Tim Garrett shows that efficiency is an accelerator of economic growth rather than a means of conservation. It’s not hard to understand.

If a company increases its efficiency it will produce more profits which can be reinvested to grow the business.

Or if you insulate your home and spend the savings on an annual trip to Hawaii you will stimulate the economy and emit more CO2 than had you not insulated your home.

Efficiency can mitigate overshoot if you capture the dollar savings from the efficiency and prevent them from being spent. For example, tax all the efficiency gains and then bury the tax revenue. You could use the taxes to retire public debt but then you’d have to find a way to prevent the government from borrowing more money to replace the retired debt.

In addition, an efficient economy tends to be brittle and less resilient. For example, most businesses to increase efficiency have reduced inventories and their associated carrying costs by relying on just in time deliveries from all over the globe. If something were to disrupt global shipping and/or the credit system it depends on, most businesses would grind to a halt, including your grocery store, in a few days. Efficiency is not always a good idea. Sometimes it is wise to have some fat in the system.

Efficiency can and should be used to lessen the impact on our standard of living as the economy contracts. However people should realize that all of the low hanging fruit for efficiency has already been harvested.

I wrote more about efficiency here.

The biggest opportunities for reduced consumption are now lifestyle changes.

Socialism 2.0

History proves that to maintain a civil society it is wise to keep the wealth gap between rich and poor to a reasonable level. Every culture has a different optimum wealth gap. For example, Japan’s optimum wealth gap is lower than Europe’s.

The wealth gap has been increasing around the world and is at dangerous levels due to the financialization of our economies and the low interest rate policies we are using to try to maintain business as usual. The wealth gap has been increasing not due to the skill of the rich or fault of the poor, but rather is a predictable outcome of our monetary policies.

Traditional socialist policies maintain the wealth gap by redistributing wealth from the rich to the poor, but in today’s world this policy will make things worse.

Much of the wealth of the rich sits idle. If this wealth is redistributed it will be immediately spent which will increase inflation, resource depletion rates, and CO2 emissions.

We need a Socialism 2.0 that understands limits to growth and the relationship between energy and wealth.

To maintain the wealth gap in our growth constrained world the correct policy is to tax excess wealth from the rich and pay down public debt while not permitting governments to re-borrow the funds, or to convert the excess wealth into cash and bury it.

Are We Experiencing the Peak of What is Possible In the Universe?

Like the collapse of Rome, but with Wi-Fi


I think yes. Here’s why.

The laws of physics are the same everywhere in the universe. There are no forms of energy useful on a human scale that we do not already know about.

The laws of biological evolution are likely the same everywhere in the universe. Life’s form and chemistry may differ, but its foundation of evolution by natural selection of replicators is probably universal.

Any life with advanced technology requires two things. First, a powerful brain with an extended theory of mind capable of collaborating on the invention of advanced technology, and second, sufficient energy to allow the specialization of skills, extraction and production of materials, and construction of infrastructure necessary to develop the technology.

Varki explains that a brain with an extended theory of mind initially requires denial of reality behavior.

The only form of energy with the utility, density, portability, and extractability necessary to boot strap the creation of advanced technology is liquid hydrocarbons (oil). The biological and geological processes that create oil remove carbon from the atmosphere, bury it under ground, and release oxygen into the atmosphere. The creation of oil therefore changes the environment, and the burning of oil, which reverses the process, also changes the environment.

If a planet has life with advanced technology then it likely began by denying reality and burning oil. The energy from oil will increase food production which in turn will cause the population and pollution it produces to increase unchecked due to universal reproduction behaviors coupled with denial of reality.

Depletion of the non-renewable oil, disruption to the climate from burning the oil, and other associated negative impacts on habitat make it probable that the life will overshoot its environment and collapse before it has time to evolve the awareness of reality necessary to reduce its population and develop a high density non-carbon form of energy such a fusion, if indeed fusion on a human scale is even possible given the temperatures and pressures involved.

This may explain why we have not detected life in the universe despite trillions of planets.

We should be grateful for being alive to witness the peak of what may be possible in the universe.

Climate Change is a Really Hard Problem, Really

I had an epiphany on climate change yesterday.

CO2 when released into the atmosphere remains for at least a thousand years before natural processes remove it. This means the only thing that matters is the total amount of CO2 we emit, not the rate at which we do so.

As a hypothetical example, lets assume we have 50 years of fossil carbon left at current rates of consumption. Now assume that citizens wake up and elect governments that initiate carbon taxes and other policies resulting in a 50% reduction in global fossil carbon use. What would happen?

