The Political Economy of Deep Decarbonization: Tradable Energy Quotas for Energy Descent Futures: Paper excerpt

September 25, 2020

Ed. note: The post below is the Introduction to Samuel Alexander’s and Joshua Floyd’s paper: The Political Economy of Deep Decarbonization: Tradable Energy Quotas for Energy Descent Futures. The link to the full paper is here. For references please see the full paper.


In this paper we offer a new analysis of the policy of Tradable Energy Quotas (TEQs), developed by David Fleming [1]. The TEQs system involves rationing fossil fuel energy use for a nation on the basis of either a contracting carbon emission budget or scarce fuel availability, or both simultaneously, distributing budgets equitably amongst energy-users. The goal is to equitably meet climate change mitigation targets [2] and/or fossil energy depletion realities [3,4] within a nationally-agreed and cooperative framework, in a manner ‘green growth’ strategies seem unable to achieve [5].

While TEQs is designed to manage the contraction of fossil fuel energy use, the system itself is agnostic with respect to the availability of energy from other sources, namely, renewables and nuclear. Given the dependence of all economic activity on having sufficient energy available, and the tight correlation between energy use and Gross Domestic Product (GDP) [5], the implementation of a TEQs system would be expected to incentivize reduced energy demand and/or increased demand for energy from lower carbon sources. All else being equal, the desired rate of increase in energy from alternative sources might be expected to correspond with the rate of decrease in fossil energy use that the TEQs system is intended to deliver. The relationship between demand for lower carbon sources and the means for satisfying this demand is, however, mediated by factors outside the TEQs framework itself. A TEQs system would meet its design objective if fossil fuel energy use was reduced by the intended amount, regardless of the portfolio of energy source substitution and demand reduction measures collectively adopted to achieve this.

The extent to which alternative lower carbon sources can meet energy expectations formed in the context of fossil fuels is subject to major uncertainties. It is highly plausible though that such sources will not be able to fully replace the range and scale of energy services currently available [6]. Such a view provides essential context for the present analysis. We note the original design of the TEQs system was informed by a similar outlook, and in this respect our analysis can be considered consistent with the system’s underlying ethos [1]. Considering this deeper background, TEQs can be seen not only as a system for managing fossil fuel energy contraction, but as a framework for navigating overall ‘energy descent’. Such energy descent would not, however, be a consequence of managing the reduction in fossil fuel energy use via a TEQs system specifically, but a general consequence of transitioning away from fossil fuels by any means, under circumstances in which energy supply from other sources is constrained in its capacity to deliver energy services at an equivalent rate.

Given the plausibility of supply-constrained energy descent as a consequence of the transition away from fossil fuels—a premise we unpack in greater detail below—any implementation of TEQs needs to be considered alongside the economic and socio-political implications of contracting overall energy availability. Even in the event, though, that non-fossil fuel energy supply does not constrain the rates at which energy services are available to future societies, the relevance of considering energy descent is not invalidated. While climate change and fossil fuel resource depletion delimit the scope for energy services enabled by fossil fuels, these are only the two most prominent dimensions of the three-pronged energy dilemma faced by human societies. Alongside these two issues is the broader suite of impacts on biospheric integrity resulting from the scale of physical power presently exercised by humans [7,8]. All such exercise of power entails the transformation and transport of matter, resulting in impacts on processes essential to biospheric functions. The complexity of these processes means that control over the consequences of the physical power that humans wield is limited. Human activity throughout history and pre-history has had unintended consequences, whether directly related to intended effects, or as a result of second-order co-effects. These unintended consequences are amplified in proportion to the physical power that directs human activity. If lower-carbon energy sources do in fact support ongoing growth in aggregate energy services, then the scale of impacts on the biosphere will also grow, with limits other than those related to atmospheric greenhouse gas concentration coming into play. With the global material footprint of human societies already greatly exceeding what some investigators consider to be sustainable [9], the implication is that not only must the rate of fossil fuel use be reduced, but so must the total rate at which energy services affect changes in the biosphere, regardless of the primary energy source.

