I have spent 10 seconds considering the solution to the "rebound effect", so forgive me if there are multiple holes in my argument.

Increased efficiency can be driven by taxing consumption of the efficiency target, in this case energy. The tax should be rise year on year to sustain the efficiency drive, thus not adding to consumer spending liquidity

The tax should be hypothecated with yields being directly invested into sustainable renewable energy schemes (ie not ethanol).

It's a non-starter in the US since not a single politician has the gumption to entertain such a tax, and would not be voted in if they did.

In my opinion, the only thing that GW Bush could do to somewhat alleviate his (non-negotiable) place in the Presidential Hall of Infamy would be to exercise his veto to implement a gasoline tax now.... it won't happen

I think you point to some very valid political difficulties in getting any kind of 'energy tax' passed by the US Congress--though I still think there may be enough support to make it happen. It IS, however, already happening, or quite likely to happen, in many individual states, Europe, etc. The real problem that I think the "shadow rebound effect" concept raises, however, is what to do with the the funds raised by that energy tax. If the goal of the energy tax is to subsidize one form of energy use over another, to redistribute income, or to fund some building project, then it seems valid to me. However, if the goal is to reduce overall energy use, then it must be spent with great care (or not spent at all--reduce deficit spending, for example).

The problem is essentially the problem of the velocity of money. When a government spends the tax revenue raised by an energy tax, they create (roughly) the equivalent velocity of money in the economy as would the consumer spending that money--either way it leads to energy consumption, regardless of whether one purchases products or services. The result is that it doesn't lead to energy conservation, just redistribution of energy consumption.

Spending money on a truly sustainable, renewable energy scheme will result in energy consumption (required to build the scheme, plus the resultant velocity of money bouncing through the broader economy), but it will lead to reduced non-renewable energy consumption in the long run (assuming the EROEI is actually greater then 1:1 after the bootstrap effect is taken into account). So this is probably a good solution, though perhaps politically impractical as you mentioned. Other notions, such as using the gas tax to fund road construction, only redistribute our energy consumption, and don't conserve it, due to the "shadow rebound effect."

Jeff,

You phrase the question... Is the push for greater energy efficiency a good policy choice to address energy scarcity AFTER Peak Oil?

The push for greater energy efficiency may have had a much more profound impact before PO, and much less of an effect after PO.
Consider some of the countries that end up in a bidding war for oil once shortages develop- Japan, China, U.S., and European countries.
Since the economies, agriculture, and stability of these countries depend on oil- they will use any advantage possible to obtain oil.
AFTER PO is widely recognized, it would be in the best interests of the other bidders for global oil, for the dollar to collapse in value. This could easily be accomplished by Asian countries selling bonds, and refusing to buy more.
The U.S. is so much more dependent on foreign financing, that in a Post PO (or PO aware) world, structural change will become tremendously more difficult as we can no longer borrow at reasonable interest rates to finance mega-projects.

Leaving aside the fact that a geologically-limited supply of a product cannot have the sort of rebound consumption effect you're thinking of (it's physically impossible; the only question is how much of what gets made from the fixed supply, and how much is investment vs. immediate consumption), you mistake the role of tax policy in shaping activity.

When a government spends the tax revenue raised by an energy tax, they create (roughly) the equivalent velocity of money in the economy as would the consumer spending that money--either way it leads to energy consumption, regardless of whether one purchases products or services. The result is that it doesn't lead to energy conservation, just redistribution of energy consumption.

Behind that claim is two faulty assumptions:

  1. You assume that every dollar of products or services embodies the same amount of energy.  This is so wrong, it's nearly risible.
  2. You assume that a redistribution of energy consumption is zero-sum.  It's not; a GJ invested in fuel for a ski boat is very different from a GJ invested in epoxy resins for a wind turbine blade.

The effect of a stiff fossil-energy (or carbon, or petroleum) tax would be to make the various alternatives (including efficiency) relatively cheaper.  People would invest accordingly.  Economies of scale would change the economic landscape further away from favoring the now-discouraged commodity.

The outcome of greater efficiency is to encourage two trends:

  • Greater production from the existing energy supply, perhaps keeping up with declining production.
  • Increasing competitiveness of renewables, as a given quantity of production yields more and more goods and services.

The whole collapse scenario is predicated upon an inability to maintain production of goods and services.  Postulating that greater efficiency in that production will also lead to collapse is just silly.

"You assume that every dollar of products or services embodies the same amount of energy. This is so wrong, it's nearly risible."

