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New sand

March 21st, 2011

Here’s a new sandpit for lengthy side discussion, rants on idees fixes and so on.

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  1. jakerman
    March 23rd, 2011 at 13:03 | #1

    Ikonoclast :@jquiggin
    I’m not sure where jakerman got the 80kWh/day per person from in that large document.

    Sorry I should have cited p.235

    Redoing the calculations for the world
    How can 6 billion people obtain the power for a European standard of
    living – 80 kWh per day per person, say?

    http://www.inference.phy.cam.ac.uk/withouthotair/c30/page_235.shtml

  2. Ikonoclast
    March 23rd, 2011 at 13:06 | #2

    I might add that any sanguine view of an orderly transition ought to be at least shaken by the notion of overshoot (if that case is proven). Various calculations show we are alreadybadly into overshoot. I would cite;

    Limits to Growth – Beyond the Limits and The 30m year update;

    and;

    Various assays at Footprint calulations.

    http://www.footprintnetwork.org/en/index.php/GFN/

    Does JQ give any credence to claims that we are already in overshoot?

  3. jakerman
    March 23rd, 2011 at 13:07 | #3
  4. Ikonoclast
    March 23rd, 2011 at 13:09 | #4

    Oops, I mean the 30 year update. I suspect at the 30 million year update it will be difficult to find any traces of homo sapiens.

  5. Ikonoclast
    March 23rd, 2011 at 13:13 | #5

    @jakerman

    That is a great chart and provides further good evidence that economic production is a function of energy use.

  6. Peter T
    March 23rd, 2011 at 14:33 | #6

    I would put it differently. I think abstract thermodynamic calculations are beside the point. We could generate (and comfortably live on) 80KW a day – if we re-engineered our cities, infrastructure, transport, modes of life…..This would require both large social shifts and enormous expenditure of energy. More to the point is that surplus energy (energy left after that expended getting it) is what expands the height and the number of niches in the socio-economic structure. As surplus declines, the structures come under stress. They adapt until adaptation is no longer possible, and then shed height and the niches that cannot be supported (usually dropping by around a third). This usually happens quite suddenly, but also quite unpredictably. Still, the stresses look to reach maximum sometime after 2030 – not just energy but water, absorption of nitrates, fisheries, land degradation, major climate change impacts….

    The classic study is Joseph Tainter, but the broad outline is familiar to any student of systems under stress – military history has a lot of examples. There are also examples in ecology.

  7. Fran Barlow
    March 23rd, 2011 at 15:47 | #7

    @jakerman

    Fran Iceland can contine to use enormous energy per capita, largely because it exports lots of (low CO2) aluminium. Australia could do likewise if we harness out huge renewables capacity.

    You’re missing the point. If you are going to work out how much energy people need to consume per day to have a European lifestyle, what Europeans currently use is only a very rough guide. To take an absurd example, if a country were to produce no goods at all, and function purely as a banking capital with a bit of tourism, but import 100% of its goods, it might have very high GDP per capita and very low emissions and energy use per capita. This would be especially so if all of the populace lived in one or two big conurbations very close together and near the entry points for goods.

    That jurisdiction wouldn’t be a good benchmark for how much energy the whole world could live on and enjoy a similar lifestyle because someone ultimately has to use energy to produce the finished goods that under pin the lifestyle. A better measure would be to look at the total energy usage of the country including the lifecycle energy cost all goods being consumed in the jursidiction and to assess all other jurisdictions in the same way. Thus, if Australia exports aluminium to some place, they get credited with the energy usage rather than us. If we import flat screen TVs and cars, then those are our energy usages.

    We could then look at what the LCO2e of those goods were and get a more accurate picture of the true contribution per capita and per jursidiction of each country to rising atmospheric CO2.

    It is hard to imagine in such circumstances that deniers could claim that Australia was only contributing 1.4% to world emissions. I suspect it would be probably double or even tripple that. Given that China is a major exporter, the gulf between our per capita emissions and theirs would be even greater than now. It would be nice to be able to lance this old trope.

  8. jakerman
    March 23rd, 2011 at 20:15 | #8

    @Fran Barlow

    I don’t see how you deduce I’m missing the point. Iceland etc does heavy industrial scale lifting with low CO2 energy to allow other economy’s to do lower energy low CO2 value adding.

