Citizen Action Monitor

Tim Garrett – Full text in one file of ALL articles by Garrett, and not posted on my website

The purpose of this large file is to facilitate keyword searching in one place of articles by Garrett.

No 2402 Posted by fw, December 7, 2018

NOTE — To access my other posts related to Dr. Garrett’s research on a global economic/civilization collapse by the end of this century, click on the Tab in the top left margin, titled Civilization/Economic Collapse ~ Links to All Posts By or About Dr. Tim Garrett’s Research

The following full text articles by Tim Garrett are arranged in three groups according to the  website where they were published: Group 1 — 11 Articles published on Garrett’s website, Nephologue; Group 2 — 12 Articles published on the University of Utah’s website; and Group 3 — 9 Articles published on other websites.

That’s a total of 32 articles presented below in full text. Plus 22 articles posted on my website, making a grand total of 54 articles either by Garrett or by others about Garrett’s climate related research.

Note: Because all the articles below were copied from a Microsoft Word file to WordPress, all images and special math and calculus characters will not appear. To view them go to the original article by clicking on the hyperlinked title.   

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Group 1 – 11 Articles published on Garrett’s website, Nephologue

On the thermodynamic origins of economic wealth Nephologue, September 10, 2018

What are the origins of wealth?

Economics textbooks describe wealth as an accumulation of all financially valuable resources. It is our collective beliefs that give this accumulated stock value.  Human labor uses this stock to produce more stuff through the GDP thereby enabling overall wealth to grow with time.

At least on the face of it, this view of the economy makes a lot of sense. Economists have mathematical equations that express these ideas providing quantitative descriptions for how and why the economy grows.

Yet something still seems unsatisfyingly magical. Why should we believe in the concept of economic value in the first place?. The existence of a financial system is hardly obvious. It hasn’t always existed through history, even during periods where people produced and consumed. And most of what we do in our lives (fortunately) doesn’t involve any exchange of currency at all. We are able to enjoy a good moment of each other’s company without having to pay a single cent.

The economy and the second law

Sure, financial wealth is a human quantity, but we are still part of the physical universe. No matter how rich we may be, we are all equal subjects of its rules.

Chief among these rules is the Second Law of Thermodynamics. The Second Law has been expressed in many ways that are either wrong, strangely mystical, or maddeningly vague. It doesn’t have to be this way. The most straightforward is to view the direction of time as a flow of matter that redistributes energy to ever lower potentials. Drop something it falls. It was up, now it’s down; air flows from high to low gravitational potential or pressure to make the winds. Easy.

Take the waterwheel in a mill. A mill consumes high gravitational potential energy from a flowing stream. The flow drives the wheel circulations and finishes its journey in the stream below where the potential energy is becomes unusable. The total capacity of the mill to dissipate potential energy, its size or “stock”, is something we can estimate by looking at the size of the mill and noting how fast it circulates.

Or how about a hurricane? The pressure difference between the eye of the hurricane and its surroundings provides the potential energy with which to drive the winds while the hurricane constantly loses energy by radiating to space. Again the hurricane has a size or “stock” that defines its power.

What does this have to do with the economy? Well, everything. Our perceptions are based on neuronal activity in the form of cyclical transfers of charge from high to low potential in our brains. The cycles are sustained by by high potential calories in food that we dissipate as waste heat from our bodies. Our food is produced with high potential fossil fuels that we burn to till the land, produce fertilizer and transport from farm to market. We get to and from market using gasoline that is dissipated in our cars. The money we use to buy food comes from the fruits of our labors staring at computers that that themselves dissipate energy as they make computations with a certain cycle frequency and transfer data to and from other computers along communication networks, all of which turns high potential energy to low potential waste heat.

But can we really reduce all this to something as simple as a waterwheel or hurricane? There’s 7+ billion of us, our brains are so complicated, and the economy is so big.

All the circulations in civilization are ultimately derived from the consumption and dissipation of high energy density “primary energy resources”. As a global organism, our civilization collectively feeds on the energy in coal, oil, natural gas, uranium, hydroelectric power and renewables. Civilization continually consumes these resources to accomplish two things: the first is to propel all civilization’s internal back-and-forth “economic” circulations along its accumulated networks; the second is to incorporate raw materials into our structure in order to grow and maintain our current size against the ever present forces of dissipation and decay.

Energy, from whatever source, powers our machines, our telecommunications, modern agriculture, and the supply of the meals that give us the energy to sustain our thoughts, attention, and perceptions. Without energy, civilization would no longer be measurable. Everything would grind to a halt. Nothing would work. Lacking food, we would be dead and our attention span with it. The gradient that meaningfully distinguishes civilization from its environment would disappear. Value would vanish.

Wealth is power
Stepping back to see the world economy as a simple physical object, one where people are only part of a larger whole, would be a stretch for a traditional economist hung up on the idea that wealth must be restricted to physical capital rather than people. But, crucially, unlike traditional models, it is an idea that can be rigorously tested and potentially disproved. It is a hypothesis that is falsifiable.

I have shown in peer-reviewed studies published in Climatic Change, Earth System Dynamics, and Earth’s Future that the observed relationship between the current rate of energy consumption or power of civilization, and its total economic wealth (not the GDP), is a fixed constant of 7.1 ± 0.1 milliwatts per inflation-adjusted 2005 dollar.

Equivalently, every 2005 dollar requires 324 kiloJoules be consumed over a year to sustain its value. In 2010, the global energy consumption rate of about 17 TW sustained about 2352 trillion 2005 dollars of global wealth. In 1970, both numbers were about half this. Both quantities have increased slowly by about 1.4% per year to 2.2% per year averaging a growth rate of 1.90% /year.  The ratio of the two quantities has stayed nearly constant over a time period when both wealth and energy consumption have more than doubled and the rates of growth have increased by about 50%. Currency is the psychological manifestation of a capacity to dissipate energy.

Can wealth continue to grow?
What this means is that we must continue to grow our capacity to consume primary energy reserves just to grow our wealth. We should never conclude that growth can’t continue over coming decades, as some claim in perennial doomsday predictions. It’s just that there is nothing stronger than inertia to guarantee that it will. The water wheel in the picture above can rot or the river can dry. Hurricane low pressures can dissolve. For us, continued consumption growth may quite plausibly become too difficult due to depletion of energy and mineral reserves or accelerating environmental disasters such as climate change. If this happens, all our efforts to produce growth can be expected to be more than offset by decay.

At some point, all systems experience decay and collapse. We’ve seen the waxing and waning of civilizations throughout history. Historical studies suggest that any long-term decline in a society’s capacity to consume forebodes hyper-inflation, war, and population decline. The question for us should not be whether collapse will happen, but when, and whether it will be slow or sudden.

 

*****

Is macroeconomics a science? Nephologue, August 1, 2018

Macroeconomics can get a pretty bad rap at times, perhaps unfairly. Some of its practitioners are so politically influential on such familiar topics as unemployment and economic growth it’s easy for the non-expert with an opinion to get a bit jealous. Few would dispute the merits of the latest winner of the Nobel in physics. But the Higgs boson is pretty inscrutable even to most physicists. It’s only natural that economists get more attention — and criticism — when Nobel prize winners like Paul Krugman write popular columns for the New York Times.

Yet, even the noted economist Paul Romer has offered the caustic remark that the field is in “…a general failure mode of science that is triggered when respect for highly regarded leaders evolves into a deference to authority that displaces objective fact from its position as the ultimate determinant of scientific truth.”

Ouch. So maybe macroeconomists are our modern day equivalent of medieval High Priests. Economists’ theoretical models didn’t predict the economic crash of 2008. Nonetheless, economists don’t seem particularly troubled, certainly not troubled enough to consider that their models might be profoundly off course. From their perch, why should they?

Confirmation bias — seeing only that which supports existing beliefs — can be brushed off as the sort of normal human arrogance that we are all susceptible to. But being able to falsify a result lies at the core of the scientific method. It must be possible to set up a test that could lead to a model being discarded.

For a comparison of professions, imagine if meteorologists predicted sunny days rather than the landfall of a hurricane. And then, because respected NASA scientist James Hansen was himself unconcerned, they put little effort into preventing such a thing from happening again.

That’s not what happens. Instead, in meteorology, the validity of forecast models is constantly tested by performing what is known as “hindcasts” — starting a model sometime in the past to see how well it predicts the present. Aside from the fact that the models are built on basic physics to the greatest extent possible, various model flavors are ranked according to their hindcast accuracy. It’s the job of a professional meteorologist to both understand the model workings and know which models do best in which situations to communicate to the public the best forecast possible.

I can find no evidence of the economics profession doing something similar. Traditional macroeconomic models employ equations for the GDP, or “production functions”, that are  “tuned” to match past observations of labor and capital. It is not possible to falsify these moving theoretical targets because they are always made “right” by adding layers of social complexity or by tweaking the production function exponents until a decent fit is obtained. If conditions change and the formula no longer works, economists just tune again and call it a “structural break”.

This is cheating! At least if the goal is understanding how things work. It would be abhorrent to imagine a basic physics equation being adjusted as time progresses for the situation at hand. The speed of light in a vacuum doesn’t get to be different for you than for me or for last year versus this year.

Let’s take for example the basic Cobb-Douglas production function used by economists as a starting point for relating economic production Y to labor L and capital K. The quantity A is a “total factor productivity” that has been thought — largely due to efforts by Paul Romer — to be related to innovation.

Y = A Lα Κ1-α

Here the parameter α is tuned to past data in order to reproduce values of Y. In economic studies, when the inelegant Cobb-Douglas function (or whatever is used as a replacement) doesn’t work well, for whatever reason, the approach is not to ask whether or not something might be fundamentally wrong about the premise behind the fit, but rather to add ever more bells and whistles until once again a sufficient fit is obtained, totally independent of any consideration of dimensional self-consistency.

For example, maybe a constant exponent α doesn’t provide a good fit unless A is allowed to change too according some equally complex function. Paul Romer introduced government stimulus of R&D to obtain this sort of example of complexity:

So many free parameters! With such a complex function one could replace labor with the historical population of rodents in Calcutta and tune A, α and β in such a manner that the Cobb-Douglas function would still reproduce beautiful timelines for Y. As John Von Neumann quipped With four parameters I can fit an elephant, and with five I can make him wiggle his trunk.

This is not what sophistication should look like! Making things ever more mathematically complex does not make things more true, if anything less so. It feels akin to astrology, a highly complex, self-consistent model based on un-physical nonsense. Totally convincing to those who are looking to believe that the world has order and explanation, and that they alone have the years of training required to understand it, but completely lacking in any means for falsifiability.

It gets worse. The production functions lack the simple element of dimensional self-consistency. Take a basic physics equation, Newton’s F=ma, or Force equals mass times acceleration. Mass has units of mass, obviously, and acceleration has units of distance per time squared. So the units of force are mass times distance per time squared. The equation would be totally bogus if force were declared to have any other sorts of units.

Now compare Newton’s F = ma with the Cobb-Douglas function. There is nothing fundamental about the free parameter α since it is just a number. In fact, it can have any value depending on the statistical fit, the country, or the period considered. Suppose for the moment that α = 0.3. If A is just a number, labor has units of worker hours, and capital units of dollars, then Y would necessarily have the absurd units of worker hours to the 0.3 power and dollars to the 0.7 power. This has nothing to do with the real units of economic output which are dollars per time!

A couple years ago I had the opportunity to discuss economic growth models with well-known environmental economist Robert Ayres on a visit to Paris where he lives. He was quite adamant that I was wrong about everything. I don’t think he had actually bothered to read anything I had done, which was too bad given the condition for the meeting (his idea) was that I buy and read his latest book. I tried to be patient, but eventually raised this units issue with him. His response was “only a physicist would care about units”!

Perhaps, I have been too harsh — everybody is trying their best — but it looks like fluency in Latin in the Catholic Church, where established macro-economists need something sufficiently opaque in order to maintain their high-priesthood. More generously, economics is complicated and economists just don’t yet know yet how to describe it without such detailed dimensionally inconsistent fits; even in physics, similar fits are occasionally used to describe interactions of particles with turbulence, for example, simply because the underlying physics can be rather challenging.

And maybe my rant is just another one of those pot-shots from non-economists, I have however tried to do better, by creating an economic growth model with no bells and whistles that can be easily tested and discarded. It is founded on a proposed constant relationship between energy consumption rates and a very general representation of total inflation-adjusted wealth (analogous to capital K) and is borne out by observations. Further evaluation of the model has been done by performing hindcasts, asking whether we predict the present with a deterministic model that is initialized at some point in the past. Again, in this case it appears we can: current global rates of energy consumption growth and GWP growth can be accurately predicted based on conditions observed in the 1950s, without appealing to any observations in the interim, with skill scores >90%.

For myself, there’s adequate contentment in simply understanding some of the power of thermodynamics. But that is balanced by some abhorrence with certain aspects of macroeconomics.

 

*****

George Orwell on the metabolism of the industrial world Nephologue, July 28, 2018

When discussing biophysical economics — the idea that the human economy can be treated like any other biological organism that grows subject to resource constraints — well-known names include Charlie Hall, Cutler Cleveland, and Robert Costanza. My personal favorite for the level of insight, using prose rather than math, is the work of Geerat Vermeij.

Recently, I’ve been reading George Orwell’s 1937 book “Road to Wigham Pier“, a testimony of the plight of the British working class. He captures similar themes, more eloquently, I think, than anything else I’ve read:

Our civilization…is founded on coal more completely than one realizes until one stops to think about it. The machines that keep us alive, and the machines that make machines, are all directly or indirectly dependent upon coal. In the metabolism of the Western world the coal-miner is second in importance only to the man who ploughs the soil. He is a sort of caryatid upon whose shoulders nearly everything that is not grimy is supported.

Watching coal-miners at work, you realize momentarily what different universes people inhabit. Down there where coal is dug is a sort of world apart which one can quite easily go through life without ever hearing about. Probably majority of people would even prefer not to hear about it. Yet it is the absolutely necessary counterpart of our world above. Practically everything we do, from eating an ice to crossing the Atlantic,and from baking a loaf to writing a novel, involves the use of coal, directly or indirectly. For all the arts of peace coal is needed; if war breaks out it is needed all the more. In time of revolution the miner must go on working or the revolution must stop, for revolution as much as reaction needs coal. Whatever may be happening on the surface, the hacking and shovelling have got to continue without a pause, or at any rate without pausing for more than a few weeks at the most. In order that Hitler may march the goose-step, that the Pope may denounce Bolshevism, that the cricket crowds may assemble at Lords, that the poets may scratch one another’s backs, coal has got to be forthcoming. But on the whole we are not aware of it; we all know that we ‘must have coal’, but we seldom or never remember what coal-getting involves. Here am I sitting writing in front of my comfortable coal fire. It is April but I still need a fire. Once a fortnight the coal cart drives up to the door and men in leather jerkins carry the coal indoors in stout sacks smelling of tar and shoot it clanking into the coal-hole under the stairs. It is only very rarely, when I make a definite mental-effort, that I connect this coal with that far-off labour in the mines. It is just ‘coal’–something that I have got to have; black stuff that arrives mysteriously from nowhere in particular, like manna except that you have to pay for it. You could quite easily drive a car right across the north of England and never once remember that hundreds of feet below the road you are on the miners are hacking at the coal. Yet in a sense it is the miners who are driving your car forward. Their lamp-lit world down there is as necessary to the daylight world above as the root is to the flower.

The full chapter, truly remarkable for its description of the work life of the miners, is here.

When I am digging trenches in my garden, if I shift two tons of earth during the afternoon, I feel that I have earned my tea. But earth is tractable stuff compared with coal, and I don’t have to work kneeling down, a thousand feet underground, in suffocating heat and swallowing coal dust with every breath I take; nor do I have to walk a mile bent double before I begin. The miner’s job would be as much beyond my power as it would be to perform on a flying trapeze or to win the Grand National. I am not a manual labourer and please God I never shall be one, but there are some kinds of manual work that I could do if I had to. At a pitch I could be a tolerable road-sweeper or an inefficient gardener or even a tenth-rate farm hand. But by no conceivable amount of effort or training could I become a coal-miner, the work would kill me in a few weeks.

 

*****

Is brain thermodynamics the link between economics and physics? Nephologue, June 18, 2018

I’ve argued that the accumulated wealth of civilization is fundamentally linked to its total rate of energy consumption through a constant. The total historically accumulated value of humanity’s inflation-adjusted production — not just the annual accumulation called the GDP — rises every year by a percentage that matches the increase in humanity’s energetic needs.

But how could this be? The value of stuff is determined by our brains. How do our brains somehow “know” collectively how fast we consume energy? How do we comprehend how a psychological construct like money can be tied to a thermodynamic construct like energetic power? Doesn’t economic value go only so far as human judgement?

As a clue, even with no one home and all the utilities turned off, a house still maintains some worth for as long as it can be perceived as being potentially useful by other active members of the global economy. Real estate agents talk about “Comps” for determining the value of a home. Comps are based on the recent sale value of other homes in the neighborhood. Comps were determined by people with brains (though arguably less so in a real-estate bubble) who in turn are connected through social and work connections to other people with brains, and with several degrees of separation, everyone on this planet with a brain.

Individual brains process a wealth of information from the rest of civilization using extraordinarily dense networks of axons and dendrites. Patterns of oscillatory neuronal activity lead to the emergence of behavior and cognition. Powering this brain activity requires approximately 20 % of the daily caloric input to the body as a whole. Arguably this number is 100% since neither the body nor the brain could survive without the other.

And we are connected not just to each other but, by definition, all other elements of civilization, including our transport and communications networks. We and civilization also couldn’t survive without each other.  Dissipative neuronal circulations along brain networks may implicitly scale with dissipative circulations along civilization networks. Our collective perceptions must reflect global economic wealth.

Individually, our brains may seem very personal, and a small part of the whole. But they are also connected to each other. They are part of a much larger “super-organism” that includes not just our bodies but our stuff. Our brains collectively march to broader economic circulations along global civilization networks that are sustained by a dissipation of oil, coal, and other primary energy supplies.

Summing wealth over all the world’s nations, 7.1 Watts is required to maintain every one thousand inflation-adjusted 2005 dollars of historically accumulated economic production. This relationship may seem unorthodox by traditional economic standards, but it may also be seen as a type of psychological constant that ties the physics of human perception to the thermodynamic dissipative flows of energy that drive the global economy.

 

*****

On the exponential growth, decay and collapse of civilization Nephologue, June 6, 2018

Last week I had the fortune of seeing Rogers and Hammerstein’s Carousel during a short trip with my wife to New York City. It’s a 1940s classic set in a fishing town in New England. Some of the themes are a bit dated to be sure, but then I still love Italian opera which can be totally absurd. This particular Broadway production fittingly introduced Renée Fleming in the role of Nettie – a real treat to hear this world-famous soprano sing.

The plot of the musical contrasts a happy couple with one that is more challenged. For the happier, fisherman Enoch woos his bride-to-be Carrie in a song showing off his good-husband-material ambition:

Enoch

When I make enough money outa one of my boat,

I’ll put all of my money in another little boat.

I’ll make twice as much outa two little boats,

An’ the first thing you know, I’ll have four little boats;

Then eight little boats, then a plenty little boats,

Then a great big fleet of great big boats.

All catchin’ herring, bringin’ into shore;

Sailin’ out again, an’ bringin’ more.

An’ more, an’ more, an’ more!

The first year we’re married,

We’ll have one little kid.

The second year we’re goin’

Have another little kid.

You’ll soon be donnin’ socks

For eight little feet-

Carrie

I am not enough for another fleet!

Utterly hokey, but presumably this was Rogers and Hammerstein’s intention. At least it’s clear that Enoch picked up somewhere a basic mathematical mastery of powers of two and the ingredients for exponential growth.

Exponential growth is curious, particularly in the economics literature where it is often presented as a God-given truth without questioning where it actually comes from. In fact, whether we look at boats, fish, or kids, or anything else, exponential growth is subject to fundamental thermodynamic constraints. The rate of exponential growth constantly changes over time as a function of past growth and current conditions, and that rate can evolve from being positive (growth) to negative (decay).

There’s a couple of important themes: 

System growth
This is the most basic ingredient of exponential growth. As a system grows, it grows into the resources that enabled its growth in the first place, increasing its interface with its supply. A larger interface permits higher flow rates of the resources thereby allowing the system to grow faster. A bigger fleet catches more fish. As long as fish are profitable, this leads to a bigger fleet yet.