  1. Total global wealth would reduce by more than 50%.  Wealth is proportional to the rate of energy use so we would lose 50% of our wealth off the top. In addition, a lot of our wealth is in the form of debt which requires growth to retain its value. This debt would default and become worthless in a shrinking economy resulting in further reduction of wealth.
  2. Fossil carbon reserves would last 100 years instead of 50 years. This assumes that much less wealthy consumers could continue to afford the high cost of extracting the remaining low quality fossil carbon reserves. It is probable that we could not afford these high costs and consumption would therefore drop even more than the 50% targeted by government policies. Which in turn would mean a further reduction in wealth.
  3. The total amount of CO2 released would be unchanged. As speculated in the previous point, it might take longer than 100 years because the maximum possible rate of extraction will decline in a smaller and poorer economy. But in the end, we clever monkeys will probably find a way to burn all the reserves, resulting in the same amount of CO2 released.
  4. The climate would change by the same amount although it might take an extra 50 years or more to do so.
  5. The negative impact on species extinction, ocean acidification, sea level rise, violent storms, food production, and fresh water supplies would be unchanged.

This means enlightened citizens willing to reduce their standard of living by more than 50% is not enough to avoid a disaster for their grandchildren and other species.

To reduce our impact on the climate we must leave fossil carbon in the ground and never burn it for at least a thousand years.

We therefore have no choice but to collapse our population and per capita consumption to, at best, an ancient Roman level. I say at best because the Roman civilization used wood and other resources at an unsustainable rate which led to its collapse.

This of course will not happen voluntarily.

It was an epiphany for me because I am trying to live a low carbon lifestyle but now understand that it probably makes no difference what I do, including influencing those around me. So now I am back to square one wondering what is the best thing to do with the balance of my life.

Why Are We Printing Money?

It’s a simple question.

You’ll hear different simple answers depending on the politics of the speaker. Talking heads on the news will usually say it’s to stimulate growth or to create jobs.

It’s also a big clue.

Large scale money printing has been tried many times in history and it never ends well.  We can expect modest inflation at best, high inflation, social unrest, and war at worst. We’ve been printing full steam for 5 years. They must know it’s risky. They must have a good reason. What’s the real reason?

Could it be?

1) The government is unable to borrow sufficient funds to cover their large deficit without causing interest rates to rise, which would force large cuts in services, and so makes up the shortfall with printed money.

2) The government is worried that if they stop printing the stock market will fall because it has become dependent on easy money. And they don’t want the stock market to fall because then people feel less wealthy and spend less.

3) The government wants to encourage retirement accounts to switch from low risk interest bearing investments to high risk equities, thus stimulating the stock market and increasing investment in companies that might create growth.

4) The big banks are in trouble and are dependent on money printing from which they skim fees and carry trades to rebuilt their reserves.

5) The government wishes to debase the currency to improve export competitiveness.

6) The government seeks to cause inflation as a means of reducing real levels of public and private debt because they know the underlying economy is struggling to service its high debt level.

7) There is little or no real growth which means the money supply is not growing fast enough to cover interest owed on existing debts, and given high debt levels, a large deflationary collapse would occur without a continual injection of new printed money.

There may be some truth in all 7 possibilities, but I discount the first 5 because we’ve had government cutbacks, high interest rates, stock market crashes, bank failures, and competitiveness problems in the past, and we recovered just fine.

I also discount 6) because inflation will cause interest rates to rise which will be a very big problem for governments with high debt.

That leaves 7) which I think is the main reason.

We’ve bumped up against limits to growth.

The Big Picture on One Page



  • our incomes are not rising…
  • which prevents us from increasing our already high debt…
  • which prevents us from affording higher oil prices…
  • which prevents an increase in oil production…
  • which prevents an increase in productivity…
  • which prevents an increase in wealth creation…
  • which prevents our incomes from rising (see above)…
  • which prevents the money supply from increasing…
  • which threatens our ability to pay interest on existing debts…
  • which threatens the value of debts…
  • which threatens a deflationary collapse…
  • which threatens social unrest…
  • which threatens politician’s jobs…
  • which guarantees money printing will continue until it can’t…
  • which erodes the value of our retirement savings…
  • and someday (probably after a crash) will cause fierce inflation…
  • which will make food and other necessities very expensive…
  • which will create social unrest…
  • which will threaten politician’s jobs…
  • which will encourage despots…
  • and thanks to geology…
  • it will cost more next year to produce the same quantity of oil…
  • and the year after…
  • and so on until it costs 1 barrel of oil to produce 1 barrel of oil…
  • and then we will use 100% renewable energy…
  • just like the Romans…
  • except we have to feed 7 billion instead of 100 million…
  • and producing food will be a challenge…
  • with most of the good soil, fish, and forests gone…
  • and an unstable climate…
  • and rising sea levels…
  • and scarce fertilizer…
  • and wars between tribes over remaining resources.

