happily live like a Grasshopper as Don suggests, but Steven points out most Grasshoppers have joined the Locust Swarm.

      I can go to the shop with the best intention of buying just a pint of milk and a loaf of bread, but arrive to discover the swarm has already passed through and stripped the shelves of everything,

      so basically I’m screwed, but aren’t we all?

  41. How the “Pension Crisis” is unfolding in Colne, Lancashire.

    To answer Kevin from Colne about the cost of providing guaranteed incomes for life, one simple approach is to run some ‘open market option’ pension annuity quotes, which I have done. I have assumed that we have a couple who are married and that they are both age 65 and live in Oxford Street in Colne and are in good health for their age, with no long-term health conditions and non-smokers. The pension would reduce by one-third on the first death and include a 5-year guarantee (meaning that if the pension buyer died after 2 years, the full pension would not change, but would reduce by one-third after the 5th anniversary).

    Let us assume that the couple from Colne have exactly £100,000 available in a pension plan to buy their lifetime income with. Firstly, if they are able to cope with the ever-increasing cost of living by drawing on other financial assets and hoping that their state pensions would increase by at least something each year, the could buy a fixed, level, pension, as over 90% of people do (which has to be seen in the context of their overall retirement income resources). Today’s top income rate, before the deduction of any income tax due, would be £4,688.84 per annum.

    If we used “Limited Price Indexation”, meaning that the pension would increase by RPI to a maximum of 5% a year in this example, then the starting amount would be £2,557.20 per annum, gross. This is the type of inflation increase commonly offered by occupational defined benefit schemes, but the maximum increase is often 2.5%, not 5%.

    If the couple were confident of a reasonable lifespan and had other financial resources to fall back on, the could choose an pension fully linked to the RPI. Here, the pension would start off at £2,485.56 per annum gross, about half the ‘rate’ from the fixed pension.

    Extrapolating from these quotes, we can see that the cost of providing an RPI linked retirement income of, say, £12,000 per annum would be about £800,000, around 13 times the average UK DC pension fund of £62,000.

    We can clearly see how desperate the situation is becoming as a wall of retirements approach in the UK. I hope that helps, Kevin from Colne!

  42. Since typing out the above, I have just learnt that one major provider of annuities, Canada Life, has cut its rates. In 2013, there were 21 annuity providers, now there are just 5. I still firmly believe that, in the right context, the annuity remains the optimal retirement income product, as long as the product is used thoughtfully.

  43. hi Mark Andrew Meldon,

    are you seeing more instances of people ‘eating their seed grain’ to keep their heads above water?

    • To a certain extent I am. It is all very well drawing ‘income’ from capital, regardless of whatever ‘tax wrapper’ (Pension, ISA, portfolio, life assurance bond) it is held in, whilst the underlying investment value is rising by more than the withdrawals being taken, which has often been the case in recent years. However, this won’t continue and those withdrawing at high rates (anecdotally, pension drawdown rates are over 7% per annum on average) will see rapid depletion of their capital.

      Most people grossly underestimate their life expectancy, because a friend or family member had the bad fortune to die young, but the average woman in the UK, according to ONS statistics will live to age 87, so that’s about 1,040 weeks in ‘retirement’, a man about 3 years less. That’s why the ‘magic bullet’ of annuities are misrepresented in the MSM. Annuities are explicitly NOT an investment, they are insurance. They should form at least part of one’s retirement income picture.
      Because the UK’s citizens have spent decades ‘investing’ in non-productive assets, like houses, the majority are now facing utterly inadequate retirement funds and incomes. How will they continue to ‘consume’ if most of their ‘capital’ is the roof over their heads? After all, just being alive is a form of consumption, and if you don’t have the wherewithal, you will end up relying on the kindness of strangers (a bit like the nation, actually!).

    • Do these dynamics imply a ‘cash in moment’, by which I mean people rush to sell assets such as property, stocks and so on before others are effectively forced into selling by their income needs in retirement?

  44. Dr Tim, I suspect, I’m afraid, that this is already happening to a certain extent. What people seem to often do is to confuse capital ‘assets’ and sources of income. I currently have two just retired single clients that have found themselves ‘sofa surfing’, having been involved in the recent ‘stamp duty holiday’ UK residential property market feeding frenzy. They are both unable to find an adequate house to purchase, and both are, in my opinion, at risk of simply buying ‘too much house’ for their ‘retirement years’ (there is now an absolute dearth of decent property on the market in Somerset).
    One individual has adequate guaranteed retirement income, and has a pragmatic approach towards how much to spend on a home, the other is relying on the stock market to treat them kindly for 20 years, which it surely won’t. I’m trying to persuade this person to be sensible in as to how much to spend on a home, trying to make sure that they reserve capital to boost their income, perhaps by using a tax-free annuity bought with their own money. It’s an uphill task.
    Also, I meet many people whose views are distorted by the ‘bequest motive’ which, frankly, is nuts!

  45. Intellectual daughter of Kunstler?
    Jody Tishmack surveying the wreckage, and the drift toward war (sounds kind of like Jancovici):
    “I believe we have entered the most dangerous decade in human history. If nations go to war now, the destruction of infrastructure will be impossible to rebuild. We won’t have access to the abundant, cheap fossil energy we used to build them in the first place. We won’t have ample forests, rich mines to plunder, or fertile soil to help us rebuild. Our access to resources will shrink down to the footprint of a region where we live (assuming we still live). There will simply not be enough resources to rebuild our cities, highways, bridges, water treatment facilities, factories, etc. If we go to war what little of humanity survives will live during the longest dark age ever experienced. It will make surviving an ice age pale by comparison.”

    This is her ‘do not feel good’ Thanksgiving message.
    Don Stewart

    • Interesting and compelling perspective.

      This would imply systemic entropy may well turn the maximum power principle from a competitive dynamic towards a more cooperative dynamic as witnessed by the recent cooperation agreement between the US and China regarding Net Zero.

      Mutually assured destruction, if the obesity analogy is applied, is clearly not a reflection of the maximum power principle if the goal of this principle is to create and sustain species longevity.

      Maybe the human species is slowly entering the maturing stage of its species development.

      Thanks Don.

    • @Steve Gwynne
      The US has turned its back on Mutually Assured Destruction. The US has consistently acted, in recent years, in search of First Strike. Why else do we need a Space Force? Why else do we want to put missiles in Ukraine? Why have we withdrawn from the Cold War agreements which reduced the chances of ‘accidental’ nuclear war?

      Putin announced that Russia had achieved MAD, and ordered a reduction in military spending. He again invited the West to sit down to discussions. Silence from the West.

      I don’t closely follow European politics and media, but I hear that they are blaming the Russians for the rise in spot prices of natural gas in particular, and Biden is blaming OPEC plus Russia for the rise in oil prices. Does anyone remember that it was Europe which demanded spot prices rather than long term contracts? Is there a total disconnect from reality?

      Don Stewart

    • Thanks Don.

      I don’t see a disconnection myself, just the maximum power principle simultaneously operating at different levels from the individual, to the nation, to the Regional to the global.

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