I don't think this is wrong at all. It's commonly *assumed* to be wrong, but I have explained at length why I think it is this assumption that is wrong: http://www.jeffvail.net/2006/11/energy-payback-from-photovoltaics.html

I think think the actual mistake is in the two trends that you see as the outcome of greater efficiency:

1. Greater production (work, actually) from existing supply keeping up with declining production. This certainly seems valid for a while. However, there are fixed limits to how efficiently you can use a resource (100% efficiency, which won't be reached). In the end, this becomes an EROEI issue. Is the true, non-bootstrapped EROEI greater than 1? IF so, is it continually increasing? If not, it still runs into diminishing marginal returns and won't "cut it" for a hierarchal society based on growth.

2. More goods and services due to increasing competitiveness of renewables--this, too, runs into the "finite world" issue, and does nothing to address the diminishing marginal returns problem as the ultimate cause of collapse.

I'm not arguing that greater efficiency will lead to collapse per se. What I am arguing is that focusing on greater efficiency without considering the ramifications of efficiency-only policy within the greater system will distract us from addressing the fundamental causes of collapse.

If I hear you right,we need to put a cap on growth or nature will do it for us. We need to put a cap on all sorts of things, including energy use, greenhouse gas emissions, water use, other resource use, mineral use, and population. The economy needs to operate within those constraints.

Efficiency should just be one means to an end, not the objective itself. What has efficiency brought us in the automotive sector? Bigger and more powerful cars that are more efficient. Within the sector itself, I agree that the Paradox is operating quite nicely.

The problem is we always want more and just use efficiency as a way to help get us there. Once we set a goal for the same or less, solutions begin to present themselves.

I don't think this is wrong at all. It's commonly *assumed* to be wrong, but I have explained at length why I think it is this assumption that is wrong [linky]

You only analyzed photovoltaics, which have the lowest EROEI of all the options.  Among the flaws of your analysis:

  1. You ignore wind.  Wind has an estimated EROEI of up to 80:1 over a 20-year lifespan (payback time as little as 3 months).
  2. The world produces considerable biomass which is not used to its best effect.  This is already being produced, so new energy inputs would only be required for processing and shipping.  Given that some of the products (e.g. torrefied biomass) have an energy content similar to coal but would be produced closer to some markets, the energy devoted to shipping may go down.
  3. Even silicon PV is changing.  Historic energy balances have been for PV silicon produced as a byproduct of the semiconductor industry; we may soon see PV-grade silicon produced for $18/kg.

Forget PV for a moment.  If you can show serious problems with the proposition that a sustainable energy system is impossible in the USA (as an example), I'd like you to go over my "Sustainability" essay and show me exactly where I went wrong.  Do note that I assumed a lot less liquid-fuel production than the maximum possible (I devoted about 2/3 of the carbon for sequestration), and even if technologies like the DCFC turn out to be duds there are backup paths which will yield a European-level energy consumption.

Greater production (work, actually) from existing supply keeping up with declining production. This certainly seems valid for a while. However, there are fixed limits to how efficiently you can use a resource (100% efficiency, which won't be reached).

Let's suppose that I put a wind turbine on a 1/4 acre pad at the edge of a cornfield.  This is a 126 meter diameter rotor, spaced 4 diameters on-center crosswind and 10 diameters downwind to the next machine.  Total land area blanked by the turbine is 63.5 ha (157 acres).  Total blade weight is ~54 tonnes, of which perhaps half is derived from resins (the other half is glass fiber).  Assume fatigue lifetime of 20 years.

If 80% of that land is cropped in maize every other year at 150 bu/ac/yr grain and 2.5t/ac/yr stover, the land will produce 157 t/yr of stover.  If the stover can be converted to e.g. bio-oil at 70% mass-efficiency and the bio-oil to resins at 20% efficiency, each year's stover can make 22 tons of resin.  This compares favorably with the 27 tons of resin required to replace the rotor after 20 years (1.35 t/yr).

This is a recipe for rapidly increasing production (80%/year growth potential) from renewable supplies.  It would be able to yield both food and energy with more than 90% of the non-food products (both energy and chemicals) available for other consumption.  In short, it grows like a plant.

Even 14% efficiency from biomass to a resin product seems to be no obstacle to rapid growth.  The key is that there is some efficiency level where the cost of renewable material and energy inputs stops being a limiting factor on system growth.

As for keeping up with declining production, let's assume a 2%/year compounded decline in fossil-fired electric generation (2005 figure:  ~2000 billion kWh/year) and a 40%/year compounded increased in wind generation (14.6 billion kWh/year in 2005).  The fossil-fired decline runs about 40 billion kWh/year/year, while the wind generation increases about 4 billion kWh/year in 2005, 8 billion kWh/year in 2007, and 32 billion kWh/year in 2011.  The increase in wind exceeds the decline in fossil in 2012, and then it's uphill until the inflection point of the logistic curve is reached — perhaps another decade.

