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Information and energy

August 7th, 2008

Via Felix Salmon, I found this interesting piece by Tim Wu, comparing monopolies in broadband and energy, and looking at ways to make better use of currently idle spectrum. Wu’s starting point is that “Like energy, bandwidth is an essential economic input”. In fact, as he implies, information is more essential than energy to a modern economy. It’s massive amounts of information, rather than massive amounts of energy, that distinguishes our economy from that of 50 or 100 years ago.

But even taking the weaker position that information, like energy, is essential puts a different perspective on a lot of current debates, like those about Peak Oil and climate change. In much of this discussion, it’s assumed, explicitly or otherwise, that energy is uniquely important. In reality, its just one of a number of inputs that are essential (in the sense that we can’t do without them completely) but still subject to the ordinary economics of demand and supply.

If we are going to do anything about climate change, one implication is that energy must get a good deal more expensive, perhaps three or four times as expensive as it is now. That obviously has some economic impacts. But on the other side of the coin, the costs associated with information have been dropping at a rate that is hard to measure accurately, but certainly amounts to a halving every couple of years ago (things seem to have stalled a bit lately in relation to broadband, which is part of Wu’s point, but the underlying trend is obvious).

On any plausible estimate of the properties of demand, the benefits of ever-cheaper and more plentiful information will far outweigh the costs of less carbon-intensive energy. Partly this is a matter of substitution in production (for example, videoconferencing replacing business travel) and partly in consumption (as information based activities become cheap and energy-based activities become dear, people will switch from one to other). The numbers cited by Wu show that this is already happening.

UpdateSome data may help to clarify the point a bit. According to the US Internet Industry Association, the volume of information transmitted over the Internet backbone rose from 1.5 million GB (petabytes) in 1995 to 700 petabytes in 2006, or roughly a factor of 500 in 10 years. In comments, Ikonoklast reports a five-fold increase in global energy use over 50 years. Over the same period, Brad Delong estimates a tenfold increase in global output. That is, the rate of growth of information greatly exceeds (and leads) the rate of economic growth, while energy use has declined relative to output. This is unsurprising, given that no fundamentally new energy technology (except for the so-far unsuccessful nuclear power industry) has emerged in this time, while information technology has been repeatedly revolutionised. But it makes the point that an analysis of the economy based primarily on energy has been obsolete at least since 1950, and was arguably obsolete when Jevons first raised the alarm about the Coal Question back in C19.

On a more minor point, a bit of data on energy use in agriculture (sources to come). Agriculture accounts for about 1 per cent of direct energy use and maybe 1.5 per cent more through fertilisers and pesticide. In total, energy amounts to about 20 per cent of the costs of agricultural production, and a substantially smaller share of the retail cost of food.

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  1. August 7th, 2008 at 17:44 | #1

    An important part of having a less emissions intensive economy will be to reduce the energy-intensity of information and reduce the carbon-intensity of information.

    As an example, at the supercomputer facility near where I work, each CPU uses 130 watts. Running a calculation that takes 100 of these CPUs an hour is like running 13 bar heaters for an hour. There are many opportunities to reduce the energy-intensity of information – I believe that most laptops have a power consumption that is a tenth as much as most desktops.

  2. Hermit
    August 7th, 2008 at 18:25 | #2

    The implications of a threefold increase in energy prices are hard to grasp if gross incomes don’t keep up. People may be happy to telecommute but not give up recreational travel. I doubt that information in any form could compensate for the implied drastic cuts to food, personal comfort and mobility. Having said that I see little alternative.

  3. Ikonoclast
    August 7th, 2008 at 20:28 | #3

    I must advance a dissenting opinion on this issue. JQ states, “It’s massive amounts of information, rather than massive amounts of energy, that distinguishes our economy from that of 50 or 100 years ago.� This statement can be refuted immediately. In 1850 world energy consumption was about 3 Gigabarrels of oil equivalent per year (GBoe/yr) estimated. In 1950, it was about 15 GBoe/yr. In 2000 it was 75 GBoe/yr. It would be more accurate to say that it is now “massive amounts of energy consumption and massive amounts of information that distinguish our economy from that of 50 or 100 years ago� (among many other factors of course).

    I argue and will continue to argue that energy supply is fundamental to the maintenance of our civilization. Energy is fundamental to the creation of order and information from the order in our bodies and brains to the order in our data and knowledge banks. Once our current high yield, conveniently utilisable and non-renewable energy sources are substantially depleted (without a massive and rapid development program of replacement renewable energy) we are in the most serious trouble. In short, modern global civilization will collapse and earth’s human population will decline by several billions before the end of this century.

    I hope mine host JQ will not find it too discourteous of me to express the following in the strongest terms. It is absolute nonsense to believe that energy is not fundamental. It seems symptomatic of the myopia of the dismal science that even its better practitioners cannot maintain at the forefront of their thinking the simple fact that the economy is based on energy and matter. Every other part of the structure is built up from that.

    It is simply to no purpose to make airy statements lauding the value of information to the economy without taking cognisance of the real basis for life, order and information. It indicates the seriousness of the disconnect between the heroic image of modern urban-economic man standing above and beyond nature and the prosaic reality of his totally contingent status with respect to the natural world of matter and energy.

    To put this in practical terms, what will power the world’s farm machinery and transport industries say in 2020 when peak oil is well and truly past? How will people eat? It is pretty clear that a return to peasant economies worldwide will never feed 6 or 7 billion. Try doing the energy and economic calculations to work out how we will provide new sources of energy to replace the loss of oil without burning all our coal and thus frying our climate. Do those calculations my friends and you will terrify yourselves. Yet, it always better to look at the reality rather than avoid it.

