Energy, population, and economic growth
Comments
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On my phone...can’t type a novel but think you are off in the weeds again thinking up possible scenarios to make what you want to believe true.
I think you severely, severely underestimate the elasticity of energy usage...in the US we are down 20-30% per capita from our peak, and yet the Brits who on average have a lifestyle at least on par with us use about 1/3 of the energy per capita we use. Price electricity 3x higher here than current prices and you’ll see usage drop...price it 10x and you will see it crater. Have a funny story about Griddy down here if you are interested. Same with gasoline. And you can talk about the energy efficiency of electrical motors all you want but the efficiency of the grid supplying the electricity is only ~33%. It’s the ironic comedy of electric cars...gas-powered cars don’t look too bad when you factor that in.
People do not appreciate how cheap energy/electricity currently is...hell we’ve built a trillion dollar pyramid scheme in cryptocurrency off of wasting it because we don’t know what to do with it. Market forces will force efficiency/corrections long before any of these crazy situations this guy thought up would happen. It’s the beauty of the supply/demand curve.
And yes you can still have economic growth in those situations...it’s just the driving forces for generating and valuing it are completely different than those in a dirt-cheap energy scenario where we currently reside. -
The market cannot defy physics. Energy is elastic until it isn't (and we're nowhere near that point). People in England are crammed onto a small island nation and are therefore advantaged when it comes to being efficient. The U.S. would have 2.5 billion people if it had the population density of the UK. Maybe it will some day, and the per capita energy consumption will reach closer to parity. That doesn't mean the UK possesses magic, and also just means they're closer to theoretical limits of efficiency. You price energy as high as you'd like, and maybe people will drive/fly less (and maybe my wife will learn how to turn off a fucking light when she leaves the room), but people are still going to pay what it takes to eat and not freeze, and those two goals are impossible without energy.HoustonHusky said:On my phone...can’t type a novel but think you are off in the weeds again thinking up possible scenarios to make what you want to believe true.
I think you severely, severely underestimate the elasticity of energy usage...in the US we are down 20-30% per capita from our peak, and yet the Brits who on average have a lifestyle at least on par with us use about 1/3 of the energy per capita we use. Price electricity 3x higher here than current prices and you’ll see usage drop...price it 10x and you will see it crater. Have a funny story about Griddy down here if you are interested. Same with gasoline. And you can talk about the energy efficiency of electrical motors all you want but the efficiency of the grid supplying the electricity is only ~33%. It’s the ironic comedy of electric cars...gas-powered cars don’t look too bad when you factor that in.
People do not appreciate how cheap energy/electricity currently is...hell we’ve built a trillion dollar pyramid scheme in cryptocurrency off of wasting it because we don’t know what to do with it. Market forces will force efficiency/corrections long before any of these crazy situations this guy thought up would happen. It’s the beauty of the supply/demand curve.
And yes you can still have economic growth in those situations...it’s just the driving forces for generating and valuing it are completely different than those in a dirt-cheap energy scenario where we currently reside.
Again, though, if market forces put a stop to energy growth before physical limits are reached, great! Once again, you're helping me out! Are you under the impression that anybody thinks we're going to encircle the sun in solar panels (requiring more material to accomplish than exists on Earth)? That situation was meant to be crazy. Once again, the ultimate reason for a transition to steady energy consumption doesn't matter to the argument. Whether economic growth can continue in spite of this matters.
Question: Is it possible for--over a long enough timeline--energy consumption to be reigned in by high price per unit (supply/demand, as you pointed out) while at the same time the economy as a whole experiences compounding growth? Over 100 years, say, energy gets increasingly precious, price goes up, consumption stays flat, but the economy experiences real (not paper printing) growth of x% per year over that same time period? This is well into the future, technology has advanced, so you're not going to pull a magical efficiency rabbit out of your hat that will do enough heavy lifting to get you x%.
Seems like every time there is a sustained hike in the price of a barrel of oil, we find ourselves in a recession, and yet (as you point out) we're nowhere near scraping the bottom the barrel of energy production capability. So how does that above scenario work? How do you increase the price of energy over a long enough period of time without there being a recession? Conversely, if you can infinitely grow the economy without infinitely growing energy use per capita, wouldn't that make energy arbitrarily cheap, not expensive? I mean, what does Bill Gates care about the price of gas when he's filling up his car? You're talking about a fixed population and exponential economic growth, meaning exponential per capita growth: Enough doublings, and everyone's relatively rich.
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Germans a better comparison for you? Economy focused on industrial production with a ton of space and they use half the energy Americans do. But they also developed with energy prices higher than the US so they developed on a different path than we did (and they still subsidize industrial electricity prices to companies to help companies compete). One example...suburbs with everyone driving to work don't exist in the same way in Europe as here...even in the outer towns everyone is packed into the town with train service to move you to the city when needed. Families don't have 3 and 4 cars with Jr getting a car when he turns 16. If gas moves to $8/gallon in the US you will see our economy adapt by moving to that type of model.
