Tim Garrett, the world’s most under appreciated scientist, makes a persuasive case that wealth is proportional to energy consumption. More specifically, US$1 (1990) = 10 mW. This makes intuitive sense because energy is required to make and/or maintain everything that we assign a monetary value to.
Yesterday the Visual Capitalist published some charts showing energy consumption trends for the US.
In the following discussion I deliberately ignore the chart’s forecast for the future because it comes from the deeply in denial Energy Information Administration (EIA), which bases its forecasts on expected demand rather than geologic and thermodynamic reality. In other words, the EIA makes forecasts based on what we will likely desire, rather than what is likely to be available, or what we will likely be able to afford.
I also ignore changes in energy efficiency because I think we have already harvested all of the low hanging fruit and recent efficiency gains are in the noise.
By applying Garrett’s theory we can draw some illuminating conclusions:
- The total wealth of the US peaked around 2000 and has been in slow decline since.
- The wealth of individuals peaked around 2000 after 3 decades of little growth, has been in steep decline since, and today is about 15% lower on average than 1970.
- The contribution of renewable energy to our wealth has been and remains insignificant. Doubly so if you consider the fossil energy required to manufacture, install, and maintain renewable energy equipment.
The actual decline in wealth for the majority of citizens will be larger than these charts suggest because of the widening wealth gap, which has resulted from the low interest rates employed to offset declining net energy. Low interest rates increase the opportunity for the rich to profit from the bubbles created by low interest rates.
I expect trends in other industrialized countries will mirror those of the US, and in many cases will be worse because the US is so well-endowed with natural resources and its reserve currency.
It is clear why social unrest is increasing in most countries.
No one is to blame for these trends. They are simply a consequence of the scientific laws of geology and thermodynamics. It is true however that low and middle income citizens are carrying a disproportionate share of the impact because governments did not implement tax policies to prevent a predictable wealth gap increase caused by low interest rates.
Our inherited denial of reality prevents most people from understanding what is going on, and thus most people seek someone to blame.
Awareness and understanding could lead to cooperation and voluntary lifestyle changes.
Denial and blame will likely lead to tragedy.