Diminishing returns

Even if a system grows into new resources, growth rates have a natural tendency to slow with time. The reason is that systems compete with their growing selves for available resources so that growth of the interface succumbs to diminishing returns. The more Enoch’s fleet grows, the more his own boats compete with with the rest of the fleet for the remaining fish that are there; the bigger the fleet, the more competition. The consequence is that the interface of boats with fish does not grow as fast as the fleet itself so consumption stabilizes.

Discovery

As former U.S. Secretary of Defense Donald Rumsfeld famously put it, there are the “unknown, unknowns… There are things we do not know we don’t know.”. A system grows exponentially by growing its interface with known resources. Normally, diminishing returns takes over, but by way of this growth, there can also be discovery of previously unknown resources. Early Portuguese fisherman could not easily have anticipated the extraordinary riches of cod to be found in the New World that would propel fish catches skyward.

Depletion

Resources can be depleted if they are not replenished as fast as the ever increasing rate of consumption. In turn, growth of the interface between the system and its supply grows more slowly than it would otherwise.  Enoch catches fish to grow his fleet. But New England fish stocks decline – there are limits to growth.

Decay
Poor Enoch will eventually grow old and his boats and nets constantly need repair. What can’t be fixed also slows growth. Exponential growth is still possible if decay is slow enough. But an unpredicted hurricane could wipe out Enoch’s entire fleet of boats beyond his knowledge or control, in which case gradual decay can easily tip towards collapse.

Putting it together
Putting all these things together we end up with a mathematical curve for growth known as the logistic function characterized by increasing rates of explosive growth followed by decreasing rates of exponential growth. Growth then stagnates and tips into either slow or rapid decline.

An example of the timeline is shown above, illustrated for the special case where resources are in fixed supply and simply drained like a battery. Resources are consumed by the system; the system thrives on resources but is always consumed by decay. While growth is initially exponential, diminishing returns takes over. Then, during a period of overshoot, the system keeps growing for a time, even as resources and consumption decline, but eventually decay takes over and tips the system into decay and collapse. Critically, there is no equilibrium of steady-state to be had, not at any point.

But, the situation is rarely as simple as a depleted battery. This is because resources can be discovered.  The figure above shows how this works. All the same phenomena are present as in the drained battery scenario except just as the system enters overshoot and plateaus, a new resource is discovered, and the system enters a second period of exponential growth. Eventually decay still takes over, but it does not forbid the system from potentially entering some new phase of growth in the future, perhaps repeating the original cycle.

It’s easy to see some of these dynamics at play in our civilization. At least in the U.S., energy has consumption has seen multiple waves of exponential growth, diminishing returns, competition and discovery. Since the mid-1700s, we have progressed from biomass, to coal, to petroleum, each discovery rescuing the U.S. so that it can continue expansion outward of its interface with primary energy supplies. Currently, natural gas and renewables appear to be entering a new exponential growth phase, with coal sliding into decline.

Similar things can be seen in world population growth going back even further in time: always successive pulses of exponential growth, followed by stagnation, then discovery, and renewed expansion. We are now growing faster than ever.

So what does this mean for us and our future? The thermodynamics and mathematics of how a system grows can be described and predicted provided we know the size of resources and the magnitude of decay.  The problem is that we don’t because there are always the “unknown unknowns”. That said, we can say with some confidence that there are two main forces that will shape this century, resource depletion and environmental decline: it seems like one of the two will get us.

So far resource discovery has more than adequately kept civilization afloat. But this cannot continue forever. When will it stop? This depends on this balance between discovery and decay. Discovery of new energy resources seems to be fairly unpredictable. Still, we’ve been remarkably good at it considering doomsday forecasts of Peak Oil have been overcome by the introduction of shale oil, natural gas, and renewables. Nonetheless, we currently double our energy demands every 30 years or so. Can new discoveries keep pace?  If they can, won’t that lead to environmental disaster as atmospheric CO2 concentrations climb past 1000 ppm and we lay waste to the forests, oceans, and ground?

Unlike diamonds, exponential growth cannot be forever. It just can’t. Eventually, something has to give.

 

*****

What’s your Carbon Footprint? Nephologue, May 21 2018

Much has been made of the question of how we can reduce our individual impact on climate change. We all of us want to make a difference. I even heard one very reasonable man state in all seriousness in public that if one Prius is good, two Prius’s is better!

But I really think this is the wrong question because, in an interconnected world, none of us can be meaningfully separated from the whole, and the whole responds to forces that are external to any of us.

Consider the number of degrees of separation between you and anyone else on the planet. This might seem like a pretty hard thing to assess given how many of us there are and in some pretty far-flung places. I don’t know personally anyone in the Papua New Guinea Highlands (to mention some arbitrarily remote location), but I can be pretty sure that it’s not too much of a stretch to suppose my Australian friend has a friend who has been to the capital Port Moresby where he ran a cross a guy whose cousin occasionally makes trips to the capital to work for “luxury” items to take back to his remote forest dwelling where he presents them to his wife.

That would be just five degrees of separation. So even if relationships are pretty far-flung, it’s like the line from
The same principle can apply to all of history. Suppose that an estimated 100 billion people have walked the earth in the last 50,000 years. With each successive generation, each of us is related to two others to the power of the number of generations. Exponentials lead to big numbers quickly: 100 billion people equates to just 37 successive generations. So, it shouldn’t take too great a number of generations before the number of your number ancestors is similar to the number of people living at that time. As evidence, all humans look and act pretty much the same. One way or another, there was sufficient intermingling for us all to have ancestors in common.

So, as a first approximation, we are linked through our current activities to everyone alive, and moreover we can be linked by blood to everyone who has ever been alive.

It seems then that the question should be not what is your carbon footprint but instead what is our carbon footprint. We are a collective “super-organism” that has evolved over time by burning carbon based fuels to sustain ourselves and to grow. Individually, we may profoundly feel that we can behave as isolated entities; our personal economic choices, in however limited a way, can reduce the collective rate of CO2 exhalation.

The evidence is against this argument, however.  If we term our collective wealth as the accumulation of all past economic production, summing over all of humanity over all of history, then the data reveal a remarkable fact: independent of the year that is considered, collective wealth has had a fixed relationship to added atmospheric CO2 concentrations. Expressed quantitatively,  2.42 +/- 0.02 ppmv CO2 is added every year for every one thousand trillion inflation-adjusted 1990 US dollars of current global wealth.

A useful analogy here is to a growing child, who consumes food and oxygen and exhales carbon dioxide. The rate of CO2 exhalation by the child is determined by the sum of all cellular activity in the child. All the child’s current living cells require energy, and all produce CO2 as a waste product. But here is the key thing: the total number of current cells in the child is not determined by what the child does today, but by child’s past. Over time, the child grew from infancy to its current size, accumulating cells and its capacity to exhale CO2.

For humanity, it is the same. We currently “exhale” CO2 as a total civilization, but our current rate of exhalation is determined by past civilization growth. So, if emissions are so tightly linked to the collective whole, and all past growth of civilization’s consumptive needs has already happened, entirely beyond our current control, what individually can we do right now?

To further illustrate the problem, let’s look at CO2 concentrations in the atmosphere. To calculate the actual increase in atmospheric CO2 concentrations, one has to consider that the land and oceans absorb a fraction of what is emitted. Estimating carbon sinks is possible but can get pretty tricky. Nonetheless, we can look at the observed relationship between economic activity and atmospheric chemistry to get a sense of what is going on.

Looking above at the past 2000 years of atmospheric carbon dioxide concentrations, obtained from Mauna Loa in Hawaii and from ice cores in Antarctica, and measured as a perturbation from a baseline “pre-industrial” concentration of 275 ppmv, there is a surprisingly tight power-law relationship with global GDP. For the entire dataset :

log[CO2(ppmv perturbation)] ~ 0.6 x log[GDP(2005 USD)]

Amazingly, for over 2000 years, the relationship between CO2 and economic activity has been pretty much a mathematical constant.

In fact, if we look just at the past 60 years in the above, the relationship is linear and even tighter: since 1950, for every trillion inflation-adjusted year 2005 USD of global economy, the atmospheric concentration of CO2 has been 1.7 ppmv higher.

And, we could turn this around. With an extremely high degree of accuracy, we could estimate the global GDP simply with a CO2 probe at Mauna Loa. In units of trillion year 2005 USD and ppmv CO2:

GDP  = 0.58 x CO2 – 174

An atmospheric chemist could easily obtain the size of the global economy within a 95% uncertainty bound of just 1.5%! No need for economists!

Of course, we have to be careful with correlation and causation. And even if the above relationship has worked extraordinarily well for the past 65 years, the underlying basis for a relationship between GDP and CO2 concentrations is in fact rather more complicated. Nonetheless, these data clearly support an argument that what matters for determining the concentrations of this key greenhouse gas are collective human activities.

A key point here is that this relationship is extremely tight and invariant over a very long time period during which the configuration of humanity has changed extraordinarily. There have been periodic wars,  famines, and global economic crises. We do not consume the same raw materials with the same efficiencies to the same extent now as we did in the past. The mix of wind, solar, nuclear and fossil fuels has been consumed in widely varying mixtures using an extraordinary range of different technologies. Yet, despite all these changes, the relationship between our economic activities and CO2 seems to have remained invariant.

What is going on? Speculating, perhaps one way to look at it is to consider individually the impact of buying that fuel efficient Prius. A car that consumes less gas allows for an instantaneously incremental reduction in the demand for gas. Sounds great. Except, the oil resources for producing the gas are still available. If demand drops incrementally, then oil producers reduce prices to increase demand. Cheaper gas is more desirable, and so the collective response of all gas consumers is to consume more. Ultimately, the net effect on the collective rate of fossil fuel consumption of buying a fuel efficient Prius is zero (or even an increase).

“No man is an island entire of itself…” We have no individual carbon footprint. We are only “… a part of the main”. Only collectively can we reduce our impact on climate. As unpalatable as it may be, it seems the only successful climate action will be to dramatically and collectively deflate the global economy.  Unfortunately, this may be a bit like asking that growing child, once it has reached a healthy adulthood, to voluntarily suffocate or shrink back to infancy.

Is there an alternative perspective that allows for change but is still consistent with the observations? It would be nice to think that our individual or collective actions can meaningfully decouple the economy from changes in atmospheric composition. But how?

 

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Determinism and the human machine Nephologue, May 14 2018

I’ve been called a “dangerous nihilist” for trying to show how humanity can be treated usefully as a simple physical object. And a paper by D. Cullenward et al. strongly critical of my work – albeit by totally getting it wrong – referenced this rather funny cartoon, concluding that “Perhaps in the future a particularly brilliant scientist will discover a robust and verifiable means for deterministically predicting energy system dynamics. Until that time, however, the evidence suggests we should err of the side of humility and uncertainty in making projections about the future.”

I get it. Treating the collective behavior of humans as simple by-products of the 2nd Law of Thermodynamics, something reducible to one line equations in physics, would hardly be the stuff of Keats or Shakespeare sonnets. Obviously, interpersonal dynamics can feel strong, and those feelings lead to decisions that seem at times to be utterly unpredictable, certainly a far, far cry from the elegant simplicity of an equation in physics.

But I don’t see that poor predictability of the human condition is inconsistent with it being strictly deterministic, something that could be, at least in principle, reduced to a mathematical representation.

The father of chaos theory, MIT atmospheric scientist Ed Lorenz was perhaps the pioneer of this idea. In his seminal paper Deterministic Nonperiodic Flow  he devised a simplified set of equations that represented some key processes in the atmosphere. The details don’t really matter, but for edification here’s the set up:

Aside from the rather extraordinary genius of representing the atmosphere in such a compact manner, what was so enormously influential was that Lorenz showed how purely deterministic equations – X, Y, and Z at any given time is uniquely determined by where XY, and Z start out – are nonetheless unstable and inherently unpredictable. This did not mean the solutions aren’t well bounded. That is to say, on Earth, XY, and Z couldn’t become just anything. It’s just that the precise solution of XY, and Z  at any point in time could not be predicted very far ahead because even very small differences in the precision of the initial state translated to large differences in some not-so-distant future state.

Sensitivity to initial conditions means the final outcome can be deterministic but nonetheless unpredictable. Determinism does not mean knowability.

Of course, this does not mean we give up in despair. Well-bounded solutions do nonetheless exist. Not everything is possible, although we must accept a certain loss of resolution in our results the further out we look.

Due to the approximate length of the water cycle, we know we can’t peer beyond about 10-days in our weather forecasts, but we will accept a 1-week forecast for our weekend planning – albeit with a larger grain of salt than the 1-day forecast for the kids’ soccer game. And we can still make climate forecasts that are averaged over space and time: it’s not idiocy to claim that summer will arrive in the Northern Hemisphere around May, 2026 even if there’s no prayer of saying it will rain in New York City on July 15.

I don’t see it as being entirely dehumanizing to treat humanity in a similar fashion. We are wonderfully unpredictable and predictable at the same time. We don’t know what exactly the day or year will bring even if we have a pretty good idea. Like the popular quote in the financial world “History doesn’t repeat itself but it often rhymes”. 

So it is with the approach I’ve taken to the evolution of civilization. There is no pretense at being able to explain the details at any given time or place, but there is predictability, predictability that can be tested with hindcasts, provided we step back and look at humanity as a whole. Stepping back, we can see farther into the future. Sensitivity to initial conditions yields to bounded solutions that are constrained by the laws of thermodynamics. For example, whatever an economist might imagine, we will not decouple the economy from energy consumption. It’s as physically possible as a perpetual motion machine.

Maybe we are a bit like Don Draper in the opening credits of the Mad Men series, falling deterministically through a series of life events, lacking any real internal control. Watching the series we already know the story: Don is irretrievably trapped by his mysterious past, and will inevitably succumb to women and booze. However, because we never know exactly how, we nonetheless derive the very human joy of watching his agonies as we binge-watch the next episode. Is this Nihilism? Voyeurism? I don’t know. But I feel a bit the same about watching the progression of civilization through its own coming struggles with resource depletion and environmental decline.

 

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The EIA forecasts environmental doom? Nephologue, May 9, 2018

The United States Energy Information Administration provides projections for how much energy the world can be expected to use over the next few decades. Predicting the future is hard, but I think one has to give them credit for trying. The low, medium, and high economic growth projections shown above are largely just extrapolations of existing trends. Even if there is a curious inflection point around 2030, assuming persistence in trends is not a bad way of going for something as highly aggregated as the global economy.

The simulations use an everything but the kitchen sink philosophy for approaching the problem, representing to the greatest extent possible the myriad forces that drive energy consumption, such as political agreements and national and sectoral competition for a range of energy sources. Just the US macroeconomic module alone has well over one thousand equations.

But, as always, there’s more than one way to skin a cat. For my part, I have developed a model for global energy consumption that is almost absurdly simple. It has only a few equations. Nonetheless it manages to produce accurate hindcasts for energy consumption and GDP growth rates with skill scores >90% for a 50 year period between 1960 and 2010 using only conditions in the 1950s to initialize the model.

The key ingredients of the model are only that global energy consumption and wealth can be linked through a constant; that inflation-adjusted global GDP grows global wealth; that the coefficient relating wealth to GDP is a function of past innovation; and, that innovation can be related through thermodynamics to resource availability and rates of decay.

Claiming that civilization can be reduced so simply is admittedly a bit unorthodox. What the model does have going for it is that each of these things is testable and based on physical reasoning.

Of course, the tremendous trade-off with this more holistic view is it offers little to nothing about the details, like how national consumption will change over the coming decades. Understandably, some think it’s important to distinguish the U.S. from the rest of the world.

Still, we do still talk about the global economy. And, for an atmospheric scientist trying to link economic growth to climate change, it doesn’t matter whether a molecule of carbon dioxide comes from Timbuktu or Trump Tower since CO2 is a long-lived well-mixed gas.

But let’s assume that those thousands of equations the EIA uses does get things plausibly right, at least in the big picture. On average, EIA projections see the global demand for energy growing by about 50% over the next 40 years, 0.9% per year on the low end and 1.4% per year on the high end.

Using the aforementioned constant, what is being referred to by others as the Garrett Relation, a trivial prediction of the model I mentioned is that inflation-adjusted global Wealth will also grow by 50% over the same time period.

Some of us might feel a bit disappointed by a real growth rate for our collective assets of just 1% per year, but effectively this is what the EIA projections imply.

I am a bit skeptical they are correct partly because the physically-based economic model also forecasts that there is substantial inertia to existing trends. Between 2000 and 2010, the average growth rate for global energy consumption and real wealth was about 2% per year (although GDP grew faster, closer to 3% per year). A sudden revision downward in growth to 1% would require something fairly dramatic in terms of a reduction to resource availability. If we were to assume for the sake of argument a continuation of the 2% growth rate instead of the EIA’s 1%, that would mean that global Wealth would increase by 60% in 40 years.

But whether the increase is 50%, as implied by the EIA, or 60%, as implied by persistence in trends, the future still looks good. Right?

Well, maybe not, at least not for the environment. Even maintaining 1% per year growth will require something that might seem pretty extraordinary: over the course of the next 40 years we will consume as much energy total as the total we consumed in the past 100 years. At 2% growth, that number is more like 140 years.

Energy does stuff. In thermodynamics we call it Work. A lot of stuff has happened in the past century. Consuming the same amount of energy in 40 Years will mean, very roughly, we will do the same amount of Work all over again.

A more advanced concept in thermodynamics is that there is a coupling of energy dissipation with material flows. What this means is that energy is consumed not just to sustain civilization’s internal circulations, but to take raw materials from the environment like fish, minerals, and wood. These are used to repair and grow civilization (including by making more of us as people) while leaving behind a big pile of garbage in solid, liquid, and gaseous forms.

We’ve certainly packed on the pounds over the past century, largely at the sacrifice of the critters and plants on land and the fish in the oceans, while leaving behind an added 100 ppm to the atmospheric concentration of CO2.

What will the world look like when we manage to do the same all over again?

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EIA energy forecasts also spell economic doom? Nephologue, May 11, 2018

The last post looked at the Energy Information Administration (EIA) energy forecasts to conclude that the 1% per year global energy consumption growth rate implied that over the course of the next 40 years we will consume as much energy total as the total we consumed in the past 100 years. Of course, we will consume even more if the growth rate continues at 2% per year, as it has in the past decade. If the past century of environmental destruction is any guide, destruction powered by our energy consumption, then the planet will be rather worse for wear in most of our lifetimes.

But what does it imply economically? Agencies like the World Bank and the International Monetary Fund forecast between 3% and 4% global GDP growth in the coming years. Can this be reconciled with EIA forecasts of just 1% for the fuel that power the economy?

A direct implication of the constant relating energy consumption and historically accumulated wealth that I have described is

GDP growth rate = Energy consumption growth rate  + Growth rate of energy consumption growth rate

So just to show that this isn’t totally out to lunch, the respective mean growth rates for the 40 year period between 1970 and 2010 are

3.1%/year = 2.0%/year + 1.4%/year

3.1%/year = 3.4%/year. So not perfect, but pretty close, about 10% error. What we see globally is that GDP has been growing faster than energy consumption, but the difference can be accounted for by the second term on the right hand side above, the growth rate of the growth rate, a term I have been calling innovation since it can be related to improvements in energy efficiency.

So, let’s now take a look at what the EIA forecasts imply for the future. If energy consumption has been growing at 2.0%/year, and the EIA projects instead a steady 1%/year, then the equation above for GDP growth would read:

1.0%/year = 1.0%/year + 0% per year

1.0%/year. Isn’t that something close to a permanent recession? Keep in mind that 1.0%/year is an average value for the world, and that there will be competition among countries for this global constraint. Developed economies tend to grow more slowly than average, so this doesn’t sound particularly rosy for those of us who live there. Really, I’m in no position to say what such an anemic growth rate actually looks like on the global economic stage, but it would seem to be well below what most economists would consider desirable. The last time growth stagnated like this over a long period of time was the 1930s. We know what followed.

And meanwhile, even at 1% per year energy consumption growth, we would still consume enough energy to bring about roughly a doubling of pre-industrial CO2 concentrations in the atmosphere, sufficient to blow well beyond the 2 degrees Celsius cap proposed by the Paris Climate Accords.

It seems we can’t win!

 

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What’s in a name? Nephologue, May 6, 2018

Professor Richard Nolthenius of Cabrillo College has been referring to the constant relationship between power and wealth in talks and podcasts as the Garrett Relation, or GR for short. Of course, its a bit embarrassing to have one’s own name attached to a phenomenon. In my view, the really interesting thing about any phenomenon is what it tells us, and not the much more incidental matter of whomever happened to stumble upon it first. But as Richard has pointed out, it needs a name. Is there better wording? The Power Theory of Value (PTV) Relation seems a bit dry but workable. Or is the Garrett Relation as good as any?

