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There is widespread agreement that precautionary measures are desirable to reduce the potential magnitude and impacts of climatic change, despite uncertainties about its possible future scale (and even direction in the event of the emergence of another Global Solar Minimum). There has been less emphasis on the need to ensure that preventative measures, whether policies or investments, in non-fossil fuels are sound economically and technically, and feasible for meeting projected goals. This applies particularly to intermittent sources of energy, especially wind and solar, though also to forms of renewable energy which compete with the availability of other essential human needs such as ‘modern biomass’ competing with food and water requirements. 

Here the focus is on the UK, characterised by relatively high mean wind speeds and modest direct and indirect solar insolation levels, and by substantial food import requirements. Yet the UK government claims to be leading the world in tackling climate change, aiming to achieve “net zero” by 2050; and with renewable sources of energy supplying 80% of total UK energy supply by that year. Renewable sources of energy are also projected to supply all electricity generation requirements by 2035. The local political environment has found it challenging to question the reality of projections in the face of vested interests and deemed scope for subsidies. Demands for rapidly available access to back-up storage in the required volumes to meet supply shortfalls have been dismissed by some in the UK renewables sector as infeasible and even neither relevant nor the responsibility of wind energy suppliers. This debate brings with it a wide range of issues, such as the need to recognise the varying power densities of different forms of energy; differing energy returns on energy invested; the range and significance of capacity (or load) factors likely to be achievable; and suppliers’ responsibilities for meeting customers’ demands for energy services by ensuring adequate storage back-up. The increasing cost burden on households is fast becoming of concern. The paper concludes that there are issues here which are all highly relevant and should be the prime responsibility of the UK’s renewable energy sector to address effectively, otherwise the goal of ‘Net Zero’ is liable to remain out of reach. 

Deficits exist in approaches to estimate the economic impact due to climate change. One such deficit is the influence that a broader set of climate variables, in addition, to mean temperature, has on macroeconomic factors. Another deficit is considering sub-annual variability associated with the economic cycle. Here, we propose a flexible, non-linear framework that includes a wide range of climate variables to estimate changes in GDP, exemplified by its application to a northern temperate economy: Canada. We predict that from 2025 to 2095 (under a high emission scenario) a cumulative increase in GDP of 5% when considering a broad set of climate variables in addition to mean temperature. Our findings suggest that climate can disrupt economic cycles at national and regional levels, potentially causing supply and productivity bottlenecks and increased credit risk. Until today, the former has not been incorporated into estimates of economic impact due to climate change but informs adaptive investment strategies. We anticipate that our framework can be used in a broader context, particularly to those in northern temperate climates, to provide more comprehensive assessments of economic impacts due to climate change.

It is widely assumed, almost with political confidence, that as global oil supplies run short of demand, that the USA can make a plausible transition away from gasoline-powered cars to EVs. Otherwise, life can continue much as usual. However, this economic transition needs to look at the numbers behind the key resources needed to make this transition work. The most limiting resource for EVs is likely to be oil and copper, which are themselves economically interdependent. However, both these key resources may now be peaking in their global production at about the same time. This presents a problem since it is hard to imagine easily expanding copper production when the oil needed to make the transition is in short supply. This resource limit picture is further complicated by industrial rivalry between the USA and China.

Efforts to accommodate the growth in global energy consumption within a fragile biosphere are primarily focused on managing the transition towards a low-carbon energy mix. We show evidence that a more fundamental problem exists through a scaling relation, akin to Kleiber’s Law, between society’s energy consumption and material stocks. Humanity’s energy consumption scales at 0.78 of its material stocks, which implies predictable environmental pressure regardless of the energy mix. If true, future global energy scenarios imply vast amounts of materials and corresponding environmental degradation, which have not been adequately acknowledged. Thus, limits to energy consumption are needed regardless of the energy mix to stabilize human intervention in the biosphere.

In this talk, I discuss the variety of roles in which scientists have opportunities to speak science to power; the origins of my serendipitous trajectory of chances to do so; some of my early and mid-career adventures speaking science to power; how I ended up as Science Advisor to President Obama; process and substance around science and technology advice in the Obama White House; and a few of the more transferable lessons I took away from these experiences. 

A global pseudo-experiment over the past century saw over 90 countries transitioning to below-replacement fertility rates (<2.1 children/woman). Fertility rates fell in many other countries while remaining high in a few dozen countries, mostly in Africa. 

The results of the global demographic transition experiment are clear: Low fertility countries increased incomes (six times higher in tfr<2.1 compared to tfr >4 countries) and life expectancy (20 years difference). High fertility countries remained poor, shorter-lived, and often violent and corrupt. 

The next century will see another experiment: Will countries with falling populations be better off compared to those with growing populations? Economists obsessed with growth forget bio-physical limits, global population overshoot, resources scarcity, and rising density-dependent mortality. And they forget total dependency ratios (young plus old) that remain lower in old Japan than in young Nigeria, for example. 

