155 comments on The financial return on energy invested
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155 comments on The financial return on energy invested
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One could argue that by 2010-11 that GDP since 2000 will have been revised downward so much (since 40% of US corporate profits this decade are in financial sector - and liabilities are still extant), that the energy per $ of GDP is actually much higher than commonly expressed - so the corrolary to 'phantom GDP' is 'zombie energy intensity'...
energy and natural resources are what we have to spend....(dollars are just who controls the energy, for now)
My simplistic view is that debt is borrowing from the future, when this is done to wisely invest in a productive asset (e.g. a rail network) then it is good, when it is done to provide say a lifestyle totally beyond one's income or to buy the voteriat then it is a bad thing. Since the borrowing countries have generally indulged in the later then they will have to cut down on non-essentials to get back on an even keel. Personal savings have started to rise as consumers try to pay down debt but most governments are not there yet since they don't like giving bad news to the voteriat.
I think using GDP is not a perfect measure since what does it really represent, we live in a closed eco-system (the world) so what's increasing? population, fossil fuels burnt/CO2, seas emptied of fish, plastic junk created and shipped.
tonyw,
I think you are mixing up GDP with sustainability. Both low and high GDP countries can be either sustainable or non-sustainable.
To go to the core of the issue, is it conceivable that a society can have a high GDP using renewable energy and recycling or harvesting in a sustainable fashion? It's clearly not possible if all energy comes from FF's whatever the GDP/capita. I see no reason why we cannot have goods that are made from 100% recyclable minerals or derived from sustainable agro-forestry. I also see no reason why energy/GDP cannot continue to decline. Many of the things we associate with a high standard of living, such as health care, education, arts, gourmet food, don't have a high energy content. Just a few are very big energy users such as tourism/travel , personnel transport, but in spite of it's high automobile use, California has a state average 4.7MJ/$GDP compared to the average of the US of 7.4MJ/$GDP, are we saying that Californians don't really have a high GDP/capita its a "Phantom high standard" or do Californians really use much more energy?
It is not particularly informative to look at individual US states or countries as examples. Texas has a very energy-intensive economy, but they refine the oil used by a lot of other states. There is nothing about California that screams efficiency. The mild weather helps a lot. Information technology on one level (game programmers, system designers) might use relatively little energy, but the overall system (Si refining, chip fabrication, etc.) uses a lot. The US and Europe have outsourced much of their energy-intensive industry, providing services in return. Yes, there are real efficiency gains that have been and will be made, and a really good meal might not take that much more energy to make than a bad one, but the idea that the electronic age is one of lower energy intensity is a myth with a capital M. As for arts, if we all painted, wrote poetry, or strummed guitar in our spare time, that would definitely be a good thing.
Well not quite the web of per capita energy usage eventually makes most activities quite even.
If you split energy usage into two parts energy to make stuff and energy to consume stuff.
On the consumption side most people are equal regardless of the industry they work in.
Next of course depending on the per capita consumption level you need X amount of core or industrial energy usage.
If you write poetry and grow all your own food etc then you make a difference. Just writing poetry alone really does nothing to change the equation since its your personal consumption not your output thats the issue.
Put it this way manufacturing cars is energy intensive. If you attribute this energy to each autoworker fine but to reduce it you have to reduce the consumption of cars by everyone. It really does not matter if the car consumer is writing green poetry about a beautiful world and is a vegan. He either must use a car or not.
And of course he can decide to practice what he preaches i.e say ride a bicycle but Jevons paradox ensures these efforts are at best symbolic.
I'm not saying don't work to reduce your own lifestyle and become both more efficient and self sufficient but unless it becomes widespread its a personal choice and ensures your lifestyle is buffered against shocks.
Its not wrong to do the right thing in your own personal life but its not correct to expect your choices to change society until it forms a significant minority.
