Saturday, September 21, 2013

Decoupling: where's the cake?


This is an expanded version of a short talk that I gave on Sep 21 2013 at the meeting of the Club of Rome in Ottawa. I added some figures and links, as well as the citation from Herman Daly.



If we want a bigger cake, the cook simply stirs faster in a bigger bowl and cooks the empty bowl into a larger oven that, somehow, heats itself - Herman Daly


Ladies and gentlemen, we are discussing now the question of "decoupling. So, first of all, what do we mean with this term? Well, decoupling is a concept based on the definition of "energy intensity" or "efficiency;" the ratio of the total energy consumption of a country to its gross domestic product, GDP.  It has often been observed that this ratio tends to go down for many countries. In this case, more GDP is generated for a unit of energy consumed and this is supposed to mean that people are learning to be smarter and more efficient in doing their jobs. In other words, it appears that we can "decouple "our ability of producing wealth from the need of consuming energy.

This idea reminds me a lot of something that Herman Daly, the economist, said some time ago. He compared the economy to making a cake. Your efficiency as a cook is how much flour (the energy) you need to make the cake divided by the size of the cake (the GDP). Some economists, Daly said, seem to think that you can make a cake without flour, just by stirring faster - that's "decoupling". Without needing to arrive to this rather extreme interpretation, the idea of "energy intensity" is that you are a good cook if you can keep making bigger and bigger cakes without the need of a proportional increase in the amount of flour.

It might work that way, although I have some doubts about this definition of efficiency. But let me tell you some data about Italy that may help you understand how these concepts may be applied to a practical case. Here are the latest data for energy intensity for Italy (from knoema):



So, it seems that Italy has shown a trend of improving efficiency; we could say it has been "decoupling". The trend seems to be slowing down, but it is still there today. So, this should be a good thing, but there is a problem. Let me show you Italy's GDP (again from Knoema)


And you see that Italy's GDP never recovered from the crisis of 2008. I could show you data for energy consumption in Italy but let me skip that: let me just say that it peaked in 2004 and it has been going down ever since. So, the energy intensity has been decreasing not because the GDP was growing, but because energy consumption was declining faster.

So, you see, maybe in Italy we should be happy because we are becoming more efficient but, as you surely understand, living in a country with a declining GDP is nothing to be happy about. Industries are closing, people are losing their jobs, there is no more money for things that once were taken for granted: social security, public health, public transportation and all that.

I was mentioning yesterday that the problem with Italy's economy is linked to the increasing costs of mineral commodities. I can cite from memory that in 2012 Italy imported 66 billion euros of fossil fuels and the net balance of imports or mineral commodities was negative for around 110 billion euros. That's surely not negligible in comparison to Italy's GDP which is around 1500 billion euros, especially if we consider that, not many years ago, the cost for imports was much smaller. We have today an additional burden on the economy that I estimate as around 70 billion euros in comparison with 10 years ago. It is money that must come from somewhere and it can only come from the pockets of Italian citizens. We are simply becoming poorer.

There is no evidence that the increasing prices of energy have caused the Italian economy to become more efficient. I can tell you that from my personal experience. You see, as university researchers, we are supposed to help companies to become more efficient, and we try to do our best. There are many ways of doing that: renewable energy, leaner manufacturing methods, better technologies, and more. I have been working on that for a long time; at least 20 years.

The problem is that, nowadays, when I tell to the managers of a company that they should be more efficient, they ask when they'll recover their investment. In the best cases, I can tell them that it could be  - say - in 3-4 years. Then they answer me that they can't say for sure if they'll still be open and producing next month; so they can't even dream of asking money to a bank (and paying a stiff interest on it) for becoming more efficient. They won't do anything unless the government pays, but the government doesn't have any more that kind of money.

So, you see, this is the situation in Italy - but I think it is a very general problem for many countries that have stopped growing. We are not becoming more efficient, we are not "decoupling." To do that, we would need resources - energy and minerals - but those resources are becoming more and more expensive. So, investing in efficiency is becoming expensive and we can't afford it.

In the end, we are back to Herman Daly's metaphor of the cake.  If you are a good cook you can make a big cake even with small amounts of flour. The problem is when the lack of flour forces you to make a smaller and smaller cake. Then, it is little consolation to note that you are an efficient cook; the problem is that people are asking "where's my cake?" and they are not happy at not having it. But there is no way out: in order to make a cake you need flour and in order to keep an economy functioning you need energy. In my view,  renewable energy is a prerequisite for decoupling - if we have clean energy, we can truly decouple and we'll even be forced to do it because not even cheap energy can re-create the minerals ores that we have destroyed. But, without energy, there will be just less and less cake for everybody.