    I think this is the point you missed.

  9. Ernestine Gross
    March 24th, 2011 at 07:06 | #9

    @John S Cook

    @43, p1, you write:
    “Some suggest that production – by living things including humans – depends on three ‘primitives’ or basic factors of production:
    * code, information, recipe,
    * energy
    * physical things”

    I am not sure how your suggestion is related to my post or to Ikonoclast’s bet with Prof Quiggin (Ikonoclast has accepted income as a measure of ‘output’.)

    1. ‘Primitives’. It seems I may have been a little too cryptic in my usage of this term in my original post addressed to JQ. The discussion (Prof Q and Ikonoclast) on ‘limits to growth’ takes place in the context of the contemporary conceptual framework of macro-economics. See reference link provided by Ikonoclast. This in turn presumes an ‘institutional environment’ (legal framework) and associated data collection and storage. But this is very limiting. It is limiting regarding the past of one society, it is limiting regarding the history of other societies, and it is limiting the research questions that can be asked. Still, I believe, Economics deals only with a limited number of questions. I am saying, when one wishes to deal with economic questions but without the limitation of the said conceptual framework, then there are 2 ‘primitives’, people and the natural environment (‘resources’). I’ll probably attract snarky and silly comments (essentially from people who can’t think of anything else than their current political aims) when I now illustrate my point by inviting a comparison of ‘the economy’ of the Aboriginal people with ‘the economy’ of the UK around 1800.

    2. Without further information, I could interpret your :”*code, information, recipe,
    * energy, * physical things” without requiring a new theoretical model. (Not sure so how or why biological organisms – such as humans – would come up with a ‘social construct’.)

  10. Ikonoclast
    March 24th, 2011 at 11:03 | #10

    Initially, I was much taken by Cook’s list (and I still think it is useful);

    “Production – by living things including humans – depends on three ‘primitives’ or basic factors of production:

    * code, information, recipe,
    * energy
    * physical things”

    However, perhaps it would have been best if Cook had stayed with “three basic factors of production” and not brought the term “primitives” (in the economic-technical sense) into it.

    On reflection, Cook’s list seems to me to be too reductionist and incomplete if it claims to represent “primitives”. (Not that I can really claim to understand Ernestine’s terminology as economics it is not my discipline).

    Ernestine’s characterisation of people and the natural environment as the two “primitives” is minimally reductionist. It implicitly includes all that people and society are and it implicitly includes not only matter and energy but the systems of the environment.

    Cook’s “matter and energy” could equal the environment if systems were not excluded. “Code, information and recipes” leaves too much out to be considered a “primitive” in the sense that Ernestine uses the term. I can understand geneticists or systems programmers highligting code, information and recipes. However, any code needs an interpreter, a fabricator and even a developer or innovator to be made and used to its full capacity to guide fabrication.

    The notion of the agent (“agency” encompassing perhaps volitional agency, innovative agency and even the necessary physical apparatus of agency) appears to left out of Cook’s list. Am I on the right track, Ernestine?

    At the same time I want to emphasise in relation to my bet with JQ, I am not just invoking (classical?) macroeconomics, I am invoking biophysical economics and putting a very strong emphasis on environmental and even thermodynamic limits to the increases of size and complexity which characterise the modern economy.

  11. Ernestine Gross
    March 24th, 2011 at 15:57 | #11

    @Ikonoclast

    1. “Am I on the right track, Ernestine?”

    Yes.

    “It implicitly includes all that people and society are and it implicitly includes not only matter and energy but the systems of the environment.”

    Lets put it this way, the formulation of the 2 ‘primitives’ does not exclude ‘all people and society’ and it does not exclude ‘systems of the environment’ by research program design. (IMHO, this is the power of the axiomatic approach to economic theory rather than the results of specific models. Isn’t that having an open mind to new scientific knowledge as well as alternative moral philosophies? In this sense, is it wrong to say that economics, as a field of inquiry, intersects with both, natural science and philosophy? Doing a Rudd, my answer to the last question is NO. Hence debates on whether or not economics is a science, are, IMHO, irrelevant. But what is important is that those who work in economics don’t have a closed mind to science. )

    2. Hint regarding your bet: Withdraw the reference you linked to (it is straight macro-economics) and adopt payoff in ‘baked beans’ (or some other thing, specified in quantity not value). Also, you could try to argue that output (as in macro-economics) has to be wrong for otherwise ghg emissions (AGW), human induced nuclear pollution of air water, soil, flora and fauna wouldn’t be a problem. After all this, you may still be stuck because you linked your idea to a macro-economic notion, namely ‘recession’.