  4. pablo
    August 7th, 2008 at 20:49 | #4

    An example which, in microcosm, favours Iconoclast’s emphatic view. My two co-habitants of a modest, modern mid NSW coastal residence move between bedrooms and kitchen/lounge, but do so currently (late winter) with attendant heating. Minus the wee small hours and a few mid-day, you could be sure a one bar equivalent (1000 watt) heater was operating. My urgings to put on a jumper, avoid global warming are to no avail. I despair …

  5. August 7th, 2008 at 21:00 | #5

    the benefits of ever-cheaper and more plentiful information will far outweigh the costs of less carbon-intensive energy

    I’ll buy that, or at least, I agree that the benefits of cheaper information will partially offset higher energy costs, dunno about “far outweigh”.

    Generally though, I’m with Ikonoclast. We can survive without modern information technology. We can’t survive without energy, food and water.

  6. Ian Gould
    August 7th, 2008 at 21:17 | #6

    I have to confess John that i’m with Ikonoclast here.

    However I’m going to take issue with another aspect of your post:

    “If we are going to do anything about climate change, one implication is that energy must get a good deal more expensive, perhaps three or four times as expensive as it is now.”

    I’d dispute this since the main low carbon alternatives in the stationary power sector – nuclear, wind and hydro – all cost less than 3-4 times the price of coal-powered electrcity.

    Here are the latest figures from the World Nuclear Association.

    http://www.world-nuclear.org/info/inf02.html

    The total cost including capital of coal, gas and nuclear is around 4-5 cents per kilowatt hour; with wind between 6 cents and 15 cents (for offshore).

    While the WNA may have a vested interest in understatign the cost of nuclear they’d also have an interest to, if anything, overstate the cost of wind.

    I’d also point out that the running costs of electric vehicles are radically lower than for petroleum vehicles although this is currently more than offset for most electric vehicles by the higher capital cost.

  7. jquiggin
    August 7th, 2008 at 21:35 | #7

    Ian, the alternatives you mention are all in limited supply. When the good locations are exhausted, I think we’ll towards the upper end of the range you mention. But I was deliberately taking an upper bound estimate to make my point. If you think the alternatives are even cheaper, I can’t see how you can support Ikonoklast who is (I’ll return the favour) arguing by assertion and failing (again) to respond to the argumetnts in the post.

    Hermit, since energy accounts for around 5 per cent of expenditure, a threefold increase in energy prices, with no change in usage patterns would be offset by 10 per cent increase in income (about 5 years growth). But as the post says, once you take account of these responses the required compensating change in income is much smaller, probably less than 3 per cent.

  8. Ian Gould
    August 7th, 2008 at 21:40 | #8

    I think Ikonoclast is correct in saying that energy use has continued to grow and indeed that growth is accelerating.

    So it’s incorrect to suggest that “It’s massive amounts of information, rather than massive amounts of energy, that distinguishes our economy from that of 50 or 100 years ago.”

    Indeed the demand for energy to support the information boom you refer to is itself one of the main drivers of growing energy demand.

  9. Hermit
    August 7th, 2008 at 21:53 | #9

    Pr Q if I can summon up Econ 101 from 1980s ANU I think you are talking about sectoral product, not multipliers or shadow prices. For example the ‘electricity industy’ may represent x% of GDP. Take away that industry and I think the loss will be more like 100%.

  10. Ian Gould
    August 7th, 2008 at 22:13 | #10

    Hermit, if there’s a signficant reduction in output from the sector you may well be right.

    However that’s a diofferent scenario to large increase in price of the output.

    I don’t think we have an energy shortage, we have a cheap clean energy shortage.

  11. Ikonoclast
    August 8th, 2008 at 00:02 | #11

    JQ says I am arguing by assertion and failing to respond again to the arguments in the post. I appreciate that that is a very restrained response given that I made a rather “forthright” post.

    I was arguing to JQ’s post not Tim Wu’s piece, mainly because I have noted a few times that JQ’s posts have severely discounted (in my view) the fundamental importance of energy as an input to the economy. I did think (so far as it goes) that I responded to the assertion “It’s massive amounts of information, rather than massive amounts of energy, that distinguishes our economy from that of 50 or 100 years ago.”

    I’ll need a little time to develop a full argument from the facts. I guess I’ll do that in a Weekend Reflections post. My thesis would be essentially that (clean) energy is the key to our whole position (globally at this point in history). It is perhaps an argument that can suffer from a tendency to reductionism like its cousin, the labour theory of value. But yes, I would probably go so far as to propose an energy theory of value.

    As a thumbnail sketch at this point… If we look at three basics namely energy, materials and technology we can see in economics that materials (raw materials) are worked on by energy via the processes of technology. Technology we may see as the coalesced instruments and processes of material invention and accumulated knowledge.

    It is clear that materials may be made into bigger and better things (to put it simply) with more energy and better technologies. It is also clear that harnessed technology can multiply and even transform outputs per unit of energy used. However, some basic forms of material production and distribution for example food, transport and the built environment look highly likely to continue to need very high energy inputs indefinitely. This is so if we are to maintain our high populations and “cities” culture.

    I am fond of saying “If we had enough energy we could make anything we needed with modern technology.” It’s a bit simplistic and overstated but it carries a definite core truth. For example, if clean energy were available in cheap and hyper-abundant supply then Australia’s general dearth of fresh water would mean almost nothing. We would pack desalinators along propitious parts of our coast and “make” fresh water to our heart’s content. But that’s enough for a thumbnail sketch. I’ll post at more length as soon as I can.

  12. scott
    August 8th, 2008 at 04:01 | #12

    As a thumbnail sketch at this point… If we look at three basics namely energy, materials and technology we can see in economics that materials (raw materials) are worked on by energy via the processes of technology.

    Why has nobody mentioned entropy?

    Dewar (J. Phys. A: Math. Gen. 36 (2003) 631–641) suggests open systems such as a planet inhabited by life tend towards entropy maximisation.

    Jenkins notes the important example of plants.