You have it in your head the economy is defined by making energy-intensive trinkets and everyone is inflexible in how much energy they use...no amount of data is going to convince you otherwise. We have an economy built on cheap energy...the US is fortunate enough to have energy reserves way beyond almost any other country in the world (sans the middle east). When energy spikes of course its going to harm that economy built on cheap energy...it doesn't mean the economy will never grow again. It just means the economy has to adapt to the new conditions.
You are also talking about theoretical energy limitations that are orders upon orders upon orders of magnitude away from where we are...we will run into a lot more market limitations of supply/demand before we hit any of those.
I will agree with you that if you really want to kill the economy you crank up energy prices and allow industries to move to low-cost energy locations (*cough* China *cough*)...doesn't mean your economy will always be in the tank but you will take a massive permanent hit in the loss of those industries. -
Or you provide such ridiculous incentives to individuals/companies that they make the choice to move gradually to alternative energy sources. That keeps the current old 'dirty' energy jobs in place to fuel the rest of the economy.HoustonHusky said:Germans a better comparison for you? Economy focused on industrial production with a ton of space and they use half the energy Americans do. But they also developed with energy prices higher than the US so they developed on a different path than we did (and they still subsidize industrial electricity prices to companies to help companies compete). One example...suburbs with everyone driving to work don't exist in the same way in Europe as here...even in the outer towns everyone is packed into the town with train service to move you to the city when needed. Families don't have 3 and 4 cars with Jr getting a car when he turns 16. If gas moves to $8/gallon in the US you will see our economy adapt by moving to that type of model.
You have it in your head the economy is defined by making energy-intensive trinkets and everyone is inflexible in how much energy they use...no amount of data is going to convince you otherwise. We have an economy built on cheap energy...the US is fortunate enough to have energy reserves way beyond almost any other country in the world (sans the middle east). When energy spikes of course its going to harm that economy built on cheap energy...it doesn't mean the economy will never grow again. It just means the economy has to adapt to the new conditions.
You are also talking about theoretical energy limitations that are orders upon orders upon orders of magnitude away from where we are...we will run into a lot more market limitations of supply/demand before we hit any of those.
I will agree with you that if you really want to kill the economy you crank up energy prices and allow industries to move to low-cost energy locations (*cough* China *cough*)...doesn't mean your economy will always be in the tank but you will take a massive permanent hit in the loss of those industries.
For example, my household actually took down older model solar panels this past year. They were ugly as sin and the marginal amount of $$$ sold to the power grid was just that, marginal. It would have been a whole different deal if the gubmint came in and said, "we'll buy you a super sweet storage system for pennies on the dollar" because in five years, we're going to blow up a few dams on the Columbia for fishies. But they didn't, and the ugliness of the panels won out over the thousands of dollars to buy a battery storage system.
Either way the gubmint is going to print money - to pay for the incentive or to pay for the carnage of the unemployed.
Unfortunately politicians like trying to turn an aircraft carrier on a dime instead of making a gradual turn. Ergo Biden essentially destroying the domestic oil industry this week (sorry, Tug-like....tried to refrain).
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Population density of UK: 712 per square mile
Population density of Germany: 622 per square mile
Population density of United States: 92 per square mile
One of these things is not like the other.
That being said, the point you're making is correct: It's not just population density. It's also that these parts of the world have built their society in a more efficient way. I'll reiterate, though, that this is irrelevant to the discussion. Even their much higher efficiency uses a boatload of energy per capita. Efficiency approaches 100% but never crosses it, so it cannot allow for perpetual growth.
There is no data that will convince me because no such data exists yet. When the argument is "reaching physical limitations will force change," any data prior to those limitations being reached is moot. We're still in the heyday for growth, like the middle, profitable period in the ponzi scheme. Ponzi schemes always reach saturation at some point and fall apart.HoustonHusky said:You have it in your head the economy is defined by making energy-intensive trinkets and everyone is inflexible in how much energy they use...no amount of data is going to convince you otherwise.
Your main criticism of my argument seems to be that I don't perfectly understand the way the market works. I'll concede that I'm not expert, sure. My primary criticism of your argument is your belief that the same conditions that allow for the growth market to function as it has for the last 200 years will exist forever. You can cite nearly endless data to support this, but all of this data can be explained away by conditions that are temporary. Countries like Qatar, UAE, Saudi Arabia are all in the top-25 in the world in GDP per capita. They can show you nearly endless data on how they can manipulate prices and interest rates and whatever to stimulate growth, and it'll look like it could go on forever. That oil and natural gas is going to run out, though, and they'd better think of something else quickly before becoming worthless piles of sand.
