[Aaron]

Ho hum, never said *no* energy or energy was unimportant. And I get accused of not reading!

<Sigh>

it is clear that economies can grow using the same or less energy

[smiley]

But to hold out Cuba as a magical oil-less society in prosperity is a stretch.

I agree.

[Wildwell]

The more energy you have the more likely it is you waste, hence less productivity, not more – that would be illogical and contrary to basic economic theory.

I'm sorry, I'm easily confused by economics. Are you saying that a society which has less energy available to it is more productive than one with more energy available to it? How is that productivity measured?

It depends. I’m saying there is not a linear relationship between energy and GDP. It has been argued that is has on the basis that in some places the GDP graph follows the energy graph. The reality is most of this is our love of modern gadgets and travel when we have disposable income. Some of which creates growth, some generates negative effects such as balance of trade problems.

The law of diminishing returns states: The more you have, the smaller is the extra benefit you get from having more. Productivity increases if people have less capital. Productivity is the relationship between input and output.

To say that the more capital (energy) you have the more you gain is nonsensical.

Anyway, this is all rather simplistic for a number of reasons. But let’s take cars.

First in any transport system there as a throughput you get before you start getting congestion and creating less throughput and productivity. This applies to any transport system. We can accept there finite amounts of land and certain patterns of urban development and pressures for land development. In northern Europe is it is now very difficult to find places to park cars and build roads, for example. The maths simply doesn’t add up.

Now, the more cheap fuel, the more growth in cars – assuming the rest of the economy is growing. Initially the cost of providing the roads is not beneficially to providing those roads – the cars do not meet costs. And, at later stage, as growth improves in cars, you get to optimum levels of flow. There are various ways to calculate this. But let’s use a ball park figure of 70%. After 80% is becomes quite clear the cars are impeding the progress of the other cars on the road and you get congestion – which costs valuable time, lost energy and so on. So already, we can see applying too much cheap energy can become counter productive.

Next we have to look at the cars that are providing benefit. How many are necessary journeys? How many people are living a long way from their workplace on the basis on fuel cost? What is the effect of things like the school run? What is the effect of offices and factories opening and closing at the same time providing peak flow, thus going over that 80% flow limit? So again, we can see too much cheap energy is actually unproductive. What would be the effect of raising the price of fuel or road pricing? Well, some people wouldn’t travel unless they had to, some people might take more fuel efficient forms of transport or walk, some people may move closer to work. Hence the throughput and necessary journeys quota improves and productivity and GDP improves because of less delay, less stress, less work and free time lost, and less energy used.

There’s loads more examples but that’s something to chew on.

[Wildwell]

Ho hum, never said *no* energy or energy was unimportant. And I get accused of not reading!

<Sigh>

it is clear that economies can grow using the same or less energy

I bet you have 68 TVs in your house all on generating money for the economy.

[Aaron]

And I'll bet you spell color wrong.

[JohnDenver]

Hey Aaron, if there's no need to conserve due to Jevon's Law, what's the difference between you and Dick Cheney? He feels there's no need to conserve, and you feel the same. Aren't you in bed together?

[Wildwell]

And I'll bet you spell color wrong.

LOL And labour

[Wildwell]

http://www.t-e.nu/docs/Publications/200 ... eMyths.pdf

Anyway, don't take my word for all this..click the link!

[Aaron]

http://www.t-e.nu/docs/Publications/2002%20Pubs/BrochureMyths.pdf

Anyway, don't take my word for all this..click the link!

And what programmeis this from?

In your defence I should withhold judgement until I have a chance to analyse the material more closely.

[JohnDenver]

Dick Cheney: Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy.

Aaron and Monte: Conservation is pointless because it increases consumption.

[Ludi]

Hence the throughput and necessary journeys quota improves and productivity and GDP improves because of less delay, less stress, less work and free time lost, and less energy used.

There’s loads more examples but that’s something to chew on.

Argh, sorry, economics just loses me, it doesn't make any sense to my way of thinking.

What are these more efficient people producing, actually? I can see they have more time to work, but what are they actually doing?

[Wildwell]

Hence the throughput and necessary journeys quota improves and productivity and GDP improves because of less delay, less stress, less work and free time lost, and less energy used.

There’s loads more examples but that’s something to chew on.

Argh, sorry, economics just loses me, it doesn't make any sense to my way of thinking.

What are these more efficient people producing, actually? I can see they have more time to work, but what are they actually doing?

Shopping, Sales meetings, delivering goods, just trying to get to work on time and so on.

[Wildwell]

http://www.t-e.nu/docs/Publications/2002%20Pubs/BrochureMyths.pdf

Anyway, don't take my word for all this..click the link!