 

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A Power Theory of Value? Nephologue, May 6, 2018

Economic wealth or capital is not a static quantity that simply exists. Rather it requires continual energy consumption for its sustenance. Civilization is like a living organism, or as Nate Hagens puts it, a super-organism. Energy is required not just to grow civilization but also to maintain its current size.

Sure, civilization is complicated. Valuing any given component of civilization is something all of us try really hard to do with varying degrees of success (myself, I’m a terrible investor). But, as philosophers have recognized for hundreds of years, all components of civilization, whether human or physical, have no innate value in and of themselves; value can only be acquired through connections and the judgement of others, nothing intrinsic to the item or person in question.

As John Donne put it: “No man is an island, Entire of itself. Each is a piece of the continent, A part of the main…” An ounce of gold has no intrinsic worth, but only acquires value by acting as a useful part of society, through banking system networks maintained by the accumulated knowledge capital of bankers, all of which require primary energy to be sustained, either by feeding the bankers or by powering electronic transactions. An ounce of gold left abandoned and forgotten in the middle of the desert is worthless until it is found.

Looking at civilization as a whole we might surmise that, like a living organism, the internal transportation, communication, and human physiological networks that define what we think of as humanity require a continual consumption of energy. Otherwise they wither and die, becoming totally valueless. We’re not much use at work if we stop eating. A road never traveled serves little purpose. We can hypothesize that economic value and energy consumption are linked.

This suggests a “Power Theory of Value”, that energy consumption and economic wealth are tied by a constant. Importantly, this is a falsifiable hypothesis. And, as shown above, it seems to be borne out by the data. Summing wealth over all the world’s nations, 7.1 Watts is required to maintain every one thousand inflation-adjusted 2005 dollars of historically accumulated economic production.

A lot of people get confused about this relationship though: to be clear, it is not about energy and yearly economic output or GDP. Plenty of people find a correlation there, but the ratio between the two has been increasing with time. The intercept is not zero.

Nor does the relationship refer to the more restrictive view of wealth as physical capital that can be found in traditional economic models. Instead, the constant relates current energy consumption to the summation of production, not just over one year — the quantity called GDP — but over all of time, what I refer to as Global Wealth.

Adjusting for inflation is key, in these calculations. Then, as shown in the figure above, this highly aggregated Wealth has a fixed relationship to current energy consumption, independent of the year that is considered. As of 2010, civilization was powered by about 17 trillion Watts of power. This energy consumption supported about 2352 trillion dollars of collective global wealth. In 1970,  civilization was younger and smaller. Both quantities were less than half as large (in fact, GDP was less than a third current values). In the interim, energy consumption and wealth grew in tandem, even at variable rates that increased slowly from 1.4% per year to 2.2% per year. At all times, the constant of proportionality stayed effectively the same, with a standard deviation of only 3%.

If one really wants to relate energy to GDP, then from the perspective above, the correct relationship is to consider year-to-year changes, that is the relationship between global GDP and the annual increase in global power capacity. Then, on average, adding every extra exajoule of global consumption capacity in a year enables 89 billion of year 2005 trillion USD of GDP. Variability is higher, but nonetheless the relationship is more or less fixed.

Why does this matter? Constants of proportionality are what provide a foundation for linking what initially seem to be two independent quantities (e.g. energy and frequency in quantum mechanics or energy and rest mass in relativity). Constants form the basis for all that follows. All other physical results are just math.

The constant of proportionality λ that relates civilization’s economic wealth to its rate of energy consumption has the potential to tell us not just where we are today but to dramatically simplify and constrain long-term estimates of where the global economy is headed. The constant ties economics to physics, so with physics, more robust economic forecasts become possible.

 

Group 2 — 12 Articles published on the University of Utah’s website

ABOUT Tim Garrett, 2016 http://www.inscc.utah.edu/~tgarrett/Economics/About.html

My professional career is as an atmospheric scientist, a field I entered as a means to apply a degree in physics to an area with more immediate societal relevance than chasing down the latest sub-atomic particle.  I have been a professor at the University of Utah since 2002. Most of my research has been focused on the complex interplay between aerosols, clouds, precipitation, radiation and climate, key ingredients in the of understanding climate change.

The pages on economics, energy, and climate described here grew from a fairly ordinary inquiry into what possible solutions might exist for what appeared to be the most pressing issues of the time, resource depletion and climate change. From a totally naive beginning, I also started to wonder about the origins of money and wealth. The two questions seemed linked since it was clear that the economy was the root cause of rising CO2 concentrations.

It seemed that all human activities had to be governed by the same fundamental thermodynamic laws as the climate system. In summer, 2006, there was a small “aha” moment for how economic currency and energy might be fundamentally linked.  Following some rather exciting moments putting the pieces together, eventually a little model was formed for global economic growth and carbon emissions. In February, 2007, the model was tested using real world data. These tests supported a hypothesis that global rates of energy consumption are tied through a constant value to the accumulation throughout history of a very general representation of global wealth: putting numbers to it, 7.1 Watts of primary energy consumption is required to support every one thousand year 2005 dollars of a historical accumulation of global civilization wealth, independent of the year considered.

I fully expected that this must be a well-known result in economics and that the model development was only for my own amusement and understanding. But surprisingly it seemed to be original. Plenty had compared to energy consumption to GDP but none surprisingly to the time integral of GDP. My later work applied the principles of non-equilibrium thermodynamics to economic forecasting, the relationship to environmental change, and possible negative impacts on future economic growth that might arise from current economic growth.

The work has often been criticized as naive or wrong, disrespectful to the economic tradition, and even nihilistic (I’m actually fairly cheerful), largely missing that the approach is intentionally far more holistic and general than normally considered in traditional economics. The primary goal of the work has been to obtain a deeper understanding of the coupled human-climate system acknowledging that human systems must be physical systems. We like any other complex system, exist and grow through a net convergence of material flows powered by a dissipation of potential energy. This necessarily makes the equations for economic growth rather different than what economists typically consider. Of course, if traditional economists prefer models that are divorced from these rules, I can perhaps see why: we are all a bit trapped by our training, including myself. But I think that if we are ever going to find solutions to the pressing global problems of the coming century, it is not going to be by pretending we can beat the laws of thermodynamics.

 

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On the Physics of Wealth 2014, http://www.inscc.utah.edu/~tgarrett/Economics/Physics_of_the_economy.html

What are the origins of wealth? 

Economics textbooks describe wealth, value, or capital, as a physical “stock”. The value of this stock is sustained by our collective beliefs. The economy is made of physical stuff whose value is ruled by competing forces of supply and demand. Through labor, stuff can be used by people to produce more stuff so that overall wealth grows.

At least on the face of it, this view of the economy makes a lot of sense. Economists have mathematical equations that express these ideas providing quantitative descriptions for how and why the economy grows.

Yet something still seems a bit unsatisfyingly magical about this approach. It doesn’t actually explain in any truly fundamental way why we would believe in the concept of economic value in the first place, especially one expressible in units of currency. The existence of a financial system is hardly obvious. It hasn’t always existed through history, even during periods where people certainly produced and consumed. And most of our lives (fortunately) doesn’t involve any exchange of currency. We are able to enjoy a good moment of each other’s company without having to pay for it.

The economy and the second law

A clue to the economic puzzle is that there are overarching principles that govern everything. Sure, financial wealth is a human quantity, but we are still part of the physical universe. No matter how rich we may be, we are all equal subjects of its universal rules.

Chief among these rules is the Second Law of Thermodynamics. Unfortunately, the Second Law has been expressed in many ways that are either wrong, strangely mystical, or maddeningly vague. Perhaps the most straightforward and easy perspective is to view the direction of time as an overall flow of matter from high to low potential energy density or pressure. The flow of matter redistributes potential energy to ever lower values. Drop something it falls. It was up, now it’s down; air flows from high to low gravitational potential or pressure to make the winds. Absent a renewed external input, the universe “runs down”. Easy.

What does this have to do with the economy? Well, everything. Consider that we cannot measure the size of anything, even the value of some economic stock, without a perception of a flow. Any signal we measure flows from a high potential source to some lower potential where it’s sensed. For example, if you pay attention to someone or something, perhaps to assess it’s value, what is physically happening is that your brain uses energy to process a light contrast that flows down a potential gradient to the sensors in your eyes.

Perhaps more easily, take the waterwheel in a mill. The mill consumes high potential energy in a flowing stream. The flow sustains all wheel circulations before the flow finishes its journey in the stream below where the potential energy is dissipated and lost. The ability of the mill to dissipate this energy, its size or its “stock”, is something we can estimate by looking at the size of the mill and noting how fast it circulates.

So how do we generalize these ideas to assess the size of the stock of our global economy? This might initially seem like an enormously difficult question to answer: There’s 7+ billion of us, our brains are so complicated, and the economy is so big.

That is until we recognize that the flow that sustains civilization circulations is the consumption and dissipation of high energy density “primary energy resources”. As a global organism, like these shipping vessels at an oil rig, our civilization collectively feeds on the energy in coal, oil, natural gas, uranium, hydroelectric power and renewables. Civilization continually consumes these resources to accomplish two things: the first is to propel all civilization’s internal “economic” circulations; the second is to incorporate raw materials into our structure in order to grow and maintain our current size against the ever present forces of dissipation and decay.

Energy, of all kinds, powers our machines, our telecommunications, modern agriculture, and the supply of the meals that give us the energy to sustain our thoughts, attention, and perceptions. Without energy, civilization would no longer be measurable. Everything would grind to a halt. Nothing would work. Lacking food, we would be dead and our attention span with it. The gradient that meaningfully distinguishes civilization from its environment would disappear. Value would vanish.

Thus, implicitly, our collective assessment of economic value reflects our combined estimation of an item’s capacity to facilitate global economic circulations through its connectivity with the rests of civilization. The more connected, the more something or someone facilitates dissipative flows, the more value that thing or person is.

Yes, some element of belief is involved here, or at least perception. But that’s the point. The key thing to recognize is that we ourselves are part of a much more general expression of global economic wealth than is traditionally assumed. Our brains require dissipative circulations as much as traffic circulations. Currency is just the psychological manifestation of an expression of value stated more physically in units of energy and time. Global circulations between and among us and our stuff are sustained by the rate of global primary energy consumption. Wealth is power.

Stepping back to see the world economy as a simple physical object, one where people are only part of a larger whole, would be a stretch for a traditional economist hung up on the idea that wealth must be restricted to physical capital rather than people. But, crucially, unlike traditional models, it is an idea that can be rigorously tested and potentially disproved. It is a hypothesis that is falsifiable. If the above is correct then we should expect to see that summing up the inflation-adjusted of GDP all nations, over the entirety of history, this very general expression of inflation-adjusted global economic wealth is tied to global primary energy consumption through a numerical constant, independent of the year that is considered.

I have shown in peer-reviewed studies published in Climatic ChangeEarth System Dynamics, and Earth’s Future that this simple hypothesis appears to hold true. The observed relationship between the current rate of energy consumption or power of civilization, and its total economic wealth (and not GDP), is a fixed constant of 7.1 ± 0.1 milliwatts per inflation-adjusted 2005 dollar.  Equivalently, every 2005 dollar requires 324 kiloJoules be consumed over a year to sustain its value. The log-linear plot below shows wealth in blue, energy consumption rates in red, and the value of the constant in green. In 2010, the global energy consumption rate of about 17 TW sustained about 2352 trillion 2005 dollars of global wealth. In 1970, both numbers were about half this. Both quantities have increased slowly from 1.4% per year to 2.2% per year averaging a growth rate of 1.90% /year.

The above shows a measure of global wealth (calculated from the historical accumulation of world economic production, inflation-adjusted) and energy consumption. On a log-linear plot, both are growing nearly linearly, i.e. approximately exponentially with respect to time on a lin-lin plot. The rate of growth (the slope of the curve) has gradually increased over time, but has been about 1.90 %/year on average. The ratio of the two quantities has stayed nearly constant over a time period when both wealth and energy consumption have more than doubled and the rates of growth have increased by about 50%.

Note that the comparison here is not between energy consumption and physical capital or the global gross domestic product (GDP), as has been erroneously claimed in published criticisms of this work. Physical capital is just one portion of total civilization generalized wealth . And GDP has units of currency per time where wealth has units of currency. GDP and generalized wealth are not at all the same thing. Mathematically, wealth is defined as the time integral, or historical accumulation of inflation-adjusted world economic production.

Physics of the GDP

Finding a constant that ties economics to physics has some rather far-reaching implications. Among these is that, at global scales, the real (inflation-adjusted) GDP is determined by how fast civilization consumption of energy is growing.

The product of the global GDP and same fixed constant of 7.1 ± 0.1 milliwatts per inflation-adjusted 2005 dollar is, on average, the growth rate of energy consumption. Over long timescales (perhaps a few years to a decade), what this means is that we must continue to grow our capacity to consume primary energy reserves just to sustain the existence of a positive real GDP. The GDP growth rate that is commonly quoted is then related to the acceleration of energy consumption, or the growth rate of the growth rate.

We should never conclude that economic growth can’t continue over coming decades, as some claim in perennial doomsday predictions. It’s just that there is nothing stronger than inertia to guarantee that it will. The water wheel in the picture above can rot or the river can dry. Atmospheric high pressures can dissolve into low pressures. For us, continued consumption growth may quite plausibly become too difficult due to depletion of energy and mineral reserves or accelerating environmental disasters, for example from accelerating carbon dioxide emissions. If this happens, all our efforts to produce growth can be expected to be more than offset by decay.

At some point, all systems experience decay and collapse. Nothing grows forever, despite what economists say. And there is no such thing as a steady-state, at least not for long. We’ve seen the waxing and waning of civilizations throughout history.

Historical studies suggest that any long-term decline in a society’s capacity to consume forebodes hyper-inflation, war, and population decline. The question for us should not be whether collapse will happen, but when, and whether it will be slow or sudden. Here, I believe that applications of physics take forecasts of our future away from fairy-land fantasies of “expert opinion” and into the realm of robust hypotheses that are physically constrained and can be as rigorously tested as forecasts of the weather or climate.

Long run evolution of the global economy: 1. Physical basisEarth’s Future doi:10.1002/2013EF000171

Long run evolution of the global economy: 2. Hindcasts of Innovation and GrowthEarth System Dynamics

 

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A definition of wealth 2014 http://www.inscc.utah.edu/~tgarrett/Economics/What_is_wealth.html

Civilization’s wealth in 2016 is 3,800 trillion US dollars. Adjusting for inflation, in 1980 it was about half this amount. How was this number obtained? It seems like an impossible thing to tally given the extraordinary complexity of our human world.

Very often people characterize wealth in terms of incomes, or at a national level in terms of the GDP. Incomes have units of currency per time, e.g. supposing someone earns $100,000 per year, this is the same as 0.3 cents per second. Wealth, however, has units of pure currency, e.g. a person’s net worth is $1000,000. It is more an expression of what we currently have, in some ways like the traditional economic concept of “physical capital”. Wealth and GDP do not have the units, so the two quantities can’t be compared or spoken about interchangeably.

This dimensional observation provides us a clue: integrating a quantity with units of currency per time over time yields a quantity with units of currency. The integral of global GDP over the entirety of history, adjusting for inflation through the GDP deflator, has units of Wealth.

Or, if integrals aren’t your cup of tea (which is fine), a clue might be to ask the question why is it that GDP is traditionally calculated for the period of one year as the summation of all production within that year? One year is a totally arbitrary length of time to be chosen. Perhaps it is easily relatable to crop cycles and government taxation systems, but nothing of obvious fundamental relevance. Wouldn’t it make just as much sense to do the summation of production for the entire preceding history of civilization? That would appear to yield a quantity more akin to our total accumulated wealth.

Economists would complain about an absence of consumption and decay in this definition. Please see a discussion of how these quantities are still implicitly addressed here. Regardless, As I have shown in the figure above, this admittedly unorthodox definition of wealth has the property of having a fixed relationship to civilization’s total rate of energy consumption; what we have accumulated we must maintain. Both energy consumption and Wealth have been growing at almost exactly the same rate. Between 1970 and the present, both wealth and energy consumption have more than doubled, growing at varying rates through out the years, but always maintain a fixed relationship. The implication is that every one thousand dollars of wealth, adjusting for inflation to the year 2005, has always corresponded to 7.1 +/- 0.1 Watts of energy consumption.

This property is rather remarkable. It’s not just that the quantities are correlated, which could mean anything, but that the ratio of the two quantities is fixed. It appears to link the economy to physics in a very fundamental way, saying essentially that they are the same thing: economic phenomena are physical phenomena. Whatever an economist might feel about the arrogance of physicists, this relationship is actually pretty useful as it allows for the use of physics as a basis for making economic forecasts, much like a weather model.

But there is also a great deal of subtlety to the result’s interpretation. It still remains to be expressed what exactly this definition of wealth actually is. 

Certainly wealth is not physical capital as in traditional economic models. That is far too restrictive since wealth should include things like our knowledge, culture, health, and personal relationships. No man is an island. We are so much more than our stuff.

Rather an interpretation of Wealth might more properly allow for the fact that civilization is part of the physical universe and must obey universal physical laws. Here the field of Thermodynamics gets especially useful since it aims to express physical laws in the most general fashion possible, the most encompassing of all being the Second Law. Most simply, the Second Law states that something always happens, and it happens by way of a material flow from high to low energy density (or if you prefer — which I don’t — increasing overall entropy).

One particularly beautiful expression of the fact that energy density always decreases (or entropy increases) is that nothing can be isolated: all of space and time are linked. Nothing happens spontaneously as all actions from the past have some influence on the present and future. Equally, no sub-component of the universe can be completely isolated from interactions with any part of the rest. It may take some time of course, but however remote or slow the interactions may be, all parts are connected to and interact with all others.

What about civilization? Applying the Second Law to us, we might make the statement that our collective Wealth is a representation of our international communications and trade, ourselves, our ideas, education and relationships, how they all form a vibrantly interacting and changing whole that is completely integrated with our transportation routes, communication networks, factories, buildings and databases.

With nothing isolated, all elements of civilization must work together. No matter how distant, no element of economic production can be viewed as being entirely separate from any other. We all compete for resources, and we are all part of a vibrant organism we call the global economy.

So, wealth is not in some inert “capital”. Instead, it lies in the relationships between civilization elements. No portion of real economic production simply “disappears” due to isolated “consumption” by humans (this subtraction of consumption is what is normally done when economists calculate physical (non-human) “capital”). Humans are inextricably linked to the rest of the organism’s overall structure. When we go to a movie we are sustaining and adding to that structure by maintain and building on the value of our collective cultural knowledge. When we eat a meal we sustain and create memories that encourage us to continue and build new eating experiences in the future.

And, just as all elements of civilization are directly or indirectly linked at any instant in time, all elements are linked throughout time as well. Power consumption that sustains us against dissipation and decay in the past, nurtures us forward so that we can continue to consume in the present. Money we expended to learn skills in the past allows us to produce more effectively today.

So, going back to the original expression that global wealth might be calculated then as simply a summation of past, inflation-adjusted production (or real GDP). The summation is over the entirety of human history and over all nations. This is what yield the result that civilization’s wealth in 2016 is 3,800 trillion US dollars. GDP grows the web. Wealth is the web. The web is what allows for energy dissipation that allows for the circulations within the web to survive.

The precise calculation methods for wealth are described in Appendix C in this paper:

Are there basic physical constraints on future anthropogenic emissions of carbon dioxide? 

and also here with associated statistics

Long run evolution of the global economy: 1. Physical basis Supporting Material

 

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Energy, innovation, and growth 2014 http://www.inscc.utah.edu/~tgarrett/Economics/Energy,_innovation_and_growth.html

Available statistics show that wealth, when it is integrated over the entire global economy, and integrated over the entire history of economic wealth production, has been related to the current rate of global primary energy consumption through a factor that has been effectively constant over nearly four decades of civilization growth. The implication is that aggregated civilization wealth and consumption has inertia, and therefore its current growth rate is unlikely to cease in a hurry.

Adjusting for inflation, the time for a generalized measure global wealth to double its rate of return (calculated as a decadal running mean), shown versus the rate of return for wealth itself. The numbers can be applied equally to energy consumption. Select years are shown for reference. 

Yet the global rate of return on wealth does change, even if slowly. Historical statistics shown in the figure above indicate that, over the past century or so, there has been a long term tendency for growing rates of return on global wealth. In the late 1800s, adjusting for inflation, rates of return for the total global economy were about 0.2% per year. Today, it’s about ten times higher: we double our collective wealth every 30 years or so. As a whole, the world is getting richer faster.