Obviously I think the most important thing is to really work on your own supply chain if you will and reduce and shorten it and localize it. Withdrawing your own personal consumption is actually more important than the job you do. Its in a sense unfair to burden someone who produces wanted goods with the manufacturing costs and consider the poet someone special. Thats not the right answer.
And Joules I'm not saying your wrong I am saying that its the big picture that determines if a certain form of work or lifestyle results in a net reduction adopting a lifestyle is required but not sufficient to reduce the overall energy intensity of the system. Even your poet is sadly a Myth.
I'm not talking about poetry as an occupation, but rather what people do in their spare time. Perhaps actually taking the time to learn to play an acoustic guitar instead of buying Wii Guitar Hero in front of a big screen TV. We can't all be professional poets, but we could all do it on the side.
Due to the scarcity of punctuation in your prose, I sometimes think you channel ee cummings. Nix the caps, though.
JoulesBurn,
There is nothing about California that screams efficiency.
See this post about the energy efficiency measures in California. It also helps to have high electricity prices, but most of these measures cost 3-4 cents /kWh saved, a lot less than anyone pays in US.
http://climateprogress.org/2008/07/30/energy-efficiency-part-4-how-does-...
The US and Europe have outsourced much of their energy-intensive industry, providing services in return.
I maintain that nearly all energy is imported into US as oil, even motor vehicle imports use a lot more energy in their life-time than embodied in manufacturing. In US 100% of vehicle steel is recycled, most of the energy in manufacturing vehicles in US(or Japan) is used by the employees at car assembly plants going to and from work and energy used at home. none the less >75% of the energy used by a car will be from gasoline and the energy used to refine transport and sell that 7,500 gallons of gasoline used over 15 years.
China's energy usage has been increasing dramatically along with their exports and GDP, and the majority of that is industrial usage.
Automobiles are a special case, since they directly consume a huge amount of energy in use.
It's almost certain that California gets its low MJ/$GDP by outsourcing the energy consumption to Mexico and China. Selling wines and being the entry portal from China for all import goods helps too. I'd need to see contradictory detailed breakdowns to change my opinion.
The last 2 comments have it correct.
GDP is a very poor way to "measure" economic gain since all it does is track money.....which in and of itself is a poor way to represent true wealth or productive endeavors.
All the last boom was about was taking from Peter(the future) to pay Paul(the present).
Just a big swindle.
Not only did the activity not represent capital investment but it was misreported deliberately by showing "profit" and hiding losses.
This has been the crime of the century and should not even be discussed in the manner of business practices.
I hear "Oh it was human fallibility this and we didn't see it coming this." BS everything was obvious as it was occurring and it is an easy conclusion to draw that criminals have gained control of all the institutions both public and private and systematically looted any and all treasure of the Nation.
Our financial and monetary systems are jokes and need to be destroyed and replaced by a system that does not allow concentration and control.
The absolute worst thing that we can allow to occur is a system based on plastic cards as the medium of exchange and hence a non private system.
That would enslave all to the whims and caprice of the handful of aberrant megalomaniacs that mean to rule the masses.
"criminals have gained control of all the institutions both public and private"
Gee, I wish I were one of those criminals in charge, so that I could reap the profits.
Or maybe the problem isn't with the criminals themselves but with a system which rewards "optimizing profits" at others' expense. I don't btw think that it has been much different since civilization set root thousands of years ago...
Cheers, Dom
I don't disagree that this is the same repeating cycle of any civilization..........and you know what the next phase is based on history.
Yes, the golden era;-)
How do you figure Nate? Corporate profits at their peak were about 1.6 trillion. If forty percent of that was via the financial sector, then we're looking at about .6 trillion for that, and after adjusting for the market correction, we lost about half that, so .3 trillion. Keeping in mind this only happened over the past five years or so (~2002-2007), so we're probably looking at an average of ~.1 trillion/year in terms of a GDP correction when comparing GDP in 2010/2011 to GDP in 2000.