Friday, October 17, 2014

Krugman versus Economic Growth

LED's are energy efficient, so let's cover a whole fucking bridge in 'em!
Paul Krugman has been making the rounds on Peak Oil sites lately, mainly for the reason of actually acknowledging that there are people and movements out there dedicated to actually questioning whether economic growth is compatible with environmental concerns. What was notable is that Krugman even mentioned the Post Carbon institute at all. Typically the economics priesthood does not recognize dissenters except in a very limited context. The attitudes toward any narrative that does not confirm the a priori conclusions of expansionist productivist corporate monopoly capitalism is pretty much equivalent to the Catholic Church's attitudes towards people like Galileo and Martin Luther.

Professor Krugman really seems to inspire intense, visceral hatred in a lot of people for some reason  which I've never understood. Of all elite economists, Krugman seems the most human to me. He accepted his Bank of Sweden prize by posting a lolcat on his blog, has pretty good taste in music (I stole the concept of Saturday Night music from him), is a science-fiction fan and a bona-fide nerd, and seems like less of an asshole than most economists of his stature. He was unafraid to buck conventional wisdom like questioning the Bush administration's rush to war and whether or not there was a housing bubble. He supports a more humane capitalism than most of the economics profession today, and is not dedicated to fostering free-market fundamentalism. He seems to generally believe in the usefulness of economics as a discipline to tell us things about the world and is not just a sock puppet for the plutocratic overclass (well, all economists are, but at least not intentionally)`. My guess is, in a time where we've lost faith in government and institutions, Krugman's wonkiness seems hopelessly naive and pointless. And the relentless campaigns against government debt waged by the plutocrats (tip: they are not afraid of debt) mean that Krugman's advocacy of government spending inspires derision and horror from both the left and the right.

Nevertheless, he is still an economist, after all, and that means hewing to the party line - economic growth is desirable and is compatible with resource limits and environmental protection. There have been some back-and-forths between Krugman and Richard Heinberg, as well as Mark Buchanan, a physicist who wrote a column for Bloomberg entitled Economists Are Blind to the Limits of Growth:
Nobel laureate Paul Krugman, for example, chides natural scientists for thinking of growth as a “crude, physical thing, a matter simply of producing more stuff.” They fail to appreciate, he suggests, that growth is about innovation and deciding which technologies and resources to use...There's just one crucial exception: energy. Data from more than 200 nations from 1980 to 2003 fit a consistent pattern: On average, energy use increases about 70 percent every time economic output doubles. This is consistent with other things we know from biology. Bigger organisms as a rule use energy more efficiently than small ones do, yet they use more energy overall. The same goes for cities. Efficiencies of scale are never powerful enough to make bigger things use less energy.

I have yet to see an economist present a coherent argument as to how humans will somehow break free from such physical constraints. Standard economics doesn't even discuss how energy is tied into growth, which it sees as the outcome of interactions between capital and labor.
Krugman offered a rebuttal using steamships as an example of doing more with less energy (read the Readers' Picks comments). Buchanan's response is below:
History is full of technological advances or just clever ways of using things differently which let us do more with less energy; there are many more to come in the future. We now have better light bulbs and LEDs, more fuel-efficient engines, etc. We could, conceivably, produce more of lots of things while actually reducing our use of energy. Could.

But what “could, conceivably” happen in an ideal theoretical world isn’t the issue. When we look at our world, and the way economic growth has always worked in the past, we find that increases in energy efficiency don’t ultimately lead to less energy being used, but to more...We’re getting ever more efficient in using energy, but we’re still using more and more of it.

There’s a well known relationship in biology known as Kleiber’s Law which describes an empirical (and now theoretically understood) relationship between an organism’s metabolic rate and total mass. It turns out that for a huge number of organisms, total energy use scales as mass raised to the ¾ power—virtually identical to the pattern noted above for total energy use and GDP for nations. A fluke? Maybe.

But something like this pattern doesn’t hold only for nations of various sizes, it extends down to individual cities as well. You can look at how various quantities scale with city size—length of transport networks, speed of individual movement, total energy use, etc.—and the results are quite regular across a huge range of scales and cities in different geographical settings and nations. From this (now somewhat old) talk by Luis Bettencourt, a leader in this field, you find that Metropolitan GDP grows as city population to about the 1.1–1.3 power, while total use of electrical energy and petroleum grows more slowly, roughly in direct proportion to population. Put them together and you get—very crudely, I admit—a similar trend: as cities grow they get ever more efficient at generating GDP, but also increase their use of energy (more slowly).

So, I can’t PROVE that higher GDP will always necessarily mean more energy used, but that’s the way it’s been so far, and even in the very recent past...
Steaming slowly toward the limits of growth (Medium)

Lloyd Alter has written about this in the past - cheap LED lights just mean that we'll find frivolous uses for them instead of using them to gain overall energy savings. It's called the Jevons (or rebound) effect, and Lloyd wades in to the fray:
Ted Nordhaus and Michael Shellenberger ...are in the New York Times, complaining about the Nobel Prize for the inventors of the blue LED, and in particular, the statement from the Nobel Committee that “Replacing light bulbs and fluorescent tubes with LEDs will lead to a drastic reduction of electricity requirements for lighting.” and “With 20 percent of the world’s electricity used for lighting, it’s been calculated that optimal use of LED lighting could reduce this to 4 percent.”