Annual wind energy potential from the continental 48 states is estimated at about 1.2 terawatts average (~10,000 billion kWh/year) from the continent, and about 900 gigawatts (~7500 billion kWh/year) from the continental shelves.  This is sufficient to supply all current end-use energy consumption.

More goods and services due to increasing competitiveness of renewables--this, too, runs into the "finite world" issue, and does nothing to address the diminishing marginal returns problem as the ultimate cause of collapse.

Please show me where those limits are in a renewable-energy scenario (don't forget to assume 25%-efficient PV at $1/watt within the next 20 years), and why they'd lead to a collapse instead of a "climax forest" scenario.

Ris·i·ble /ˈrɪzəbəl/ Pronunciation[riz-uh-buhl]
–adjective
1. causing or capable of causing laughter; laughable; ludicrous.
2. having the ability, disposition, or readiness to laugh.
3. pertaining to or connected with laughing.

4. cant of the orotund flatus

The world produces considerable biomass which is not used to its best effect.

Who are you to decide how this planet puts to best 'effect' it's biomass? Sorry poet, but I find that sort of thinking the reason we are in this sorry state. We tear up the floor boards of our house in order to heat it.

Who are you to decide how this planet puts to best 'effect' it's biomass?

When I said "the world", I meant the human portion thereof.  If we're producing stalks, leaves, trimmings, slash, pulp and other material that we essentially throw away, we might as well change our methods to get the most out of them.

While the analysis in the link was aimed at PV, the relevant point here is that it lays out a methodology for calculating EROEI--a "price-estimated EROEI." I state quite clearly that it is an imperfect methodology, just one that I think is better than current methodologies, which ignore a huge percentage of energy inputs to a given product.

The truly laughable notion is your assertion that wind has an EROEI of 80:1. That's greater than any other form of electricity generation--If there is so much wind potential, I wonder why we don't rely primarily on wind in this country? How much do you have personally invested in wind developments?

The bottom line is that, even if we accept your wildly optimistic projections for wind and other renewable energy production, this does nothing to address the fact that we have an economy predicated upon continual growth situated on a finite planet. But advocating wind energy is where you want to place your effort, more power to you...

The truly laughable notion is your assertion that wind has an EROEI of 80:1. That's greater than any other form of electricity generation--If there is so much wind potential, I wonder why we don't rely primarily on wind in this country?

Beyoned energy returns of 40 or 50 it just doesn't matter. First your analysis becomes sensitive to rather small things so you can start fudging the numbers without really lying, so either hydro or nuclear or wind have the highest energy return depending on which day of the week it is.

Second, and this has been hammered home many times, energy return isn't the sole determinant of economic competitiveness of electricity generation. For example, if wind had twice or three times the energy payback it would still require quite a bit of excess capital for dealing with intermittency, from HVDC lines routing between different generating regions to pumped hydro storage.

The bottom line is that, even if we accept your wildly optimistic projections for wind and other renewable energy production, this does nothing to address the fact that we have an economy predicated upon continual growth situated on a finite planet.

Sure this is something we'll have to deal with... in several centuries. We aren't close to tapping out the energy potential of the solar flux or the radiative capacity of earth of roughly 10^16 watts. One might reasonably surmise that we'll address this by moving a substantial amount of our industry off planet by then.

The truly laughable notion is your assertion that wind has an EROEI of 80:1.

If you can't tell me what's wrong with the source, what do you have to argue with?  I admit that 80:1 is extreme, but other sources claim EROI of 17-39.

That's greater than any other form of electricity generation

Why shouldn't it be?  It's got zero energy expenditure per unit of "fuel".

If there is so much wind potential, I wonder why we don't rely primarily on wind in this country?

Rural areas once did, until the REA brought grid power to most of the nation and destroyed the market for wind turbines.  Note that the wind industry was put out of business by a government-subsidized competitor.

How much do you have personally invested in wind developments?

I don't know.  Most of my money is in mutual funds, and I have no idea what their particular investments are.

The bottom line is ... we have an economy predicated upon continual growth situated on a finite planet.

Which means the oil situation (heck, everything about fossil fuels) is irrelevant to your thesis, so why do you bother to post on this site?

In closing, an analogy:  An individual shark lives based on continual growth in a finite ocean.  Sharks have been around for about 420 million years.