As to the first part of the above quote, this is the question I keep asking: To me, the economy seems to be defined by arbitrary assignment of value that make no sense (GameStop?...), but with some faint connection to actual physical goods. The question becomes whether there are limits to this. How wide can the gap between make believe money and real physical goods go before it blows up? With exponential growth, 7% growth per year means a doubling of the economy every decade. With physical limitation to--as you put it--trinket production, the energy required to do such, and our ability to dispose of the waste from such, how many doublings can the economy experience before 99% of it is just Hardcore Husky being valued at a trillion dollars on some exchange?
Fantastic point, and one I've conceded multiple times already. We're not talking about today, tomorrow, possibly our lifetimes, just that it's impossible to avoid if growth continues. That being said, exponential curves get really steep really quickly.HoustonHusky said:You are also talking about theoretical energy limitations that are orders upon orders upon orders of magnitude away from where we are...we will run into a lot more market limitations of supply/demand before we hit any of those.
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I'm not big on the population density stats for this kind of stuff for several reason (think Alaska...ton of land with almost no people, and a good chunk of them live in a few towns). Look at Germany. They actually have slightly more % of the people living in "rural" settings than the USA:
https://www.statista.com/statistics/455825/urbanization-in-germany/ Germans 22.6%
https://www.census.gov/newsroom/press-releases/2016/cb16-210.html US: 19.7%
But they way they live in both settings (rural and urban) results in half the energy usage per capita...amazing what gas and electricity prices being 2x does for efficiency and people's behavior.
The last 50 years in the US show you don't need energy growth per capita to still maintain economic growth.
People adapt...its the one constant throughout history. Well, that and people reproduce less and less as they achieve 1st world status.
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Agree on all points. Have never disagreed, in fact.HoustonHusky said:I'm not big on the population density stats for this kind of stuff for several reason (think Alaska...ton of land with almost no people, and a good chunk of them live in a few towns). Look at Germany. They actually have slightly more % of the people living in "rural" settings than the USA:
https://www.statista.com/statistics/455825/urbanization-in-germany/ Germans 22.6%
https://www.census.gov/newsroom/press-releases/2016/cb16-210.html US: 19.7%
But they way they live in both settings (rural and urban) results in half the energy usage per capita...amazing what gas and electricity prices being 2x does for efficiency and people's behavior.
The last 50 years in the US show you don't need energy growth per capita to still maintain economic growth.
People adapt...its the one constant throughout history. Well, that and people reproduce less and less as they achieve 1st world status.
My question is whether the bolded line can go on forever. Or even another 100 to 200 years. Can the gap between economic growth and energy/physical growth spread to a breaking point? -
That seems to be the crux of the theory/discussion.1to392831weretaken said:
Agree on all points. Have never disagreed, in fact.HoustonHusky said:I'm not big on the population density stats for this kind of stuff for several reason (think Alaska...ton of land with almost no people, and a good chunk of them live in a few towns). Look at Germany. They actually have slightly more % of the people living in "rural" settings than the USA:
https://www.statista.com/statistics/455825/urbanization-in-germany/ Germans 22.6%
https://www.census.gov/newsroom/press-releases/2016/cb16-210.html US: 19.7%
But they way they live in both settings (rural and urban) results in half the energy usage per capita...amazing what gas and electricity prices being 2x does for efficiency and people's behavior.
The last 50 years in the US show you don't need energy growth per capita to still maintain economic growth.
People adapt...its the one constant throughout history. Well, that and people reproduce less and less as they achieve 1st world status.
My question is whether the bolded line can go on forever. Or even another 100 to 200 years. Can the gap between economic growth and energy/physical growth spread to a breaking point? -
Exactly.creepycoug said:
That seems to be the crux of the theory/discussion.1to392831weretaken said:
Agree on all points. Have never disagreed, in fact.HoustonHusky said:I'm not big on the population density stats for this kind of stuff for several reason (think Alaska...ton of land with almost no people, and a good chunk of them live in a few towns). Look at Germany. They actually have slightly more % of the people living in "rural" settings than the USA:
https://www.statista.com/statistics/455825/urbanization-in-germany/ Germans 22.6%
https://www.census.gov/newsroom/press-releases/2016/cb16-210.html US: 19.7%
But they way they live in both settings (rural and urban) results in half the energy usage per capita...amazing what gas and electricity prices being 2x does for efficiency and people's behavior.
The last 50 years in the US show you don't need energy growth per capita to still maintain economic growth.
People adapt...its the one constant throughout history. Well, that and people reproduce less and less as they achieve 1st world status.
My question is whether the bolded line can go on forever. Or even another 100 to 200 years. Can the gap between economic growth and energy/physical growth spread to a breaking point?
