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Energy, ecology, and economics revisited

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We must understand the concept of net energy in order to see the underlying energetic basis for society. Yet net energy is often misunderstood, typically through optimistic measures of valuation that do not address the hidden inputs.

Perhaps HT Odum’s clearest, simplest, most understandable paper on the topic was written 40 years ago, in a special issue of the Royal Swedish Academy of Science’s Energy in Society issue of Ambio (1973). The article was republished in Mother Earth News, still available online through Minnesotans for Sustainability. The paper remains as relevant and fundamental to the arguments for net energy today as it did 40 years ago. Each time I read the paper, I find new meaning from it.

Perhaps it is time to revisit the principles quoted below from the paper, to update the terms and give modern examples of the interrelationships between the 3Es of energy, ecology, and economics. Some of the terminology and accounting methods have been refined over time, but the general principles remain unchanged–principles that are essential to the energy dialogue.

1. “The true value of energy to society is the net energy, which is what’s left after the energy costs of getting and concentrating that energy are subtracted.”

All processes in the world involve energy, materials, and information. Materials are transformed through energy, which drives the process of creating every good, service, and environmental process. Information guides the process of transformation. Energy has different qualities, so a calorie of one form of energy is not the same in quality as a calorie of another form, as certain forms of energy are not substitutable, depending on the situation. A calorie of sunlight may not be substituted for a calorie of oil or of food. In order to compare apples and oranges, we need to create a common denominator. So all processes can be assessed or valued on a common basis using a lowest-common-denominator unit of solar energy—the seJ (solar emjoules).

The science of Emergy accounting places values on the energy, information, and materials in the processes, allowing us to choose more efficient policies. Emergy is defined as the available energy of one kind that is used up in transformations directly and indirectly to make a product or service. Real wealth, then, can be measured as the emergy memory that exists in human goods and services, and in non-human environmental goods and services. Odum’s updated term for net energy is net emergy or net empower. The true cost of a process to society is the net emergy, which is the emergy delivered after the emergy costs of getting and concentrating that energy are subtracted.

Net emergy contribution of any process within the economy including energy production can be calculated using an Emergy Yield Ratio, which is the net energy yield of a process expressed in emergy, divided by the purchased goods and services, which are also expressed in emergy. The EYR includes the contributions for renewable and non-renewable sources, and inputs such as human labor/services and environmental contributions, using a quality correction factor for energies of different qualities. Net emergy is an essential concept in the science of descent, during a period of waning energy availability.

Brown, Cohen, & Sweeney, 2009

Brown, Cohen, & Sweeney, 2009

2. “Worldwide inflation is driven in part by the increasing fraction of our fossil fuels that have to be used in getting more fossil and other fuels.”

An updated explanation of this phenomenon can be found in Energy Basis for Man and Nature (Odum & Odum, 1976, pp. 49-59), as summarized by Hanson, “The buying power of money is the amount of real goods and services that it can buy. If the amount a dollar can buy diminishes, this is called inflation. Inflation can be caused by increasing the amount of money circulating without increasing the amount of energy flowing and doing work, for example, when more money is printed. It can also occur when the money supply is constant but less work is done, for example, because energy becomes scarce. As long as there is unused fuel energy to be tapped, increasing the money supply can increase the flow of energy through the system, causing growth as well as some inflation.” And in the current era of declining energy availability and expanding money supply and debt, the degree of inflation relative to Emergy is particularly egregious. The graph below illustrates the calculated steady decline of Emergy per dollar value of gross world product since 1970, demonstrating a loss in value of about 33%.

Brown & Ulgiati 2011 http://www.mendeley.com/research/understanding-global-economic-crisis-biophysical-perspective/

Brown & Ulgiati 2011 http://www.mendeley.com/research/understanding-global-economic-crisis-biophysical-perspective/

3. “Many calculations of energy reserves which are supposed to offer years of supply are as gross energy rather than net energy and thus may be of much shorter duration than often stated.”

Because the emergy valuation method is notable for including human labor and environmental goods and services in the valuation of a process, the net emergy yield for energy sources tends to be lower than other methods that do not include all inputs. Below is a diagram from Chapter 3 of a pending book by Mark T. Brown and Sergio Ulgiati on Emergy and environmental accounting, posted here with permission. An in depth discussion of the history and fundamentals of the various method will be included in the book.