Party-on or Not?

When a person learns that over-population, over-consumption, and resource depletion are leading to collapse of civilization and extinction of many species, what should they do?

One response is to work hard to maximize income and to invest as much as possible to increase the probability of a comfortable life after the collapse.

Another response is to voluntarily reduce income and consumption and to have fewer or no children.

The problem with the latter response is similar to why efficiency alone cannot solve our energy or climate problems. If total consumption is to be reduced through frugality and/or efficiency then there must be a mechanism to prevent the newly freed resources from being consumed by someone else.

No such mechanism exists today.

In today’s global world if I choose not to consume a liter of gasoline it almost certainly will be consumed by someone else.

Despite this pessimistic view of the impact an individual can make, I have concluded that frugality is still the correct strategy.

It is probable that much wealth will be lost in the coming collapse as paper claims (money and investments) on future wealth vaporize. Any wealth that escapes the initial deflation will be threatened by the inflation that is likely to follow and/or governments in desperate need of taxes and/or angry mobs.

By voluntarily reducing consumption one builds material resiliency to coming shocks because less is needed to maintain your lifestyle, and builds emotional resiliency because less pain is associated with voluntarily doing something than being forced to do the same thing.

A modest lifestyle also sets a good example for family and friends. If enough people admire and emulate your actions then a meaningful positive impact might emerge.

You might also sleep better knowing that you did what you could.

What to Expect as We Collapse

What are we likely to experience as we collapse?

  • unemployment will rise
  • incomes will fall
  • interest rates will rise
  • stock and bond prices will fall
  • real estate prices will fall
  • credit availability will decline
  • trade will decline and may become sporadic due to credit system problems
  • fewer imported goods will be available — think about how few durable items are manufactured in Canada
  • food prices will increase due to less availability of imported food and consequent higher demand for local food
  • large-scale industrial food production may be disrupted due to rising interest rates and supply chain problems however governments will probably make it a priority to keep big agriculture going
  • energy prices and consumption will fall as fewer consumers are able to afford it
  • the upper bound on energy flow rates will decline because lower prices will not support expensive extraction like tar sands and fracking
  • total economic activity will shrink in parallel with declining energy consumption
  • air travel will decline or stop for all but the rich
  • many cars will be abandoned as operating costs becomes unaffordable and resale value approaches zero
  • roads and infrastructure will fall into disrepair
  • electricity may become intermittent in some regions
  • social unrest and crime will increase
  • tax rates will increase, tax revenues will decline, demand for social programs will increase, and governments will be forced to choose between more social unrest now due to deflation, or more social unrest in the future due to inflation — most will chose inflation
  • the severity of the pressure on governments will result in collapse or hyper-inflation for some countries, especially those will no indigenous energy or goods to trade for energy
  • war between countries competing for scarce resources and/or seeking scapegoats is probable
  • everyone will experience hardship but farmers without debt will probably do best

The collapse will likely occur in steps and will continue for about 100 years until all affordable fossil fuels have been extracted at which point civilization will resemble medieval life, assuming we have not gone extinct through famine, disease, or wars.

Layered on top of this economic and social chaos will be a rapidly changing and violent climate that will disrupt food production and cause economic damage. We can expect a warming impulse with unknown but likely negative consequences when aerosol particulates drop with declining industrial activity and air travel.

The Universe and Its Purpose

I have read many books on astronomy and physics. Here are a few of the important ideas that stuck with me:

  • We have deduced mathematical laws of physics that accurately describe and predict the universe’s behavior.
  • Some of the laws of physics, such as quantum mechanics, are very strange but they work remarkably well.
  • The universe began about 13.8 billion years ago as a big bang of extremely dense energy.
  • A few constants define how the universe evolved after the big bang. It seems these constants could have been different resulting in a completely different universe. We do not know why they are the way they are.
  • We do not and probably never will know what existed before the big bang, nor whether our universe is unique or one of many, nor whether our universe is infinite or finite.
  • As the big bang expanded and cooled some of the energy converted into light gases.
  • These gases formed clouds which collapsed under gravity to form stars.
  • As these stars aged some exploded and created heavier elements like carbon and other materials necessary for life.
  • Some of these heavier elements collapsed into new stars and planets including our sun and earth about 4.5 billion years ago. All life is thus amazingly composed of exploded star-dust.
  • There are a mind-boggling 300 sextillion (3×1023) stars in the universe and probably more planets.
  • Shortly after our earth formed it was randomly struck by a mars sized body which created our moon.
  • The moon helped to create an environment hospitable for life by stabilizing earth’s rotation and creating tides.
  • Our sun will use up its fuel and consume the earth in about 6 billion years.
  • The universe’s expansion is accelerating and we do not know what the “dark energy” is that is causing this.
  • We calculate more gravity than should exist for the mass we observe and we do not know what this “dark matter” is.
  • 95% of the universe is dark energy and dark matter (the stuff we do not yet understand).
  • The universe began as high quality dense energy and most scientists think it will end in about 100 trillion years as low quality diffuse energy – cold, black, and without life.

