I’m seeing a lot of assumptions out in the Peak Oil blog traffic lately that really demand some critical response. To take a recent example, Dave Cohen yesterday wrote in Everybody’s Jumping on the Solar Bandwagon
Do we live in a world of ever flowing abundance, or do we live in a world of limits to growth?
If your answer is “abundance”, your approach to the future requires a shift in direction in a context of business as usual. If your answer is “limits”, your approach requires a shift in behavior in a context of living within your means. What follows examines possible constraints on the expansion of solar energy in the 21st century.
The assumed correct answer here is “limits.” However this doesn’t square with physics. In fact, the answer is that both are true. This is based on understanding what a system is, and what the 2nd Law of Thermodynamics actually says, and on our common thinking about natural resources and time.
What the 2nd Law says is that in a closed system not yet in equilibrium, entropy - the measure of disorder in a system - is always increasing. Clearly the Earth is not a closed system, thanks to the continuous inputs of solar energy, the vast quantities of which Cohen thoughtfully describes in detail. So from the perspective of systems thinking, the world is abundant from an energy and material perspective (since one can be converted into the other).
Systems theory has been around for a long time, and has been well-articulated in the last 70 years. One of it’s more popular incarnations has been Donella Meadows’, (et. al.) studies and books Limits to Growth and Beyond the Limits based on the systems work of Jay Forrester (Urban Dynamics, Industrial Dynamics, etc.). Big Gav recently had some interesting things to say about Limits to Growth.
Limits tried to predict, using a computer model, dynamic measures of world population, food, pollution and prosperity. Some aspects of systems theory were made clear by this work, including that systems behave in complex, non-linear and often counter-intuitive ways.
Where we come down on the side of limits is in the domain of natural resources: fossil fuels, minerals, forest and arable land for agriculture, air and water. Let me point out that the concept of “natural resource” needs further elaboration and critical analysis, being defined, as it is, from the viewpoint of economics. This analysis and the wildly undervalued way in which natural resources are priced will be the subject of a (near) future post.
Nobody (that I’ve read, heard or talked to) doubts that oil is a limited natural resource. The Peak Oil community has pointed out clearly that this limit is compounded by the shape of Hubbert’s production curve. Thus, “limit” is itself a complex concept, that has been assumed to be simple and straightforward in environmental discussions on both sides. A limit is a function of a system, not a hard and fast quantity in and of itself.
The POs also make clear that oil is basically millions of years of compressed sun-time. We have been living off our natural capital rather than natural income at least since the beginning of the fossil fuel age. They also rightly argue that the history of economics, that is of capitalism, is contiguous with the age of fossil fuels, and is dependent on many assumptions about the supply, demand and price of fossil fuel resources.
All of this discussion has profound implications for economic theory. This theory is still being worked out, by the way, no matter what Reagan-praisers and neo-Hayekian Thatcherites might say. Georgescu-Roegen is the key figure here, though his work is rarely mentioned in discussions on general economics. Not surprisingly, Georgescu-Roegen’s economic lineage inherits from Schumpeter and passes down to Herman Daly. A version of Daly’s famous “The Economy is a Wholly-owned Subsidiary of the Ecosystem” diagram can be seen here.
Underlying all this are my deep misgivings about concepts at the heart of economic theory and policy, including what we mean by cost, work, labor, value, trade, rationality, power and so on. These are the topics - energy, ecology, economics, sustainability, systems- I want to take up in the next several months. I’ve chosen to blog about them for two reasons: 1) I want your input, and 2) my method is what I would call “patch-and-mosaic”, to borrow a phrase from landscape ecology. What I mean is that I want the freedom to write topically, stochastically, in more of an essay form. My hope is that these threads and discussions turn into something more tangible, but for now my aim is to clarify our thinking on these muddy topics.