By Tim Morgan: Primed to Detonate (O O Canada)

Maple Leaf Falling

Today’s essay by Tim Morgan is a must read.

https://surplusenergyeconomics.wordpress.com/2019/02/18/147-primed-to-detonate/

Morgan has developed new metrics for measuring the health of economies that are grounded in an understanding of the energy that drives our civilization.

Here he considers 4 risk factors:

  1. Debt: Instead of using the conventional debt to GDP ratio Morgan backs out the portion of GDP created by the spending of borrowed money to obtain a ratio of debt to prosperity that better represents the actual debt risk.
  2. Credit Dependency: This is the ratio of incremental debt to incremental growth and represents the “ponziness” of an economy.
  3. Systemic Exposure: This metric takes a broader view of risk by considering an economy’s dependence on its financial sector and is calculated as the ratio of financial assets to prosperity.
  4. Acquiescence Risk: This metric represents the change in discretionary prosperity and is a good measure of expected social unrest when the next financial crisis occurs.

Morgan compares these risk factors for various countries and concludes that Canada is among the top 6 riskiest countries on the planet.

SEEDS risk matrix, end-2018

Other observations include:

  • China is a ponzi bomb waiting to detonate.
  • Ireland, Holland, Britain, Japan and China are accidents waiting to happen.
  • Ireland is the craziest country on the planet.
  • France has the highest social unrest today for good reason.

By Tad Patzek: On Human Overshoot

Tad Patzek

Tad Patzek, a professor of petroleum engineering and physicist, gave a talk on January 16, 2019 at the King Abdullah University of Science and Technology (KAUST) in Saudi Arabia.

His talk is titled “How Can We Salvage Our Global Civilization?” however Patzek does not answer his own question. Instead he reviews the brief history of humans and shows that we are in a severe state of overshoot with a population that exceeds the carrying capacity of the planet by about 30 times thanks to fossil energy, which he predicts will soon rapidly decline due to depletion. In the Q&A that follows the talk, Patzek advocates for population reduction policies. Also in the Q&A, Patzek gets quite aggressive with audience members who argue that technology will save us. He concludes that we will probably use nuclear war to correct overshoot. I wonder if he’ll be invited back next year? 🙂

You can find other work I’ve posted by Patzek here.

Thanks to Nate Hagens for bringing this talk to my attention.

 

 

Here are some notes I took while viewing the talk:

  • Continued exponential growth of human population is suicidal and will stop one way or another.
  • Humans have only one chance of survival by drastically limiting population and consumption.
  • Patzek quotes from Ronald Wright’s A Short History of Progress, my all-time favorite lecture series, to make the point that humans, the fire apes, have been setting fires continuously from our origin until today when many of the world’s tropical forests are being burned to make way for agriculture and plantations.
  • Patzek does a nice job of explaining that humans have existed for an extremely short period in the context of geologic time. For example, if we call January 1 the start of the Silurian period 444 million years ago when multicellular life first appeared on land, then behaviorally modern humans emerged 70 minutes before midnight on December 31, our first civilization began 9 minutes before midnight, and the industrial civilization we currently enjoy began 20 seconds before midnight. The explosion of human population to 8 billion began 7 seconds before midnight on December 31, and was enabled by the Haber Bosch industrial process that converts natural gas into nitrogen fertilizer.
  • At 3 seconds before midnight on December 31, half of the US’s top soil had been washed into the sea, having taken only 9 seconds to accomplish this feat.
  • For an example of what 10,000 years of agriculture does to the earth, look at Iraq with its complete environmental devastation.
  • We only have one shot at the global civilization, and it shall never be repeated again.
  • Sending colonies to Mars is complete nonsense because there are not enough resources to send them.
  • None of our overshoot issues are captured by our economic models.
  • Our planet can support a maximum of 8 million humans making a living as hunter gatherers.
  • The earth might support 2.5 billion people assuming an 1800’s equivalent life expectancy (32 years) , lifestyle, slavery, and conflict. If we assume today’s life expectancy (71 years) the maximum drops to 1.1 billion people. Adjusting for our increased standard of living decreases the maximum to 500 million people. If we assume a peaceful life without wars the maximum sustainable population drops to 250 million people. This means we have overshot by the 30 times the carrying capacity of the planet by using fossil fuel subsidies.
  • Later in the Q&A, Patzek clarifies that if we assume an American or German lifestyle, the maximum sustainable population is 90 million without fossil energy.
  • I note that Patzek’s estimate of the maximum sustainable population aligns nicely with Jack Alpert’s plan to preserve our modern civilization with rapid population reduction.
  • Patzek shows that population is proportional to power production. Recall that Tim Garrett has also shown that wealth is proportional to power production. Energy is therefore central to our predicament as Nate Hagens elaborates in his video course.