5 comments:

  1. Humans are great at "grasping at straws". Decoupling is just the latest straw they are hoping to grasp at to avoid facing the real problems and their real solutions and what they imply. So now a couple of years will be spent discussing "decoupling" and various patient people (like yourself above) will have to spend time explaining why it is mistaken, or a false hope. or why it can only "work" very partially. But I think you did a good job of trying to explain it with the concrete example of Italy. But it doesn't mean that the bright idea of how "we are going to decouple" will now simply just go away and people will start to focus on what actually needs to be done. And then other things and notions undoubtedly will be thought up besides "decoupling" that will permit doing what people like to do best. i.e. think that things will somehow work themselves out all by themselves...(e.g. "the soft approach" you also mentioned in an earlier post as one of two major options the CoR seems to be considering) and other such ...e.g. "population will stabilize all by itself" (without mass famines or etc.) or "we will reach a kind of kind of steady state plateau in terms of economic output by 2040" (and will avoid collapse)...and other happy such. Nobody wants to "take the bull by the horns" and as a result we are all very likely to end up being seriously gored. (and certainly not by Al "Gore", if a play on words and a joke is allowed) (and I hope it is, since humour is probably the only safe refuge at least at a personal level that we are left with at this belated point)

    Personally I think the simple truth is this: There will be a lot less total cake going forward (because fossil fuels are running out and because climate change and other environmental problems that affect the size of the cake are getting much worse) and there also will be far less cake per person because the number of people keeps increasing. There are things that could still be attempted to try to do something about the preceding but talking about "decoupling", or "further efficiencies forever".....and other such (in addition to economic growth forever made more possible by "greater efficiencies forever" ) is only going to delay further doing something that actually might work. And starting to do it comprehensively and at scale and seriously starting yesterday.

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  2. I attended the CoR Annual Meeting in 2005. No one was talking about human overpopulation. Nothing appears to have changed.

    The AWAREness Campaign on The Human Population was founded in 2001. Since that moment I have seen it as a moral imperative to continue the work I’ve been doing for many years now: getting the message out and explaining to as many people as possible that human overpopulation of the Earth is occurring on our watch, that it poses profound existential risks for future human well being, life as we know it and environmental health, and that robust action is required starting here, starting now to honestly acknowledge, humanely address and eventually overcome.

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    1. understand your point Steve. But there is a problem, in my opinion. Population is a bad "leverage point" of the system (see my previous post about leverage points). It is a bad leverage point in the sense that when you try to push the lever in what you think is the right direction, reducing birth rates, you generate a strong opposing feedback; in large part in the form of aggressive natalist propaganda. That's one of the accusations that were made made against the Club of Rome in the early times: that of being a secret organization with the purpose of exterminating the colored races (I was mentioning propaganda!!!).

      So, the idea of telling people of the overpopulation problem and hoping that they will decide to have less children has been tried over and over in the past, but with no tangible results. I think we have to accept that this lever is very hard to push. Not that it would be impossible - after all the Chinese government had a reasonable success with that. But it is very, very difficult.

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  3. Decoupling, a great concept for the eternal optimist...

    Great because it provides a seemingly plausible way to imagine future circumstances that don't result in climate catastrophe.

    Great because it is easily observed in isolation (without the data necessarily suggesting that there is something more complex going on - ie, that there may be other reasons why we can observe an instance of "decoupling" that have nothing to do with increased efficiency).

    The concept of "decoupling" seems like a real opportunity for propagandists out there.

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  4. In general, the discussion of decoupling economic progress from energy consumption might be meaningful if the discussion were based on meaningful concepts. Personally, I regard GDP as almost meaningless. As an illustration, I offer a possibly analogous table of numbers from physics:

    No. GTM Efficiency
    1. 80.987 10.8
    2. 82.033 10.3
    3. 83.428 11.9
    4. 85.227 10.0
    5. 87.998 9.8
    6. 89.491 13.8
    7. 91.999 11.5
    8. 93.007 13.3
    9. 94.011 15.7
    10. 99.153 16.5
    11. 106.811 21.4
    12. 112.995 20.5
    13. 123.012 30.8
    14. 158.941 53.0

    Here, the values have been "normalized" according to the row of Mendeleev's table in which the element appears (specifically, the numbers are divided by the row number minus one). The {energy} efficiency is calculated by dividing the Gross Total Measure by the normalized number of protons in the nucleus. The GMT is the normalized sum of the covalence radius of the atom, the standard atomic mass, and the atomic weight of the most prevalent isotope. Perhaps a physicist will argue that I can't add the radius (of dimension length) and the atomic weight (of dimension mass). I don't see why I can't, if I can add "repair damaged buildings" to "build new buildings" for the GDP. Besides, the table above clearly shows a general tendency for efficiency to increase as the GTM increases, i.e., the GMT increase generally leads to a decoupling of energy consumption.

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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)