Wednesday, November 14, 2012

Ultimate Limits to Growth

My latest essay in Bloomberg touched on ultimate limits to energy growth (and quite possibly economic growth) due to the accumulation of waste energy in the environment. It's really just an exercise in taking basic physics into account while extrapolating trends in energy use into the future. The conclusion is that continued exponential growth in energy use -- which we've experienced over the past few centuries (and possibly much longer) -- cannot last for much more than a century or so. What about economic growth? We don't know. Economists theorize about a great "decoupling" of energy from economic productivity, but that hasn't happened so far in any country. My conclusion is that economic growth must also end, fairly soon (by which I mean, say, 100 years) -- unless we transform our economic activity to involve far less energy and in a way we have never done before.

I noticed that Noah Smith has a post criticizing physicist Tom Murphy, who I cited in my article. I love Noah's blog and read everything he writes, but I don't think this is his fairest criticism, although parts are fair. Certainly, I can see that economists might feel that their best arguments weren't put forward in the dialogue Murphy recalled between himself and an economist, the subject of Murphy's most widely read post. (Note: I didn't cite that particular post Noah refers to, but this one of Murphy's which looks at trends in energy growth alone.) But reading Noah, I'm led to believe that my understanding of the prevailing view among modern economists on economic growth is hugely mistaken. Indeed, he makes it sound as if economists generally accept that growth must end, and fairly soon (if true, I' very happy about that).

Murphy made the point that, if we extrapolate our current and past energy growth into the future, then we will actually boil the oceans in 400 years (with 2.3% energy growth; sooner with fast growth). To this Noah responds,
This is correct. And in fact, Murphy didn't even need to mention waste heat or anything like that to make his argument; he could have just said "Hey, eventually the Sun will explode, and then the whole Universe will degrade into heat, and where will your economy be then?" So what if that happens 500 million years in the future, or 10^100 years? What's the difference? One way or another, the human race is kaput!
Yes, of course. But the point is that 400 years is not very long. And we don't need the oceans boiling before we would see important temperature change (and other associated environmental changes) that would make life rather uncomfortable. I think Murphy is right that most people do not appreciate how soon in the future (soon on a timescale of human history) continued growth of energy use brings problems. This isn't a problem set some 5 billion years in the future. This is one reason I think so many people have found Murphy's posts worth reading: this seems really surprising to them.

Noah goes on:
Are economists ignoring this basic fact? Do economists' models crucially hinge on the idea that economic growth will continue forever and ever and ever? No. The "long term trend growth" that is used in growth and business cycle models is only meant to represent a trend that lasts longer than the business cycle - so, longer than a decade or two. No economist - I hope - thinks that currently living humans are making economic decisions based on what they think is going to happen in 400 years, or 2500 years, or 500 million years.
Again, I think this is just the point Murphy is trying to make -- that if these effects are looming only 400 years (or significantly less) in the future, then perhaps contemporary humans ought to be taking them into account now in making their economic decisions. Certainly it would be appropriate for our leaders to be casting an eye on this long term, and to seek advice from our best economists who might help them think clearly about how our society could manage to change in response. Does economics end with the business cycle? Nothing longer term than that? 400 years is perhaps only 20-30 business cycles away.

These are the main points I think Murphy was trying to make. I do agree with Noah that other parts of Murphy's original post are much less convincing. When he moves into proper economic territory, discussing prices, scarcity of future energy, etc., my own feeling was to take that all with a grain of salt, as quite a lot of speculation.

In any event, I'm glad Noah has brought the attention of more economists to the quite short timescale on which continued energy growth leads to problems. If this is already well understood in economics, and built into theories of growth, then great, I've learned something. In my experience a lot of people think we'll be fine and continue growth if we can only find some cheap, infinite and non-polluting energy source to power our future. That's not the case.  

6 comments:

  1. Mark,

    This is a good post. Economics is the science of making the bowl larger from which the human population feeds. The only problem is it does nothing about the food in it.

    Not only does the literature miss the fact that resources are limited (be it energy or anything else), it also supports the hypothesis that demand stimulation can fuel growth regardless of the supply dynamics.

    Jimmy

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  2. As economic growth succesfully decoupled from agricultural output growth, the path to decouple from energy and materials is pretty straightforward and has started some decades ago. In 400 years all of agriculture, manufacturing and energy production will probably be a few basis points of GDP.

    A modern economy is about people who tell stories to each other and charge for it, which is in no interesting way an energy story, no more than it is the land story your predecessors were worried about.

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  3. Mark, the way forward has been known for a very long time, you just have to look to nature for the model. I've been discussing the use of nature's blueprint for unlimited future growth for over a decade. Here are the basics.

    All liquid and solid "waste" in the future will be completely recycled by decomposing these materials into simple molecules or atoms. Vacuum pyrolysis is currently the most promising thermal molecular decoupling method. Since this is an endothermic process, a large amount of energy is needed to break molecular bonds. This energy must come from clean renewable energy sources. Once the "waste" is broken down into usable pieces, like deconstructing a paragraph into letters and small letter combinations and then building new words and sentences from these starting materials, new products can be built from the ground up using 3-D printers and as yet undiscovered nanotechnology manufacturing methods.

    Atoms are virtually eternal and undestructable. We can manipulate them anyway we want given enough energy and the right technology. We complete the cradle to cradle recycling loop through this manufacturing model, and all the starting materials eventually are captured at the end of the useful life of a product and are recycled back into new products. No more landfills, just resource collection facilities. Of course, to make this viable and not drive climate change, we have to quickly ween ourselves off fossil fuels and continue rapid advancements in nanotechnology manufacturing techniques.

    One other possibility is the use of pyrolysis to remove carbon from the atmosphere by pyrolysizing biomass and sequester the carbon as elemental carbon biochar for use as a soil amendment product. The carbon is unavailable for uptake by plants but acts to retain moisture and fertilizers.

    We know the way forward, the technology exists or is close to commercialization and it provides for a sustainable future. What it takes is some imagination, which I just provided, and the willpower of those in power to reset the course.

    I clearly understand that the vision I just outlined will result in a wholesale reworking of the manufacturing sector, but it is a reasonable vision backed up by tens of millions of years of evolutionary trial and error.

    Greg Hawk

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