  12. John S Cook
    March 24th, 2011 at 17:33 | #12

    @Ernestine Gross
    Perhaps I missed the meaning you attached to the term ‘primitive’. I have been working for a long time on the information processes associated with government; and needed to get as close as possible to the idea of ‘nature’ to see where humans started to do things with the resources at hand to secure their own survival. These three factors of production have been suggested by other people with far more stature than I have. Nonetheless, it is a useful starting point for thinking about basic human needs – even though they may be satisfied in a variety of ways.

    Accounting at the level of the enterprise includes an activity statement and a balance sheet – the reference to flows and stocks. It doesn’t take long to run into problems of assigning value and return on investment in the macro economy or even in large enterprises that survive over periods of say 70 or more years. I agree that it may be better to talk about baked beans if it helps the monetary system retain some touch with reality.

    Trying to see if people leave the place better or worse off when they die is important to notions of sustainability and intergenerational equity. A glance at the Table of Contents in my work at http://eprints.qut.edu.au/40727/. You may find more points of similarity than difference. The section 3.3.3.4 on ‘Financial accounting and auditing’ led me to wonder whether economic growth figures could say much that was useful. I suspect that far more work needs to be done in trying to establish economic stability and retain employment; and I;m not encouraged by the standard of debate on these things.
    However as a septuagenarian, I become more impressed each day about how much I won’t be able to learn in what’s left of a lifetime.

  13. SJ
    March 24th, 2011 at 19:38 | #13

    Test

  14. SJ
    March 24th, 2011 at 19:56 | #14

    Testing

  15. Ikonoclast
    March 25th, 2011 at 10:02 | #15

    @Ernestine Gross

    I’ll stick with my bet parameters. In good wholistic economic accounting, the value of outputs should be decreased by the damages caused by negative externalities. However, as my bet implicitly rides on a nag called “Overshoot”, the negative externalities are factored in as limits which will send us down the slope after “peak everything”.

    I for one find it difficult to believe that industrial and food production in 2020 will match 2010. Surely, this will have a concomittant effect on world income? Ponzi scheme “wealth creation” is inflationary and reaches a collapse point when it is not backed up by real material production of goods and services. (Services have a physical component and/or a complexity cost but I won’t digress.) Provided world income is expressed in 2010 inflation adjusted purchasing power equivalents (is that too much to ask?) I should be OK.

  16. Alice
    March 27th, 2011 at 10:53 | #16

    Seems the sandpit (Botany bay sandpit?) might be the best place to discuss NSW labors burial. Seems they still have Richo as resident ex ex expert on labor policies and thats part of the problem isnt it? Even when he left politics he was happy to take a position on the board of one of Australia’s nastiest polluting companies who have known but done nothing for twenty or more years about a monumental toxic mess they made in Botany Bay.

    Good one Richo but I suppose he still thinks someone like Orica may pay him to be a political lobbyist into the future. Thats whats wrong with labor. The mates insider trading club.

    Just toddle off to the old folks home Richo. Youve made more than enough from politics.The lack of real action to repair this mess in Botany Bay and the weasel words in the below link tells us how far the power mates club in NSW labor had sunk…… and they thought we didnt notice what they did, during and after politics.

    http://sixtyminutes.ninemsn.com.au/stories/tarabrown/259409/a-deadly-legacy

  17. Alice
    March 27th, 2011 at 17:42 | #17

    Oh and on transport ane electricity which the NSW definitely needs some solutions to – hey guess what?
    We cant fix public transport till we fix the grid. They have already tried putting more trains on and it blew the gris.
    We cant fix electricity and the need fo renewable ebnergy until we fix the grid and the privatisation of electricity.
    Apparently the government abandoned solar rebates for the simple reason they were getting too much electricity into the grid and the electricity companies (or BBEs or whatever semi private model they have been following) was burning off the excess. Ill bet my bottom dollar they were burning off so they could keep their no renewable electricity prices high.