By Nate Hagens: Reality 101: What every student (and citizen) should know

Nate Hagens

Nate Hagens just released a new video course titled “Reality 101” that he produced for honors freshman at the University of Minnesota where he teaches.

The course is backed by 15 years of research by Nate into our overshoot predicament created by the interaction of human behavior, energy, economy, and ecology, and distills his 45 hour university course of the same name into 4 hours of video.

I’ve followed Nate for many years and have posted some of his work here.  Nate is a rare multidisciplinary dot connector, and has one of the best big picture understandings of our predicament.

Nate differs from others doing similar research in that he retains hope and offers positive advice to young people for how they might help make the future a more desirable place to live.

I suspect this new video course will become a go-to resource for people seeking enlightenment on vitally important topics that are usually ignored, and when occasionally broached, are almost always misunderstood or denied by most educators, leaders, and news sources.

Nate can be found on both Twitter and Facebook.

Nate’s Facebook announcement of the video course:

I’ll be putting the entire Reality 101 course content (two 500 page books co-written w DJ White plus related content and videos) online for free this spring. In the meantime, the Honors Program at U of Minnesota asked for a ‘hologram’ of that material that could be watched in 4-5 hours (instead of ~150 hours of the course) for the Nexus One experience for all freshmen. They’ll watch this in 3 pieces: 1) Brain/behavior 2) Energy/economy and 3) Ecology/Earth systems/what to do/how to live during these times. The Energy videos (link below) are ‘finished’ (with a bunch of small errors to fix when I get time), The 12 videos are 1 hour 45 minutes total – as usual both too long for most peoples attn spans but too short to really get into some important nuances. Our culture is energy blind. This new choreography outlines the story of humans, growth, energy and the future in the most comprehensive way I could envision for a short(ish) summary. (thanks to Katie Fischer and Keegan L Robinson for tireless help and suggestions and to Katie for doing great work on the tech side)

Reality 101 full course description:

How is the economy like a hurricane? Where does money come from? Will economic growth last forever? What is wealth? How many hours would it take you to generate the same amount of energy in a gallon of gasoline? Why are you so confident in your own beliefs? Why do you spend so much time on social media? Why do we want “more” than our neighbors? What do all of these questions have to do with the environment? With your future? And what if our most popular societal beliefs about these issues turn out to be myths?

Reality 101 will delve into these questions and unify them as they apply to the major challenges humanity faces this century, among them: slow economic growth, poverty, inequality, addiction, pollution, ocean acidification, biodiversity loss, and war. The seminar will provide students with broad exposure to the foundational principles central to addressing these interrelated issues. The readings and lectures will cover literature in systems ecology, energy and natural resources, thermodynamics, history, anthropology, human behavior, neuroscience, environmental science, sociology, economics, globalization/trade, and finance/debt with an overarching goal to give students a general understanding of how our human ecosystem functions as a whole. Such a systems overview is necessary to view the opportunities and constraints relevant to our future from a realistic starting point. Though the hard science relating to sustainability will be surveyed, few answers will be presented and it is hoped that creativity and group dialogue will lead to emergent ideas on how these big themes fit together. While the class material is daunting and intense (reflecting our world situation), the course itself will be enlightening and deeply informative, with an open, engaging, and entertaining class atmosphere.

Dr. Nathan John Hagens worked on Wall Street at Lehman Brothers and Salomon Brothers and closed his own hedge fund in 2003 to pursue interdisciplinary knowledge about the bigger picture of modern society. Nate was the lead editor of the online web portal theoildrum.com, and is currently President of the Bottleneck Foundation and on the Boards of the Post Carbon Institute, Institute for Energy and Our Future, and IIER.

 

 Section 1 – Brain & Behavior

Click here to play all 10 parts in sequence.

Part 1: Evolution, Natural Selection, and the Agenda of the Gene

 

Part 2: Sexual Selection and Social Status

 

Part 3: Dopamine, Supernormal Stimuli and Consumerism, Part 1

 

Part 4: Dopamine, Supernormal Stimuli and Consumerism, Part 2

 

Part 5: Our Social Natures, Part 1 (Groups and Tribes)

 

Part 6: Our Social Natures, Part 2 (The Superorganism and Culture)

 

Part 7: Self-Blindness, Part 1 (Cognitive Biases)

 

Part 8: Self-Blindness, Part 2 (Cognitive Biases)

 

Part 9: Time Biases

 

Part 10: From Self Blindness to Self Awareness

 

Section 2 – Energy & Economy

Click here to play all 16 parts in sequence.

