Energy, ecology & economics–part III
This is the third and final post in a series revisiting HT Odum’s classic Ambio paper on the 3Es (Ambio, 1973). The article was republished in Mother Earth News, and the reprint is still available online through Minnesotans for Sustainability. The first 15 points are covered in part one and part two of the post series. The final five points, 16-20 of the Ambio paper, are extracted and quoted below, with updated explanations. In this final section of the paper, Odum described relative energy availability during stages of growth and descent, and recommended policies for energy descent.
Consider the future with less fossil fuel. How can a lower energy lifestyle be peaceful and prosperous? Many of the policies described in this post are from Odum’s development of the ideas over the past 40 years. Our civilization could thrive in a future where we live with less. Decisive, proactive changes in attitudes, policies and practices could divert a destructive collapse, leading instead to a prosperous way down, if we choose to do so?
16. “Substantial energy storages are required for stability of an economy against fluctuations of economies, or of natural causes, and of military threats” (Odum, 1973).
Stored energy includes potatoes in a grocery store of fuel in a tank, or fertile soil on a farm. Storages are associated with most transformation processes, and they represent accumulations of energy and emergy. These storages fill and discharge as systems pulse between accumulation and consumption. Storages depreciate over time due to entropy or disruptive pulses.
Our complex fossil fuel-based society has developed enormous storages of information, food, fossil fuels, structures, and people. We will not be able to maintain all of these storages in descent, and we will need to decide which are most important to keep up. Storages create buffers to allow systems to keep equilibrium during pulsation and adaptation, and they could mean the difference between descent and collapse.
Countries that strive for energy independence through the exploitation of their own non-renewable energies end up with less storages when resource availability becomes a problem. Thus, countries should strive to use imported resources first, and local sources second to save valuable storages of local resources.
On the other hand, retaining resources does not maximize economic vitality. Symbiotic trade with neighbors may create the strongest economies. Marked imbalances of power between countries can become problematic during an era that is increasingly vulnerable to resource wars. Wars serve to balance and organize the landscape into units that are right-sized for available resources, but world wars could be devastating to the biosphere. Countries should not attempt to overextend their military influence beyond the power of the countries’ resources.
Energy acts as a 6 to 1 amplifier that contributes many times as much to economic wealth as it costs, so developed nations should not limit fuel imports because these stimulate their economies. There is also a 6 to 1 negative amplifier effect on the economy when energy use is restrained, so countries should avoid taxing, embargo, or other inhibition of free use of fuels, except for luxury or wasteful use (Odum, 1987).
17. “The total tendency for net favorable balance of payments of a country relative to others depends on the relative net energy of that country including its natural and fuel-based energies minus its wastes and nonproductive energy uses” (Odum, 1973
“Since money and energy/ resource flow in opposite directions, the use of monetary flows to make public policy and decisions regarding the future of a country is in reality looking at the world backwards. Frequently, sound economic advice in resource rich nations recommends the selling of raw resources and the importation of finished products. Yet under such even monetary trades, the resource-exporting country always loses, sending out far more wealth than they receive in finished products (Brown et al., 2009 and Ulgiati and Cialani, 2005). Continuing uneven emergy trades at the expense of the developing countries of the world is a recipe for global instability because it keeps the majority of the world’s population in poverty while the west tries to live an unsustainable lifestyle” (Brown & Ulgiati, 2011, p.8)
When a developed country borrows money from outside, it stimulates its economy temporarily but later the debt inhibits economic growth. A less developed country is generally damaged more that a developed country would be when required to repay borrowed money. Unfair international exchange and market valuations have created the current imbalances in international trade.
Countries should avoid selling local resources to make wealth. Instead they should keep the resources and make products locally for export, as market prices are not a fair basis for international trade. Human goods and services from less developed nations are worth more in emergy terms than the payment that developed countries receive.