    If we dont get that power is a public good and you simply cant entrust the private sector with it – we wont fix power and we wont fix Sydney transport.

    Doh – the system is integrated (transport and pwer)…and yes we can have a better gris and yes we can have solar renewable energy and yes we can have a train system but the government needs to own and invest in the grid and see it as a long term investment in infratructure that will save everyone – houesholds abd business money (and jobs and growth) ie a publuc good not a hsort term profit based enterprise. Thats whereNSW Labor has failed. They couldnt look outside the short term profit market model box. They couldnt look into the future. They couldnt see what needs to be done.

    But if we mess this up we are doomed to another thirty years of inaction and incompetence and that looks like hell to me.

  18. Ernestine Gross
    March 27th, 2011 at 17:42 | #18

    @John S Cook

    Thank you for your reply and the link to your work. It seems to me your work is in the area of sustainable development within the broad framework of the Earth Summit 1992. My reference to the 2 primitives in economics (people and the environment) is, on the basic research methodology level, compatible (I noticed you reference a paper by Kenneth Arrow). In this regard, I concur with your suggestion that we might be closer than what is apparent after the usage of terminology (‘primitives’ vs ‘factors of production’) has been sorted out.

    I’d be happy to hear more about your ideas on what is wrong with accounting-national acounts-monetary economy and I’d like to hear what you think of a new definition of money but I suspect this forum is not suitable – everybody else might be bored.

  19. Alice
    March 27th, 2011 at 17:45 | #19

    Thats grid. We need the grid fixed.

  20. Alice
    March 27th, 2011 at 17:48 | #20

    Oh and London is burning.

  21. John S Cook
    March 27th, 2011 at 19:20 | #21

    @Ernestine Gross
    Thanks for your note. I have watched the global environmental monitoring movements since the 1972 UNCHE and the foundations of UNEP. I became interested in system theory and the cybernetics movement; and completed a PhD in cybernetics applied to natural resource management in 1994.

    My approach has been to trace the origins of money as a symbol or token used in lieu of barter in commodity transactions. The social sanctions against interest on money – and later controls on interest rates – survived over a long period of history; and separation from the gold standard is of recent origin. At p.189, I borrowed from a 19th century comment on usury laws and converted a numerical example to show the effects of compounding interest.

    In terms of modern measurements, the earth’s mass approximates 5.98 × 10^24 kg and an
    Australian one dollar coin weighs 9 grams. One dollar invested at 5% compound interest
    for 1266 years would weigh more than the earth. At 2000 years, the mass would be 2.15
    × 10^41 kg — the earth’s mass multiplied by an astronomical number.

    Various institutional arrangements intervene to prevent the appearance of something that would otherwise be absurd. Systemic inflation is one; and fiddling with the coins and notes to reduce the physical volume while the numbers keep escalating is another. Holding and inventory costs are also absorbed into the system – a problem if we try to use tins of baked beans in lieu of money. The abstraction from reality becomes more complete with digitized transactions where it become easy to add zeros to numbers or accounting statements. However, a time of reckoning occurs when people begin to doubt the meaning that attaches to the numbers.

    I don’t pretend to know the answers but I do see other options without knowing whether or not they would be workable in practice. I believe I can deduce many of Steven Keen’s conclusions using simple ideas from the linguistics of money as a symbolic token and simple arithmetic of compound interest.

  22. Freelander
    March 27th, 2011 at 19:54 | #22

    John S Cook :

    In terms of modern measurements, the earth’s mass approximates 5.98 × 10^24 kg and an
    Australian one dollar coin weighs 9 grams. One dollar invested at 5% compound interest
    for 1266 years would weigh more than the earth. At 2000 years, the mass would be 2.15
    × 10^41 kg — the earth’s mass multiplied by an astronomical number.

    All that suggests, that when you turn up at the bank to withdraw it all, they will say: “Can you take a cheque?”

  23. John S Cook
    March 27th, 2011 at 19:59 | #23

    @Freelander
    To which you might ask – ‘Are you sure it won’t bounce?’

