YOUR Plan B

[Licho]

Barbara, economic (value) growth is possible even without population/waste/energy consumption growth. During all last century effectivity of all industrial and social processes gradualy improved, economy uses less energy/value, goods manufactured produce less waste/value. Of course this growth is smaller than total economy growth which also pushes consumption higher. But making more music or PC programs or making alternative cheap car engines all improve economy without negative effects. Most EU countries now produce far less pollution than before. Slower economic growth is still possible without putting further load on neviroment.
I don't believe that economy is going to grow during early phases of transition, but I'm convinced growth will be resumed after it.

[Aaron]

Matt, this "system" has been working even during depression when all economic indicators fall down. It can work during contraction.

64 years and counting...

The global economy has never ceased to grow since WWII.

Trying to mind my P's & Q's here, but the notion that any economy can grow without using more energy is absurd.

The very idea is counter-intuitive.

As discussed in another thread, comparisons between per capita energy consumption vs GNP/GDP by region can be misleading. What's quite clear is that European countries have, without exception, increased their use of energy & energy products after WWII. Every economy on earth, despite advances in efficiency, conservation and new technologies. have grown exponentially.

Although on further reflection I have realized moving to Europe may be a very good idea. As electricity becomes more expensive, refrigeration gets more expensive as well. At some point I won't be able to afford to refrigerate food & beverages. I can probably live without ice, but have you ever had American beer at room temperature?

Look out Bournemouth here I come!

[Licho]

No global economy didnt fall, but local certainly did!
And growth in former east bloc was achieved without rising total energy consumption. And !globally! economy value per energy consumption rises!

Again, you seem to not grasp it, economy doesn't grow without energy consumption grow, because there is no need for it. But when energy becomes more expensive, major sectors of economy will be knowledge based instead of energy bases.
Making more PC programs or music or creating more effective GM crops doesn't increase total energy consumption, do you agree?

[Aaron]

The asymmetrical economic development in Central and Eastern Europe, initiated in 1928 in the FSU by the first five-year plan and in the late 1940s in Central Europe and the Balkans, is largely responsible for the region's high energy intensity. The economic theories of rapid industrialization that were implemented in these countries considered energy consumption as a means towards achieving strategic goals, such as producing a given amount of steel, cement, chemicals, and other products, many of them requiring vast inputs of energy. Fulfilling the production of these products had always been the first priority, and resources were allocated to ensure that such production could take place. To make the production cycle function as smoothly as possible, both energy production and energy prices were heavily subsidized.

http://www.unu.edu/unupress/unupbooks/80836e/80836E0y.htm

[Barbara]

Licho,
yes, making PC programs and music is not an energy consuming activity... but making and distributing hardware is! And here comes conservation: ok people, we'll make great software, but keep in mind that you have to use it on your old Pentium III (or G3, in my case)... and when it's broken, then throw it and clean the dust from your old typewriter.

Aaron,
have you ever tried italian wine at cellar temperature?
We don't need those refrigerators, after all...

[Licho]

Aaron, yes, this old (92) article describes the way it was during cold war. Basically after fall of iron courtain, economies in these central european regions grew without increasing energy consumption (actually were decreasing it).
It just depends on type of economy you have, and this was my argument.



Barbara - but still, distributing PC HW or even producing it, is less energy intensive than making new car.. I mean future economies could provide less (at higher price) of some tradiotinal consumer goods, but in the same time more of services and high-tech stuff.

[Aaron]

Although the per capita consumption of fossil fuels in Europe as a whole has hardly changed over 30 years, this is partly the result of negative growth in energy consumption in CEE countries due to economic restructuring. In Western Europe, however, the link between economic growth and energy use has not been broken (EEA 2001). Per capita energy consumption varies considerably throughout Western Europe but is increasing in most countries with the exception of Germany, where it decreased by 5 per cent between 1987 and 1997. While per capita energy consumption in CEE is often lower than the Western European average, energy intensity is three or more times higher (OECD 1999). This is due to the high share of heavy industries, obsolete technologies and low efficiency of energy use. Current and future changes in industrial activity will have major implications for the link between energy use and economic growth. Replacing obsolete technologies with modern

http://www.grida.no/geo/geo3/english/107.htm

http://www.infoplease.com/ipa/A0778281.html

Electricity throughout the former Soviet bloc is heavily subsidized. Governments are reluctant to raise prices to realistic levels lest they incur the wrath of their impoverished subjects and reignite dormant inflation. Fuel prices, government taxes, and variable costs, such as labor, have been rising steeply in the last decade but the electricity behemoths' ability to amend their tariffs to reflect these is politically curbed.

http://samvak.tripod.com/brief-electricity01.html

[Licho]

Yes, aaron, you are further validating my original statements that:
- central european countries decreased TOTAL energy consumption, while their economy grew
- overall energy efficiency is increasing over time

In your quote there is interesting information about Germany decreasing 5% energy per capita consumption (this in case of germany means total consumption as well).