    The distinctive contribution of human activity to the global thermodynamic balance comes with the exploitation of fire. Before that time, human influence was effectively indistinguishable from that of other forms of living organism. Living systems tend to have a high degree of order (negative entropy), but they maintain this state by ‘feeding’ on energy and mass sources with a low specific entropy, and producing waste products with a higher entropy. For example,
    plants utilise radiant energy from the Sun, with an effective temperature of over 5000K, and release the energy as heat at an ambient temperature of about 300K. From Eqs 2 and 3, we see that the plants will tend to produce entropy.

    Equations 2 and 3 were dE = TdS − PdV and dS >= dQ/T

    Life on Earth obeys a “codicle to the second law” that might suggest entropy plays an important role too.

    Evolution and the universe

  13. jquiggin
    August 8th, 2008 at 08:29 | #13

    Ikonoklast, I shouldn’t have said you weren’t responding to the argument in the post. But, following up the discussion, there is no shortage of clean energy. The supply of solar energy is far more than we need, and the cost as noted in the post, is at most three or four times what we pay now, that is, a very modest amount in relation to our total, steadily growing income. (Worries about supply variability and so on are second-order in this context).

  14. August 8th, 2008 at 10:00 | #14

    The supply of solar energy is far more than we need, and the cost as noted in the post, is at most three or four times what we pay now, that is, a very modest amount in relation to our total, steadily growing income.

    Sure, but we have to build the infrastucture — the solar power stations, the wind farms, the geothermal powerstations, the pipes over the Great Divide for CCS (God forbid!), the new smart grid, the HVDC transmission lines into the desert, the hydrogen pipes into every home and business, the battery-swapping stations for the fleet of electric vehicles, the factories to build the EVs … I could go on and on and on.

    The task is immense.

    To build this massive renewables infrastructure we need trucks, cranes, construction equipment … in short, a lot of oil, oil that in all likelihood will be very, very expensive in the future.

    Seems to me this is a global project of epic proportions. Bigger than the war effort of 1939-45, the Manhattan Project, the Snowy Mountains Scheme. It is, in fact, the greatest economic transition since the industrial revolution.

    Ok, I might be “arguing by assertion” but my gut tells me this “it’ll cost one percent of GDP” line is a load of b*llocks and I’m not buying it.

    Anyone else buying it?

  15. PeterRickwood
    August 8th, 2008 at 10:18 | #15

    Two things. Firstly, on the Wu piece:


    AMERICANS today spend almost as much on bandwidth — the capacity to move information — as we do on energy. A family of four likely spends several hundred dollars a month on cellphones, cable television and Internet connections, which is about what we spend on gas and heating oil.

    This seems a bit glib to me. It focuses on direct consumption of energy only (i.e. burning of fuel), when most of the energy we consume is embodied energy (i.e. energy that is used up by producers or transporters down the supply chain). I dont have the numbers to make a case, but I would guess that embodied energy costs outweight embodied information costs. If this is the case, increases in energy costs will filter though to cost increases for everything else, and this may well outweigh possible cost reductions in `information’.

    Second related point, JQ says:


    The supply of solar energy is far more than we need, and the cost as noted in the post, is at most three or four times what we pay now, that is, a very modest amount in relation to our total, steadily growing income.

    I’m a fairly casual observer to all this, but I hang around with a few peak oil end of the world types, and I get the following argument from them. Can someone who subscribes to the ’4-fold energy cost increases wont matter (much)’ theory tell me where they are wrong? Here goes:

    If energy input costs to food production (including transportation, energy embodied in fertilizer, etc) are, say, 10%, a 4-fold increase in energy costs will produce about a 30% increase in food costs. Cost of personal transport would rise by more. At the household level, once you lump increases in food and transport (two of the biggies in ABS Household Expenditure surveys) and other indirect cost effects with the direct costs (i.e. higher utility bills), the increases in cost of living will be quite large, and, moreover, will be highly regressive. Won’t this cause significant economic damage? Enough to cause a slow-down, even a significant recession? Then we have the situation where incomes are not increasing, but costs are, and, moreover, are increasing fastest for those with least capacity to absorb them. That sounds pretty serious.

  16. James Haughton
    August 8th, 2008 at 10:25 | #16

    What hasn’t really been addressed and might link the two strands (energy vs information) together is the role that better information can play in managing the supply and distribution of energy (and matter).
    For example at the household level, sensors that detect where you are and your comfort level and can turn lights and heaters on and off automatically, or “smart windows” that change their opacity and insulation levels according to sunlight and temperature, or at the farm level, cheap sensor networks that enable even large crops of staples to be drip-fed the amount of water and fertiliser that they need (and no more), or automated water monitoring and trading networks might have a shot at actually balancing the water budget of the murray-darling (they couldn’t do a worse job than the NFF and pollies).
    I don’t know much about energy intensive industry but I would be amazed if there aren’t similar large savings to be made by the precision application of energy and matter that better information makes possible. Amory and Lovins’ book Natural Capitalism (available free from their website: http://www.natcap.org/) has a lot of examples, chiefly focussing on the automobile industry.
    Iknonoclast I think the problem with energy-centric approaches is that they tend to discourage demand management. Even with (hypothetically) large supplies of cheap renewable energy, this can create problems, e.g. light and noise pollution.

  17. jquiggin
    August 8th, 2008 at 10:49 | #17

    “Bigger than the Snowy Mountains scheme”. According to Wikipedia the scheme cost (in 2000 values) about $6 billion over 25 years. Relative to our current national income, that’s about 0.02 per cent per year. Over the construction period, it would have been a bit more, maybe around 0.1 per cent of income. In other words, 1 per cent of GDP per year is enough to finance a scheme 10 times as big as the Snowy Mountains, which is about what we want.

  18. scott
    August 8th, 2008 at 10:51 | #18

    Ok, I might be “arguing by assertion� but my gut tells me this “it’ll cost one percent of GDP� line is a load of b*llocks and I’m not buying it.