I use the word innovation to describe this acceleration of inflation-adjusted rates of return because it represents the capacity of civilization as a whole to beat mere inertia. Adjusting for inflation is important here, because it is not always evident that any investment in innovation will pay off. If investing in human creativity does not lead to true innovation, then it is a waste of effort. The investment could have otherwise contributed to maintaining previously attained rates of growth. But, real innovations provide a jump in rates of return that civilization can carry forward into the foreseeable future.

Globally, innovation has come in fits and starts. The figure above shows that innovation has had two golden periods over the past two centuries. The first was during the Gilded Age or “Belle Epoque” of the late 1800s and early 1900s, when resource expansion and technological discoveries allowed the rate of return to double in just 40 years. Then again, in the baby boom period between 1950 and 1970, the rate of return doubled in the remarkably short timespan of just 20 years.

By contrast, both the 1930s and the past decade have been characterized by much more gradual inflation-adjusted innovation rates. Even though wealth is now doubling more quickly than ever before in history, for the first time since the Great Depression the rate of return is no longer increasing.

Why has the passage of history been characterized by economic “fronts” on global scales, with rapid innovation giving ultimately giving way to stagnation?

Here again, physical principles can provide guidance. Given that inflation-adjusted wealth and energy consumption appear to be linked through a constant, the identical question is asking what enables energy consumption to accelerate.

Conservation laws from thermodynamics tell us that rates of innovation and growth should be largely controlled by the balance between how fast civilization discovers new energy reserves and how fast it depletes them. For example, it is easy to imagine that access to important new coal reserves in the late 1800s and new oil reserves around 1950 allowed civilization to capitalize on human creativity in ways that were previously impossible.

Today, we continue to discover new energy reserves, but perhaps not sufficiently quickly. We are now very large and we are depleting our reserves at the most rapid rate yet, just barely keeping pace with discoveries. Increased competition for resources may be constraining our capacity to turn our creativity and knowledge into real innovation and accelerated global economic growth.

 

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Inertia and the growth of civilization 2016 http://www.inscc.utah.edu/~tgarrett/Economics/Economic_inertia.html

For questions related to climate change or the long-term value of financial accounts, a link between economics and physics means that we can anticipate inertia in global consumption and economic growth. Our current consumption and wealth are inextricably tied to past production, where the past is unchangeable. Absent some sort of severe external shock (e.g. a meteorite), near-term reductions in energy consumption and wealth are implausible because they would somehow require civilization to “forget” its past.

Assuming that economic consumption and growth will persist in the near term may seem rather obvious to some. But what may be less well recognized is that there are mathematical and physical constraints to growth. For those who study the evolution of physical systems, a term that is often used here is “reddening”. This is a convenient way of expressing that large systems have accumulated a large amount inertia; or, the most slowly varying, low frequency and “red” (rather than blue) components of past variability in a system are the ones that most strongly influence its present behavior.

Predicting the weather next week can be almost impossible. But forecasting northern hemisphere average temperatures this coming winter is actually quite easy: history is an excellent guide. 20 years of growth through childhood and adolescence tends to have a greater influence on our daily food consumption than how much we ate yesterday. It is very difficult to predict a small company’s stock value next week; but extrapolating trends in globally-aggregated wealth can plausibly be done for as much as a decade hence. Surprises can happen, of course. Still, the natural tendency for growth is that it is predictably slow and steady.

The global economy’s current capacity to consume and grow has evolved from thousands of years of human development, through the creation of subsequent generations, as well as the construction of farms, towns, communication networks and machines. While everything does slowly decay or die, the past can never be entirely erased. Even our most distant ancestors have played a role in our current economic and social well-being. By now, civilization has enjoyed a rather lengthy past, and we can count on this accumulated inertia to carry us into the future.

Certainly, individual countries will continue to rise and fall, but globally aggregated economic wealth, defined as the accumulated inflation-adjusted GDP over all time and countries, should continue to enjoy recent inflation-adjusted rates of return for the next couple of decades. Even in 2009, during the depths of the Great Recession, 2.14% was added to total real generalized global wealth, only slightly down from the historical high of 2.26% in 2007. And we continue to grow our power production at similar rates. It is probably a safe bet to assume that similarly high rates of return will persist for some time. The mechanisms we put in place through centuries of innovation are unlikely to disappear in a hurry.

While we always need to be careful, persistence in trends is a highly effective tool for forecasting, particularly for highly “reddened” systems that are highly aggregated over time and space. It is always easier to make forecasts provided that we are willing to sacrifice temporal and spatial resolution.

The discouraging aspect to this is that global generalized wealth and energy consumption are linked through a fixed constant of 7.1 ± 0.1 milliwatts per inflation-adjusted 2005 dollar. If wealth grows at 2.2%/yr, i.e. with a doubling time of about 30 years, then we can expect our global energy demands to double over that time too. And given that inertia applies to our mix of energy needs as well, it is hard to see how our carbon dioxide emissions will not also do something close to a doubling over the same time period.

Naturally, the details dynamics of growth are more complicated than pure inertia, but the broad-brush aspects are probably not, at least not in a “near-term” of a couple of decades. Eventually carbon dioxide emissions and resource depletion will catch up with us, but my expectation is that globally aggregated economic growth will continue to persist for a few decades yet before the burden of our waste products and resource depletion becomes to great.

 

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Physics based economic forecasting and hindcasting 2014 http://www.inscc.utah.edu/~tgarrett/Economics/Economic_Forecasting.html

  1. Long run evolution of the global economy: 2. Hindcasts of Innovation and Growth

One of the more challenging problems in physics is the evolution of complex systems. Atmospheric scientists study phenomena ranging in scale from those of molecules to the size of the planet, and struggle with integrating the full gamut of interacting forces into a usefully comprehensive whole.

The world’s economy could easily be another example where individual actions become intertwined with global trade agreements. These economic forces may seem uniquely human, but it must be acknowledged that they are also part of the physical universe. Many of us would like to know where the economy is headed so perhaps the many well-established tools from physics could be used for addressing such problems. These forecasting tools are developed most fully in the geosciences where predictions are a major component of forecasting earthquakes, wind, and tides. Can we apply these tools to determine our financial future?

For illustration, consider this beautiful woodcut. We might ask ourselves which way is the boat going? Up or down? The artist Hokusai conveys the sense that the oarsmen in the foreground are moving upward towards the crest of a wave. But really, we cannot know because all we see is a snapshot in time.

The first thing we might wish to ask the artist is where the boat was a few moments earlier. Then, assuming the boat has inertia, we might sensibly suppose that the boat continues its current upward or downward trend. As a means for making a forecast of the boat’s position, we might call this technique “Persistence in Trends”. We might feel confident that such a forecast does better than assuming a model of mere “Persistence” that does not have the boat not move at all.

Going further, we would probably want to have a model for the physics of an ocean wave. We all have some intuitive sense that waves go up and down with a period and an amplitude, and that really big waves can break. With a background in ocean physics we might even be able to go further to make some fairly accurate predictions. Important things to know would be the amount of existing energy in the wave, the rate at which energy is being supplied to the wave, and the nature of the forces that pull the wave down.

Economic hindcasts and Skill Scores

With an understanding of the physical forces governing the economy we can to do something similar. Being able to predict how economic systems respond to external forces offers the possibility of making robust, physically constrained economic forecasts. A way to test any prognostic model framework is to perform what in meteorological forecasting is called “hindcasts”: How well can a deterministic model predict present conditions initialized with the conditions observed at some point in the past?

Model accuracy is evaluated using a “Skill Score”, which expresses how well the model hindcast reproduces current conditions relative to some Reference Model that requires zero skill. In the Hokusai woodblock, a zero skill Reference Model of “Persistence” would assume the boat stays still; “Persistence in Trends” would assume the boat continues on its existing trajectory. A model based on ocean physics would hopefully beat either of these simple models to exhibit “positive skill”. The Skill Score would be

Skill Score = [1 – (Error of the hindcast)/(Error of the Reference model)]x100%

If a physics-based model does no better than the reference at predicting the present, then the Skill Score is zero percent. If it does perfectly, then the Skill Score is 100%.

Hindcasts of civilization growth

I have applied these techniques to evaluate a new economic growth model for the long-run evolution of civilization. The model approaches the global economy rather like an organism, where civilization’s growth rate is determined by its past well-being, environmental predation, whether it eats all its food, and whether it is able to move on to discover new food sources. For civilization, food is things like oil and iron. These are things we deplete but can also use to discover new reservoirs, if they exist. Our ability to discover these reservoirs might easily be impeded by natural disasters, such as those we might experience from CO2 induced climate change. The model provides deterministic expressions for civilization’s rates of economic growth and energy consumption that are rooted in what is some fairly straight-forward physics (though admittedly it took a few years to sort it all out).

Input parameters to the model are the current rate of growth of global energy consumption and wealth η (what is termed the “rate of return”), and a rate of technological change that can be derived from, among other things, past observations of inflation and raw material consumption. Output parameters include the rate of return on wealth and primary energy consumption, how fast this rate is growing (or what is termed the “innovation rate”), and the world GDP growth rate (or GWP).

Gray lines: Fully prognostic model hindcasts initialized in 1960 for the global rate of return on wealth, economic innovation rates, and the GWP growth rate. Hindcasts are derived assuming an average rate of technological change of 5.1%/yr (dashed lines) derived from conditions observed in the 1950s.  Solid colored lines: Observed decadal running means. The model reproduces observations with skill scores > 90%. 

As shown in the figure above, a first principles physics-based model initialized in 1960, based only on observations available in the 1950s, does remarkably well at hindcasting evolution through the present. For example, average rates of energy consumption growth in the past decade would have been forecast to be 2.3 % per year relative to an observed average of 2.4 % per year. Relative to a persistence prediction of the 1.0% per year growth rate observed in the 1950s, the Skill Score is 96%.

Or, using the same model, a forecast of the GWP growth rate for 2000 to 2010 based on data from 1950 to 1960 would have been 2.8% per year compared to the actual observed rate of 2.6% per year. The persistence forecast based on the 1950 to 1960 period is 4.0% per year, so the skill score is 91%.

No other economic model I am aware of is capable of such accuracy, at least not without cheating by tuning the model to data between 1960 and 2010. How is it then that the physics-based model does so well at predicting the present based only on conditions 50 years ago? Well, the obvious answer might be that humanity acts as a physical system and the model at least has the correct physics. But it helps too that the model was initialized in the mid-twentieth century when civilization was responding to an exceptionally strong impulse of fossil fuel discovery. The figure above shows that between 1950 and 1970, remaining reserves of oil and natural gas doubled because discoveries outpaced depletion. Since, discovery and depletion have been in approximate balance; remaining reserves have been more or less stable.

It was as if civilization suddenly found itself at a restaurant buffet in 1950. Each time it visited the table it discovered new plates of delicious energy to consume, and its appetite increased apace. At some point around 1970, however, its appetite increased to the point that it discovered new food not much faster than it consumed the food that was already there. The amount of known food on the table stayed stable.

New discoveries matter, just not as much as showing up at the buffet in the first place. Finding the buffet was far more innovative than merely going back to the table, and it had a correspondingly large and lasting impact on economic growth.

That there was a remarkable discovery event between 1950 to 1970 period makes numerical modeling more straight-forward. What followed was a clear physical response to a strong prior forcing. I think this is why the hindcasts described here have such high Skill Scores.

Forecasting the future should be possible, but it will probably be more of a challenge than hindcasting the past 50 years…unless, once again there is a new wave of massive energy reserve discovery. Discovery would have to outpace growing demand if it is to propel civilization to a renewed phase of accelerated innovation and growth that is easily forecast using deterministic equations based on physics.

 

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Does physics succeed where mainstream economic growth models fail? 2014 http://www.inscc.utah.edu/~tgarrett/Economics/Physics_vs._Mainstream_Economics.html

Using physics as the basis for an economic model provides profound advantages to mainstream macroeconomic growth models. It allows for falsifiable hypothesis testing; it does not rely on mere opinion; and offers the potential for long-range forecasts of the global economy. On the other hand, it’s certainly not what most economists do. So, perhaps can the two approaches be reconciled? It would be nice to think so. Unfortunately, I don’t think this is possible without some simple but important adjustments.

Mainstream economic models take the approach that we should separate humans and their short-term “consumption” of things like food and entertainment from long-term “investments” in physical capital.

In a physics-based model on the other hand people are not all that special, at least there’s nothing in the fundamental equations of physics that says “people”. So it makes most sense to subsume people into a very general physical representation of worth, capital, or wealth that includes all components of civilization. After all, we are just sacks of matter that enable electrical and fluid flows down potential gradients; and it sure has been hard for neuroscientists to find any evidence for free will; so perhaps people are really no different than any other physical component of civilization, acting as conduits for energetic and material flows just like communications networks or roads.

Not treating people as special might seem strange at first, but let’s go with the possibility that our egocentrism doesn’t really matter. Then, the consumption/investment dichotomy of traditional models disappears. Everything that lasts, including us, is an investment in the future. Equally, everything to last must consume resources to be maintained.

The model I’ve introduced in these pages is based on the very simple premise that global economic worth, including us, must be sustained by a proportionate amount of global primary energy consumption. Turn off all the power and civilization is worth nothing; more wealth requires more power. In principle, this hypothesis can be disproven in which case the model would be wrong. Yet it turns out it is strongly supported by the data: 7.1 ± 0.1 milliwatts of continuous power consumption are required to sustain the worth associated with every inflation-adjusted 2005 dollar.

Traditional macroeconomic models lack such falsifiability. They employ equations for the GDP, or “production functions”, that are dimensionally inconsistent formulae that can be “tuned” to match observations of labor and capital. And they always are. It is not possible to falsify these moving theoretical targets because they can always be made “right” by adding layers of social complexity or by tweaking the production function exponents. If conditions change and the formula no longer works, economists just tune again and call it a “structural break”! This is crazy, at least if the goal is understanding how things work. It would be abhorrent to imagine a basic physics equation being adjusted as time progresses or for the situation at hand. The speed of light in a vacuum doesn’t get to be different for you than for me or for last year versus this year.

Consumption versus production

Still, don’t economists have a point that consumption is a key element of the economy? From an accounting point of view it makes a lot of sense to selectively subtract household and government consumption from economic output (or GDP) to obtain a capital investment that adds to previously accumulated capital. Capital investments are then independent and additive; it is assumed that the whole is the sum of its parts. If saving an ounce of gold adds $1000 then it seems obvious that saving two ounces adds $2000.

But a little added thought suggests it’s not quite so straight-forward. Neither labor nor physical capital means anything without the other. “No man is an island, Entire of itself. Each is a piece of the continent, A part of the main…” An ounce of gold has no intrinsic worth (it’s just a rock), but it acquires value by acting as a part of society. Physically, it facilitates society’s global energy consumption through banking system networks, which in turn are maintained by the accumulated knowledge capital of bankers, all of which require primary energy to be sustained, either by feeding the bankers or by powering electronic transactions. If the ounce of gold was left abandoned and forgotten in the middle of the desert it would currently be worthless. It only has value as part of a larger energy consuming society.

And if everyone else tried to sell their gold for $1000, the value per ounce would fall, including the ounce you kept . Value, therefore, does not lie in individual “things” or people by themselves. True value lies in a larger global network and the role we and our structures play in it. Physiological, social, computer, communication, and transportation networks are all part of the living organism we call civilization. Capital value is not strictly additive because no element is completely independent of any other.

To better understand consumption by the whole, and its relationship to the economy, it helps to think of a subsistence society at near steady-state where nothing can be stored for the future: food rots quickly; the society maintains a more-or-less fixed population; and in its purest form there is no currency and no GDP. Even though the society has to consume food, the consumption is not part of any measurable economic output.

I have personally experienced something like a subsistence society working as a Science and Physics teacher for a couple years in the beautiful, remote tropical South Pacific island group of Ha’apai, Tonga. Even though there was a little money to go around for luxury items, it was almost totally impossible to buy traditional foods like coconuts, taro, and octopus that anyone could access. Only revolting imported “specialties” like canned beef and mutton flaps were readily found in small shops. Any given root crop was more or less available from whomever had it; everyone except a handful of foreigners had direct or indirect access to a fixed, finite quantity of fertile land where they could grow throughout the year — if you didn’t have a yam, get your own or ask. The local mantra was “Ha’apai is good; food is free”.

Matters are different in an expanding civilization where products can be acquired and stored for the future. Food is treated quite differently as it is a real commodity — in most homes we have a fridge, freezer, and larder. Owning money gives us a right to buy access to something, whether a house or a tasty sandwich. We tend to like sandwiches, and buying access to a sandwich is an investment in our well-being. It offers the future potential to be content, better able to interact with others, and more productive in our jobs. Crucially, over time, this productivity even enables us to gradually desire and afford even nicer sandwiches. Each purchase is a means by which we and our Western civilization can grow.

Nothing about this purchase of food is “consumed” in a way that becomes totally lost to the past as expressed in standard economic models. In a growing civilization, food acquisition is an investment in an access right, even if it lasts only the seconds it takes to transfer the sandwich from the deli owner to our mouths. Over longer times, food sustains us as human capital and motivates us towards further engagement with the rest of civilization.

Thus, the instant of monetary exchange represents an investment in a future privilege that gets tallied in the GDP and gets tallied in our wealth: the wonderfully consumptive process of actually eating the energy and raw materials in the bread, mayo, lettuce, ham and cheese is not actually part of the GDP since it happens at a later stage than the point of financial transaction. And long after we eat, the sandwich adds to and sustains our personal wealth, both by providing fuel for our bodies and by providing a lingering memory of sublime satisfaction that spurs future purchases to come.

Viewed more generally for civilization as a whole, all financial transactions that count in the GDP are really just monetary expressions of small, instantaneous increments in the growth of civilization’s networks of connection and access. For totally arbitrary accounting purposes, the GDP is usually tallied over an arbitrary interval of one year. After adjusting for inflation and depreciation (and these turn out to be linked), all aspects of the real GDP add to overall capital. Total capital wealth (units currency) is just the summation of these increments approximated in chunks of annual, real GDP (units currency), and tallied since the beginnings of history. More strictly, capital wealth (units currency) is the time integral of every little differential increment in productivity (units currency per time).  Even the most ancient inflation-adjusted economic production has to some degree sustained us through to our activities today. Subsistence cavemen did nothing for our wealth today — we should expect the GDP was zero. But growing cavemen societies, if they persisted, did.

And if one takes this approach, it leads to the rather wonderful result that 7.1 ± 0.1 milliwatts of continuous power consumption is required to sustain the worth associated with every inflation-adjusted 2005 dollar of civilization, year after year after year. Simply put, consumption of energy and raw materials sustains all of civilization’s previously accumulated value as calculated by the summation of all prior economic production adjusted for inflation. This value or wealth must be sustained by a proportionate amount of energy consumption.

 

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Is macroeconomics a science? 2014 http://www.inscc.utah.edu/~tgarrett/Economics/Is_Macroeconomics_a_science.html

Scientific models must be falsifiable

Being able to falsify a result lies at the core of the scientific method. It must be possible to set up a test that could lead to a model being discarded. A good model should contain a single or simple set of highly explanatory equations. At a bare minimum the equations should be dimensionally self-consistent, i.e. they have the same dimensions or units on either side of the equals sign.

The physics-based model I have described here is based on a proposed constant relationship between energy consumption rates and a very general representation of total inflation-adjusted wealth. If this relationship does not hold to within observational uncertainty, then the model can be dismissed as being flat-out wrong and we can then go off to try to do something better. All we should really care about is figuring out how things work. No point in pursuing something false.

Of course, it does look like the relationship is constant, but the point is that the hypothesis could, in principle, be invalidated. Further evaluation of the model can be done by performing hindcasts, asking whether we predict the present with a deterministic model that is initialized at some point in the past. Again, in this case it appears we can: current global rates of energy consumption growth and GWP growth can be accurately predicted based on conditions observed in the 1950s, without appealing to any observations in the interim, with skill scores >90%.

Strangely, such rigorous evaluation appears alien to traditional macroeconomics. I can find no evidence of tests of whether the models can perform true hindcasts. This is probably because, in fact, no test could be devised that would definitively show whether or not these models actually describe anything fundamental about how the economy works. Even where they reproduce the past, they are tuned to the past with no obvious applicability to a future where the tuning constants might change.

At an even more basic level, traditional economic models use production functions that use totally nonsense units. Take for example the basic Cobb-Douglas production function used by economists as a starting point for relating economic production Y to labor L and capital K. The quantity A is a “total factor productivity” that has been thought to be related to innovation.