To sum it, economy growth is possible even without total energy consumption growth.

The fact that some FSU countries subsidize energy is not valid for central european countries (they were never part of soviet union) and don't generally subsidize energy. Prices are not regulated here anymore. In fact, biggest producer here is selling electricity to Austria at lower rates than on local market
Anyway, this doesnt relate much to my statements.

(Also, in link you presented, GDP is not measured in parity of buying power, if so, GDP is about 15 000-16 000)

[gg3]

At least it seems there's no a-priori reason why energy consumption must necessarily increase as a function of economic growth.

Back a ways:

Clarification: Federalize the *transmission infrastructure*, not the "grid" including generation.

Transmission is a right-of-way, therefore should be publicly owned as with roads. Same case for rails. Public ownership of the right-of-way preserves the potential for competition among carriers using the right-of-way.

One of the reasons long-distance trucking has gained popularity over rail shipping for certain classes of freight, is because trucking firms can compete whereas railroads tend toward monopoly on their rights-of-way. As fuel costs are a significant part of transport costs, competing carriers on a public right of way will lead to greater fuel efficiency via a market mechanism.

Federalizing the electricity transmission infrastructure and rail rights of way is the minimum government intervention needed to enable a significant increase in competitive market-driven activity here.

Re. taxation of marijuana:

Pragmatically, we're going to have industrial hemp for biodiesel production and fiber to replace wood pulp; and it's very difficult to do that while simultaneously forbidding smoking of the leafy byproduct:-). Also, in terms of dollars, cannabis is the #1 agricultural product of California, British Columbia, and other primary centers of production. So the tax revenue potential is enormous, even if only a minority of the population smokes it.

Here's another intentional byproduct of the policy: Alcohol intoxication tends to increase violent behavior; cannabis intoxication tends to reduce it. Stressful times lead to an increase in the consumption of intoxicants generally; however, attempting to suppress drug use entirely is a losing battle that just creates enormous crime syndicates. To the extent that cannabis replaces alcohol, there will be a reduction of random violent behavior.

Last but not least, adverse effects of smoking anything can be offset via another tax component that pays for health care for those who smoke the product. All of the political wrangling over tobacco should be handled similarly: high tax on cigarettes to cover the high health risk; lower tax on cigars and pipe tobacco since their risk factors are minimal. The tax covers the health care costs; the problem solves itself without once again putting big government in your living room.

Re. armies:

Some countries may not need standing armies; they can either sign on as allies of larger neighbors or find other solutions e.g. the Swiss militia system. However the US and certain of our allies, are in a unique position of having to be the world's "emergency services provider," including intervening in regional conflicts and dealing with natural disasters. A modern military organization is needed for these purposes.

Also the practical facts right now are that we are under attack from extremist barbarians with modern weapons, and we need a strong and nimble defense infrastructure to fight those aggressors wherever they may be coming from. For example, despite the controversy about Iraq, there was global consensus that action was needed to take out the Taliban in Afghanistan.

Credible conventional forces are a necessary component of an overall deterrence strategy. There needs to be an intermediate step between diplomatic & economic means on one hand, and the nuclear deterrent on the other. The ideal case from the military's own point of view is to have sufficient conventional strength as to never need to actually go to war, i.e. by successfully deterring any possible aggressor.

And last but not least, there is always the possibility that at some point in the future, some nation may attempt to attack us or our allies. For example China in response to its own resource crises: North America is a huge continent with a relatively limited population and relatively extensive resources. This could be a very tempting target. Start the attack in Canada and work southward. Even though Canada's army is superb in terms of quality, it is relatively small in size. I can think of more than a few ways by which an adversary nation could achieve the surprise and tactical advantage needed to make a full-scale invasion feasible. (In fact I think we need to *strengthen* our coastal defenses including re-establishing military bases where they were previously closed, but that's another item for another day.)

Hovercraft:

These use less energy than airliners, though more than ships or dirigibles. They are intended as an intermediate technology, faster than ships or dirigibles, slower than jet airliners, which will naturally tend to reduce the reliance on jet air transportation. Also another natural diversification for the airlines and shipping industry.