On “Emergy evaluation of World Bank and IMF impact on less developed countries: the emergy/dollar ratios (after currency conversions to dollars) are much higher in the less developed countries than in developed nations. Where the ratio is 4 to 1 the repayment with interest in real wealth is equivalent to a 440% interest for a loan with a 10% interest rate. The raw resources bought by developed countries transfer 2 to 250 times more real wealth than is paid for in buying power of money exchanged. An undeveloped country can develop its own capital faster by using its real wealth at home than by trying to exchange real wealth for a fraction of its real value. For example, with shrimp pond mariculture in Ecuador the real wealth of the mangrove coastal zone was taken from the local people and sold to the U.S. for a fraction of its emergy value” (Odum, 1996, pp. 208-219).
There will be no room for market and social inequities in a world in energy descent. We will have to work together for public welfare instead of marketplace competition for personal gain. Capitalism, profit, and unearned income are functions of surplus energy and a growth economy. Growth stocks will decline and stocks of companies emphasizing reorganization and contraction of society (remodeling, repair, and adapting to rural living) will rise.
Borrowing fails when neither production nor markets can expand. Borrowing and high interest rates may become regarded as usury again. Too big to fail international banks will fail or be broken up, and smaller banks will have to run locally instead, to fund efficient, smaller, lower energy enterprises. Federal deficit financing will result in inflation. Governments (everyone, really) will need to plan for annual reduction in budgets or losses through inflation.
Any hope for a civil society in descent will require more social equity. Governments will need to place an upper limit on personal incomes. And since full employment maximizes an economy, policies that support everyone in productive work will optimize the economy. We will need to provide part-time jobs for the retired as long as health permits, and to lower minimum wages for teenagers and older workers if necessary. Instead of laying off people, we can cut all wages across the board. Governments can also create sustainability-oriented public works programs for the unemployed.
18. “During periods of expanding energy availabilities, many kinds of growth-priming activities may favor economic vitality and the economy’s ability to compete. Institutions, customs, and economic policies aid by accelerating energy consumption in an autocatalytic way” (Odum, 1973).
The Maximum Empower principle suggests that “In time, through the process of trial and error, complex patterns of structure and processes have evolved…the successful ones surviving because they use materials and energies well in their own maintenance, and compete well with other patterns that chance interposes” (Odum). The rapid post World War II growth of the United States illustrates this principle. Through the IMF, World Bank, and other growth-priming organizations, the U.S. achieved petro-dollar status and expanded the control of their monetary system and fossil fuel and other resource imports through expansive international loans. In other words, the system self-organized into a design where the US, already in power, designed new feedback loops to bring in even more power. Maximum empower dictates that in a situation with surplus energy, those that have typically get more, through competitive exclusion and enhanced feedback. Whether one calls the imbalance shock doctrine, predatory capitalism, or resource imperialism, the result is massive inequities in economic growth and the capture of global real wealth. Unfortunately, the fifth law of hierarchy suggests that “stealing your opponent’s game pieces shortens the cumulative length of the game.” American imperialism has shortened long-term sustainability of our global trade system, as the global flywheel economy spins faster, and faster, and faster.
Resource imperialism is the act of appropriating resources from other countries with unfair advantage. Under the guise of free trade, nations with strong currencies, because of the differences in the buying power of their currencies, (USA and Western Europe) have unfair advantage if trade is balanced based on monetary flows. In all trade, monetary flows have to more or less balance, that is, income must more or less equal expenditures. Thus nations with weak currencies are at a competitive disadvantage. The question arises . . . how best to evaluate currencies and their buying power in a manner that is free of speculation driven values that result from international monetary markets? (Brown, 2003, p. 400).
In order to balance international trade and develop peaceful partnerships, we can use emergy valuation rather than money to evaluate products, goods, and services for trade to balance the equity and energy. We must also prioritize the communication of concepts of international respect and cooperation for global sharing.
19. “During periods when expansion of energy sources is not possible, then the many high-density and growth-promoting policies and structures become an energy liability because their high energy cost is no longer accelerating energy yield” (Odum, 1973).