On this basis, we situate our analysis in relation to Joseph Tainter’s theory about the development and the collapse of complex societies [10]. Tainter’s theory is predicated on the observation that societies become more socio-politically and technologically ‘complex’ as they solve the problems they face and that such complexification necessitates increased energy use. For a society to sustain itself, therefore, it must secure the energy needed to solve the range of societal problems that emerge. Since problems continually arise, however, there is persistent pressure for growth in complexity [11]. Both historically and today, such ‘problems’ might include securing enough food, adjusting to demographic, climatic, or other environmental changes, dealing with aggression within or between societies, organizing society and managing institutions, pandemics(!), and so on. Indeed, the challenges any society might face are, for practical purposes, ‘endless in number and infinite in variety’ [12] (p. 91), and responding to problems generally requires energy and other resources. Tainter describes this development in human organization and behavior as a process of socio-political complexification.

Tainter argues that, due to the diminishing returns on complexity, there comes a point when societies may no longer be able to secure sufficient energy or other key resources to solve the range of problems faced. Accordingly, without corresponding advances in resource-use efficiency, such societies may be unable to maintain arrangements corresponding to their peaks of complexity. Put more directly, large-scale societies can collapse (i.e., undergo rapid involuntary reduction in socio-political complexity) when the costs of sustaining their complexity become energetically unaffordable [13]. As outlined below, this is the essential dynamic that Tainter argues ‘can explain collapse as no other theory has been able to do’ [14] (p. 400). Not only is Tainter’s theory of historical interest, we maintain it can offer insight into the evolving nature and dynamics of globalized industrial civilization, today and in the future [15,16].

We will argue that TEQs offers a practical and effective means of managing contraction in the use of energy derived from fossil fuels. Furthermore, it offers an important policy tool to help navigate the overall trajectory of energy descent that will plausibly follow from such contraction. TEQs could therefore act as a vital support for the controlled reduction of socio-political complexity via processes of ‘voluntary simplification’ and economic ‘deintensification’ (the result of these processes being ‘degrowth’ or controlled contraction in the scale of the physical economy [17,18]). We therefore distinguish voluntary simplification from the similar term ‘voluntary simplicity’, with the latter generally referring to individuals consuming less within existing structures, and the former referring to a reconfiguration of systems and structures to manage, or actively induce, reduced socio-economic complexity [19]. Structural voluntary simplification, in this sense, would likely require cultural voluntary simplicity, but the converse need not be true.

Under conditions where current levels of socio-political complexity cannot be extended or even maintained, acknowledging the systemic and cultural need for such controlled reduction is, we argue, far preferable to allowing collapse to unfold haphazardly and chaotically, but making this case requires a nuanced engagement with Tainter’s theory. For present purposes, we will treat voluntary simplification and economic deintensification as aspects of a general process leading to degrowth of formal economies and socio-political matrices, although to emphasize Tainter’s conceptual framework we will generally refer to this process via the term ‘voluntary simplification’. Defined further below, this refers to a process of planned contraction of a society’s energy and resource demands, with corresponding reductions in socio-political complexity [17,18].

Structure and Overview

Our substantive analysis begins in Section 2 by reviewing the literature on renewable energy (RE) transitions. We seek to understand the scope for RE to replace the extent and nature of energy services provided by fossil fuels, a question of urgency for existing economic systems due to both climate change and the finitude of fossil fuels. We proceed from a position of epistemic humility [6]–that is, from an appreciation of deep uncertainties surrounding energy futures, and therefore of what knowledge claims relating to this area of investigation can reasonably be made in the present. These uncertainties imply the need to hold serious doubts about whether RE (or nuclear) can fully replace what it is that human societies do at present via fossil fuels. While we fully endorse the goal of transitioning to RE, we contend it is plausible that a full transition would entail ‘energy descent’ relative to the availability of energy services in developed regions of the world today [20,21,22,23,24]. Given that the degree of socio-political complexity, in Tainter’s sense, that can be maintained by a society is dependent on available resources, reduced energy availability is likely to drive significant deintensification of economies, and with this, reduction in socio-political complexity, whether enforced through circumstances that overwhelm human agency, or voluntarily embraced [19,25]. As discussed in the introduction, even if energy services are not supply-constrained, other biosphere impacts resulting from continued exercise of physical power at the current historically extreme level must at some point force a confrontation with the need for contraction in human energy conversions, and hence with the prospect of reducing socio-political complexity. The term ‘deintensification’ implies changes that generally result in closer proximity between producers and consumers of goods and services, both geographically and socially. This will typically involve the emergence or reemergence of informal economies at the bio-regional, neighborhood, and household scales, where mostly local resources are used to provide for mostly local needs, at the expense of formal economic transactions and arrangements where global supply chains coalesce in complex and often energy-intensive ways [1].