    Why is national GDP considered the relevant metric? I was under the impression governments globally were recognising that costs “external” to such a measure were now worthy of policy recognition, that the growth of GDP as an isolated indicator of social development is misguided, on sustainability grounds and that unless coordinated global efforts to reduce atmospheric GHG (amongst a range of global – subsuming national – environmental trajectories) are successful then the global damage by whatever social metric you like is likely to be of far more significance than any small change in aggregate national GDP indicators humans could reliably estimate.

    Certainly, the upper echelons of the policy elite in this county and many others are stocked with economists, but I would hope that the cost-benefit rationale in such circles isn’t constrained by preservation of a 20th century doctrine/theory that measurable GDP growth is the basis of sustainable economic activity.

  19. Ian Gould
    August 8th, 2008 at 10:54 | #19

    “Seems to me this is a global project of epic proportions. Bigger than the war effort of 1939-45, the Manhattan Project, the Snowy Mountains Scheme. It is, in fact, the greatest economic transition since the industrial revolution.”

    Correct but there are two differences:

    1. We have not six years but 30 or 40 years to do this; and

    2. the world economy is several times as large as it was in the 1940′s.

  20. conrad
    August 8th, 2008 at 11:03 | #20

    “To build this massive renewables infrastructure we need trucks, cranes, construction equipment … in short, a lot of oil, oil that in all likelihood will be very, very expensive in the future”

    Perhaps a better way to look at this is what would happen if big countries like the US started doing it rather than Australia. If the US had spent the 2 trillion on better energy sources instead of fighting in Iraq, then I imagine the price of oil would have been absolutely decimated, since it would have massively impacted energy supply. In addition, because of all the new energy supply that would be coming online, people would be betting on the future price going down, rather than up, so you wouldn’t have any speculative component.

  21. Ian Gould
    August 8th, 2008 at 11:15 | #21

    “If energy input costs to food production (including transportation, energy embodied in fertilizer, etc) are, say, 10%, a 4-fold increase in energy costs will produce about a 30% increase in food costs. Cost of personal transport would rise by more. At the household level, once you lump increases in food and transport (two of the biggies in ABS Household Expenditure surveys) and other indirect cost effects with the direct costs (i.e. higher utility bills), the increases in cost of living will be quite large, and, moreover, will be highly regressive. Won’t this cause significant economic damage? Enough to cause a slow-down, even a significant recession? Then we have the situation where incomes are not increasing, but costs are, and, moreover, are increasing fastest for those with least capacity to absorb them. That sounds pretty serious.”

    Again, this process will be spread out over a minimum of twenty years.

    Also, peopel keep comparing the market price of coal and oil with the market price of alternatives.

    This is understandable but ignores the various large environmental externalities associated with coal and oil use.

    I’ll leave aside the impacts of global warmin and point out that coal burning is probably the largest source of Mercury and Radium pollution.

    That’s one reason why in the US alone air pollution from coal-fired power-stations are estimated to kill 10,000 people a year.

    Worldwide the number woudl almost definitely be over 100,000.

    The so-called Asian Brown Cloud is estimated to reduce agricultural output in South Asia by 10% or more.

    So the actual cost of substituting nuclear, wind and solar for oil and coal will be substantially less than the difference in market costs (and in any case market prices for the alternatives will likely shift down with economics of scale and improved technology).

    Carbon pricing via either emissiosn trading or a carbon tax will indeed be regressive. However, the tax system and government transfer payments can be
    used to overcome this.

    Here is Australia we saw this with the GST. At the time, I was opposed to the GST precisely because of its distributional effects (and the transitional costs). In the event I was proven wrong – the GST was introduced and the tax system as a whole shifted significantly from income to consumption.

    However the living standards of all Australians including the poor increased after the introduction of the GST.

    There is no a priori reason why the same thing couldn’t be done with carbon pricing.

    (I should say however that the US may have particular difficulty in introducing such a change. The US tax system (looked at in toto including state and local taxes and “sin taxes’) is already more dependant on consumption taxes and less progressive than many other developed countries. There will also be ideological opposition to any atempt to offset the regressive impact of carbon pricing through increased government transfer payments.)

  22. gerard
    August 8th, 2008 at 11:22 | #22

    On any plausible estimate of the properties of demand, the benefits of ever-cheaper and more plentiful information will far outweigh the costs of less carbon-intensive energy. Partly this is a matter of substitution in production (for example, videoconferencing replacing business travel) and partly in consumption (as information based activities become cheap and energy-based activities become dear, people will switch from one to other).

    There might be some substitution on the margins, but ‘energy-based activities’ are the core of absolutely everything in day-to-day life: food, clothing, shelter and all the rest. The basic point that cheap, plentiful ‘information’ can in some way be a substitute for cheap, plentiful energy seems to me similar to saying that ‘information’ can substitute for water or topsoil. it just can’t. we may be able to video conference instead of fly, but we can’t just download images of all the food, clothes and manufactured goods that are shipped and trucked all around the world once the cheap fuel that provides both the energy to produce and to transport them gets costly. as energy is THE input into basically everything, the benefits of exponentially increasing supplies of ‘information’ won’t compensate us for much more expensive energy, unless it is ‘information’ about how to make more stuff (including energy) with less energy (and even then it won’t help much unless it becomes action).

  23. gerard
    August 8th, 2008 at 11:31 | #23

    I think the really interesting point of Wu’s article is that the private oligopoly control of information infrastructure is creating artificial scarcity and driving up the costs of something that ought to be much, much cheaper. which is obvious anyway. Wu is talking about America but I imagine Australia is even worse in this regard. I mean seriously what is the “marginal cost of production” when we’re talking about the cost to a carrier of transmitting a mobile phone call or downloading a megabyte of data? so much for econ1010. the point I took from Wu’s article is that if we are paying as much for electricity/gas as we are for information access then there’s some serious ‘distortion’ in our economy, considering the respective costs involved (including costs to the future of the planet) in producing these two things.

  24. David
    August 8th, 2008 at 11:35 | #24

    An issue aside from increasing energy costs which, frankly, scares the shit out of me, is the extent to which agricultural production is dependant on oil. Ikonoclast has already mentioned this, but I don’t think anyone else has picked up on it.