The amount we understand about the universe is quite remarkable and is something to be genuinely proud of as a member of the human species.

We have found no need for a god to explain anything in the universe, unless we want to assign a reason for the laws of physics being the way they are, in which case such a god would have no resemblance to any of the gods worshiped by our many religions.

I find it enlightening to contemplate the purpose or objective of the universe.

Since the universe started as high quality dense energy and its destination is low quality diffuse energy it is reasonable to state that the objective of the universe is to degrade energy.

Structures and mechanisms which degrade energy can and will form provided they are consistent with the laws of physics. Those structures and mechanisms which degrade energy the most effectively are the most likely to exist.

Another way to think about this is that wherever an energy gradient exists, things (work) can happen, and given enough time they will happen, provided the laws of physics permit it.

This is important because life is an excellent mechanism for degrading energy. Life is thus probable everywhere in the universe that has conditions that permit it to exist.

Humans are the Earth’s most effective species at degrading energy. We dominate the planet because of this talent, and although in the process we are causing the extinction of many other species and probably causing our own collapse, it is interesting to observe that humans are doing what the universe wants. That is, burning all of the fossil energy as quickly as possible to convert it into low quality waste heat thus helping the universe to arrive at its destination as quickly as possible.

If humans had not learned to exploit fossil energy then some other species would probably have evolved to exploit this energy gradient.

It is probable that intelligent life has evolved many (but not too many) times in the universe but always collapses shortly after it learns how to exploit fossil energy. This may explain why we have not heard from any other intelligent life despite years of listening.

This interactive tool titled The Scale of the Universe 2 by Cary Huang is excellent for helping to visualize our place in the universe:


Or if you prefer to watch it as a video:

book review: Storms of My Grandchildren by James Hansen



This is a review of James Hansen’s 2009 book “Storms of My Grandchildren”. James Hansen is the most respected climate scientist in the world. He is naturally shy and avoids publicity but decided to write this, his only book, after the birth of a grandchild. He wanted his grandchild to know later in life that his grandfather had done everything he could to warn the world. I’m of the opinion that Storms of My Grandchildren is the definitive book on climate change.

The density of information in the book is very high so it won’t be possible for me to summarize all of it. Instead I will try to convey the big takeaways for me. Hansen did a remarkable job of summarizing all of the important science. This science is much more complex and nuanced than I had previously thought. I was surprised how deep our understanding is, and the stability of the foundation upon which it rests. I was under the mistaken impression that most predictions had been drawn from computer models, the accuracy of which is of course dependent on model assumptions. It turns out that most of the important predictions are drawn from studying climate change throughout the geologic history of our planet, and they know a surprising amount about past climate.

Before I discuss Hansen’s conclusions, I need to digress for a moment. Experts in the fields of energy, economy, and climate tend to have narrow fields of view. Economists generally know very little about or deny the physical realities of energy and climate. Energy experts frequently dismiss climate change or are ignorant of the science. Climate scientists frequently do not understand or include the implications of peak energy and peak debt in their forecasts. These blind spots are remarkable given the intimate inter-dependencies of energy, economy, and climate.

James Hansen is no exception. From his book I conclude that he does not understand the implications and timing of peak oil, and seems to be unaware of our monetary system mathematics that guarantee collapse in the absence of growth. Therefore it is very important to place Hansen’s climate predictions in the context of his energy and economy assumptions.

Hansen assumes the economy (and hence energy consumption) will continue at roughly its current level.  He makes a very compelling case that if we continue to burn coal, oil, and natural gas at the current rate, then global warming will make the lives of our grandchildren miserable at best, and unlivable at worst.  The most important impacts being significant sea level rise, agriculture disruption, storm damage, and species extinction.

He further asserts, with no uncertainty, that if we burn all of the remaining coal plus non-conventional oil (tar sands and oil shale) then the planet will experience runaway warming and will end up like Venus with all life extinguished.