Rationing:

Is hardly as extreme as other methods including the absence of a method. Again, I'm looking for methods that involve the minimal degree of government regulatory intervention and enable the maximum of market-driven solutions. Rationing will automatically lead to more effient vehicles, carpooling, etc. Also it is a "direct" solution, rather than an "indirect" solution: instead of taking other steps and "hoping" that they will reduce consumption to a target level, we just do it directly and eliminate the guesswork.

Monetary reform:

Good point, Matt. This area is outside of my expertise so I'll be interested in your proposals. Say more about Catherine Austin Fitts; I vaguely recall hearing somthing about her a year or two ago.

Re notacornucopian:

Thanks (blush:-). Re. congress: I'm assuming that whatever public opinion got me elected would have also gotten a sympathetic Congress elected. And I *did* say "emergency authority," and much of what I'm proposing could be accomplished by executive order.

Re. licho, growth:

For example, getting the airlines to diversify into rail operations and ocean hovercraft, will overcome contraction of air travel. There is less overall entropy from having existing corporations morph into new fields, than from having them go bankrupt and waiting for new corporations to form in the new fields of business. This is part of why I want to Federalize ownership of rail rights-of-way: simplify the transition for the airlines, which already have expertise in passenger transport and in the relevant security measures. This will also ultimately lead to the privatization of Amtrak, or its parsing-out to other private entities.

Aaron's point about growth:

However, the economic growth in the past also occurred at a time of cheap energy, and we do not have an empirical basis to say that the correlation was due to a causal relationship. We have not yet explored the territory of what is possible when energy shortage is not acute but chronic. In fact there is reason to believe, e.g. Licho's posts about Eastern Europe, that an economy that is oriented toward the accumulation of industrial capital (capital goods and plant, not financial capital) rather than consumer goods, can be built in the context of decreasing per capita energy consumption. Frivolous consumption is what takes up the difference in capitalist economies. We can consider those days to be on their way to being over.

Barbara's item about the hardware that goes with the software:

But new computer technology has a lower unit energy consumption level. Today's computers with flatscreen monitors consume far less power than the predecessors with CRT monitors. For example 60 watts compared to 350 watts. Power consumption for printers has also dropped significantly.

In the telephony industry, today we have digital PBX phones with power consumption level of 1/16 what it was for their predecessors five to seven years ago. One sixteenth! I can provide a digital PBX system sufficient to serve 20 houses in a small sustainable village, that runs on a power supply that's no different than the one that runs your laptop computer. I routinely install systems that serve offices of up to 100 people but the power consumption is less than one desktop computer. Seriously.

What's needed in the computer industry, and other consumer and commercial electronics & appliances industries, is for hardware to be recyclable by the manufacturer. In the telephone utilities (Bell System and GTE in the USA, GPO Telephones in the UK, etc.) before deregulation, all telephone equipment including outside cable and central switching facilities, was designed to be repaired indefinitely, often attaining over 40 years in service. Then if something was damaged to the point where it couldn't be repaired, it could be rendered down into raw materials for making more new equipment. This was the most complete closed-cycle industrial system in history, and it worked superbly for about 100 years. There is no reason -from an engineering standpoint- that it couldn't be brought back and applied to other industries.

[Licho]

gg3, your plan would probably work for USA. Just short comments -

- cannabis - agreed, although I don't believe it's so big potential tax income. Marihuana also has some long term averse effects, like reducing memory/concetration capacities. Sure, they are smaller than with alcohol, but higher than with tabacco..

- army - it depends on what role want's nation to play. Hate against USA comes from disruptive politics and actions that US did. Terrorism cannot be fought with conventional armies anyway. Afghanistan was probably good step, and was widely supported by almost all countries and their population, many countries have combat units there, including anti-war Germans. But after "Iraq" action, world is even more insecure with more terrorists raising everywhere and more attacks. Hate can make a terrorirst from any person, from US citizen as well.. It's not anything well organized with structure similar to country. Btw. almost all 911 terrorists were from Saudi Arabia and not Afghanistan..
For playing global "police" actions need to be in global consensus, or you will make even more enemies. And world usually accepts only stabilization forces (ie. current troops in former Yugoslavia and other countries), these forces don't need high-tech aircrafts and other expensive stuff because they basically just make sure ordinary people don't kill each other.
Regarding allies - I honesty don't believe USA would go to war with China because of some small ally.. this just don't happens, history teaches us well about how credible such ally treaties are..

- hardware - yes, mandatory recycling by manafucturers was already passed as EU directive and will come to action soon in EU..