    Without cheap oil, modern agriculture is impossble, as it is the feedstock for fertilisers and pesticides as well as the primary energy source. The only reason we come close to feeding 6 billion people is because of our current agricultural practices.

    We can’t eat information.

  25. jquiggin
    August 8th, 2008 at 11:54 | #25

    #17 Scott, you’ll notice that I am careful to avoid using the term GDP for much the reasons you give. GDP is a useful metric for short-term macroeconomic management, but is not a good measure of income or welfare.

  26. Ian Gould
    August 8th, 2008 at 12:08 | #26

    Gerard, this was the rationale behidn the proposal to privatise the competitive bits of Tesltra (like the mobile business, the firxed lien retail business and Sensis) and keep the basic copper network in public ownership under a “common carrier” charter where it had to provide all customers with the same service at the same cost.

  27. frankis
    August 8th, 2008 at 14:52 | #27

    I agree that one ought to discuss entropy at the same time as energy, thanks both JQ and Scott.

    So … consciousness is beyond the scope of simple thermodynamic models and the 2nd Law. Simple example: rather than merely metabolising, an individual with consciousness may choose between activities with vastly different effects on entropy increase of the universe. One might choose to write a good book rather than set fire to a house, for instance. The conscious decision to employ metabolic energy to create information rather than to destroy it is a consideration not addressed by the physics and mathematics of thermodynamics, yet one which seems germane to this discussion.

    Does the existence of life necessarily increase entropy in the universe? Is a dark bottomed pond of dark water more or less contributory to entropy in the universe than the same pond covered in living algae? In the second case doesn’t the partially reflective green algae actually cause less increase of entropy (relative to the incident sunlight) than does the dark, absorptive pond water?

    How about building a dam? Water behind a dam wall is lower entropy than that which has reached the sea. Some of the potential energy it represents can be transformed into information (via hydropower and the use of electricity for computations or manufactures, for instance). Is this an example where the presence of sentient life can in fact lower the rate of increase of entropy of the universe?

    Can an individual make much of a difference? While eating probably less food – thus creating less entropy – than your average schmoe, the information created by Newton and Einstein through thought far outweighed the energy and entropy it cost the universe to host them (which you can see because the information they created has already been shared out to millions of other conscious actors at only marginal energy and entropy cost).

    These are real not rhetorical questions btw, I don’t know the answers. It seems to me though that evolution of consciousness in the universe might be capable of mitigating against increase in entropy, both universally and locally, which for some might even be heartening in discussion of our present and future energy budget.

  28. Hermit
    August 8th, 2008 at 15:46 | #28

    I think the embodied energy investment (steel, concrete etc) needed for the information economy will be far less than that needed to replace ‘classic’ infrastructure like transport and electricity. For example my neighbours and I are entitled to ‘free’ satellite dishes as we are in an ADSL black spot. That few millions of public funds is peanuts compared to tens of billions needed to seriously replace coal fired electrical generation with say solar power. By ‘serious’ I mean building extra transmission lines, multiple plants and quick start backup.

    The question is to what extent can information related infrastructure obviate the need for ‘hard’ assets like roads and power stations. I don’t think it can be done without major societal changes.

  29. August 8th, 2008 at 15:55 | #29

    ProfQ #16

    In other words, 1 per cent of GDP per year is enough to finance a scheme 10 times as big as the Snowy Mountains, which is about what we want.

    The Snowy generates 3.5% of the mainland grid’s power. We have to decarbonise 80-90% of the grid, and decarbonise transportation with some technology not yet invented. Therefore I’d say the task is easily bigger than ten Snowy Mountain Schemes, which is at least 10% of GDP.

    Ian Gould #18:

    1. We have not six years but 30 or 40 years to do this

    Depends on whether oil production starts to decline in the next six years, because we’re sure as hell not gonna be building all this infrastructure in a post-peak world.

  30. John Mashey
    August 9th, 2008 at 03:34 | #30

    1) The general topic of energy & efficiency [of which IT substitutions are part] is exactly what folks like Bob Ayres and Benjamin Warr study. I mentioned them back in that guest post that JQ was kind to put up.

    If one looks at Ayres&Warr, Accounting for Growth: the Role of Physical Work, especially pages 17-18, one finds that the {Solow residual, Total Factor Productivity} seems well-modeled by:

    work = energy*efficiency

    except for a positive residual over the last 30 years that they think is from computing&networking. I think that means:

    a) Computing [not just bandwidth, see below] adds to the economy.
    b) Computing helps improve efficiency, in various ways
    c) But one still needs energy.

    2) As for Tim’s paper, he usually does good things, but unfortunately, telecommunications laws don’t override in-the-ground economics and laws of physics. My comments here come from:

    I worked 10 years at Bell Labs, including 5 in a lab that built data systems for managing “outside plant”, i.e., the cable infrastructure that connects subscribers to central offices, or “the last mile”. You might guess that the economics of such things were relevant to our work.

    My wife also worked at Bell Labs, has done a lot of wireless work, and tries every scheme that comes along to get more bandwidth to our house. I’ve helped 2 wireless sensor network companies get funded, have advised networking companies, have designed high-bandwidth supercomputers, and look at startups for venture capitalists. We live in the hills just above Stanford, about 5 miles from Sand Hill Rd.

    There are plenty of dumb laws, and monopolies can be slow-moving.

    3) BUT, the “last mile”, at least for physical cables, whtehr copper or fiber, is pretty much a natural monopoly/duopoly. It is really expensive to do this stuff. In the US , we tried to “manufacture” local competition, and it really didn’t work very well. When we switched from ISDN to DSL in our house, we used DSL vendor A, under rules that required the local teloc to provide space in their central office for DSL termination gear, and to provide use of their wires. Vendor A ran into trouble, and we switched to B, and they ran into trouble, and we ended up with the local telco. In this whole sequence, when anything went wrong, we had several vendors to call, and when somebody repaired something, it was always the same telco repair guy, even if contracted out to A or B. It is *far* easier to have rational competition in long-haul than for the wires to your house, especially in suburban/rural areas, but even in many urban areas.