Here the parameters and α are tuned to past data. There is nothing fundamental about the quantity α since it is just a number. It can have any value depending on the statistical fit, the country, or the period considered. Suppose α = 0.3. If A is just a number, labor has units of worker hours, and capital units of dollars, then Y has the absurd units of worker hours to the 0.3 power and dollars to the  0.7 power. Of course economic output should have units of dollars per time.

In economic studies, when the inelegant Cobb-Douglas function (or whatever is used as a replacement) doesn’t work well for whatever reason, the approach is not to ask whether or not something might be fundamentally wrong about the premise behind the fit, but rather to add ever more bells and whistles until once again a sufficient fit is obtained, totally independent of any consideration of dimensional self-consistency. For example, maybe a constant exponent α doesn’t provide a good fit unless is allowed to change too according some equally complex function. Sometimes this function is attributed to government stimulus of R&D.

But to successfully achieve a fit, really could be anything! With a sufficiently complex function one could fit the historical population of rodents under Wall Street to A  in such a manner that the Cobb-Douglas function once again reproduces timelines of Y.

Why such absurdity? Making things ever more mathematically complex does not make things more true, if anything less so. It feels akin to astrology, a highly complex, self-consistent model based on un-physical nonsense. Totally convincing to those who are looking to believe that the world has order and explanation, and that they alone have the years of training required to understand it, but completely lacking in any means for falsifiability.

Perhaps, this is too harsh — everybody is trying their best — but it looks like fluency in Latin in the Catholic Church, where established macro-economists need something sufficiently opaque in order to maintain their high-priesthood. More generously, economics is complicated and economists just don’t yet know yet how to describe it without such detailed fits; even in physics, similar fits are occasionally used to describe interactions of particles with turbulence, for example, simply because the underlying physics can be rather challenging.

But, in any situation, a useful first step to solving a seemingly complicated problem can be to step back to look at the larger whole. The physics model for the global economy that I have developed offers a simple, straightforward, and most importantly, falsifiable expression for economic production. Instead of the flexible complexity of the Cobb-Douglas production function or its cousins, the replacement is where the link to the past is given by a growth rate, always adjusting economic production for inflation:

Here, is the global rate of primary energy consumption (units Watts), η is a variable growth rate (units per time) and λ is a constant 7.1 Watts per $1000 inflation-adjusted to year 2005. The units work out, and there is nothing to tune. λ is either a constant or it isn’t. The rest of the parameters are measurable. Output has units of real dollars per time. There are no bells and whistles. It is a model that can be easily tested and discarded. Economic output is determined by the amount of energy consumed and a variable coefficient η that can be shown to be determined by the energy efficiency of converting energy consumption to work.

It might seem a bit dehumanizing to have an expression for the economy that doesn’t have a labor term L  that explicitly mentions people. It would be nice to think that human agency has a little more power at altering its collective future than an amoeba in a petrie dish. But maybe not. Hopefully, at least, there is some value to understanding the forces that control our future. It is only by understanding our current state that we can understand the future for us and our children. We will not escape this century’s ecological and economic dilemmas by furthering fairy tales as solutions.

 

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The global economy as a heat engine 2014 http://www.inscc.utah.edu/~tgarrett/Economics/The_economic_heat_engine.html

Modelling civilization as ‘heat engine’ could improve climate predictions – physicsworld.com  Nov 27, 2008

Civilization is a heat engine. How? We as humanity consume energy and dissipate waste heat to sustain our internal circulations like the pistons in the internal combustion engine of car.

But we are a very special kind of heat engine rather different than the type envisioned by French engineers in the early 1800s.

In a car, energy is used to keep the engine moving and to do work to propel the car forward. Civilization also uses energy to keep it moving and to do work. But unlike a car, civilization can grow. By growing, its engine expands. A larger engine consumes more, dissipates more, and does work ever faster. This positive feedback provides a recipe for exponential growth.

Perhaps the most fundamental expression of the Second Law of Thermodynamics is that all systems are thermodynamically open, or more to the point, no system is perfectly isolated. All systems have flows in from where they have a high potential to do work, and they have flows out to a lower potential, like cascading pools in a waterfall.

High potential primary energy resources like oil and coal sustain civilization’s circulations against dissipation of waste heat. ‘Useless’ energy ultimately flows to space through the cold planetary blackbody temperature of 255 K. In between lies civilization, including people, their activities, and all their associated circulations, whether or not they are part of the GDP.

Thermodynamic representation of an open system with constant back-and-forth “reversible” internal circulations that have a constant potential and a characteristic period τcirc. Steady-state circulations shown on the left are sustained by a dissipation of a potential energy source that heats the system. The system maintains a steady state because high potential energy (blue) and matter (green) is consumed by the open system at the same rate the energy is dissipated leaving behind material waste. The right-hand diagram shows an open system that is out of balance, with more flowing into the system than out of the system. Here, the system grows irreversibly with time scale τgrowth τcirc. 

In an economic system, the steady state circulations are associated with Wealth and the growth of these circulations is associated with the real GDP. The real GDP is positive only when consumption exceeds dissipation and material diffusion exceeds decay. Otherwise, we might expect unemployment, war, and hyper-inflation while civilization collapses.

Civilization uses energy consumption mostly to sustain existing circulations. A small fraction is also used to grow civilization through an incorporation of new raw materials (e.g. iron and wood) into its structure. This is possible only if the consumptive flow into civilization is greater than the dissipative flow out of civilization. In the case of a net convergence of flows, a small remaining fraction of energy is available to incorporate raw materials to build civilization. Only then does the GDP exist and is it possible to grow civilization’s value through positive economic production.

We’re actually pretty familiar with this. If we eat too much we get fat. I’m told that consuming an extra 3500 calories beyond what we need leads to a pound of weight gain. This is the energy required for the body to turn food into flesh.

A child consumes food today in some proportion to the child’s body mass. The child experiences a production of mass if there is a convergence of energetic flows such that it dissipates less heat than is contained in the food energy eaten. The child’s current size is directly a consequence of an accumulation of prior mass production. Its current rate of food consumption is also a consequence of prior production so the child eats more as it grows. As the child approaches adulthood, the disequilibrium between consumption and dissipation narrows, and the production of new mass (hopefully!) stalls.

In traditional macroeconomics, consumption is subtracted from production to obtain an investment that adds to total value. From a heat engine perspective, this isn’t quite the right way to describe the economy. Mathematically speaking, consumption and production are orthogonal because, although they may be related, they don’t happen at precisely the same time. At any given instant, subtracting one from the other is as nonsensical as subtracting the x co-ordinate from the y co-ordinate on a Cartesian plane.

Instead, production is better viewed as the consequence of an imbalance: production is positive only when primary energy consumption is greater than the rate at which civilization dissipates energy due to all it’s internal circulations. If production is positive, civilization is able to incorporate raw materials into its structure that allow it to grow to potentially (though not certainly) consume even more.

The relevant equation is that every 1000 dollars of year 2005 inflation-adjusted gross world product requires 7.1 additional Watts of power capacity to be added, independent of the year that is considered. If we ever fail to add consumption capacity, the global economy measurable by a GWP collapses.

 

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GDP is not Wealth 2014 http://www.inscc.utah.edu/~tgarrett/Economics/GDP_is_not_Wealth.html

These pages argue for there exists a fixed relationship between energy and wealth, that there is a constant number that ties global rates of energy consumption and the time integral of inflation-adjusted economic production, a sum across all nations and a sum across all years since the beginnings of civilization.  The motivation for calculating Wealth I have is outlined here and in the supporting material for this article:

  1. Long run evolution of the global economy: 1. Physical basis Supporting Material, Earth’s Future doi:10.1002/2013EF000171

The time integral of real GDP is a totally different quantity from GDP, I call it Wealth simply because it has units of currency rather than currency per time, recognizing that traditional economic models have a more restrictive terminology of wealth based purely on physical capital. Call it something different if you prefer. The important thing is that the annual GDP may appear to have units of dollars, but this is only because it is the accumulated production over an arbitrarily defined period of one year. The generalized wealth described here, on the other hand, is the accumulated production over all of civilization’s history, where annual real GDP can be best understood as the yearly averaged inflation-adjusted addition to wealth.

Expressed in the terms of calculus, production is the derivative with respect to time of wealth, or wealth is the time integral of production. Time integrals and their derivatives are as independent as speed and acceleration. At any given time, they are unrelated. This is (or at least should be) clear whether traditional equations are used or the substitute I’ve proposed. Still, I have have consistently heard economists talk about time integrals of quantities and the quantities themselves as if they were effectively the same thing, or at least linearly related. This is very, very wrong, or at least only right for the very special case of constant exponential growth or decay

For example, the following peer-reviewed paper introduced a physics based economics model that defined wealth very generally as the totality of civilization, including people, and provided theoretical and empirical arguments showing that wealth is tied to civilization’s rate of energy consumption.

Garrett, T. J., 2011 Are there basic physical constraints on future anthropogenic emissions of carbon dioxide?   Climatic Change 104, 437-455,  doi:10.1007/s10584-009-9717-9

Two commentaries accompanied the above article in the journal Climatic Change, both solicited by the chief editors Michael Oppenheimer and Gary Yohe. These critiques were not peer reviewed. From Is accurate forecasting of economic systems possible?  by Irene Scher and Jonathan Koomey

  1. “Believers in an unbreakable link between energy use and GDP assigned the immutability of physical law to this historical relationship (just like Garrett does) but found their belief shattered by events”

From Psychohistory revisited: fundamental issues in forecasting climate futures by Danny Cullenward,  Lee Schipper, Anant Sudarshan and Richard Howarth

“Essentially, Garrett is saying that there is a fixed ratio of energy inputs to economic outputs, and that all plausible visions of the future will follow this relationship. This perception is sorely mistaken on both theoretical and empirical grounds.”

“Indeed, the trend we observe in the data—a declining energy/GDP ratio—would seem to be the counterargument to Garrett’s model formulation”

“…the evidence to date shows that the global E/GDP ratio has been steadily declining over the last 40 years; the available data do not support the theory that the ratio has been constant.”

To show why these statements are so strange, the article I wrote is based on the relationship of energy consumption to wealth being fixed while it makes quite detailed arguments that the energy/GDP ratio is changing and explores reasons for why. Even the abstract states that energy productivity varies with time, where it is defined as the ratio of GDP to energy consumption. Figures showing evolution of this or a thermodynamically related quantity are shown in Figures  3, 4, and 5 (see the green line on the right below). There, and in Table 1, the rate of change is explicitly given as about 1% per year, which bizarrely is the same trend Cullenward et al. argued for in their effort to dismiss my article. Section 6 is almost entirely devoted to a detailed discussion of how the ratio changes, and the article conclusion states “For predictions over the longer term, what is required is thermodynamically based models for how rates of energy efficiency evolve.”

To recap: global wealth and GDP are not the same thing. One is the time integral of the other. They do not have the same relationship to energy consumption at global scales. Even in a hypothetical situation where inflation-adjusted global GDP were declining, wealth would still increase. Things would still be produced (hence the P in GDP). Since production adds, even if it is at a low rate, wealth would still grow. Even where the ratio of energy consumption to GDP is declining, the ratio of energy consumption to wealth remains a constant. Evidence for one is cannot be used as counter-evidence to the other.

 

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Is population growth a problem? 2018 http://www.inscc.utah.edu/~tgarrett/Economics/Is_population_growth_a_problem.html

It seems so easy to blame excess population for our planet’s woes. It could hardly appear more straightforward: people consume resources; more people means more consumption; if we have any prayer of reducing our collective damages to the environment, we must make fewer babies.

There’s a well-known equation first devised in 1970 by John Holdren and Paul Ehrlich called the IPAT identity:

Impact = Population x Affluence x Technology

The environmental impact of society is proportional to our population, our GDP per person (affluence), and the environmental damages per unit of GDP (technology).

On the face of it, the IPAT identity is totally clear, and dimensionally irrefutable. An increasingly affluent and growing population is going to have an increasing impact on its environment.

A step further is the Kaya Identity, which looks specifically at the impact from carbon dioxide emissions, and breaks down Technology into two components: energy efficiency measured as annual energy consumption per annual GDP and carbon intensity measured as CO2 emissions per Energy:

CO2 Emissions = Population x (GDP/Population) x (Energy/GDP) x (CO2/Energy)

Again, at least on the face of it, nothing is wrong with this expression. Modifying any of population, affluence, energy efficiency and carbon intensity, will allow us to help the environment: we can maintain our affluence and reduce carbon dioxide emissions provided that we invest in energy efficiency, switch to renewables, and support birth control.

What’s not to like? Certainly, countless politicians and scientists have argued that with sufficient political will, we can accomplish these combined goals to save our planet while supporting our economy.

The devil is that the Kaya and IPAT identities are constructed so that affluence, energy efficiency and population can be seen as being largely independent of one another, making it seem possible to tweak one without affecting the other.

In fact, each of the ingredients of the Kaya and IPAT identities can be better seen as symptoms not causes. One perspective is that, broadly put, civilization is a heat engine. What this means is that all of the internal circulations defining what we do in civilization are driven by a consumption of energy, mostly fossil, and a dissipation of waste heat, including carbon dioxide as a by-product. From this perspective, only about 1/20th of the total caloric consumption by civilization as a whole is due to the caloric consumption of people themselves. The remainder is used to support the appetites of everything else, like the energy required for industry, transportation, and communications. Globally averaged, people have each about 20 energy slaves working around the clock to help them accomplish all of civilization’s tasks.

People themselves are a relatively small proportion of the world’s total resource consumption. Imagine someone visiting Earth for the first time, knowing nothing ahead of time about the planet or its inhabitants. The visitor would witness all the marvelous phenomena of the earth, atmosphere and oceans. Maybe they would even have a special sensor they use to detect massive plumes of heat, particulates, carbon monoxide and carbon dioxide emitted into the atmosphere from all over the planet, some from small stationary sources and others moving quickly across the oceans and land. Almost all would come from objects made of steel. The visitor would probably fail to perceive people and conclude they are insignificant relative to civilization’s machinery.

You as a staunchly proud human might tell the visitor that they are missing important context. It’s people who are running the machines not the other way round, and that the measured environmental impacts are proportional to population.

This is largely a matter of perspective, however. It is based on a belief that people are independent drivers of environmental impacts, that make and grow babies independent of environmental conditions, and affect the environment proportionately.

As a counterweight to this perspective, in an article I wrote in 2009, I presented an alternative to the IPAT identity. Using some physics to derive Eq. 12, it was shown that:

Population growth rate + Affluence growth rate = λ x Energy efficiency + Energy Efficiency growth rate

Where the symbol λ had a constant value of 0.22 exajoules per year per year 2005 trillion USD. For example, for the period 1970 to 2015, plugging numbers into the equation gives the following for the annual growth rate of each of the terms:

1.5% + 1.5% = 0.22 x 0.089 x 100% + 1.0%

where the value 0.089 has units of inflation-adjusted year 2005 trillion USD per exajoule. Simplifying:

1.5% + 1.5% = 2.0% + 1.0%

or,

3.0%  = 3.0%

 

Both sides of the equation add up to 3.0% per year. This is pretty cool. A simple equation for the growth of humanity derived using physics rather than economics agrees surprisingly well with what is actually observed.

But what does it all mean? The upshot is that being energy efficient, as on the right hand side of the equation, is what enables civilization as a whole (not at just the national level) to increase its population and affluence, as on the left hand side of the equation. If we become more energy efficient, we accelerate growth of population and affluence, and increase our environment impact. It is not the reverse!

Moreover, because the first term on the right hand side of the equation — current energy efficiency — reflects the history of prior energy efficiency gains, and we cannot erase the past, past advances in energy efficiency are effectively the single parameter that determines current growth of population and affluence.

Intellectually, this is a really nice simplification that removes some of the uncertainty in making long-run forecasts of population and affluence. On the other hand, it might seem totally counter-intuitive. Understandably, most would assume that we can increase energy efficiency independent of population and affluence; and more importantly, increasing energy efficiency will reduce our overall environmental impact. Let’s buy a Prius!

But this comes back to the previous point that the components of the Kaya and IPAT identities are coupled symptoms of something more important. To understand how each IPAT component is linked through the equation above, it is necessary to understand a bit about the very special nature of how a self-organizing civilization operates like a heat engine.

The heat engine in your car is of fixed size. Civilization differs because it can grow. It grows because it is able to successfully use energy to incorporate raw materials from its environment into its internal structure.

If civilization is energy efficient, then it is able to rapidly incorporate raw materials into its structure. Energy efficient civilizations are productive and grow quickly. There are two ways we can witness this material growth. One is that population increases: we ourselves are constructed from raw materials. The other is that we increase the amount of our stuff, or our economic affluence.

With greater efficiency, we can have faster growth, and more of everything, more people included. Interestingly, as shown above, increased energy efficiency appears to increase population and affluence in roughly equal parts, both 1.5% per year.

So, does population growth matter? Well, I think it’s the wrong question. Instead it makes more sense to ponder the external forces that control the energy efficiency of civilization as a whole, and how efficiently it can use energy resources to incorporate raw materials from the environment.

Waves of accelerated discovery and exploitation of coal and oil that began around 1880 and 1950 preceded unprecedented explosions in population and affluence. Looking ahead, many question whether we will sustain continued resource discovery. If we can’t, what does a declining civilization look like? If we can, what is the end game when there are inevitably accelerating negative impacts on the environment?

 

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What is your carbon footprint? 2018 http://www.inscc.utah.edu/~tgarrett/Economics/What_is_your_carbon_footprint.html

What is your carbon footprint?

I would like to make a case that this is the wrong question. In an interconnected world, none of us can be meaningfully separated from the whole, and the whole responds to forces that are external to any of us.

Consider the number of degrees of separation between you and anyone else on the planet. This might seem like a pretty hard thing to assess given how many of us there are and in some pretty far-flung places. I don’t know personally anyone in the Papua New Guinea Highlands (to mention some arbitrarily remote location), but I can be pretty sure that it’s not too much of a stretch to suppose my Australian friend has a friend who has been to the capital Port Moresby where he ran a cross a guy whose cousin occasionally makes trips to the capital to work for “luxury” items to take back to his remote forest dwelling where he presents them to his wife. That would be just five degrees of separation.

So even if relationships are pretty far-flung, it’s like the line from the TV series Breaking Bad, I know a guy who knows a guy.” None of us is truly independent of anyone else.

The same principle can apply to all of history. Suppose that an estimated 100 billion people have walked the earth in the last 50,000 years. With each successive generation, each of us is related to two others to the power of the number of generations. Exponentials lead to big numbers quickly: 100 billion people equates to just 37 successive generations. So, it shouldn’t take too great a number of generations before the number of your number ancestors is similar to the number of people living at that time. As evidence, all humans look and act pretty much the same. One way or another, there was sufficient intermingling for us all to have ancestors in common.

So, as a first approximation, we are linked through our current activities to everyone alive, and moreover we can be linked by blood to everyone who has ever been alive.

It seems then that the question should be not what is your carbon footprint but instead what is our carbon footprint. We are a collective “super-organism” that has evolved over time by burning carbon based fuels to sustain ourselves and to grow. Individually, we may profoundly feel that we can behave as isolated entities; our personal economic choices, in however limited a way, can reduce the collective rate of CO2 exhalation.

The evidence is against this argument, however.  If we term our collective wealth as the accumulation of all past economic production, summing over all of humanity over all of history, then the data reveal a remarkable fact: independent of the year that is considered, collective wealth has had a fixed relationship to added atmospheric CO2 concentrations. Expressed quantitatively, 2.42 +/- 0.02 ppmv CO2 is added every year for every one thousand trillion inflation-adjusted 1990 US dollars of current global wealth.

A useful analogy here is to a growing child, who consumes food and oxygen and exhales carbon dioxide. The rate of CO2 exhalation by the child is determined by the sum of all cellular activity in the child. All the child’s current living cells require energy, and all produce CO2 as a waste product. But here is the key thing: the total number of current cells in the child is not determined by what the child does today, but by child’s past. Over time, the child grew from infancy to its current size, accumulating cells and its capacity to exhale CO2.

For humanity, it is the same. We currently “exhale” CO2 as a total civilization, but our current rate of exhalation is determined by past civilization growth. So, if emissions are so tightly linked to the collective whole, and all past growth of civilization’s consumptive needs has already happened, entirely beyond our current control, what individually can we do right now?