[Barbara]

gg3,
my english is bad... I was not talking of hardware power consumption on the grid, but power needed to produce the hardware! Our hardware, today, is mostly produced in China and Asian countries, in factories, and then distributed worldwide. In future, we can't afford anymore this crazy way to produce and distribute, will be too expensive. And I'm not talking of hardware only... any product we use/want to use in the future, must be produced in place. And this means that we have to invert globalization for localization... nobody will do that.

[gg3]

Barbara, your English is fine, and chances are I couldn't even use an online translator well enough to write in your language.

Localism:

Of course! This is something I assume will have to be done. Perhaps I should have stated it more explicitly. I firmly believe that production should be located close to consumption wherever possible. Certainly for agriculture, and basic industrial goods. Computers and such should at least be manufactured in the country where they're used.

The problem is, if "someone else" can make "more" money by producing goods elsewhere, they'll do it to the extent the law allows. I suspect that this problem will be self-correcting once the cost of transport is higher than the cost of local labor, in maybe ten more years.

Embodied energy in products:

The obvious solution is short-path recycling, i.e. as you have with appliances and we used to have with the telephone industry. The problem comes in fields such as computer systems where the technology really is advancing rapidly. In that case, one can hope that at least certain of the raw materials can be reclaimed in some way. Computer technology is one of the few cases where a high level of entropy is almost unavoidable, and I frankly don't know how to solve that.

Licho:

Cannabis:

If you look up the production/consumption figures on cannabis, you'll see that the tax revenue potential is higher than you expect. Agreed, excessive consumption, as with alcohol, makes people stupid. Moderate consumption of either is much less harmful than the consequences of prohibition. Also consider the threat of huge and powerful crime syndicates in times of social dislocation due to resource shortages. *That* is scary.

Military:

Basically I agree with your main points. And you might be interested to know that much of the US military also agrees with you! Our national traditions preclude the military from speaking out about political matters. But if you know how to read between the lines, it's unmistakable, and almost unprecedented.

The problem presently is that the current Administration has been acting on the basis of an ideology, and as a result has been making significant policy errors. The largest of these has been to fall for the Iranian spying and disinformation campaign, which led us directly into the war in Iraq. Many of us who have loved ones serving in the war will remember that fact when we go to the voting booths in November.

[MattSavinar]

The US government will never legalize mj/hemp. Never.

Because it isn't taxed, money from the drug trade provides a tremendous amount of liquidity for the US stock market.

I'll post some links to articles that explain this in more detail in a few days. It's pretty mind blowing stuff when you get into it. If it was legalized the market would crash very quickly.

So if I was king, I don't know what I would go in regard to hemp/mj. On the one hand, it has tremendous attributes that would make it a staple crop for a post-petroleum world. On the other hand, deprving the market of the liquidity would be extremely painful.

Perhaps a gradual transition to legalization would work, but I don't know that we have anywhere near enough time to do that.

Again, give me a few days and I'll post some very well researched articles on this stuff in a different thread.

It's heart breaking stuff when you get into it.

Matt

[MattSavinar]

Licho:

Can a baby grow without more food (energy) than it needs to barely stay alive? No, and neither can the economy.

Its a very simple point. Any orgranism requires excess energy to grow. No excess energy = no growth.

Simple physics.

So long as we have a monetary systems based on interest, we are held hostage by growth.

Finding replacement fuels will be easy compared to dismantling our monetary system.

Matt

[Licho]

Well Matt, your logic is nice, except that reality is different.. Again, countries from central Europe managed to almost halve energy consumption during 1 decade while economy was growing (and since early 90's economy was generally already free market, with most companies privatised and stock based).
So economy can tranform to something else using less energy while maintaining growth - this is simple reality. Many companies crashed, many stocks lost value, but other growed extremely quickly and overall economy increased.

[gg3]

Matt, I'm familiar with some of the arguements about financial liquidity due to the illegal drug trade. One of them compares "two boat owners carrying white powdered agricultural product from South America: one is carrying sugar, one carries cocaine..." and goes on to show that the inevitable result is that honest businesspeople get left in the dust while the narco-smugglers make out rich and go on to control large chunks of the economy & politics as a result.

Fine. So what? I suppose if it's OK to wink-nudge that, then we should bring back prohibition of alcohol as well, because the added criminal dollars would fuel a new economic boom..? That reasoning is about as tortured as the Bush Admin's justifications for, you know, torture!

We're going to see legal industrial hemp for practical reasons, and marijuana won't be far behind. If nothing else, many are the chiefs of police who are sick of spending their resources chasing after people for smoking a plant that at worst hurts only themselves (aside from DUI issues, which are the same in any case).