    Tim’s idea of owning your own fiber as being just like owning solar panels doesn’t impress me. You have to buy it from the same monopoly/duopoly, you will need service, and connectivity. If you are the first or only one to want a fiber to your house, you should check and see how much that will cost to lay a cable to it.

    4) Wireless is more hopeful, and more naturally competitive, but physics is pesky, and law professors can’t wish it away. This is Silicon Valley, dense with people trying to start companies to do the last mile. My wife is fond of this stuff, has helped startups, and looked at every one that’s come along in 20 years to get more bandwidth here. Without going into the details, we’re still using DSL… but think about hills, trees, rain, building penetration, routing, backhaul, etc, etc. Also, unlike the wire to your house, the aether is a shared medium. Yes, we can do better laws, but electromagnetic radiation is what it is, even with terrific, low-power ASICs to extract signal from noise, and samrt antennas (like my wife has worked on). Iit’s amazing that Edge or 3G networks are as good as they are, but their effective bandwidths are pathetic next to fiber.

    5) Silicon Valley is working very hard on energy efficiency, and computing is a part of that, although other areas are more important. I think Tim is wrong to just focus on bandwidth, as quite often, the critical thing isn’t big bandwidth, but local control & low-bandwidth connectivity.

    Computing can save energy in various ways, and companies around here do them all, and I’ve personally had a hand in at least one application in each category:

    a) Obviously, computers have to be kept getting more efficient in their own internal power use.
    b) Computers are used to *design* more efficient products, i.e., most commonly via mechanical engineering apps, to use less material, streamline cars and planes, etc, etc.
    c) Computers are used to *schedule* resource usage better, like optimizing truck routes or doign better seismic studies or reservoir modeling for oil companies.
    d) Computers get embedded in products, sometimes to help save energy. This usually involves embedded microprocessors, with sensors and controllers, as in cars, industrial automation, or smart buildings. Two I work with, Dust Networks and Streetline Networks do *wireless sensor networks*. WSNs even show up in agriculture, as per Grape Networks, a CA company which has distribution in Oz, where it’s quite relevant. WSNs sometimes use the Internet, but generally, connectivity counts way more than bandwidth for many applications.
    e) Finally, one can use networking to eliminate some motion of people and physical objects, and that’s where bandwidth does matter.

    BUT, even given all that, I think it is fantasy to hope that we can dematerialize the economy to the point where energy doesn’t matter much. That’s why VCs here fund solar {everything}, electric cars, biofuels, etc, etc. Again, my canonical issue:

    In CA, the Sacramento/San-Joaquin River Delta is a large, very productive farming area, and much of it is below sea level already, and it will be further below sea level later. Much of the water supply for many people comes from there. CA uses something like 20% of its electricity for pumping water around. The SF Bay Area has a huge amount of very valuable infrastructure built within a meter or two of sea level, including two airports, some roads, sewage plants, and a big chunk of San Jose.

    Suppose we had infinite bandwidth, free. How much does that help us:
    - build dikes and seawalls
    - relocate infrastructure uphill
    - move water around
    - do farming: we grow half the fruit & vegetables for the US in CA
    - rebuild infrastructure after earthquakes

    And CA is the probably the most aggressive state in the US in decarbonizing and efficiency, with energy efficiency “godfather” Art Rosenfeld pushing for decades. But even here, people worry about peak Oil+Gas [we use almost no coal], and how we’ll do efficiency and substitution fast enough to avoid the economy getting clobbered and creating a lot of stranded assets.

  31. jquiggin
    August 9th, 2008 at 06:27 | #31

    Efficiency has lots of different aspects. In Brisbane, due to a long drought, we’ve halved water use per person in the space of a few years. It’s been inconvenient in various ways, but not a fundamental change in our way of life. And water is obviously at least as essential as energy.

  32. John Mashey
    August 9th, 2008 at 06:31 | #32

    re: water

    For sure: energy, climate, water are really intertangled in ways that CA and OZ in particular share. Neither of us can take water for granted.

  33. jquiggin
    August 9th, 2008 at 06:39 | #33

    #31 Agreed, absolutely. And we have been wasting both on a huge scale.

  34. BilB
    August 9th, 2008 at 07:57 | #34

    Might I suggest that there is a chicken and egg relationship here. If you take away all of the energy then there is no need for the band width, nor flux to make it possible. What do a lot of humans swinging from trees need bandwidth for? Hunting for berries leaves little time to indulge in viewing entertainments that do not exist as there is no energy with which to produce or convey them.

    It is our direction of energy that gives rise to the need to process and convey massive amounts of information (requiring bandwidth). I think that at best you can argue the relative ratio and evolving interelationship between the energy and bandwidth. And to that end may I also suggest that there is an intertwined relationship with degree of product (technology) complexity. The ever increasing penetration of science into our lives creates the dependence upon bandwidth supported information flow for growth, education, marketing and entertainment. So it is not surprising that it was the science community that took bandwidth from books to keyboards. And energy consumption came right along with it.

  35. Ken
    August 9th, 2008 at 08:20 | #35

    I have to admit to being taken with the quaint notion that all economic activities are not equal – agriculture for example represents something essential that can’t be abandoned in favour of something more economically productive. Energy supply is part of that but energy for agriculture is essential whereas energy for making toys, whilst more profitable during a period of energy abundance, should not be considered of equal importance. In an era of more costly energy there may be some triage needed.

    Meanwhile the cost of renewables is dropping and whilst companies like Nanosolar aren’t yet flooding the market with cheap solar cells (just how cheap isn’t something they are making public yet), how quickly they went from idea to commercial production is heartening, the low cost of the production equipment is very significant. All who pontificate on the high costs and limited capacity of solar aren’t basing those assertions on the emerging solar production methods but on those headed for obsolescence. Australia would do better doing deals with them and their competitors than with hybrid car makers.