To further illustrate the problem, let’s look at CO2 concentrations in the atmosphere. To calculate the actual increase in atmospheric CO2 concentrations, one has to consider that the land and oceans absorb a fraction of what is emitted. Estimating carbon sinks is possible but can get pretty tricky. Nonetheless, we can look at the observed relationship between economic activity and atmospheric chemistry to get a sense of what is going on.

Looking above at the past 2000 years of atmospheric carbon dioxide concentrations, obtained from Mauna Loa in Hawaii and from ice cores in Antarctica, and measured as a perturbation from a baseline “pre-industrial” concentration of 275 ppmv, there is a surprisingly tight power-law relationship with global GDP. For the entire dataset :

log[CO2(ppmv perturbation)] = 0.6 x log[GDP(2005 USD)]

Amazingly, for over 2000 years, the relationship between CO2 and economic activity has been pretty much a mathematical constant.

Actually, if we look just at the past 60 years in the above, the relationship is linear and even tighter: since 1950, for every trillion inflation-adjusted year 2005 USD of global economy, the atmospheric concentration of CO2 has been 1.7 ppmv higher.

In fact, we could turn this around. With an extremely high degree of accuracy, we could estimate the global GDP simply with a CO2 probe at Mauna Loa. In units of trillion year 2005 USD and ppmv CO2:

GDP  = 0.58 x CO2 – 174

An atmospheric chemist could easily obtain the size of the global economy within a 95% uncertainty bound of just 1.5%!

Of course, we have to be careful with correlation and causation. And even if the above relationship has worked extraordinarily well for the past 65 years, the underlying basis for a relationship between GDP and CO2 concentrations is in fact rather more complicated. Nonetheless, these data clearly support an argument that what matters for determining the concentrations of this key greenhouse gas are collective human activities.

A key point here is that this relationship is extremely tight and invariant over a very long time period during which the configuration of humanity has changed extraordinarily. There have been periodic wars,  famines, and global economic crises. We do not consume the same raw materials with the same efficiencies to the same extent now as we did in the past. The mix of wind, solar, nuclear and fossil fuels has been consumed in widely varying mixtures using an extraordinary range of different technologies. Yet, despite all these changes, the relationship between our economic activities and CO2 seems to have remained invariant.

What is going on? Speculating, perhaps one way to look at it is to consider individually the impact of buying that fuel efficient Prius. A car that consumes less gas allows for an instantaneously incremental reduction in the demand for gas. Sounds great. Except, the oil resources for producing the gas are still available. If demand drops incrementally, then oil producers reduce prices to increase demand. Cheaper gas is more desirable, and so the collective response of all gas consumers is to consume more. Ultimately, the net effect on the collective rate of fossil fuel consumption of buying a fuel efficient Prius is zero (or even an increase).

“No man is an island entire of itself…” We have no individual carbon footprint. We are only “… a part of the main”. Only collectively can we reduce our impact on climate. As unpalatable as it may be, it seems the only successful climate action will be to dramatically and collectively deflate the global economy.  Unfortunately, this may be a bit like asking that growing child, once it has reached a healthy adulthood, to voluntarily suffocate or shrink back to infancy.

Is there an alternative perspective that allows for change but is still consistent with the observations? It would be nice to think that our individual or collective actions can meaningfully decouple the economy from changes in atmospheric composition. But how?

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Group 3 — 9 Articles published on other websites

Long‐run evolution of the global economy: 1. Physical basis by Tim Garrett, Earth’s Future, January 23, 2014

https://agupubs.onlinelibrary.wiley.com/doi/full/10.1002/2013EF000171#support-information-section

NOTE – Owing to the highly technical nature of this research paper, only the Abstract, Introduction, a sample of the body of the text, and concluding Summary are included. To access the full PDF version, click on the above link.

Abstract

Climate change is a two‐way street during the Anthropocene: civilization depends upon a favorable climate at the same time that it modifies it. Yet studies that forecast economic growth employ fundamentally different equations and assumptions than those used to model Earth’s physical, chemical, and biological processes. In the interest of establishing a common theoretical framework, this article treats humanity like any other physical process; that is, as an open, nonequilibrium thermodynamic system that sustains existing circulations and furthers its material growth through the consumption and dissipation of energy. The link of physical to economic quantities comes from a prior result that establishes a fixed relationship between rates of global energy consumption and a historical accumulation of global economic wealth. What follows are nonequilibrium prognostic expressions for how wealth, energy consumption, and the Gross World Product (GWP) grow with time. This paper shows that the key components that determine whether civilization “innovates” itself toward faster economic growth include energy reserve discovery, improvements to human and infrastructure longevity, and reductions in the amount of energy required to extract raw materials. Growth slows due to a combination of prior growth, energy reserve depletion, and a “fraying” of civilization networks due to natural disasters. Theoretical and numerical arguments suggest that when growth rates approach zero, civilization becomes fragile to such externalities as natural disasters, and the risk is for an accelerating collapse.

Summary

Linking physical to economic quantities comes from a fixed relationship between rates of global energy consumption and historical accumulation of global economic wealth. When growth rates approach zero, civilization becomes fragile to externalities, such as natural disasters, and is at risk for accelerating collapse.

1/ Introduction

As with any other natural system, civilization is composed of matter. Internal circulations are maintained by a dissipation of potential energy. Oil, coal, and other fuels “heat” civilization to raise the potential of its internal components. Dissipative frictional, resistive, radiative, and viscous forces return the potential of civilization to its initial state, ready for the next cycle of energy consumption.

Burning coal at a power station raises an electrical potential or voltage allowing for a down‐voltage electrical flow. The potential energy is dissipated along the journey from the power station to the appliance. The appliance sustains people, who themselves dissipate heat. And, because what the appliance does is useful in their minds, the cycle is completed with the human desire for more coal to burn. Similarly, energy is dissipated as cars burn gasoline to propel vehicles to and from desirable destinations. Or, people consume food to maintain the circulations of their internal cardiovascular, respiratory, and nervous systems while dissipating heat and renewing their hunger.

Such cycles are fairly rapid; at least the longest might be the annual periodicities that are tied to agriculture. This paper provides a framework for the slower evolution of civilization, over timescales where rapid cyclical behavior tends to average out, where the material growth and decay of civilization networks is driven by a long‐run imbalance between energy consumption and dissipation.

As sketched in Figure 1, the approach is to develop a general framework for describing the current state of systems and their spontaneous emergence, starting from physical first principles and using a simple theoretical framework outlined previously in Garrett [2012c]. From this point, the paper exploits a fixed link between rates of global primary energy consumption (or power production) and a general measure of global wealth that was described in Garrett [2011] (see also supporting information). This leads to prognostic formulae for economic innovation and growth that are expressible in units of currency. The equations are presented in a form that can be evaluated against available economic statistics for past behavior. Potentially they may be used to provide physically constrained scenarios for the future, linking human and natural systems where the two are increasingly becoming coupled.

Figure 1

Open in figure viewer PowerPoint

Diagram of the approach taken in this paper where physical first principles are used to derive analytical expressions for the long‐run evolution of the global economy during the Anthropocene. Black arrows indicate a differential process. Red arrows indicate an additive or integral process.

There have been many prior efforts to link economic models to climate models [e.g., Yohe et al., 2004; Stern, 2007; Tol, 2009; Nordhaus, 2010. This paper differs by describing the human system in terms of the same thermodynamic laws that underpin parameterizations of gradients and flows in model representations of the earth’s physical processes [e.g., Bitz et al., 2012]. Of course, many might argue that we should not subject human systems to physical laws due to the complexities of human behavior [Scher and Koomey, 2011]. Others might note that even physical systems at their most simple can easily become so sensitive to initial conditions as to become inherently unpredictable. But while we would not dream of predicting local weather beyond a week or so [Lorenz, 1963], forecasting the global mean surface temperature a century out is an accepted challenge. The primary requirement for maintaining predictability is that we degrade temporal and spatial resolution. In this case, little or nothing might be said about the short‐term, finer‐scale details of the system; yet, broader, constrained forecasts can be made for more slowly evolving behaviors [Bretherton et al., 2010; Temam and Wirosoetisno, 2011].

From the standpoint of forecasting the human role in climate change, a broad brush may be all that is necessary given that carbon dioxide is both well‐mixed and long‐lived in the atmosphere. What the article presents is long‐range prognostic equations for global economic quantities by stepping back and viewing civilization as a whole, as it evolves slowly over “long” timescales and subject to such global externalities as resource availability and increasing natural disasters from a changing global climate.

The hope is to help resolve an apparent disconnect between how we forecast Earth’s future during the Anthropocene, by moving away from traditional macroeconomic models and more toward treating civilization as a dissipative physical system like any other on our planet. Section 2. of this paper describes an underlying thermodynamic framework for emergent systems. Section 3. connects this framework to basic economic quantities. Section 4. discusses prognostic solutions for economic innovation and growth. Section 5. identifies formulations for distinct modes of growth in economic systems, and Section 6. summarizes the conclusions of this study.

3/ Thermodynamics of the Growth of Wealth

The above discussion is intended to be quite general for system evolution. Here civilization can be considered as a special case. Taken as a whole, civilization might be viewed as an example of a living emergent system that consumes a matrix of matter and energy. For civilization, “food” includes raw materials such as water, wood, cement, copper, and steel. The potential energy is contained in fossil fuels, nuclear fuels, and renewables. The linear networks are our roads, shipping lanes, communication links, and interpersonal relationships.

Over short timescales, civilization can be characterized by the internal circulations that govern our daily lives, including our bodily functions, commuting to work, and communications. But, as shown by comparing Figures 3 and 4, if civilization is examined with an eye to more slowly evolving behaviors, where the internal circulations are not explicitly resolved, then energy consumption at a rate a enables civilization to raise raw materials across a potential energy barrier. This then enables an incorporation through diffusion of matter into civilization’s bulk at rate ja. The amount of energy that is required to turn raw materials into the stuff of civilization is the enthalpy of rearranging matter into a new form. Section 2.2. included a discussion of how heating transforms liquid into vapor within a pot of boiling water. A similar “phase transition” can be seen when we burn oil to extract such things as iron ore and trees from the ground, and then reconfigure raw materials from their low potential, natural state into carefully arranged steel girders and houses.

6/ Summary

This paper has presented a physical basis for interpreting and forecasting global civilization growth, with the intent that it might be used to develop a consistent theoretical basis for forecasting interactions between humanity and climate during the Anthropocene.

The perspective is that, like a living organism [Vermeij, 2009], energy consumption and dissipation drives material flows to civilization. If there is a net convergence of matter within civilization, then civilization grows. Growth increases the availability of new and existing reserves of matter and energy, and this leads to a positive feedback loop that allows growth to persist or even accelerate.

These rather general thermodynamic results can be expressed in purely economic terms because there appears to be a fixed link between global rates of primary energy consumption and a very general expression of human wealth: λ = 7.1 ± 0.1 Watts of primary energy consumption is required to sustain each $1000 of civilization value, adjusting for inflation to the year 2005 (see supporting information and Garrett [2012a]).

It was argued that wealth does not rest in inert “physical capital”, as in traditional treatments. Rather, wealth can be interpreted to include all aspects of civilization, even the purely social. Value lies in the density of a network of connections between civilization elements, insofar as this network contributes to a global scale consumption and dissipation of energy (equation 41). Global economic production Y is positive when consumption exceeds dissipation, and there is a net diffusion of matter to civilization that grows its size.

This leads to an economic growth model for wealth C and economic production Y that is more simple, physical, and dimensionally self‐consistent than mainstream models:

(70)

(71)

where Y is directly proportional to a lengthening of civilization’s networks and growth of its energy reserves. The real rate of return on wealth η is somewhat analogous to the total factor productivity in traditional models. Prognostic expressions for η presented here show that its value is determined by a combination of rates of civilization decay, the quantity of available energy reserves, the amount of energy required to incorporate raw materials into civilization’s structure, and the accumulated size of civilization due to past raw material flux convergence. Current values of the rate of return can be inferred from equation 71. For example, current global rates of return are about 2.2% per year [Garrett, 2012a]. Trends in η can be forecast based on estimates of future decay and rates of raw material and energy reserve discovery (equation 56).

Thus, this paper offers a set of prognostic expressions for the growth of civilization, expressible in economic and energetic terms that can be linked to physically measurable quantities. The implications that have been described are summarized as follows:

  • Civilization inflation‐adjusted wealth is sustained by global energy consumption and grows only as fast.
  • Some combination of price inflation and unemployment is related to rates of civilization decay.
  • Rates of return on wealth decline in response to accelerated decay or increased resource scarcity.
  • Rapid rates of current growth act as a drag on future rates of growth.
  • Rates of return grow when there is “innovation” through technological change.
  • The GWP grows when energy consumption grows super‐exponentially (at an accelerating rate), or when global energy reserve discovery exceeds depletion.
  • If growth rates of wealth approach zero, civilization becomes fragile with respect to externally forced decay. This appears to be particularly true if prior growth was super‐exponential.

Many of these conclusions might seem intuitive, or as if they have been expressed already by others within more traditional economic perspectives. What is novel in this study is the expression of the economic system within a deterministic thermodynamic framework where a very wide variety of economic behaviors are derived from only a bare minimum of first principles.

More importantly, a sufficient set of statistics exists for global economic productivity, inflation, energy consumption, raw material extraction and energy reserve discovery that the nonequilibrium solutions presented here can be evaluated and falsified with no requirement for any a priori tuning or fitting to historical data. Such evaluation will be addressed in Part II. Specifically, it will be shown that the logistic equation given by equation 64 closely matches the evolution of global economic rates of return since 1950, allowing for observed rates of technological change defined by equation 56. Logistic behavior has been recognized in the evolution of human empires throughout history [Marchetti and Ausubel, 2012]. It will be shown to be evident in global rates of economic growth as well.

Global civilization has enjoyed explosive growth since the industrial revolution, but it is unclear how long this can be sustained when it is facing ongoing resource depletion, pollution, and climate change. Global economic wealth is tied to energy consumption, and energy consumption through combustion is tied to carbon dioxide emissions. Without a sufficiently rapid switch to noncarbon sources of energy, growing wealth is necessarily linked to growing emissions.

Yet accumulating carbon dioxide in the atmosphere is also likely to drive accelerating civilization decay through amplified hydrological extremes, storm intensification, sea level rise, and mammalian heat stress [Hansen et al., 2007; Solomon et al., 2009; Vermeer and Rahmstorf, 2009; Sherwood and Huber, 2010]. The prognostic expressions that have been derived here might be useful to help guide a physically plausible range of future timelines for civilization growth and decay, particularly in models that couple human and climate systems during the Anthropocene.

 

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Our Capacity to Discover and Produce Energy Matters Retirement Management Journal 2015 http://www.inscc.utah.edu/~tgarrett/Economics/Publications_files/RMJ2015.pdf

All of us, at some point, hope to enjoy retirement. Yet we also face uncertainty about the future. Maybe we can adapt to a changing retirement income, even if it is for the worse. But it would certainly help if we could plan.

It might seem strange to think that the field of physics could have anything useful to say about retirement planning. I believe it can provide useful insights particularly if we expand our time horizon from the next few years to the coming decades.

Myself, I am a physicist with a specialization in the atmospheric sciences. I became interested in the problems of economics and finance by way of studying another long-run concern: climate change. Around the time of the 2006 documentary “An Inconvenient Truth,” atmospheric scientists were occasionally asked to speak publicly about the science of global warming and to offer social prescriptions for finding solutions. I rather admired how the documentary provided some challenging physics for a general audience. Yet, with most of my scientific colleagues, I felt some discomfort about saying how and whether we should control carbon dioxide emissions. Pronouncements on policy weren’t our expertise.

Still, many economists were suggesting policy-based remedies, like decreasing carbon dioxide emissions by increasing energy efficiency. Their complex social models offered the appeal of climate solutions without great economic pain.

I thought it might be worthwhile to try to think of the relationship between climate and society in a different way, by considering all the wonders of civilization as part of the physical world. As with the motions of the sun, oceans or a blade of grass, our daily activities, even our thoughts, are slaves to inviolable physical laws.

Chief among these laws is the Second Law of Thermodynamics which says that nothing can happen without a dissipation of energy in some higher “potential” form. Dissipation sustains circulations in the system while allowing it to do work. Burning high potential fuel allows pistons in a car engine to circulate and turn its wheels. We consume food with calories to radiate heat while we think and move.

What does the Second Law imply for civilization? And what does it mean for retirement? I believe that my research has shown that fiscal measures of our global economic wealth have a fixed link to our capacity to dissipate energy. Our total global power production capacity is what ultimately sustains all the world’s economic circulations and wealth. The two are so inseparable that both have risen in lock- step over the past few decades. Each has more than doubled since 1970. The link between wealth and power has been an average 7.1 +/- 0.1 watts per one thousand inflation-adjusted (year 2005) U.S. dollars.

This result is important because it offers the following very simple prescription: Global wealth, once adjusted for inflation, cannot increase without a commensurate rise in global power production capacity.

I would like to note a common confusion here. The constant correspondence between wealth and power that I claim is not the same as the varying correspondence between GDP and power. Wealth is not current GDP. Rather wealth is accumulated over time. It is therefore a summation of prior inflation-adjusted production. Also, wealth is not some inert stock like the “physical capital” of standard economic treatments. Rather, it is a representation of our capacity to interact with each other through our social, transportation and communications networks.

The wealth of our existing networks grew from the prior efforts of us and our ancestors. Maintaining this existing network capacity requires that we ceaselessly dissipate potential energy in the form of fossil fuels, nuclear and renewables. Growing the networks will require faster energy consumption. And, put to an extreme, if current power production were ever switched off, like a houseplant without sun, civilization would wither and die.

In a paper that appeared in the Summer 2012 Retirement Management Journal™ (Vol. 2, No. 2), I described this relationship more fully. The conclusions made the point that our global wealth and power production capacity are currently growing at a rate of about 2.2% per year, adjusting for inflation. Moreover, even with the Great Recession, this global rate of return has been fairly stable over the past couple of decades, inching upwards only very slowly.

Stable growth can help us plan. Inertia allows us to expect the coming decade to be characterized by similar returns: 2.2% may be nothing spectacular, but at least it offers some realism to the best and worst of what we may come to expect.

We should keep in mind, however, that the 2.2% figure is a constraint on the globe as a whole. If we see developing countries boom at a faster rate, then we should anticipate that wealthier countries will come off worse. Also, physical considerations tell us the primary factor that determines how fast we can consume energy is the availability of primary energy reserves. We will remain reliant on burning fossil fuels for quite some time. So, if reserves of these fuels are suddenly discovered much faster than we consume them, then our energy consumption capacity – and our wealth – should be expected to grow faster than normal. Otherwise growth will be constrained.

Booming discoveries of oil accompanied accelerating rates of return in the two decades following World War II. Today, available statistics suggest that the United States is doing well, but that global energy discoveries are only barely keeping up with rapidly growing consumption. Nations are increasingly competing for their share of a relatively modest global rate of return.

I have no qualification to offer investment advice. In any case, the future is essentially unknowable. But I would like to suggest that financial planning for the coming decade should consider the following: Our capacity to discover and produce energy matters in a very profound way. Energy reserves are like our collective retirement account, with their own rate of return. If discoveries ever flag relative to consumption, then rates of energy consumption must eventually adjust downward, and the expectation should be that wealth will follow. The tide that lifts all boats may also be the one that lowers them. ■

 

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Can we predict long-run economic growth? Retirement Management Journal 2012 http://www.inscc.utah.edu/~tgarrett/Economics/Publications_files/RMJ-V2N2-Garrett.pdf

For those concerned with the long-term value of their accounts, it can be a challenge to plan in the present for inflation-adjusted economic growth over coming decades. Here, I argue that there exists an economic constant that carries through time, and that this can help us to anticipate the more distant future: global economic wealth has a fixed link to civilization’s total capacity for power production; the ratio of these two quantities has not changed over the past 40 years that statistics are available. Power and wealth rise equally quickly because civilization, like any other system in the universe, must consume and dissipate its energy reserves in order to sustain its current size. One perspective might be that financial wealth must ultimately collapse as we deplete our energy reserves. However, we can also expect that highly aggregated quantities like global wealth have inertia, and that growth rates must persist. Exceptionally rapid innovation in the two decades following 1950 allowed for unprecedented acceleration of inflation-adjusted rates of return. But today,real innovation rates are more stagnant. This means that, over the coming decade or so, global GDP and wealth should rise fairly steadily at an inflation-adjusted rate of about 2.2% per year.

Introduction

Our financial accounts seem to change unpredictably according to the actions of individuals, organizations and governments. Because the range of human behavior can be so diverse and out of our control, it seems that there is an exceptionally broad range of future societal outcomes. Anticipating long-term economic conditions anything more than a year away seems daunting at best.