Part 1: Energy Blindness

 

Part 2: Energy Surplus

 

3 – Energy Benefits

 

Part 4: Energy Scale

 

Part 5: Energy Impacts

 

Part 6: Energy Primacy, Part 1

 

Part 7: Energy Primacy, Part 2

 

Part 8: Energy Primacy, Part 3

 

Part 9: Energy Primacy, Part 4

 

Part 10: Energy Primacy, Part 5

 

Part 11: Energy Remoteness

 

Part 12: Energy Depletion

 

Part 13: Energy Fungibility

 

Part 14: Energy Transitions

 

Part 15: Energy and Happiness

 

Part 16: Energy and Our Future

 

Section 3 – Ecology & Earth

To be released.

By Gail Zawacki: Diva of Doom Interview

I’m a long-time admirer of the intellect and work of Gail Zawacki, the self-described Diva of Doom. You can find some of my favorites by Gail that I’ve posted here, and all of Gail’s work at her blog Wit’s End.

Here in a new 60 minute interview with Sam Mitchell, Gail provides an articulate description of the what and why of our overshoot predicament, and concludes with some wise advice on what to do about it:

Enjoy every good day that remains.

 

Eat the rich, save the planet?

Eat the Rich

A cursory look at human history or the genetic behavior of monkeys confirms that it is unwise for societies to permit the wealth gap between the rich and the majority to become too wide. Especially when the standard of living of the majority is falling.

Brexit, Trump, and the yellow vests are examples of increasing social unrest. Anecdotally I’m also seeing a meme emerge on the internet that can be summarized as “eat the rich, save the planet”. This meme is supported by some intellectuals like Kevin Anderson who argue that climate change can be addressed by focusing on reducing CO2 emissions from the rich.

We’ve been warned that to maintain a climate compatible with civilization we have 10 years to cut our CO2 emissions in half and 30 years to reduce them to zero. As Tim Garrett has shown, CO2 emissions are proportional to wealth, so to reduce CO2 emissions we must reduce the total wealth of civilization.

Many other important planks of our ecosystem’s health are sick and getting sicker, primarily due to the high consumption needed to support our collective wealth.

We also know (here and here) that the net return from our energy sources is declining due to the depletion of low-cost non-renewable reserves which means our productivity and thus ability to grow wealth is declining and this decline will accelerate.

Governments have responded to declining economic growth by reducing interest rates and increasing debt. This has deferred the reduction in our standard of living necessary to balance the books, but has also increased the wealth gap because low-interest rates have created a bubble in the value of most assets, and the rich own a disproportionate share of assets.

An individual cares primarily about their own wealth, not the total wealth of civilization. We could in theory keep individuals comfortable and maintain a healthy(er) planet by reducing our population without reducing our per capita wealth. Unfortunately, reproduction is the primary goal of our genes and we therefore don’t even discuss the obviously optimal solution of population reduction. To be fair on its potential effectiveness, we should have reduced our population back in 1970 when we were warned by our experts. It’s never too late to do the right thing but given that even the Green party doesn’t have a population reduction platform it is probable that any population reduction will be involuntary rather than voluntary.

The uniquely powerful human brain exists because it evolved to deny unpleasant realities. Topics don’t become much more unpleasant than overshoot so we collectively have not acknowledged, and do not discuss, and do not act, on any of the issues associated with overshoot.

To summarize:

  • The total wealth of civilization must decrease to maintain a planet compatible with civilization.
  • The total wealth of civilization will decrease due to the depletion of non-renewable resources (especially energy).
  • We are doing everything possible to prevent the decline of total wealth but our actions have increased the wealth gap and social unrest.
  • We do not discuss or act on the only “good” solution, population reduction.
  • We aggressively deny our overshoot predicament.

Governments react to pressure from their citizens, they do not lead their citizens. I sense some bubbling optimism about the yellow vest movement from people who seek fundamental change. A key question then is are movements like the yellow vests good or bad for our future prospects?

Put more succinctly, will eating the rich save the planet?

The answer lies in how we close the wealth gap.

If we close the wealth gap by taxing the rich and redistributing their wealth to the less fortunate we will temporarily reduce social unrest but will worsen our overshoot predicament. This is because the poor will tend to spend the liquidated assets of the rich which will increase the total consumption of energy and other resources.

In addition, the spending of liquidated assets will increase inflation because there are far more paper assets than real assets in our economy, and this inflation will be a new source of social unrest.

While it is true that total wealth will decrease no matter what we do, there are two paths we can take. The first path is deflation which means people have less money but the money is still worth something. The second path is inflation which means people have money but it is worth less. I think inflation is more corrosive to the social fabric than deflation. Inflation caused a modern civilized country to blame and exterminate 6 million members of a minority tribe.

If on the other hand, we close the wealth gap by taxing the rich and paying down public debt, then we benefit everyone, rich and poor, by helping to stabilize the currency in a shrinking economy. This is important because all modern currencies are debt-backed fractional reserve systems that tend to become unstable without growth.

So to answer our question, will eating the rich save the planet, we need to know what the yellow vests marching in the streets want.

Do they want the rich to be pulled down to their level?

Or do they want to be pulled up closer to the rich?

