|
|
|
|
Carey King Energy Research Newsletter - Summer 2018:
"Researching the role of energy in our past and future using a systems approach"
Want to know how to recreate the Industrial Revolution and understand energy transitions? Then read on ...
Want to know what are the Energy and Economic Narratives? Then REALLY read on ...
It has been an energy-economic heavy last few of months. I've begun filming my talks to make the presentations more accessible and make your research contributions go further. There are three new videos linked via my website presentations page, and I've listed them below.
Modeling for understanding the first energy transition: the Industrial Revolution
Thank you to my supporters as the research is paying off! My presentation was selected for an award for most novel new research at the 2018 Conference of the International Society for Biophysical Economics!
So what did I discuss in this presentation? The modeling I am working on, in cooperation with Eric Kemp-Benedict at the Stockholm Environment Institute, is a new way to understand the fundamentals linking the long-term change of (1) resources, (2) capital, like machines and factories, (3) population, and (4) wages. This model can help answer core questions we have about the economy:
- How is money linked to resources?
- How is the consumption of energy related to wages, profits, and debt?
- How does a transition to a low-carbon/renewable (and thus capital-heavy) energy system affect the rest of the economy?
What have I learned so far from the modeling? That I can generally represent very basic and very important relationships that show how our economy is linked to both resource extraction rates and cost, as well as insights derived from existing (Post-Keynesian) theory indicating how debt-based investment affects how much of GDP goes to wages.
The first of two talks on energy-economic modeling:
What are the Energy and Economic Narratives?
I gave my first talk based upon the ideas in my book that I'm now in process of writing. The picture below summarize the "end-points" of various stories, or narratives, that we hear regarding how a future energy system will support our future economy. Any one of us has views that reside some point along both the ENERGY NARRATIVE (fossil - to - renewable) axis and ECONOMIC NARRATIVE (infinite substitutability - to - finite earth) axis. Where do the articles or books you have read fall along these narratives?
- Watch my June 7 talk at the 2018 Modern Solutions Power Systems Conference, organized by Schweitzer Engineering Labs:
Energy Narrative 1: Fossil Fuels are the Future
This narrative recognizes that fossil fuels enabled us to achieve what we have today. It emphasizes that fossil fuel physical fundamentals, such as high energy-density and portability, ensure low cost and their continued dominance. Renewable energy technologies cannot achieve the historical or present levels of low cost and productivity of fossil fuels and related technologies. Therefore, we should not restrict their continued use for the foreseeable future. Fossil fuels, and the technologies we have developed to burn them, enable us to shape and control the environment rather than the reverse situation before we invented fossil-fueled machines. Further, fossil fuels are the best hope to bring poor countries and their citizens out of poverty while continuing to increase prosperity within developed countries.
Energy Narrative 2: Renewable Energy is the Future
This narrative recognizes that fossil fuel production and consumption create environmental harm both locally over the short-term (e.g., water contamination) and globally over the long-term (e.g., climate change) to such a degree that their continued unmitigated use ensures environmental ruin that will lead to economic ruin. In addition, the concentration of fossil fuel resources means that countries and citizens have unequal ownership of them, creating geopolitical instability over extraction and distribution. Thankfully, renewable energy technologies are now cheap enough to transition from fossil fuels to avoid negative economic consequences from fossil fuel depletion (energy source problems) and greenhouse gas emissions
(waste sink problems). We can use renewable energy technologies and resources to sufficiently substitute for the services currently provided by fossil fuels. Thank you fossil fuels, but we’ve modernized. We don’t need or want you anymore. Further, a renewable and low-carbon energy system is the best hope to bring poor countries and their citizens out of poverty while continuing to increase prosperity within developed countries.
Economic Narrative A: Infinite Substitution via Markets; Technological Optimism
Narrative A posits unbounded technological change that creates substitutes for whatever we desire. It does not necessarily deny that the Earth is finite, but it does not believe that this fact affects economic or physical outcomes that impact the overall human condition. Narrative A is the view of most mainstream economists. Usually, this narrative coincides with market-based solutions that arise when needed. In order to promote seeking of solutions, we need a signal. That signal is the price of a good, or a “bad” (e.g., air pollution), and the signal is provided by setting up a market. With regard to energy, its price always decreases, so there is no need to worry. This narrative holds that it is preferable to make a market to address socioeconomic issues because markets process information better than any human regulator or government agency. Got a problem? Make a market for it. Julian Simon’s The Ultimate Resource and Milton Friedman’s 1980s “Free to Choose” book and 1980s PBS film series are examples of this narrative.
Economic Narrative B: The Finite Earth imposes Biophysical Constraints; Technological Realism
This narrative takes to heart that the Earth is finite. Further, humans need food to survive and our economy requires energy consumption and physical resources to function. These facts very much matter for economic reasons because the feedbacks from too much physical growth on a finite planet will force socioeconomic reactions. These reactions can have positive or negative outcomes for the overall human condition, but to create positive outcomes, we must perceive, accept, and adjust to the physical limits of a finite Earth. Narrative B is the position of many ecologists, physical scientists, and some economists. It is emphasized at the extreme by Paul Erlich’s The Population Bomb, and perhaps more moderately by the Club of Rome and authors of The Limits to Growth and more recently Tim Jackson’s Prosperity without Growth. It is summed up well by a statement attributed to economist Kenneth Boulding: “Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist.”
|
|
|
Thank you very much for your time. As always, please contact me for more information about how you can be involved in and contribute to my research program.
Sincerely,
Carey W. King, Ph.D.
Research Scientist, Energy Institute and Jackson School of Geosciences
Assistant Director, Energy Institute
Lecturer, McCombs School of Business & LBJ Schol of Public Affairs
The University of Texas at Austin
|
|
|
My research takes a systems approach to describe the role of energy and energy technologies in our past and future. This approach provides the best way to both address questions about our future economy and environment as well as understand how individual technologies can and cannot affect the macro-scale and long-run trends that will frame our future options. I seek understanding of the relationships among:
- energy resources and technologies,
- population demographics,
- water and food,
- macroeconomic factors, and
- implications of internalizing environmental externalities.
|
|
|
|
|
|
|
|