For atmospheric scientists like myself, forecasting future human behavior becomes relevant where the goal is to provide society with forecasts of climate change. Through the combustion of fossil fuels, our economic activities have been slowly increasing atmospheric greenhouse gas concentrations1. Consequent changes in climate patterns remain modest. But, perhaps several decades from now, global warming will become an important drag on economic growth 2.

For current and future retirees, the issue is more about anticipating inflation-adjusted rates of return for their accounts, sometimes as much as a decade or more ahead. While, diversification can help financial portfolios to weather short-term fluctuations in market valuations, the optimal strategy for the longer term is less clear. For example, regardless of investment strategy, Baby Boomers have generally prospered from a rising economic tide that has lifted most boats over the past half-century. Yet many worry that such extraordinary overall gains cannot persist indefinitely. All tides subside. Broad economic gains can be lost.

Are we confined to hoping for the best but preparing for the worst? Or can we at least plan ahead for the future by making constrained predictions for where our net worth is headed? In a recent paper, I proposed that we can, provided that we are willing to take a broader view by considering slow changes in the economy as a global whole 3,4.

A Link Between Economics and Physics

Fig. 1Since 1970, global wealth as defined by Eq. 2 (blue), global power consumption (red), and the ratio of power to wealth (black). Wealth is referenced to 100 in 1970.

By applying a link between Economics and Physics reasoning, I developed an argument that civilization’s fiscal wealth has a fixed link to its overall rate of primary energy consumption, independent of time. Observations seem to support this hypothesis to a remarkable degree (see Figure 1, above). For retirees, the implication is that global wealth will continue to rise for as long as power consumption can continue to grow. Otherwise, if resources ever become so constrained that consumption fails, global wealth must enter a phase of collapse.

Before elaborating further on this economic growth model, it is worth comparing it to traditional macro-economic models that focus on human labor and creativity as the motive economic forces. Almost all economists treat “human” capital, or labor, and “physical” capital as two totally distinct quantities. Labor and capital combine in a complex way to enable economic production. A small part of economic production is a savings that can be carried into the future as added physical capital. But most production is siphoned away by people through their consumption of such things as food and entertainment. Once something is consumed, it has no potential to influence future economic activities.

While this model is certainly logical, from the standpoint of physics, it seems strange because it appears to both ignore and violate the most universal of laws: the Second Law of Thermodynamics. The Second Law is familiar to many for its statements about entropy production. Perhaps the best known is that the universe, taken as a whole, inescapably slides towards increasing disorder.

But the Second Law also demands that nothing can do anything without consuming concentrated energy, or fuel, and then dissipating it as unusable waste heat. For example, the Earth “consumes” concentrated sunlight to power weather and the water cycle, and then radiates unusable thermal energy to the cold of space.

Like the weather in our atmosphere, all economic actions and motions, even our thoughts, must also be propelled by a progression from concentrated fuel to useless waste heat. The economy would grind to a halt absent continued energetic input. Buildings crumble; people die; technology becomes obsolete; we forget. Civilization must constantly consume in order to sustain itself against this constant loss of energy and matter.

So, for example, we as individuals consume the energy in food at an average rate of about 100 watts. This sustains and builds the joint activities of our brain, heart, lungs and other body functions. We must keep eating to regenerate dead cells and offset the constant loss of heat through our skin.

As a whole, civilization is no different, except that after centuries of growth, it is rather large and wealthy. Today, sustaining all of our activities requires continuous consumption and dissipation of about 17 trillion Watts of power, or the equivalent of 17,000 one Gigawatt power plants.

We burn fossil fuels, split uranium nuclei and tap the potential energy in rivers, sunlight and wind. About 4% of this energy sustains our 7 billion bodies. The rest powers our agriculture, buildings and machines. Once consumed, all energy is ultimately dissipated as waste heat. If energy consumption ever ceased, our machines would stop, and we would all die. Certainly, economic wealth would be zero.

Treating the Economy as a Global Whole

The idea that the economy is sustained by power consumption has certainly been discussed by others 5. However, there is a particularly beautiful corollary of the Second Law whose implications have largely been missed. This is the statement that nothing can be isolated: all of space and time are linked. Nothing can happen spontaneously, and all actions from the past have some influence on the present and future. Equally, no sub-component of the universe can be completely isolated from interactions with any part of the rest. However, remote or slow the interactions may be, all parts are connected to and interact with all others.

The implication for society is perhaps best expressed by the Elizabethan poet John Donne, “No man is an island, entire of itself. Each is a piece of the continent, a part of the main.” Through international communications and trade, ourselves, our ideas, education and relationships all form a vibrantly interacting and changing whole that is completely integrated with our transportation routes, communication networks, factories, buildings and databases.

In other words, all elements of civilization work together. No matter how distant, no element of economic production can be isolated from any other. We are all part of a vibrant organism we call the global economy. A portion of real production cannot simply disappear due to “consumption” by humans, because humans are inextricably linked to the rest of the organism’s overall structure.

Neither can consumption vanish to history. Rather, power consumption that sustained us against dissipation and decay in the past, nurtured us forward so that we continue to consume in the present. Feeding Ancient Greece sustained an architectural tradition that has been carried forward to the designs of today. Entertainment consumed a hundred years ago sustained a cultural tradition that influences our choices today.

A New Model for Economic Growth

In an economic model, the above arguments are simply expressed by a hypothesis that “Wealth is Power”. We are sustained by a consumption of energy. All inflation-adjusted economic output must be returned to wealth defined as human and physical capital combined. Unlike traditional economic treatments, real production can neither be siphoned off to humans alone, nor to the past. It has nowhere else to go but to “produce”, thereby adding to combined wealth.

This means that we can consider the current global GDP as being the “rate of return” on global wealth. Or, equally, current wealth is the accumulation of past inflation-adjusted global GDP. The tie to physics is that wealth is directly proportional to power consumption. Only when power consumption exceeds dissipation can a convergence of flows allow for civilization expansion and a positive inflation-adjusted economic output or GDP (see Appendix for the mathematical details).

Crucially, this hypothesis is falsifiable. In other words, it is sufficiently simple, transparent and easy to test, that it could potentially be discarded based on observational evidence. I tested this hypothesis using statistics for world GDP and energy consumption that are available for each year from 1970 onward, together with more sparse estimates for world GDP that extend back to 1 AD 3.

What these data show is that, for each year between 1970 and 2009, the ratio of power consumption to wealth has barely deviated from a constant 7.1 watts per thousand inflation-adjusted 2005 US dollars (Figures 1 and 2). The standard deviation has been only 3% during a period when global power consumption and wealth have increased by 120% and world GDP has risen 230%. Wealth and power consumption are not merely correlated, any more than mass and energy are correlated in the formula E = mc2. Rather, like mass and energy, the ratio of the two appears to be fixed.

Fig. 2For select years since 1970,measured values for the global power consumption (trillion watts), global real wealth (trillion 2005MER USD), the ratio of power consumption to wealth (watts per thousand 2005 MER USD), global real GDP (trillion 2005 MER USD per year) and the rate of return on wealth defined by GDP/Wealth (% per year).

It seems extraordinary, but the implication is that we can begin to think of seemingly complex human systems as simple physical systems. Our collective fiscal wealth is an alternative and very human measure of our capacity to power our society through the consumption of fuel. Our total assets, including ourselves, our relationships and our knowledge, are inseparable from our collective capacity to consume our primary reserves of coal, oil, natural gas, nuclear fuels and renewables. Both will rise and fall together.

Precision vs. Predictability in Economic Forecasts

For current and future retirees concerned with the long-term value of their accounts, a link between economics and physics has some important implications. Perhaps most encouraging is that we can anticipate inertia in global consumption and economic growth. Our current consumption and wealth are inextricably tied to past production, but the past is unchangeable. Absent some sort of severe external shock, near-term reductions in energy consumption and wealth are implausible because they would somehow require civilization to “forget” its past.

Assuming that economic consumption and growth will persist in the near term may seem rather obvious to some. But what may be less well recognized is that there are mathematical and physical constraints to growth. For those who study the evolution of physical systems, a term that is often used here is “reddening”. This is a convenient way of expressing that it is the most slowly varying, low frequency and “red” (rather than blue) components of past variability in a system that most strongly influence its present behavior.

For example, seasonal temperature trends normally have a stronger influence on daily high temperatures than shorter term weather variability. Or, 20 years of growth through childhood and adolescence tends to have a greater influence on our daily food consumption than how much we ate yesterday. Surprises can happen, of course. For us, there is always the potential for accident or a disease. Still, the natural tendency for growth is for it to be slow and steady.

Equally, the global economy’s current capacity to consume and grow has evolved from thousands of years of human development, through the creation of subsequent generations, as well as the construction of farms, towns, communication networks and machines. While everything does slowly decay or die, the past can never be entirely erased. Even our most distant ancestors have played a role in our current economic and social well-being. By now, civilization has enjoyed a rather lengthy past, and we can count on this accumulated inertia to carry us into the future.

Certainly, it is still possible that countries will rise and fall, but globally aggregated economic wealth should continue to enjoy recent inflation-adjusted rates of return. Even in 2009, during the depths of the Great Recession, 2.14% was added to total real global wealth (see Figure 2, on previous page), only slightly down from the historical high of 2.26% in 2007. And we continue to grow our power consumption at similar rates. It is probably a safe bet to assume that similarly high rates of return will persist over the coming decade.

The main point is that persistence in trends is an effective tool for forecasting, but most especially when applied to highly ”reddened” variables that are aggregated over time and space. When predicting the evolution of any system, there is always a trade-off. It is always easier to make forecasts provided that we are willing to sacrifice temporal and spatial resolution.

Predicting the weather next week can be almost impossible. But forecasting northern hemisphere average temperatures this coming winter is actually quite easy: history is an excellent guide. Similarly, it is very difficult to predict a small company’s stock value next week; but extrapolating trends in globally-aggregated wealth can plausibly be done for as much as a decade hence.

Innovation and Increasing Rates of Return

To reiterate, available statistics show that wealth, when it is when it is integrated over the entire global economy, and integrated over the entire history of economic production, has been related to the current rate of global primary energy consumption through a factor that has been effectively constant over nearly four decades of civilization growth. Aggregated civilization wealth and consumption has inertia, and therefore its current growth rate is unlikely to cease in a hurry.

Yet the fact remains that the global rate of return does change. Historical statistics (shown in Figures 2 and 3) indicate that, over the past century or so, there has been a long term tendency for wealth to double over ever shorter intervals. In the late 1800s, doubling global wealth would have taken about 200 years based on then-current rates of return. Today this takes just 30 years. As a whole, the world is getting richer faster.

Fig. 3 A History of Growing Wealth. Adjusting for inflation, the time for global wealth’s rate of return to double (calculated as a decadal running mean), vs. the doubling time for wealth itself. Select years are shown for reference.

I use the word innovation to describe this acceleration of inflation-adjusted rates of return because it represents the capacity of civilization as whole to beat mere inertia. Adjusting for inflation is important here, because it is not always evident that any investment in innovation will pay off. If investing in human creativity does not lead to true innovation, then it is a waste of effort that could have otherwise contributed to previously attained rates of growth. But, real innovations provide a jump in rates of return that civilization can carry forward into the foreseeable future.

Globally, innovation has come in fits and starts. Figure 3 (above) shows that innovation has had two golden periods over the past two centuries. The first was during the Gilded Age or “Belle Epoque” of the late 1800s and early 1900s, when resource expansion and technological discoveries allowed the rate of return to double in just 40 years. Then again, in the baby boom period between 1950 and 1970, the rate of return doubled in the remarkably short timespan of just 20 years.

By contrast, both the 1930s and the past decade have been characterized by much more gradual inflation-adjusted innovation rates. Even though globally aggregated wealth is now doubling more quickly than ever before in history, for the first time since the Great Depression, the rate of return is no longer increasing.

Why has the passage of history been characterized by economic “fronts” on global scales, with rapid innovation and accelerating rates of return ultimately giving way to stagnation?

Here again, physical principles can provide guidance. Given that inflation-adjusted wealth and energy consumption appear to be linked through a constant, the identical question is asking what enables energy consumption to accelerate.

Conservation laws from thermodynamics tell us that rates of innovation and growth should be largely controlled by the balance between how fast civilization discovers new energy reserves and how fast it depletes them6. For example, it is easy to imagine that access to important new coal or oil reserves in the late 1800s and around 1950 allowed civilization to capitalize on human creativity in ways that were previously impossible.

Today, we continue to discover new energy reserves, but perhaps not sufficiently quickly. We are now very large and we are depleting our reserves at the most rapid rate yet. Increased competition for resources may be constraining our capacity to turn our creativity and knowledge into real innovation and accelerated global economic growth.

Conclusion

I have described here a constant that links a very general representation of the world’s total economic wealth to civilization’s power production capacity. Because this constant does not change with time, physical principles can be applied to estimate future global-scale economic growth over the long-term without having to explicitly model the exceptionally complex internal details of people and their lifestyles.

There have been criticisms of this approach, which have stated that “economic systems are not the same as physical systems, and we shouldn’t model them as if they are”7. Yet, civilization is undeniably part of the physical universe. It is difficult to imagine how we aren’t fundamentally constrained by physical laws. At the very least, appealing to physics appears to make the job of economic forecasting more transparent, simple and scientifically robust.

Here, I have made the argument that recent rates of return are most likely to persist in such highly aggregated quantities as the global economy. We can make quite distant estimates of future growth, but only if we are willing to sacrifice resolution. While this does not specifically help us to predict trajectories for individual countries or economic sectors, we might anticipate that slower than average rates of return in one nation or sector should be balanced by faster growth elsewhere.

It must be kept in mind that exponential growth trends cannot continue unabated. Wealth is tied to power production and therefore to resource consumption. Sooner or later, civilization must face up to reserve depletion or environmental degradation.

But, for as long as these impacts remain manageable, we can anticipate that global economic wealth, GDP and energy consumption will continue to grow at recently observed rates. The qualification is that rates of return are unlikely to rise as fast as they did in the decades following the 1950s. Rather, for time scales significantly less than the current wealth doubling time of 30 years – perhaps a decade – the forecasted inflation-adjusted global rate of return should average a fairly steady 2.2% per year.

For current and future retirees thinking even further ahead, inflation-adjusted rates of return should be guided by whether there is net depletion or expansion of our primary energy reserves. It might help to think of our energy reserves as the retirement account for civilization as a whole. Discovering new energy reserves today expands our collective accounts. But having sufficient reserves for the long-term requires that we not “spend down” what we have discovered too quickly. What we consume today must be balanced against what we have left to consume in the future. ■

NOTE — For endnotes and Appendices go to the PDF file

 

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Physics and your retirement savings: How energy reserves are like the world’s collective retirement account, by Tim Garrett, Retirement Weekly 2013 http://www.inscc.utah.edu/~tgarrett/Economics/Publications_files/retirement-weekly-2013-10-11-1.pdf

All of us at some point hope to enjoy retirement. Yet we also face uncertainty about the future. Maybe we can adapt to a changing retirement income, even if it is for the worse. But it would certainly help if we could plan.

It would seem strange here to think that the field of physics might have anything to say about retirement planning. But I believe it can provide some useful insights for the coming decades.

I am a physicist with a specialization in the atmospheric sciences. I became interested in the problems of economics and finance by way of studying another long-run concern: climate change. Around the time of the documentary “Inconvenient Truth,” atmospheric scientists were occasionally asked to speak publicly about the science of global warming and to offer social prescriptions.

While what came to be known as “Al Gore’s” film was unpopular with many, I rather admired how some rather challenging physics was presented for a general audience. Yet, with most of my scientific colleagues, I felt some discomfort about saying how and whether we should control carbon dioxide emissions. Pronouncements on policy weren’t our expertise.

Yet many economists were suggesting policy-based remedies like increasing energy efficiency. Their complex social models offered the appeal of climate solutions without great economic pain.

I thought it might be worthwhile to try to approach the issue in a different way, by considering all the wonders of civilization as part of the physical world. As with the motions of the sun, oceans, or a blade of grass, all of our activities, even our thoughts, must equally be slaves to inviolable physical laws.

Chief among these laws is the Second Law of Thermodynamics which says that nothing can happen without a dissipation of energy in some higher “potential” form. Dissipation sustains circulations in the system while allowing it to do work. Burning high-potential fuel allows pistons in a car engine to circulate and turn its wheels. We consume food with calories to radiate heat while we think, move, and if there is an imbalance, grow.

What does the Second Law imply for civilization growth? And what does it mean for retirement? I believe that my research has shown that fiscal measures of our global economic wealth have a fixed link to our capacity to dissipate energy. Our total global power production capacity is what ultimately sustains all the world’s economic circulations. The two are so inseparable that both have risen in lock-step over the past few decades. Each has more than doubled since 1970. The link between wealth and power has been an average 7.1 +/- 0.1 Watts per 1,000 inflation-adjusted (year 2005) U.S. dollars.

This result is important because it offers the following very simple statement: Global wealth, once it is adjusted for inflation, cannot increase without a commensurate rise in global power production capacity.

I would like to note a common confusion here. The constant correspondence between wealth and power that I claim is not the same as the varying correspondence between GDP and power. Wealth is not current GDP. Rather it is an accumulation of prior production. Neither is wealth some inert stock like the “physical capital” of standard economic treatments. Rather it is a representation of our capacity to interact with each other through our social, transportation and communications networks.

We grew our current wealth of networks from our own prior efforts and those of our ancestors. Maintaining this current network capacity requires that we ceaselessly dissipate potential energy in the form of fossil fuels, nuclear and renewables. Put to an extreme, if current power production were ever switched off, like a house plant without sun, civilization would wither and die.

In a paper that appeared last year in the Retirement Management Journal, I described this relationship more fully. The conclusions made the point that our global wealth and power production capacity are currently growing at a rate of about 2.2% per year, adjusting for inflation. Moreover, even with the Great Recession, this global rate of return has been fairly stable over the past couple of decades, inching upward only very slowly. In an earlier era between 1950 and 1970 by contrast, rates of return doubled.

Stable growth can help us plan. Inertia allows us to expect the coming decade to be characterized by similar returns. While 2.2% may be nothing spectacular, at least it offers some realism to the best and worst of what we may come to expect.

We should keep in mind, however, that the 2.2% figure is a constraint on the globe as a whole. If we see developing countries boom at a faster rate, then we should anticipate that wealthier countries will come off worse. Also, physical considerations tell us that the primary factor that determines how fast we can consume energy is the availability of primary energy reserves. We will remain reliant on burning fossil fuels for quite some time. If reserves of these fuels are suddenly discovered much faster than we consume them, then our energy consumption capacity—and our wealth— should be expected to grow especially fast.

Booming discoveries of oil accompanied accelerating rates of return in the two decades following World War II. But today, available statistics suggest that our discoveries are only barely keeping up with our rapidly growing consumption. Indeed, physics supports this. Accelerating growth should be expected to be followed by an adjustment to stable growth where discovery and consumption are in rough balance.

I have no qualification to offer investment advice. In any case, the future is essentially unknowable. But I would like to suggest that planning for the coming decade should consider the following: Our capacity to discover and produce energy matters in a very profound way. Energy reserves are like our collective retirement account, with their own rate of return. If discoveries ever flag relative to consumption, then rates of energy consumption must eventually adjust downward. Rates of return on wealth will enter a phase of decline. The tide that lifts all boats may also be the one that lowers them.

About the author: Tim Garrett is an atmospheric sciences professor at the University of Utah and the president of Fallgatter Technologies, a spinoff company that sells meteorological instrumentation. He has written 60 peer-reviewed articles about the atmospheric sciences and on the role of energy in economic growth. In March 2012, his economic work was presented in a keynote for the Retirement Income Industry Association Spring meeting.

 

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How persistent is civilization growth? by Tim Garrett, Climate Change, January 28, 2011 https://arxiv.org/pdf/1101.5635v1.pdf

NOTE: Owing to the highly technical nature of this research paper, most of the advanced level mathematical and calculus calculations, the accompanying text, and the footnotes have been omitted. What remains is the Abstract, some of the Introduction, and the Conclusion,.To see the full paper, click on the above PDF link.

Abstract In a recent study [7], I described theoretical arguments and empirical evidence showing how civilization evolution might be considered from a purely physical basis. One implication is that civilization exhibits the property of persistence in its growth. Here, this argument is elaborated further, and specific near-term forecasts are provided for key economic variables and anthropogenic CO2 emission rates at global scales. Absent some external shock, civilization wealth, energy consumption and carbon dioxide emissions will continue to grow exponentially at an average rate of about 2.3% per year.