I suspect they want the latter. If true, this means the yellow vests are acting to worsen our overshoot predicament.

What we need is green vests marching in the streets demanding that our governments acknowledge our overshoot predicament and manage the required and inevitable decline in a fair and humane manner.

This of course requires citizens to understand what’s going on.

And that requires us to find some way to break through our tendency to deny reality.

And that requires us to study and communicate Varki’s MORT theory.

 

 

Comfort on a Razor’s Edge

 

You know you are in trouble when the only comfortable place is a razor’s edge.

When oil prices are rising we can soon expect trouble from reduced economic growth and inflation.

When oil prices are falling we can soon expect trouble from a slowing economy and deflation; and we can also expect oil shortages a few years out because investing in new oil production becomes unprofitable and most of our existing wells now deplete quickly.

 

Q: Why is it so important that the economy grows?

A: Most people mistakenly believe growth is important because it makes us a little more wealthy in the future. The real reason growth is important is that it makes us much more wealthy today.

 

Q: We never used to worry about a little inflation or deflation. What’s changed?

A: Total global debt has grown to over $250,000,000,000,000 (250 thousand billion dollars) and it’s consuming more and more of our income for interest payments.

Inflation causes interest rates to rise which makes it more difficult to service the debt.

Deflation removes money from the economy which makes it more difficult to service the debt given that interest rates are already as low as they can go.

 

Q: Why has debt become a problem?

A: Debt is growing much faster than our income. We must now borrow about $5 for every $1 of GDP growth.

 

Q: We used to achieve $1 of growth with less than $1 of debt. What’s changed?

A: We burned all the cheap oil which caused the price of oil to increase which forces us to borrow more money to maintain our lifestyles.

 

Q: Why do our lifestyles depend on the price of oil?

A: Our comfortable lives are made possible by a growing GDP. Most of our GDP is produced with machines, and energy is the food of machines. As the price of energy goes up, we can’t afford to feed our machines as much, and they produce less.

 

https://www.cnbc.com/2018/11/09/oil-markets-crude-supply-global-economy-in-focus.html

US crude oil posts longest losing streak in over 34 years, falling for 10th day

  • Oil prices fall for a 10th consecutive session, sinking U.S. crude futures deeper into bear market territory and wiping out the benchmark’s gains for the year.
  • Crude futures fell for a fifth straight week on growing output from key producers and a deteriorating outlook for oil demand deepen.
  • Signs that OPEC and several other oil producers including Russia could soon cut output have not put a floor under the market.

New Badass in Town: Jean-Marc Jancovici (Radio Ecoshock interview)

Jean-Marc Jancovici

Step aside all you established peak oil and climate change pontificators. There’s a new badass in town and he’s an engineer who specializes in energy and climate which means you don’t stand a chance. 🙂

It’s very rare to find someone who can articulately explain in one hour, without hyperbole or bullshit, everything important going on in the world, including the underlying causes, what the future holds, and what we should do in response. Jean-Marc Jancovici is one of those rare gems.

Jancovici’s native language is French so English works by him are scarce. I’ve already posted the only other recent English talk that I’m aware of here.

Today’s interview with Alex Smith of Radio Ecoshock is a treat. After investing an hour here you will understand much more about the issues that matter than 99% of the people in the world.

Alex Smith wrote a very nice summary of his interview here:

https://www.ecoshock.org/2018/10/jean-marc-jancovici-whistling-past-the-graveyard.html

 

 

Following are a few quotes from the interview that I thought were noteworthy. Notice how close Jancovici comes to discussing denial of reality on several occasions.

 

Tell me how much energy you use and I will tell you how you live.

 

Governments are not guided by [wise] advisors. They respond to external pressure.

 

The present standard of living cannot be sustained without the help of fossil fuels for physical reasons.

 

Two centuries ago the world was fully renewable and consisted of 1 billion peasants with a life expectancy of 30 years. [We therefore] know of at least one option available to us.

 

Every time you hear the words “energy consumption”, replace them with “fleet of machines” .

 

A future with no growth is considered unthinkable by so many people, including Nobel prize-winning economists, that nobody thinks about what to do if it happens for real.

 

Q: What do you think is the greatest soonest threat: peak oil or climate change?

A: I place my bets on the likelihood that nobody will understand what is happening with either of these threats.

 

No government understands that energy equals machines, and if machines work less, GDP goes down.

No political leader understands that climate change is already putting refugees on the road.

 

Think of peak oil and climate change as opposing scissor blades squeezing your finger. Asking which is worse does not make any sense.

 

You must wait over 10,000 years for surplus CO2 to evacuate from the atmosphere. There is no such thing as a reset button for climate change. The only thing we are sure of is the day that consequences become unbearable, it will become worse later on.

 

A huge misunderstanding is that energy is a sector of the economy rather than the blood of the economy.