Our difference of opinion here hinges on the question of whether the criminal syndicate money is powerful enough to keep its own interests working by keeping the current laws in place. I say they're not. You say they are. Time will tell.

Re. interest: So the old Biblical wisdom about the sin of lending or borrowing at interest turns out to contain the seeds of a much greater truth about its macro effects on society. Divine inspiration or good intuition & long range foresight.

So, lending at interest causes money to "multiply" like living organisms, and then a "population growth" effect kicks in. Okay, but then how to construct a system of currency and exchange that does not allow this to occur...? Something like Islamic banking but with fixed "fees" that are not a de-facto interest rate?

So for instance, I want to go buy a new plug-in hybrid van, I borrow $20,000, (assuming I've already got $15k for a decent downpayment) and pay a processing fee of, for example $1000 to the credit union for the paperwork and so on. Now I pay it back over five years, at the rate of $333.33 per month. In the meantime the credit union is holding a receivable, and can only lend out what it gets back from me (assuming we modify the fractional-reserve lending system so it runs steady-state).

Somewhere I see a macro-flaw in this system that makes it not-work at some level. Can't quite put my finger on it at the moment.

If we're going to design a new financial system that's compatible with a steady-state energy economy, we have to consider all the ramifications. This sounds like it could become a very interesting discussion.

[RIPSmithianEconomics]

To be honest, 20-30 years could be a hinderance. This may be unbelivably terrible, but since I'm approaching my physical prime (I'll be 20 in 2008) I see an early crash as my best hope of suriving to a ripe old age of 50 or 60.

[Pops]

Don't worry RIP, I'll be reaching the ripe old age of 50 in 2008 and am much more prepared now for events than when I was a youngster of 20 minus four.

[Merc]

This is a fascinating topic but I don't think congress would ever go for these kind of reforms, even if TSHTF. They have too many conflicting interests, the oil lobby, their constituents' nimby concerns, etc etc. By the time TSHTF it'll be too late for such modest reforms in any event. In my view there is absolutely no way to survive with our infrastructure and population intact (forget the economy, the economy is going to go no matter what geniuses we have working on it) short of hard, fascist centralization. Bush could accomplish this tommorow, incidentally.

Democracy, justice, freedom, they are ideas of a better world, a world in which we no longer find ourselves.

A policy not unlike Stalin's 5 year plan might be advantageous, forced labor and such. The best way of course wouldn't be nationalization (though that's second best) but an easing of the monopoly laws to allow corporations to gather themselves up into vast conglomerates which would be more effectively influenced by a powerful, centralized, militaristic (but business friendly) government.

So then, I'd start off fairly benignly. I'd gather the captains of industry to the whitehouse to exert the government's tremendous influence on them to do what what I want: a complete retooling of all industries towards military or energy concerns. What oil we have left would be used to create a new power infrastructure (primarily nuclear), and for the military.

All civillian oil use shall be forbidden. All non-essential industries shall be immediately mothballed. If anyone disagrees with this policy (or any other, for that matter) they will be declared terrorist subversives and thrown into jail to be held as long as the capricious whims of the government deem neccesary (Patriot Act). As for where the labor/supplies for this huge undertaking shall come from, the military provides the only answer. They can be used to both force civillians to work with token or no pay and to seize capital from civillians domestically (not from corporations that are cooperating, of course) and from our allies/enemies (the distinction shall wear quite thin, I'd imagine) abroad. From where, you might wonder, do I derive the authority to use the military in such a decidedly unAmerican manner? I would answer that if the Patriot Act can be passed in such a speedy manner after a crisis another crisis can be manufactured (maybe congress can be burned down, nobody in America studies history thoroughly enough to recognize how blatantly repeatist that would be anyways) which, in concert with the peak oil concerns, will allow for my drafting some emergency powers legislation, which I will then abuse.

For any allies/enemies who do not cooperate there is still the military and in fact the manufacture of certain "irreconcilable differences" between oil wealthy nations and America might prove advantageous. We'd go in--spending what precious oil we have left to do it, of course--strip-mine and use the most invasive, hackjob, quickest oil-drilling techniques that exist, and get out. These newly acquired resources will be injected into our burgeoning infrastructure to complete the last of the modernization requirements for a totally oil independent society. After this has been done I'll dissapear (assuming I'm not killed in a Coup first) and the American people will never know what a service I did them with my harsh and neccesary methods.

[Bud Dywer]

I like possible steps Jamaica is already dealing with, now.
http://www.jamaica-gleaner.com/gleaner/ ... lead1.html