1 Introduction

Through combustion, carbon dioxide (CO2) is emitted as a by-product of the primary energy consumption that is used to run the economy [20]. Anthropogenic CO2 emissions accumulate in the atmosphere [12], and are a primary control of changes in global mean climate [14].

Studies of the response of the atmosphere to changing greenhouse concentrations are informed by a mixture of observations and a basic understanding of underlying processes. The evidence is that about 40% of emitted carbon remains in the atmosphere [11,15,13]. Numerical and theoretical models, combined with paleoclimate data, point to an equilibrium surface temperature response to a doubling of CO2 concentrations that lies somewhere between 2 ◦C and 4.5 ◦C [9].

Meanwhile, economic scientists consider the evolution of civilization and its emissions to be driven by decisions made by individuals, organizations and governments [1]. The judgement is that human perceptions and behavior control the rate at which civilization consumes fossil energy. Policy guides sources of primary energy, rates of human reproduction, individual wealth and lifestyles, and how efficiently energy is consumed to produce economic output [20]. Global CO2 emission trajectories are determined by these choices.

Unfortunately, there is an exceptionally broad range of CO2 emission trajectories that is considered to be humanly plausible, and this greatly amplifies the uncertainty in the physics [23]. Arguably, this is a real problem, especially if climate change becomes a negative feedback on economic growth [8]. If human adaptation to climate change is to be anything more than purely responsive, constrained forecasts of global CO2 emission trajectories will certainly be needed.

In a recent paper in this journal [7], I suggested that predictability might be greatly improved if, like climate systems, human systems were also approached from a physical viewpoint. To this end, I proposed a thermodynamically-based framework for the evolution of civilization wealth and its rate of energy consumption at globally integrated scales. At the core of the prognostic model is a hypothesis that the instantaneous rate of primary energy consumption by civilization a is linked through a constant λ to its inflation-adjusted economic value (or civilization wealth) C, where wealth is the time-integral of global economic production (or GDP) P, adjusted for inflation at market exchange rates (MER), and aggregated over the entirety of civilization history [16,3]

Taking a to be in units of Watts, and P in units of 1990 MER US dollars per second, then wealth C has units of 1990 MER US dollars, and the constant λ has units of Watts per 1990 MER US dollar.

While this formulation is highly unorthodox from traditional economic standpoints (see a discussion in Appendix B of Garrett (2011)), it is nonetheless transparent, and therefore easy to test. What was found was that for the period 1970 to 2005 for which global statistics for a were available [2], the mean value of λ amounts to 9.7 milliwatts per 1990 US dollar, with an uncertainty in the mean at the 95% confidence level of just 0.3 milliwatts per 1990 US dollar.

It appears then that λ is indeed constant with time. This is the empirical support behind the initial hypothesis expressed in Eq. 1, that real global economic value is an expression of the global capacity to consume primary energy resources. More recent data extending to 2008 has not changed the value of the derived result (see Table 1 and the supplementary material). If anything, the inter-annual variability in calculated values of λ is diminishing with time.

2 Precision versus predictability in economic quantities

Here, the implications of Λ being constant for long-range predictability are discussed in greater detail. The main implication is that global civilization has inertia. Eq. 1 shows that the current rate of energy consumption a is intrinsically determined by the entirety of past economic productivity P, which, when adjusted for inflation, yields our current global wealth C. Because the past is unchangeable, civilization will carry its current wealth into the future, and also its associated rate of energy consumption a = λ C. Unless there is very rapid decay from some severe external shock, near-term reductions in energy consumption and wealth are physically implausible. They would require civilization to somehow “forget” its past accumulation of wealth C.

In general, the variance of any externally forced system demonstrates the property of “reddening”, meaning that it is the most slowly evolving components of the system that exhibit the most power. The analogy that could be drawn is to a growing child, or in fact any other organism [18,4]. Whether the child is growing or shrinking, energy must still be consumed to sustain all the internal circulations that have developed through prior growth of body mass. Accident or a disease could rapidly change rates of energy consumption through sickness and death. But otherwise, the child will tend to follow a slowly evolving growth trajectory.

In the same manner, civilization as a whole consumes energy in order to sustain the material flows that enable it to survive. The current capacity to consume has evolved from the activities of our ancestors, through their creation of us, as well as their construction of farms, towns, communication networks and machines. This past production and consumption continues to enable us to consume. And, since civilization is currently very large, it is this accumulated past that will most strongly govern our future energy consumption and emission rates of carbon dioxide.

The growth rate of civilization and its energy consumption can be expressed in a variety of ways, all of which follow from Eq. 1:

There is currently no fundamental theory for describing what controls the evolution of η in civilization. However, the data indicate that the growth rate η (t) evolves slowly itself. In 2008 it reached a historical high of 2.24 % per year (Table 1), up from 1.93% per year in 1990. It is probably a safe bet to assume that that similar growth rates will persist in the near-term.

3 Persistence in growth

To reiterate, available statistics show that wealth, when it is integrated over the entire global economy and integrated over the entire history of economic production, has been related to the current rate of global primary energy consumption through a factor that has been effectively constant over nearly four decades of civilization growth. Its implications for the future are that civilization has inertia, and therefore its current rate of consumption growth is unlikely to cease in a hurry.

Conclusion

Sometimes one sees the naive argument that climate scientists are presumptuous to make long-range forecasts of climate when short-term weather forecasts are so often wrong. What makes climate forecasts possible is top-down energetic constraints. It is not necessary to explicitly model weather in order to make long-term forecasts of globally-averaged surface temperatures. With certain assumptions about relative humidity and clouds, the key ingredients for a simple 1D radiative-convective equilibrium climate model are the rate of solar energetic input, and the concentration of greenhouse gases [17]. Long-range predictions of regional climate variability require greater sophistication. But even here, top-down constraints dictate the plausible range of climatolological parameter space [9].

Scher and Koomey (2011) have argued that “Economic systems are not the same as physical systems, and we shouldn’t model them as if they are”. Nonetheless, civilization is part of the physical universe. As with climate and weather, its evolution should also be constrained by global scale energetic flows. The evidence presented here and in Garrett (2011) suggests that it is indeed possible to make long-term forecasts of global energy consumption rates, without having to explicitly model the internal, short-term details of people and their lifestyles. Long-range forecasts of energy consumption by specific countries or economic sectors will be more difficult [22] and require additional sophistication. But, from the standpoint of determining emission rates of a long-lived gas such as CO2, the internal details are largely irrelevant. So long as there is atmospheric mixing and international trade, it is only global scale energy consumption and CO2 emissions that matter.

The main point made in Garrett (2011) was that the global economy can be placed on a physical footing, through a constant coefficient that links economic wealth (not wealth production) to the global consumption rate of primary energy resources. The relevant physics is still too primitive to provide a fully deterministic solution into the future. Still, as argued here, one can apply the principle of persistence based on recent trends, provided one is looking at quantities that are highly integrated over space and time. Just as one might make the purely statistical argument that recent trends in globally-averaged surface temperatures will continue into the near future, here it is suggested that near-term growth in economic wealth and energy consumption rates will also persist. The qualification is that the growth will not be super-exponential, as it has been in past decades, but more purely exponential. The forecasted growth rate is about 2.3 % per year.

 

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No way out? The double-bind in seeking global prosperity alongside mitigated climate change by T. J. Garrett, Department of Atmospheric Sciences, University of Utah, Salt Lake City, Utah, USA https://www.earth-syst-dynam.net/3/1/2012/

Received: 21 Mar 2011 – Discussion started: 06 Apr 2011 – Revised: 03 Dec 2011 – Accepted: 31 Dec 2011 – Published: 05 Jan 2012

NOTE: Owing to the highly technical nature of this paper, the Abstract and Conclusion only are presented here. To access the full PDF click on the above link

Abstract. In a prior study (Garrett, 2011), I introduced a simple economic growth model designed to be consistent with general thermodynamic laws. Unlike traditional economic models, civilization is viewed only as a well-mixed global whole with no distinction made between individual nations, economic sectors, labor, or capital investments. At the model core is a hypothesis that the global economy’s current rate of primary energy consumption is tied through a constant to a very general representation of its historically accumulated wealth. Observations support this hypothesis, and indicate that the constant’s value is λ = 9.7 ± 0.3 milliwatts per 1990 US dollar. It is this link that allows for treatment of seemingly complex economic systems as simple physical systems. Here, this growth model is coupled to a linear formulation for the evolution of globally well-mixed atmospheric CO2 concentrations. While very simple, the coupled model provides faithful multi-decadal hindcasts of trajectories in gross world product (GWP) and CO2. Extending the model to the future, the model suggests that the well-known IPCC SRES scenarios substantially underestimate how much CO2 levels will rise for a given level of future economic prosperity. For one, global CO2 emission rates cannot be decoupled from wealth through efficiency gains. For another, like a long-term natural disaster, future greenhouse warming can be expected to act as an inflationary drag on the real growth of global wealth. For atmospheric CO2 concentrations to remain below a “dangerous” level of 450 ppmv (Hansen et al., 2007), model forecasts suggest that there will have to be some combination of an unrealistically rapid rate of energy decarbonization and nearly immediate reductions in global civilization wealth. Effectively, it appears that civilization may be in a double-bind. If civilization does not collapse quickly this century, then CO2 levels will likely end up exceeding 1000 ppmv; but, if CO2 levels rise by this much, then the risk is that civilization will gradually tend towards collapse.

Conclusion

This study builds on a key result presented in a prior article (Garrett, 2011), that civilization wealth and global rates of primary energy consumption are tied through a constant value of λ = 9.7 ± 0.3 mW per 1990 US dollar. On this basis, a very simple prognostic model (CThERM) is introduced for forecasting the coupled evolution of the economy and atmospheric CO2 concentrations. While the model in its basic form has just three prognostic equations, it nonetheless provides accurate multi-decadal hindcasts for global world pro-duction and atmospheric concentrations of CO2.

The much more sophisticated formulations commonly used in Integrated Assessment Models can have hundreds of equations. In part this is required to forecast regional variations of specific societal indicators such as population or standard of living. The argument made here and in Garrett (2011) is that, at the global scales relevant to atmospheric composition, such complexity is largely unnecessary. Both the global economy and atmospheric CO2 can be considered to be “well-mixed”, and they both are constrained by the global rate of primary energy consumption.

One implication of this result is that global warming should be expected to manifest itself economically as a growing gap between the nominal and inflation-adjusted GWP. Environmental pressures erode a material interface that enables civilization to consume the primary energy resources it requires. Normally, this erosion is more than offset by in-creasing access to primary energy reservoirs; in fact, it is an increasing access to energy supplies that has enabled a positive (and growing) inflation-adjusted gross world product, and has led to the generally high standard of living we enjoy today. However, in a global warming scenario, it can be ex-pected that environmental pressures will increase, and these will act to slow growth in energy consumption. Fiscally, this will appear as an inflationary drag on the growth of economic wealth. Ultimately, it is conceivable that it will push civilization towards an accelerating decline.

Another implication is that the commonly used IPCC SRES scenarios make unphysical underestimates of how much energy will be needed to be consumed, and CO2 emitted, to sustain prosperity growth. At the globally relevant scales, energy efficiency gains accelerate rather than reduce energy consumption gains. They do this by promoting civilization health and its economic capacity to expand into the energy reserves that sustain it.

Reductions in CO2 emissions can be achieved by decarbonizing civilization’s sources of fuel. But this has an important caveat. Decarbonization does not slow CO2 accumulation by as much as might be anticipated because it also alleviates the potential rise in atmospheric CO2 concentrations. If decarbonization leads to fewer climate extremes, then economic wealth is supported; and, because wealth is tied to energy consumption through a constant, improving wealth partly offsets the anticipated CO2 emission reductions. Ultimately, civilization appears to be in a double-bind with no obvious way out. Only a combination of extremely rapid decarbonization and civilization collapse will enable CO2 concentrations to be stabilized below the 450 ppmv level that might be considered as “dangerous” (Hansen et al., 2007).

How to cite: Garrett, T. J.: No way out? The double-bind in seeking global prosperity alongside mitigated climate change, Earth Syst. Dynam., 3, 1-17, https://doi.org/10.5194/esd-3-1-2012 , 2012.

 

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Are there basic physical constraints on future anthropogenic emissions of carbon dioxide? Climate Change, February 2001 —  https://link.springer.com/article/10.1007%2Fs10584-009-9717-9

NOTE: Owing to the highly technical nature of this paper, the Abstract and Conclusion only are presented here. To access the full PDF click on the above link

Abstract

Global Circulation Models (GCMs) provide projections for future climate warming using a wide variety of highly sophisticated anthropogenic CO2 emissions scenarios as input, each based on the evolution of four emissions “drivers”: population p, standard of living g, energy productivity (or efficiency) f and energy carbonization c (IPCC WG III 2007). The range of scenarios considered is extremely broad, however, and this is a primary source of forecast uncertainty (Stott and Kettleborough, Nature 416:723–725, 2002). Here, it is shown both theoretically and observationally how the evolution of the human system can be considered from a surprisingly simple thermodynamic perspective in which it is unnecessary to explicitly model two of the emissions drivers: population and standard of living. Specifically, the human system grows through a self-perpetuating feedback loop in which the consumption rate of primary energy resources stays tied to the historical accumulation of global economic production—or p×g—through a time-independent factor of 9.7±0.3 mW per inflation-adjusted 1990 US dollar. This important constraint, and the fact that f and c have historically varied rather slowly, points towards substantially narrowed visions of future emissions scenarios for implementation in GCMs.

Conclusion

The physics incorporated into GCM representations of the land, oceans and atmosphere is required to adhere to universal thermodynamic laws. Ideally, the CO2 emissions models meant for implementation in GCM projections of climate change should do so as well. Fortunately, it appears that appealing to thermodynamic principles may lead to a substantially constrained range of possible emissions scenarios. If civilization is considered at a global level, it turns out there is no explicit need to consider people or their lifestyles in order to forecast future energy consumption. At civilization’s core there is a single constant factor, λ = 9.7 ± 0.3 mW per inflation-adjusted 1990 dollar, that ties the global economy to simple physical principles. Viewed from this perspective, civilization evolves in a spontaneous feedback loop maintained only by energy consumption and incorporation of environmental matter.

Because the current state of the system, by nature, is tied to its unchangeable past, it looks unlikely that there will be any substantial near-term departure from recently observed acceleration in CO2 emission rates. For predictions over the longer term, however, what is required is thermodynamically based models for how rates of carbonization and energy efficiency evolve. To this end, these rates are almost certainly constrained by the size and availability of environmental resource reservoirs. Previously, such factors have been shown to be primary constraints in the evolution of species (Vermeij 1995, 2004). Extending these principles to civilization, emissions models might be simplified further yet.

 

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Energy Could Hold the Key to Predicting Global Growth by Nick Rockel, Institutional Investor, April 8, 2011 https://www.institutionalinvestor.com/article/b14zbd705jv9cw/energy-could-hold-the-key-to-predicting-global-growth#.UXhZRaWkZUs

By treating the complex global economy as a simple physical system, climate scientist Timothy Garrett has
created a model to forecast long-term economic expansion.

Most attempts to marry economics and physics run aground on complexities. But Timothy Garrett, an associate professor of atmospheric sciences at the University of Utah, has created a physics-based model of the world economy that can forecast long-term economic growth.

In a recent paper for the Boston-based Retirement Income Industry Association, Garrett calculated that during the past 40 years the ratio of global wealth to energy consumption has remained fixed. The climate scientist isn’t the first person to link energy and economic expansion. By framing civilization as a physical system where wealth is the accumulation of past production and gross domestic product is the return on that wealth, though, Garrett argues that the economy must obey the laws of physics. Also, his model stands up to scientific scrutiny because it can be tested, he says.

Garrett describes energy reserves as civilization’s retirement account. “If we have a positive rate of return in the future, it is going to be dependent on this balance between discovery of new reserves and our current depletion of existing resources,” he explains. Garrett notes that his long-term forecasting only works if one considers the global economy as a whole. “I would not dream of doing so for Europe or the U.S.,” he says. “That sounds like too hard a problem.” His call: Over the next decade world GDP and wealth should climb at an inflation-adjusted 2.2 percent annually.

 

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Complexity Theorist 2012  https://www.thinkadvisor.com/2012/03/26/complexity-theorist/?slreturn=20181105145219

For years, atmospheric sciences professor Tim Garrett has been intensely curious — as many are — about what actually drives financial wealth. But then he elevated the discussion to another level: Where does money get its value, Garrett wanted to know, and what does that mean physically?

The 41-year-old Garrett has found his answer in, of all places, the clouds.

“Sometimes I think too much,” says Garrett, who teaches at the University of Utah in Salt Lake City. “But one of the really fun things about physics is going up to a new problem and seeing if maybe some headway can be made. And because the physics is identical for the global economy and for clouds, I can kill two birds with one stone. It’s really a general study of a complex system.”

A cloud physicist, Garrett looks at clouds (the physical world) and civilization (the global economy) as complex, highly energetic systems that in his opinion should obey similar physical laws and evolution paths. Taking his theory a step further, he factored in a popular assumption: that the world needs to improve its energy efficiency in order to offset global warming.

“Something about that seemed wrong to me,” says Garrett, a keynote speaker at the Retirement Income Industry Association (RIIA) conference in Chicago in March. “If we are more efficient, we should grow more quickly. If a child is healthy, it will consume energy efficiently and use that energy it consumes in food to grow. If it grows, it consumes more energy.” Likewise, he adds, civilization as an organism also consumes energy and the stronger it gets, the more power it needs. The issue going forward: Where will the energy come from?

Doug Short, vice president of research for Advisor Perspectives in Lexington, Mass. (and another RIIA presenter), says Garrett’s work challenges advisors to really examine the big picture and shift gears accordingly.

“The thing that makes Tim’s work fascinating is also a big leap for the advisor in that he’s looking at the very big picture and long timeframes relative to normal financial planning. I might look at it from a multi-decades perspective. He’s looking at multi centuries,” added Short. “He’s addressing major cultural issues having to do with profound problems with no easy solutions. The ultimate goal has to be to create an awareness to help us find ways to get policymakers to take this seriously. What we are talking about are problems of epic proportions: How do we wean ourselves off of fossil fuels? We need to look at other novel ways, things not yet discovered.”

RIIA has taken particular interest in Garrett’s research for one overarching reason. Without adequate energy reserves, the thinking goes, your retirement dollars won’t be worth a whole lot. Or, as RIIA chairman François Gadenne puts it: “Your retirement chits are just claims on whatever the economy is going to be worth.”

Garrett’s hypothesis does not incorporate the commonly used GDP, instead using inflation-adjusted wealth. The math that powers Garrett’s equation: Every $100 of global financial wealth (at 1990 levels and in inflation-adjusted dollars) is sustained by one watt of continuous energy consumption.

“It’s not wealth as economists would normally think about it. It includes us and our knowledge and our relationships, even,” he acknowledges. “Wealth is something that encompasses everything we consider to be part of civilization. We’re not just talking about our buildings alone because they are meaningless without us and our knowledge. And you can calculate it. You can quantify it. It’s simple. Basically, I’m summing up production from the beginning of time.”

Garrett admits that traditional economists have a hard time with the concept and that he has endured some “difficult moments” at the hands of critics.  “Yet when I explain it to people with a physics background, it seems almost obvious and naturally intuitive. Why would you do it any other way? I’m not setting out to overturn standard economic theory,” says Garrett. “I just want to figure out how things work. This formulation does work extremely well. I can make forecasts that are extremely accurate in a way I don’t think any other model can.”

And this, he says, is where things get a little scary.

“We must uncover new energy reservoirs to sustain innovation and growth. But the larger we grow, the ever more we need to consume and ever faster we need to uncover new energy sources. There is no system in the universe that can continue to grow forever,” according to Garrett. “One thing I would expect to see in a world that is increasingly constrained in how fast it can consume energy is that competition for resources will increase. Physics suggest this will show up as increased inflation.”

Garrett said he recently has come to think of the trajectory of civilization as being fundamentally a geological issue.

“Civilization has enjoyed a tremendous burst of growth over the last few hundred years and that can be attributed to the discovery of energy reserves,” he observes. “I don’t see why it wouldn’t continue along a similar path. One way that might help is to use fuels that allow for growing wealth without changing atmospheric conditions, including renewables and nuclear power. Although we may switch to a regime less of discovery and more of depletion. Honestly, I try not to think about it.”

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END OF 32 GARRETT ARTICLES POSTED ON WEBSITES OTHER THAN MINE

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