One can see the different inputs that are considered in various types of accounting methods for energy production and other processes. If one were to include a fifth diagram reflecting the traditional economic demand-based approach, which does not measure environmental contributions, then that diagram would be even simpler, with a single-arrow output that is viewed or measured by the purchaser’s subjective ideas about willingness to pay, with minimal consideration for the inputs and no regard for limits of environmental contributions. It would be helpful to this discussion if we examined the various energy accounting methods and the ranges of net energy estimated from each one, and placed them on a continuum. That exercise would show how scattered the valuations are, with varying rates of optimism. But that is not today’s goal in this post.

From a pending book by Brown and Ulgiati, chapter 3

From a pending book by Brown and Ulgiati, chapter 3, used with permission

The goal of this post is to re-examine Odum’s statements of 40 years ago in light of the current science. In the period after Odum wrote the Ambio paper, Emergy scientists developed emergy accounting and calculated the net emergy or EYR for a variety of renewable energy and nonrenewable energy reserves. The ranges in the table below show values of EYR for a number of settings and processes over several decades. Net emergy is declining over time for these sources, so many of these values are now lower than what is published in the table. How many wrong policy guesses have occurred in various countries attempting to produce marginal sources? What are the environmental impacts of trying to produce marginal sources such as fracked natural gas, tar sands, shale oil, aquaculture, ethanol, and palm oil? How many wrong guesses on net energy policies are we allowed?

Odum, 2007, p. 201

Odum, 2007, p. 201

4. “Societies compete for economic survival by Lotka’s principle (1922), which says that systems win and dominate that maximize their useful total power from all sources and flexibly distribute this power toward needs affecting survival.”

(From MT Brown Lecture 2)

Mechanisms of Maximum Empower (From MT Brown Lecture 2)

Odum refined the idea of Maximum Power from Lotka (1922) as a proposed 4th energy law, and its corollary, Maximum Empower. Individuals and systems that maximize energy flow and power flow (empower) through systems have an advantage in competing with other systems for available energy. Systems develop mechanisms of feedbacks, high quality storages, and systems of exchange to maximize energy flow (see diagram above).

For examples of this in modern economies, look at the United States. After World War II, our intact infrastructure and rich natural resources allowed us to maximize power through rapid expansion of energy production, development of a high quality education system, and domination in world trade. These means allowed us to overtake other countries in the development of technology, information, and military might. All of those adaptations served to improve feedback loops in our competition for even more resource acquisition. Power begets more power.

5. “During times when there are opportunities to expand one’s power inflows, the survival premium by Lotka’s principle is on rapid growth even though there may be waste.”

Using this same example, America’s empire development in the 1950s and 1960s resulted in rapid expansion of energy production, industrialization, highway systems, suburbanization, industrial agriculture, and finally a high-tech information society. Competitive and predatory capitalism, an expansive, debt-based financial system, and a large construction industry promoted rapid growth which gave the United States a great advantage in global trade, creating inequities and power imbalances.

6. “During times when energy flows have been tapped and there are no new sources, Lotka’s principle requires that those systems win that do not attempt fruitless growth but instead use all available energies in long-staying, high-diversity, steady-state works.”

from Mark T. Brown's Democracy Lecture

from Mark T. Brown’s Democracy Lecture

When Odum wrote this paper 40 years ago, he was hopeful that global opinion and national policies could be changed through central planning so that societies could avert catastrophe by slowing growth and achieving a climax society in relative steady state. But that did not happen. We are now in overshoot, and over the past 40 years, signs that the United States and the world at large are slowly losing emergy flow per capita can be seen in indirect proxies such as failing wages, failing middle class, and collapsing empires.

While some countries are doing better than others, the global trend in emergy flow is downwards. Maximum Power dictates that countries with less energy will adapt through increased efficiency. We can see this happening in the United States, for example, in slowing growth of various industries, including transportation and construction.

7. “High quality of life for humans and equitable economic distribution are more closely approximated in steady-state than in growth periods.”