  24. Freelander
    March 27th, 2011 at 20:17 | #24

    “Safe as a bank”…

    I agree with what seems your basic thesis that there is a limit to growth. Question always is where is that limit? Personally, I believe it wiser to stop long before folly demonstrates what that limit might be. The problem is that stopping would require some limits on having kids which is something that would be very difficult to get people to agree to.

  25. John S Cook
    March 27th, 2011 at 20:44 | #25

    @Freelander
    I agree with you summation. Curbing population growth is difficult – but perhaps it is possible; and better than some alternatives.

  26. Alice
    March 27th, 2011 at 21:45 | #26

    @John S Cook
    Maybe we should really be wondering why we dont have more solar energy… we have a lot of warmth and a lot of space.
    Can solar crash the grid? These articles are interesting because what they imply is that solar is workable but that the electricity industry doesnt like it. Hmm interesting.

    http://www.off-grid.net/2005/08/30/459/

    http://www.off-grid.net/2010/10/29/can-solar-really-crash-the-grid/

  27. Hermit
    March 27th, 2011 at 22:23 | #27

    According to UK energy guru David Mackay the Brits use 125 kwh of energy a day. Divided by 24 hours that’s a bit over 5 kilowatts continuous average or the power of a small ride-on mower running around the clock. I’ve mislaid the ABARE figures but Aussies rate about the same. That total power consumption has thermal, electrical and mechanical fractions which may vary if we convert from petrol to electric cars. That’s ‘if’. This average applies to everybody since in theory even a yurt dweller is partly responsible for aluminium smelters; it’s part of the broader society. Advocates of simpler living suggest we can make significant cuts to our 5kw lifestyles but population growth, air conditioning and upward social mobility all put relentless pressure on energy demand. I don’t see a happy outcome to attempts to cut energy use. Perhaps the NSW election result partly reflects this.

    Since Aussies each emit about 20 tonnes of CO2 a year if 7 billion people were as fossil energy gluttonous then total man-made emissions would be 140 billion tonnes a year. Fortunately world anthropogenic emissions are a mere 30 billion tonnes or so a year. We want to get that 30 down to about 6. Thank God the rest of the world is not as selfish and irresponsible as Australia.

  28. John S Cook
    March 27th, 2011 at 22:31 | #28

    @Alice
    We should have been developing solar and other renewable sources of energy years ago. I suspect that much of this generation needs to be site-specific and requires a bit of ingenuity in using resources at hand more intelligently. We need some decent engineers and some decent economists who can understand more completely the nature of investments in energy production.

  29. paul walter
    March 27th, 2011 at 22:32 | #29

    Family planning…birth control…good grief, how can you have big pop development (and fat contracts and tenders) without an increasing population?
    Worse still, no big pop globally, no way of keeping wages down by playing off the pool against itself. And so on.
    Surely we can do better than this?

  30. Freelander
    March 27th, 2011 at 22:51 | #30

    Even if we make most of them slaves we would need some restrictions before we get to the point that we are unable to feed them all (or get them to do the work to feed themselves and us, and keep us in the style to which we aspire).

  31. Alice
    March 28th, 2011 at 05:42 | #31

    @John S Cook
    I agree John – because when I find out that new trains are capable of crashing our grid, and when I hear that solar rebates were wound back due to the same risk (in fact too much energy was being generated if they had to resort to burning some off) then that refers to a grid problem and I cant even imagine that electricitu companies are going to be willing to invest in the grid for their own industry let alone what may be in effect a cheaper substite / competitor….which then brings us back to the issue that when it comes to infrastructure we need an integrated approach and privatisation may not be the best solution in terms of getting an integrated approach (if every industry is protecting its own patch somewhere).
    We do need good engineers and designers and we do need decent economists working independently of any particular private sector patch (and that includes the banks) on getting the grid able to handle both solar and more trains and we simply cant leave it to the existing power companies to achieve this. They wont. There are no reasons for them to do so….so even more woe is me for KK and Roozendahls mindless sell off of electricity assets.
    John S you are right – the investment in renewables whould have started years ago instead of leaving it the power companies to come up with very ugly solutions like nuclear.