General societal policy recommendations for descent (Odum & Odum, 1987, 2001):
- For a competitive economy, educate all children to develop their abilities to use information, communication, and technology and to adapt to changing conditions.
- Substitute communication for transportation.
- Eliminate the acceptability of waste and replace it with the use of byproducts; reuse or recycle them to nature’s earth processes but don’t store in dumps and landfills. Dispersal is better than incineration or accumulation.
- Rebuild nature’s natural capital of wetlands, forests, soils, and water. Set a priority for ecological net production over consumption.
- Restore natural capital and associated environmental production.
- Restore environmental reserves, forests, fisheries.
- Use ecological engineering self-design for environmental-economic interfaces.
- The water cycle organizes the landscape. Filter waste waters from city sewage, street runoff, and agricultural runoff through nature’s filters, the wetland ecosystems, and recycle sewage through agriculture.
- In descent, keep standards of living by allowing leveling of population in proportion to decline in resource use. Endorse lifestyles that limit reproduction. Remove all incentives, dogma, and approval for excess reproduction.
- Reduce the yield per acre of agriculture, cutting costs and using more land. Preserve gene pools. Recycling of nutrients can supplant fertilizers.
- Cities will decentralize, with fewer cars and building heights. We will need to make more decisions at state and local levels and not nationally. Industries will decentralize. Heavy industries will be smaller and spread world-wide. Job hierarchies will shrink with fewer jobs at the top and middle. We will need less advertising. Accidents and disruptions will increase. Natural materials will supplant synthetics, and we will reuse plastics.
- Plan for more population moving from cities to agricultural towns. Absorb urban unemployment using tax incentives in a new move to the land, where more self-sufficiency allows lower wages. Federal government could sponsor new homesteading.
- Decentralize organizational hierarchy, and select hierarchically organized roads and railroads for maintenance.
- Abandon luxury or wasteful uses of power in recreation, big cars, and power boats.
- In the short-term, increased CO2 will create more intense extremes in weather; in the longer term, the decline in world fuel consumption will cut the effects of increased CO2.
- Direct electric power for useful information processing and sharing, and select and combine information for libraries. Education may shift to new life themes, smaller schools with less technology and big sports, and a curriculum thread stressing systems thinking, while storing society’s information and restoring its role for choice and testing of information.
- Religions may redevelop ethics and values of service, sacrifice, and care of the earth; teaching systems understanding of the context of society within nature.
- Redefine medical ethics that interfere with genetic selection. Priorities for community health over personal health will increase, mental health may improve, and healthcare will decentralize (Odum & Odum, 1987, 2001).
20. “Systems in nature are known that shift from fast growth to steady state gradually with programmatic substitution, but other instances are known in which, the shift is marked by total crash and destruction of the growth system before the emergence of the succeeding steady-state regime” (Odum, 1973).
Odum & Odum (2001) suggest that “we must redefine progress as adaptation to earth restoration. We must urge every person’s initiatives on this new frontier of organizing a lower energy world. We must make beneficial descent the collective purpose for this century.” To quote from the original paper:
“The terrible possibility that is before us is that there will be the continued insistence on growth with our last energies by the economic advisors that don’t understand, so that there are no reserves with which to make a change, to hold order, and to cushion a period when populations must drop. Disease reduction of man and of his plant production systems could be planetary and sudden if the ratio of population to food and medical systems is pushed at the maximum at a time of falling net energy. At some point the great gaunt towers of nuclear energy installations, oil drilling, and urban cluster will stand empty in the wind for lack of enough fuel technology to keep them running. A new cycle of dinosaurs will have passed its way. Man will survive as he reprograms readily to that which the ecosystem needs of him so long as he does not forget who is serving who. What is done well for the ecosystem is good for man. However, the cultures that say only what is good for man is good for nature may pass and be forgotten like the rest. . . . What is the general answer? Eject economic expansionism, stop growth, use available energies for cultural conversion to steady state, seek out the condition now that will come anyway, but by our service be our biosphere’s handmaiden anew” (Odum, 1973, p. 226-7).