    The matter of storage for renewables is a real issue, but the practicality of utility scale thermal storage is probably there, it’s just that to date there’s been no need to develop it, even for larger scale renewables. Time to do so I think.

  36. BilB
    August 9th, 2008 at 09:21 | #36

    Ken,

    I used to think along those lines. In fact I used to annoy my Dad endlessly, as we washed the dishes together, with arguments about activity streams valued for worth by their relative position to primary production. But the reality is that we all have to support ourselves, and not everyone wants to be a farmer. Industrially, there is little difference between a plastic toy and a housing for an irrigation water flow monitor.

    I do struggle with the fact that I run a small factory for which there is no future if it is not consuming resources and energy to justify its existence. Our modern world offers me an alternative if I want to change to become an information manufacturer. This would take me from being a “bucketwidth” manufacturer to a “bandwidth” manufacturer. The net gain being less material and energy consumption, with the subsequent reduction in environmental impact.

    This is, I feel, the challenge for the coming generations.

    Livelyhood without environmental consequence.

    My generation has explored the other, and we now know, as it took just one generation to discover the flaw, that it does not have an extended future.

  37. Ian Gould
    August 9th, 2008 at 10:41 | #37

    I wonder how much energy South East Queensland has saved through reducing water use?

  38. BilB
    August 9th, 2008 at 12:30 | #38

    JohnM,

    Surely you can increase your bandwidth simply by adding more lines. This would give you band width * x number of lines rather than bandwidth ^ x number of lines, which would be more desireable. Then the challenge becomes how to use x nuber of lines for the one application (I should add here that shared line use can work well here unless every one in your residential group is a gaming nut). This is local software that you do have control of. Then the next battle is how to get a reduction in line and service cost for volume use. If everyone did this then your local telco would eventually get the point that more is better.

    How can bandwidth reduce energy consumption and infrastucture needs? Well this is a content issue. It is encouraging that electronic media does have the effect of reducing peoples need for external experience. A whole new generation of life sized projected 3d images mixed with superior sound and fragrance generation (all today realities) will progress further to keep people at home rather than venturing out into that scary dangerous world. Who knows, maybe our legs will eventually drop off and we can replace V10 SUV’s with souped up electric wheel chairs.

    I think that we just have to keep working on it.

  39. August 9th, 2008 at 14:56 | #39

    ProfQ in his Update writes:

    That is, the rate of growth of information greatly exceeds (and leads) the rate of economic growth, while energy use has declined relative to output.

    I don’t think anyone disputes this point. Energy use per unit of economic output has been declining for decades, if not centuries. However, I fail to see how this makes energy any less essential to civilisation.

    In a world where energy is cheap, plentiful and supply is growing, energy use per unit of output will surely decline further, but in a world where the amount of energy available is declining and becoming more expensive, energy use per unit of output must surely rise (and potentially rise very rapidly as spare capacity approaches zero, as we have seen in the oil market recently).

    The cost of energy today largely reflects the cost of production. It doesn’t reflect its true value. We will only know the true value of energy when we can no longer make enough of it to meet demand.

    Just because something is cheap, and getting cheaper, doesn’t mean its not essential. I would argue its more a failure of the market to accurately price energy rather than a reflection of its true value.

    Cilivisation would survive the destruction of all our information technology tomorrow (indeed much of it didn’t exist a few decades ago) but we couldn’t survive without energy, food and water.

  40. Ken
    August 10th, 2008 at 11:04 | #40

    As long as resources are abundant the economic benefits of various activities might seem equivalent but when it gets down to the wire some activities are going to be deemed essential whilst others are not. To ensure it doesn’t get down to the wire we need to treat the conversion to clean sustainable energy like the developing crisis climate science is telling us it is. I think anyone who really believes the nations that are racing to come last will be the winners is encouraging the world to join a race where everyone ends up losing. Even those parts of the world where climate change might prove locally beneficial will be surrounded by a world economy of nations and people that are facing serious harm and that harm will flow across every border.

    I don’t see clean energy as beyond our capabilities, I see adaptation to the worst case climate change scenarious as beyond our capabilities. Abundant clean energy, enough to make all the economic worries about mitigation go away is a long way off, but not impossible. A conviction that it can’t be done is a solid foundation only for failure.

  41. scott
    August 10th, 2008 at 13:31 | #41

    On a more minor point, a bit of data on energy use in agriculture (sources to come). Agriculture accounts for about 1 per cent of direct energy use and maybe 1.5 per cent more through fertilisers and pesticide. In total, energy amounts to about 20 per cent of the costs of agricultural production, and a substantially smaller share of the retail cost of food.

    Prof Q I am curious about the situation with agricultural dependence on fossil fuels so I would support any publication of data on this you can. I would greatly appreciate it if you could explain how you arrived at the above figures.

    It seems to me this is the type of work that may reveal what needs to be done if civilisation is to survive the next millenia, notwithstanding nuclear holocaust at least.

    I was under the impression nitrogen fertiliser production was already largely natural gas fed. It is conceivable that processes could exploit a number of feedbacks in any moving away from fossil fuel dependence. Methane abatement efforts are advancing, energy supply alternatives are available and developing fast, and land improvement appears possible.

    We can’t make it rain so are limited only by water it seems.

  42. Hermit
    August 10th, 2008 at 14:16 | #42

    scott there is an extensive literature on the connection between farming and fossil fuels eg
    http://www.energybulletin.net/node/5045
    The accepted view is that energy inputs to food are an order of magnitude higher than its calorific value. Thus we need diesel fuelled 150 kilowatt combine harvesters to maintain our 150 watt metabolism. Sure the ratio of tractors to humans is high but must decline with fossil fuel depletion and population growth.