  32. Hermit
    March 28th, 2011 at 06:36 | #32

    I might add that while other countries not in the OECD have higher average emissions than Australia they don’t pass themselves off as moral exemplars. Qatar and Bolivia don’t send large delegations to climate conferences then wag their finger at others. Australia should s.t.f.u..

  33. Alice
    March 28th, 2011 at 14:40 | #33

    LOL Hermit – its a bit like that when we keep shovelling coal into the worlds furnances isnt it?.

  34. bill
    March 28th, 2011 at 18:28 | #34

    A man is known by the company he keeps – Mungo MacCallum takes on Abbott at The Drum.

  35. Fran Barlow
    March 28th, 2011 at 18:36 | #35

    @Hermit

    Qatar and Bolivia don’t send large delegations to climate conferences then wag their finger at others. Australia should s.t.f.u

    QATAR, fair enough but as Australia emits about 14 times the output per capita as Bolivia (17.95 v 1.38 in 2007) I can’t imagine what you were thinking typing this. FTR Bolivia ranks 89th by jurisdiction as opposed to Australia which is about 15th. I daresay Australia in historic terms would have emitted even more relative to Bolivia over the last 100 years.

  36. Freelander
    March 28th, 2011 at 19:02 | #36

    As a matter of interest, there should be some ranking by consumption as well as by production. Australia is producing things that use a lot of energy or emit a lot of CO2 in their production. I doubt if looked at from the consumption side, that Australia’s consumption would be any greater, in terms of CO2 that was emitted in the production of those goods, than any other typical country with the same income per capita. On the consumption side, the big consumer is likely to be the USA. Unfortunately, it is impractical to try to fix the problem from the consumption side. It is unfortunate that the mix of products Australia produces happen to currently involve heavy CO2 emissions. That fact alone makes it all the more important that adjustments are made sooner rather than later, if only for our own benefit. If Australia continues to delay, when the rest of the world finally forces those adjustments it could be extremely costly and disruptive to our economy.

  37. BilB
    March 28th, 2011 at 19:40 | #37

    Hermit @ 27,

    That would 43 thousand kilowatt hours per annum. The bulk of that will be gas consumption for heating. UK households pull as little as 4800 Kwhrs per annum electricity, but use 16,000 Kwhr equivalent gas. The other 20,000 Kwhrs will be transport and industrial share per house hold.

    http://www.carbonindependent.org/sources_home_energy.htm

    Australia’s energy mix is quite different as we do not heat with gas, but cool with electricity (13,000 Kwhrs Australian average household consumption) , and commute further by car rather than train and bus.

    Ernestine,

    what is the weight of all of the money in the world currently converted to 9 gram one dollar coins?

  38. Ernestine Gross
    March 29th, 2011 at 05:38 | #38

    John S. Cook,
    I like your compounding interest example in terms of physical quantities. Surely, it provides food for thought to those who want both, interest on ‘their capital’ and a metal (or any commodity) based currency.

    BilB asks “what is the weight of all of the money in the world currently converted to 9 gram one dollar coins?”

    How long is a piece of string, BilB?

  39. BilB
    March 29th, 2011 at 07:00 | #39

    Ernestine

    Oops, that was John Cooks calculation. I took a punt at there being 1000 trillion $ in circulation which came out to be 9 billion tonnes of coins. Nowhere near as impressive as John’s calculation.

  40. BilB
    March 29th, 2011 at 07:05 | #40

    When in fact there is less that 5 trillion US dollars in circulation.

    http://dollardaze.org/blog/?post_id=00752

  41. Ernestine Gross
    March 29th, 2011 at 10:35 | #41

    BilB,

    The dollardaze site you referenced contains M0 measures of money and a little life box on national debt. Surely, some questions arise as to what is money.

  42. John S Cook
    March 29th, 2011 at 17:45 | #42

    @Ernestine Gross
    Yes Ernestine, I agree – what is the nature of money, what purposes do we want it to have, are there conflicts in trying to serve more than one purpose, and what policy implications does all that have? That could be a new and worthwhile way of looking at macroeconomics and economic stability problems.

  43. SJ
    March 29th, 2011 at 18:00 | #43

    Testing again.

  44. SJ
    March 29th, 2011 at 18:01 | #44

    Works. Thanks John.

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