Without calling it Jevons Paradox, they note that the LED might well increase consumption of electricity.

The growing evidence that low-cost efficiency often leads to faster energy growth was recently considered by both the Intergovernmental Panel on Climate Change and the International Energy Agency. They concluded that energy savings associated with new, more energy efficient technologies were likely to result in significant “rebounds,” or increases, in energy consumption. This means that very significant percentages of energy savings will be lost to increased energy consumption.

I used to disagree with this position, and argued the point with Martin Holladay of Green Building Advisor, suggesting that rising energy prices would solve the problem. It is a smackdown between Adam Smith and William Jevons; when stuff is expensive, people use less of it. And prices are going to rise, whether we tax them or not.

I was wrong, and Martin was right. Every day there are new ways that LEDs are put to use, all of which consume energy where they never did before. I see it every time I go to a public washroom or a Timmy's, where the conventional menu boards have been replaced by a line of huge LED monitors.

On every highway, we now have digital billboards pumping out pixels day and night, probably killing people in the process. Cycling down the street, I have to share the road with a moving LED ad.

In fact, the proof is in the data, which show that even though houses and appliances are more efficient, our average household energy consumption has gone up in the last ten years, notwithstanding our more efficient light bulbs, because our houses are 30% larger. Appliances, electronics and lighting have gone up 18%. Even snowboarders are getting into the game; see Jevons Paradox in Action: An LED Covered Snowsuit

In fact, without a dramatic rise in energy prices (not happening right now) or a dramatic reduction in personal income (recession? what recession?) it appears that Stanley Jevons, Martin Holladay and yes, even Shellenberger and Nordhaus, are probably right. Cheap, efficient LEDs might well lead to greater consumption of energy, not less.
Jevons Paradox and the Nobel Prize: Will LEDs really lead to a drastic reduction in electricity use? (Treehugger)

Here's George Monbiot a few months back on the same question:
Some people try to solve the impossible equation with the myth of dematerialisation: the claim that as processes become more efficient and gadgets are miniaturised, we use, in aggregate, fewer materials. There is no sign that this is happening. Iron ore production has risen 180% in ten years. The trade body Forest Industries tell us that “global paper consumption is at a record high level and it will continue to grow.” If, in the digital age, we won’t reduce even our consumption of paper, what hope is there for other commodities?

As the philosopher Michael Rowan points out, the inevitabilities of compound growth mean that if last year’s predicted global growth rate for 2014 (3.1%) is sustained, even if we were miraculously to reduce the consumption of raw materials by 90% we delay the inevitable by just 75 years. Efficiency solves nothing while growth continues.
The impossibility of growth (George Monbiot)

And speaking of the "digital economy" that will supposedly save us all this energy and material:
Which uses more electricity: the iPhone in your pocket, or the refrigerator humming in your kitchen? Hard as it might be to believe, the answer is probably the iPhone. As you can read in a post on a new report by Mark Mills — the CEO of the Digital Power Group, a tech- and investment-advisory firm — a medium-size refrigerator that qualifies for the Environmental Protection Agency’s Energy Star rating will use about 322 kW-h a year. The average iPhone, according to Mills’ calculations, uses about 361 kW-h a year once the wireless connections, data usage and battery charging are tallied up. And the iPhone — even the latest iteration — doesn’t even keep your beer cold. (Hat tip to the Breakthrough Institute for noting the report first.)

The iPhone is just one reason why the information-communications-technologies (ICT) ecosystem, otherwise known as the digital economy, demands such a large and growing amount of energy. The global ICT system includes everything from smartphones to laptops to digital TVs to — especially — the vast and electron-thirsty computer-server farms that make up the backbone of what we call “the cloud.” In his report, Mills estimates that the ICT system now uses 1,500 terawatt-hours of power per year. That’s about 10% of the world’s total electricity generation or roughly the combined power production of Germany and Japan. It’s the same amount of electricity that was used to light the entire planet in 1985. We already use 50% more energy to move bytes than we do to move planes in global aviation. No wonder your smartphone’s battery juice constantly seems on the verge of running out.
The Surprisingly Large Energy Footprint of the Digital Economy (Time)

Nice to see not only acknowledgment of the Limits to Growth community, but pushback from them in the mainstream media.

1 comment:

  1. I can't speak for anyone else, but I detest Krugman for the same reason that I blast Democrats even harder than I do Republicans on my own blog--namely because if the liberals are selling the SOS but merely in a perfumed box, there is no hope that any real change will ever occur. Here Krugman is playing in a field well outside his own specialty while making the common mistaken assumption that many at the top of the heap in this country make--that just because they've been successful in one area they should be acknowledged as experts in others. It's that kind of thinking that caused Steve Jobs, for example, to think he was smarter than his own oncologist.

    John Michael Greer has stated his belief that when the likes of Krugman deign to take notice of the likes of Heinberg, then the gig is just about up. I tend to agree with him on that point.

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