    While Australia appears to have half a century of natural gas the world production peak is expected within a few years. That will create shortages of nitrogen fertilisers such as urea, nitrates and ammonia based compounds. The next cheapest approach may be to recycle human wastes close to where the food is grown.

  43. BilB
    August 10th, 2008 at 17:38 | #43

    Hermit,

    There is another way of looking at food and energy. It is entirely realistic for every farmer to produce all of the energy that their activity requires, alongside the food production. The ratio I believe would be one hectare for energy from ten hectares farmed. The reality is that we just don’t have that in our business culture, so we take the easy option.

    And on recycling human waste
    http://en.ce.cn/Business/Macro-economic/200704/13/t20070413_11028532.shtml
    the Chinese are well down that road. We would do well to follow their example. Isn’t that interesting? China leading the way on environment. What ever was it that Howard was on about?

    It is not hard to find ways that China is working to turn the situation around http://www.autobloggreen.com/tag/Zotye/ out of interest.

    But China is very proactive in farming development as well. Realising that feeding their populace will be a challenge as their land degrades and is steadily turned over for industry and olympic sites, China has been steadily buying up land in all of its neighbouring countries (this is from someone who has just returned from 3 years living in China and who tried to buy land in Vietnam but found that that there was little to be had). And to support that farming they have just recently put a 100 percent tarif on the export of all phosphorus based products, to keep control of their available phosphate fertilizer.

    This drive by China (and India) is the base cause of the recent food price increases in developing countries. Not biofuels as is claimed by the oil industry missinformation machine.

    So for what it is worth there is a little bit of information about energy, and food.

  44. John Mashey
    August 11th, 2008 at 14:25 | #44

    re: #38 BilB

    Physical resources still cost money in the real world. In “outside plant” as in other areas, there is always tension between overprovisioning the initial installation versus the cost to add lines if it turns out you’ve underprovisioned.

    This shows up most simply in “how many wires to the house”? Which also implies “how many wires up the street” and “how many terminations”, depending on the neighborhood – richer neighborhoods have tended to want more lines, although with cellphones and DSLs and such, this has retreated, I think. For a while in some places there was real pressure on cabling when people wanted extra phone lines not just teenagers but modems.

    Ganging lines together has been done for decades; it’s still expensive/complicated to put 2 DSL lines together and actually get 2X better bandwidth for one stream.

    See: DSLAM, link aggregation, channel bonding, dsl channel bonding

  45. BilB
    August 11th, 2008 at 16:19 | #45

    JohnM,

    I took it that you were talking from the frustrated end user point of view, rather than that of the system designer. Well it is out of my league, not being a technician. But the only other thought that I might have is to deal with the cable tv people rather than the telco. The cable guys seem to be able to get mass data into every home. Maybe the solution is overhead optic fibre rather than underground. It is ugly, but it works.

  46. wilful
    August 11th, 2008 at 16:53 | #46

    John Mashey, the answer to your conundrum about California having to expend energy on protection from sea level rises despite being relatively low emission is that it’s a globally caused problem. had we all adapted in the way California had, perhaps none of this would have been necessary.

  47. John Mashey
    August 12th, 2008 at 02:38 | #47

    re: #45 BilB

    Well, actually, I was talking from both the consumer view and the “I worked for 5 years in Bell Labs, i.e., where lots of this came from, and in the specific lab that worried about management , maintenance & economics of the outside cable plant” view.

    There is lots of one-way, downstream broadcast bandwidth, whether over-the-air, satellite, or cable. The transmitter transmits over a *shared* phyiscal medium, without knowing how many receivers are out there, or where they are, or caring, or being able to listen to them.

    But that’s not the Internet (or the phone system), in which someone somewhere sends packets through the network and it gets to *you*, and you send packets back to them. That is way, way harder.

    If you have a cable modem, and everybody on your coax segment decides to download videos from the Internet (as opposed to just watching the common broadcast channels), you will discover the meaning of th phrase “Quality of Service”.

    Overhead fibre: of course it works. It’s just expensive, and it’s more expensive the closer it gets to the end user. Look up FTTH.

  48. John Mashey
    August 14th, 2008 at 02:39 | #48

    re: #46 willful
    Well, it’s not a conundrum, and of course, the issue is always:

    a) Locally, places will have to adapt.
    b) locally, each place has to do its share of mitigation.

    CA, as relatively good as it is (for N. America) still emits a lot of CO2 & CH4 and other stuff [we have 1.5M dairy cows], and still has a *long* way to go, but also believes in doing its share (and hopefully, making $$ from some of the technologies developed, although most of the methods are just paying attention to efficiency.)

    See CARB on climate change, and look under Climate for AB32, which is the current plan.

    Another crucial agency here is the CA Energy Commission. As always, the awesome Art Rosenfeld’s work is worth perusing at least once a month.

    At this point, one simply cannot separate climate and energy, and as high-tech as CA is, and as fanatic about computing/telecom substitutions as Silicon Valley is, energy efficiency and sustainable substitutes are red-hot areas for the local VCs, thank goodness.

  49. BilB
    August 14th, 2008 at 17:20 | #49

    Johm M,

    I wonder if you can keep us posted on any new environmental intitiatives in your part of the world there. We are seeing some really interesting new directions coming out of California. One that I think is pivotal is the aptera car. This may well be the breakpoint for vehicles. Extremely light weight as far as vehicles go, and of course very spectacularly fuel efficient, as well as flexible. Funny looking in comparison to our general automotive theme, but compared to the weird things that people wear when riding push bikes very natural. I think that it will take and become a whole new style.

  50. scott
    August 15th, 2008 at 10:02 | #50

    BilB,

    I want one!

    Pity our govt didn’t give the money he gave to Toyota, Japan, to an Australian manufacturer of those things. They would be everywhere if we could make them here…

  51. BilB
    August 15th, 2008 at 10:22 | #51

    I’m with you, Scott. For credits this was Steve’s find. I think that I can live well feeling like the odd man out for a while. This vehicle fulfills all of my needs in a way that I would like to have them filled full.

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