Given the epistemic grounds on which anticipation of energy futures rests, energy descent is no less plausible (and a sound case can be made that it is more so) than alternatives. Individuals, households, nations, and indeed the global community should therefore plan for such an outcome, even if this conflicts with dominant expectations of continued economic growth and corresponding assumptions about the need or desire for ongoing increases in socio-political complexity [26]. In Section 3 we explore the implications of energy descent informed by Tainter’s theory of complexity and collapse. Although we sympathize with much of Tainter’s analysis, we seek to show that energy descent pathways involving voluntary simplification and economic deintensification are potentially more viable than is suggested if the historical record is taken as the necessary benchmark. That is, we suggest that pathways may be available differing sufficiently from those attempted previously to make economic deintensification a legitimate policy option for decision makers. In that vein, we outline how a society embracing voluntary simplification could manage energy descent in ways consistent with human and ecological flourishing, although we argue this means deep transformations in societal structures, cultures, and institutions [17,27], not merely attempting to ‘green’ today’s globalized carbon civilization [5].

To anticipate later discussions, energy descent futures shaped by voluntary simplification would involve more localized agency in relation to governance and organization (i.e., more context-specific, context-sensitive, and hence more diverse social forms and structures across bio-regions and cultures); it would require planned contraction of energy and material demands (i.e., degrowth); it would necessitate a more equitable distribution of wealth; and it would involve embracing cultures of consumption that reflect ethics favoring sufficiency, moderation and frugality. While the likelihood of voluntary simplification, economic deintensification and consequent degrowth receiving population-wide embrace may not be high, we argue these strategies deserve critical attention, especially since we contend that they are the best, and perhaps the only, means of resolving the overlapping crises facing humanity today [13,16,28,29].

In Section 4, we outline TEQs as a policy tool with practical potential to manage society-wide processes of energy descent in viable and equitable ways. We conclude with brief reflections on obstacles and challenges that lie in the way of TEQs (and other strategies for managing energy descent) being adopted.

Samuel Alexander

Over the last ten years Dr Samuel Alexander has been a lecturer and researcher at the University of Melbourne, Australia, teaching a course called ‘Consumerism and the Growth Economy: Critical Interdisciplinary Perspectives’ as part of the Master of Environment. He has also been a Research Fellow with the Melbourne Sustainable Society Institute and is currently co-Director of the Simplicity Institute. Alexander’s interdisciplinary research focuses on degrowth, permaculture, voluntary simplicity, ‘grassroots’ theories of transition, and the relationship between culture and political economy. His current research is exploring the aesthetics of degrowth and energy descent futures. His books include Degrowth in the Suburbs: A Radical Urban Imaginary (2019, co-authored with Brendan Gleeson); Carbon Civilisation and the Energy Descent Future (2018, co-authored with Josh Floyd); Art Against Empire: Toward an Aesthetics of Degrowth (2017); Just Enough is Plenty: Thoreau’s Alternative Economics (2016); Deface the Currency: The Lost Dialogues of Diogenes (2016); Prosperous Descent: Crisis as Opportunity in an Age of Limits (2015); Sufficiency Economy: Enough, for Everyone, Forever (2015); and Entropia: Life Beyond Industrial Civilisation (2013); he is also editor of Voluntary Simplicity: The Poetic Alternative to Consumer Culture (2009) and co-editor of Simple Living in History: Pioneers of the Deep Future (2014). In 2016 he also released a documentary called A Simpler Way: Crisis as Opportunity, co-produced with Jordan Osmond of Happen Films. Alexander blogs at

Tags: building resilient societies, collapse of complex civilizations, powering down, TEQs, Tradable Energy Quotas