And what programmeis this from?

In your defence I should withhold judgement until I have a chance to analyse the material more closely.

The European federation for transport and the environment. But there's plenty of this material about, it's fairly well known for anyone with in interest, works in or studies Transport.

[MonteQuest]

It's a bit startling that some of us believe energy has little or no impact on GDP.

This is only true when energy is plentiful and cheap as it has been for 50 years running.

This is so obvious that I find it difficult to respond seriously...

I quite agree. This whole thread is about a perpetual motion machine! Wildwell dismisses the fact that there are no free lunches and you just can't get something for nothing. The laws of thermodynamics are the most supreme laws of the universe, especially 2nd law.

Wildwell claims that you can have economic growth without using more energy. Energy produces money, not the other way around. These are all "common knowledge" facts that he claims are false.

His notion of growing GDP by "price inflation" reeks of a lack of basic understanding of economics.

When prices go up due to inflation, more money has to be put into the economy as it takes more to facilitate commerce.

How does new money get into the supply? It is borrowed at interest.

In order to service this debt, the economy must grow. Ok, so you inflate prices again and borrow more. Are you getting the picture? Sometime, somehow, somewhere, somebody must increase productivity of real goods and services, which by definition results in the consumption of more energy.

As an example, look at housing prices. Inflated prices of homes without consuming more energy. Just value added. But in order to do this, we must borrow $2.9 billion dollars a day from foreign investors, primarily the central banks. Some day, somebody is going to have to produce some real goods and services to pay off this debt. And they will consume massive amounts of energy in the process.

There are no free lunches.

[Wildwell]

From the above link.

'The role of transport in the economy is comparable with that of energy - without it the econmy grinds to a halt. But, as we have learned from the energy sector, it is uneconomic to use too much. Energy conservation and using exactly the right amount of energy are the best ways to stimulate the economy. The same holds true for transport. '

I rest my case.

[Wildwell]

It's a bit startling that some of us believe energy has little or no impact on GDP.

This is only true when energy is plentiful and cheap as it has been for 50 years running.

This is so obvious that I find it difficult to respond seriously...

I quite agree. This whole thread is about a perpetual motion machine! Wildwell dismisses the fact that there are no free lunches and you just can't get something for nothing. The laws of thermodynamics are the most supreme laws of the universe, especially 2nd law.

Wildwell claims that you can have economic growth without using more energy. Energy produces money, not the other way around. These are all "common knowledge" facts that he claims are false.

His notion of growing GDP by "price inflation" reeks of a lack of basic understanding of economics.

When prices go up due to inflation, more money has to be put into the economy as it takes more to facilitate commerce.

How does new money get into the supply? It is borrowed at interest.

In order to service this debt, the economy must grow. Ok, so you inflate prices again and borrow more. Are you getting the picture? Sometime, somehow, somewhere, somebody must increase productivity of real goods and services, which by definition results in the consumption of more energy.

As an example, look at housing prices. Inflated prices of homes without consuming more energy. Just value added. But in order to do this, we must borrow $2.9 billion dollars a day from foreign investors, primarily the central banks. Some day, somebody is going to have to produce some real goods and services to pay off this debt. And they will consume massive amounts of energy in the process.

There are no free lunches.

Get yourself a book on economics sometime, ok?

[Ludi]

[

Shopping, Sales meetings, delivering goods, just trying to get to work on time and so on.

In what way does this add to the GDP? They must be producing something to add to the GDP, mustn't they?

You said using less energy would increase their efficiency at producing, unless I've misunderstood you.

[Wildwell]

GDP = Output of goods and services.

There are various ways to calculate it, but services are producing wealth which may mean very small uses of energy. It's not true you to have to be producing goods. This is why MQ reference to 'real goods' and services makes me laugh. Also goods have various energy intensities. Energy does not produce money, that is not where the money supply comes from.

[Ludi]

So, useless, non-productive activities like "sales meetings" count toward GDP?

Man, it is one messed-up world we live in....

[Wildwell]

So, useless, non-productive activities like "sales meetings" count toward GDP?

Man, it is one messed-up world we live in....

Well someone is getting paid and trying to get a good deal for someone. I wouldn't say it's non productive. The salesman's job is to maximise the income of a company and his commision.

He might sell 1000 oranges @ $200 or at $300. But in the MQ world, somehow that extra $100 has to be made up for by setting fire to 3 gallons of oil round the back of the office when he's finished to keep in the within laws of Thermodynamics otherwise the earth will stop spinning. (And just for the benefit of doubt I am being sarcastic)