For points #7 and #8, I will let Odum’s words speak for themselves:

“During growth, emphasis is on competition, and large differences in economic and energetic welfare develop; competitive exclusion, instability, poverty, and unequal wealth are characteristic. During steady state, competition is controlled and eliminated, being replaced with regulatory systems, high division and diversity of labor, uniform energy distributions, little change, and growth only for replacement purposes. Love of stable-system quality replaces love of net gain. Religious ethics adopt something closer to that of those primitive peoples that were formerly dominant in zones of the world with cultures based on the steady energy flows from the sun. Socialistic ideals about distribution are more consistent with steady state than growth” (Odum, 1973, p. 222).

8. “The successfully competing economy must use its net output of richer-quality energy flows to subsidize the poorer-quality energy flow so that the total power is maximized.”

“In ecosystems, diversity of species develop that allow more of the energies to be tapped. Many of the species that are specialists in getting lesser and residual energies receive subsidies from the richer components. For example, the sun leaves on top of trees transport fuels that help the shaded leaves so they can get some additional energy from the last rays of dim light reaching the forest floor. The system that uses its excess energies in getting a little more energy, even from sources that would not be net yielding alone, develops more total work and more resources for total survival. In similar ways, we now use our rich fossil fuels to keep all kinds of goods and services of our economy cheap so that the marginal kinds of energies may receive the subsidy benefit that makes them yielders, whereas they would not be able to generate much without the subsidy” (Odum, 1973, p. 223).

9. “Energy sources which are now marginal, being supported by hidden subsidies based on fossil fuel, become less economic when the hidden subsidy is removed.”

Stephanie McMillan Code Green

Stephanie McMillan Code Green

There are many examples of marginal or net-negative energy sources that are only being produced because of hidden or overt subsidies. Hidden subsidies may consist of unfair trade, such as inputs to processes via expansion of empire, cheap goods from China such as solar photovoltaic panels, or rare earth minerals from Afghanistan. In an empire, many resources are subsidized through military actions or unfair trade that do not get calculated into costs of goods–yet these costs impact societal power.

Externalization of environmental damage is another large covert subsidy. Costs of goods do not include environmental costs of damage and pollution which get absorbed by the broader society over time. Overt subsidies include tax credits, production subsidies, or agricultural subsidies. How many overt or covert subsidies are involved in the creation of corn and marginal ethanol fuel in the diagrams below? Which components are not reflected in the economic price? If you want to learn more about this specific topic or what inputs contribute to an emergy analysis, the folio by Brandt-Williams (2002) analyzes the emergy basis including the inputs for 25 Florida agricultural commodities.

Cambell 2008 Emergy Brief Comparative Corn Production 4 states

Cambell 2008 Emergy Brief Comparative Corn Production 4 states

BioFuel_Prod

10. “Increasing energy efficiency with new technology is not an energy solution, since most technological innovations are really diversions of cheap energy into hidden subsidies in the form of fancy, energy-expensive structures.”

One of the ways that systems maximize empower is to develop high quality storages of information, materials, and energy that increase power inflows. New technology is highly transformed, energy-intensive machinery and processes that add to the transformity and emergy basis of processes. Technology acts as a driver to promote faster use of energy. Technology in and of itself cannot power a system. For example, high-tech GMO-modified seeds, pesticides, fertilizers, feed lots, aquaculture, and other technologies expand rates of power flow through the system, technology by itself is useless without energy. Technologies add to the emergy basis of produced foods.

While the required other fuels, chemicals, and services allow larger yields in the short run, the system creates more wastes and is not sustainable when the fossil fuel subsidies are withdrawn. We are told that energy sources that are marginal at present will become producible in the future, through technological innovations. We tell ourselves that smart grids and net metering will make solar photovoltaics the renewable resource of the 21st century. Or electric vehicles are touted as energy solutions, even though the solar emergy required for an electric car is even higher than that of an internal combustion engine car, due to hidden costs of electricity, batteries, and new infrastructure. It is time for us to look beyond the hoods of our cars at the real cost to society, beyond the sticker price.

Odum, 1987, Crafoord Lecture

Odum, 1987, Crafoord Lecture, modified from A. Brown

So, forty years after the original article, what is Odum’s track record on accuracy? Except for his hopeful stance on a climax steady state, Odum and colleagues’ estimates of which sources measure net benefits to society seem to be on track. This is part 1–that’s enough for now. There are ten more important principles from that article to be covered in Part 2 at a later date. I’ve avoided discussing nuclear and solar photovoltaic in this first part of the series, as Odum covered those specifically in the ideas in the next section of his paper.

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