Hansen concludes (with supporting analysis) that there is only one possible solution to maintain a planet that is hospitable (if somewhat damaged) for our grandchildren:

1) We must reduce CO2 from today’s 392 ppm to below 350 ppm, and very soon. It was refreshing to hear him acknowledge how difficult this will be. For example, every single country that signed the Kyoto protocol, which promised CO2 reductions, actually saw CO2 increases, and CO2 is still increasing today. Furthermore, even countries that signed with honest intentions and worked hard on renewable energy and conservation, like Japan, still saw CO2 go up. In case you are puzzled by this, it is exactly what one would expect given that GDP is proportional to energy consumption, and 90+% of our energy comes from burning fossil fuels.

2) To achieve 350 ppm we must stop all use of coal, plus stop non-conventional oil (tar sands & oil shale), plus implement a carbon tax, plus stop deforestation, plus control population growth. Again, it was refreshing to hear him acknowledge that we cannot stop using our remaining conventional oil because there is no alternative and because we will need it for the following step.

3) To maintain civilization as we know it, and to have any hope of public support, we must replace most of the electricity that was previously generated by coal. Again I was impressed that Hansen understands that the low power density and intermittency of solar and wind eliminates them as candidates for coal replacement. Hansen says our only choice is nuclear. But current nuclear produces too much waste and consumes too much depleting non-renewable uranium. Therefore we need a crash program to develop 4th generation nuclear and a little luck. If successful, 4th generation nuclear will burn waste from today’s reactors and will produce very little new waste.

I have studied energy in sufficient depth to know that Hansen is correct about the need to replace coal with nuclear, assuming  lifestyles as usual. More specifically, I agree with Hansen that when you hear people promote clean coal (which means carbon capture and storage) you can rest assured that this is green-wash that will never happen for a variety of solid technical and economic reasons.

It’s worth reflecting on the precariousness of our grandchildren’s situation, when the only possible solution that maintains current lifestyles and a livable planet requires a new nuclear technology that is still in the R&D phase and may not work.

But now we need to circle back and revisit his initial assumption that the economy (and hence energy consumption) will continue at roughly its current level. As you know from my analysis of energy and the economy, I am certain that we are facing a global collapse. What does this mean for Hansen’s climate prediction and prescription for avoiding a disaster for our grandchildren?

When collapse occurs we can conservatively expect half of the wealth and economic activity on the planet to be wiped out. And it’s entirely possible that the decline will be much deeper than 50% given the huge levels of debt and derivatives that need to be unwound. This means that there is no chance of us being able to afford the nuclear replacement of coal given the many trillions required for the switch. Which means we will continue to burn coal but at a reduced rate because of reduced economic activity. Will this reduced energy consumption be sufficient to save our grandchildren?

But it gets more complicated. At the end of his book Hansen summarized the key uncertainties in our understanding of climate science. One of the big uncertainties is the effect of aerosols on the earth’s energy balance. Aerosols are the particulates (soot) that are emitted from the combustion of coal and diesel and other industrial processes. Aerosols tend to mask the effect of CO2 by blocking sunlight. But unlike CO2 which remains in the atmosphere for centuries, aerosols fall out of the sky after a week or so. So when economic collapse occurs, we can expect energy production and industrial activity to dramatically drop and thus aerosol production to dramatically drop. Which means that in a very short period of time we will experience increased effect of our CO2, which means we may experience a global warming “surge”.

Climate scientists acknowledge the presence of a tipping point beyond which the climate will warm no matter what we do. Many scientists are very scared that we are close to this tipping point. Hence Hansen’s call to arms for us to get back below 350 ppm.  Will the warming surge caused by economic collapse push us past the climate’s tipping point?

So now let me try to sum this all up.

If you do not believe Hansen’s predictions and prescriptions, then you really should read his book. It is very persuasive and I think it will give you confidence that he knows what he is talking about. In fact you should read it regardless. We all need to understand this stuff given the stakes.

If you do not believe that the economy will collapse, and you believe Hansen’s science, then you know exactly what needs to be done. You should push the Canadian and Alberta governments to shut down the tar sands immediately. You should push for replacing all of our coal-fired power plants with nuclear plants. You should support a carbon tax. You should support sending aid to developing countries to discourage deforestation. And you should support government policies to control population growth.

If, on the other hand, you believe my prediction of economic collapse, then our actions are less clear. We need to ask our scientists to answer the questions: 1) How much economic activity reduction is required to get us back to below 350 ppm? 2) What are the implications of a sudden drop in aerosols? With answers to these questions we can derive any further actions required to protect our grandchildren. Hopefully nothing more will need to be done than to survive a permanent economic depression.