Since 1970, when demographic transitions accelerated due to concerns about overpopulation, world population growth has been roughly linear—about a billion added every 12-15 years. But global fertility decline has stalled at well above replacement levels. As global average fertility rates halved from 5 to 2.4, the population doubled from 3.5 to 7 billion, so that growth continues at 80 million per year, 8 billion by 2023, 10 billion by 2060.

Using the Kaya Identity to highlight reasons for changes in Greenhouse emissions shows that unless global population growth ceases, cuts to emissions will not be fast enough to avert catastrophic planetary warming. As Attenborough put it, “Every environmental and social problem becomes more difficult and ultimately impossible to solve with ever more people.” Improving the status of women and reducing international migration give additional arguments for reducing fertility rates. Completing the global fertility transition should be high on everyone’s agenda

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What allows any type of energy to be sustainable? I would argue that one of the requirements for sustainability is adequate production of taxable revenue. Company managements depend upon taxable revenue for many purposes, including funding new investments and paying dividends to shareholders. Governments depend upon taxable income to collect enough taxes to provide infrastructure and programs for their growing populations. 

Taxable income is a major way that “net energy” is transferred to future investment and to the rest of the economy. If this form of net energy is too low, governments will collapse from lack of funding. Energy production will fall from lack of reinvestment. This profitability needs to come from the characteristics of the energy products, allowing more goods and services to be produced efficiently. This profitability cannot be created simply by the creation of more government debt; the rise in the price of energy is tied to the affordability of goods, particularly the goods required by low-income people, such as food. This affordability issue tends to put a cap on prices that can be charged for energy products. 

It seems to me that Green Energy sources are held to far too low a standard. Their financial results are published after subsidies, making them look profitable when they really are not. This is one of the things that makes many people from the financial community believe that Green Energy is the solution for the future.

EROEI of Green Energy does not adequately measure production of taxable revenue. If EROEI is to be used as a measure of which types of energy best meet our needs, perhaps the list of items to be included in EROEI calculations needs to be broadened. Alternatively, more attention needs to be paid to unsubsidized taxable income as an indicator of net energy production

New Zealand is planning to transition to a new economy in which net greenhouse gas emissions are reduced to zero by 2050.  

The plan is based on economic modelling. Vivid Economics (London) and a parliamentary working group, GLOBE-NZ, completed this work. It includes a partial shift in our energy sources from fossil fuels to renewable alternatives, primarily wind, solar PV, biofuels, and geothermal. It assumes continued economic growth. National GDP (gross domestic product) is projected to double during this transition. 

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Energy Return On Investment (EROI) is a an analytical method drawn from thermodynamics (physics) in the field of biophysical economics. It establishes a ratio (outputs:inputs) of energy produced by a system relative to  the energy required to create and maintain that system. For example how much energy a wind turbine puts out during its lifetime relative to the energy input required to obtain the raw materials, manufacture the turbine, maintain it, and eventually decommission and recycle it. 

Many scientific papers have collectively established general EROI values for the main fossil based and renewable energy sources. They have also established that these ratios are higher from fossil fuel based systems than from renewable systems.  

In this analysis the EROI for the New Zealand economy was compared between the present day and in the modelled scenario of net zero emissions in 2050.

The EROI for our national energy system drops from 20.3:1 to 15.7:1. For context, this is a drop in per capita energy consumption of 37% from 16.5 GJ/person/yr today to 10.4 GJ/person/year. Our per capita energy consumption in 2050 will be equivalent to what it was in the late 1970s and early 1980s.  

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Financial economies are fueled by energy. Energy to manufacture products, maintain systems, and deliver services to society. Energy systems provide the quality of life we enjoy today. Constricting the energy supply to our society at the expense of our energy system will also constrict the economy. Financial modelling does not detect this fact. Indeed it is not considered in our transition plan thus far.   

Planning for a ‘low emissions’ transition by any country must include both biophysical (eg EROI) and economic dimensions. The alternative risks a major shortfall in physical resources required to achieve economic aspiration. 

Oil and gas have been the dominant fuels of industrial society for more than a century. Their unbridled consumption has allowed for accelerated economic development but has also led to significant environmental damages and also reduced the stock of ultimately recoverable resources. And while there have not been shortages across the globe, a shift from conventional to unconventional resources has occurred. One aspect of this shift that was not fully explored in previous discussions is the extent to which the long-term net-energy supply of oil and gas is affected by the use of lower quality energy sources. To fill this gap, we incorporate standard EROI (energy-return-on-investment) estimates and dynamic decline functions in the GlobalShift all-liquids bottom-up model at global scale. We evaluate the energy necessary for the production of oil liquids to represent today 15.5% of the energy production of oil liquids, and growing at an exponential rate: by 2050, a proportion equivalent to half of the gross energy output will be engulfed in its own production. Similarly, we estimate the energy necessary for the acquisition of gas to correspond today to 6.7% of the gross energy output, before reaching 25% in 2050. Our findings thus question the feasibility of a global and fast low-carbon energy transition.

Transportation is one of the key sectors to decarbonize globally. It largely relies on liquid fuels (95%) and around 55% of the world’s total liquid fuels are dedicated to this end. Electric vehicles are in principle a technically workable solution for decarbonizing light mobility; although a 1-to-1 vehicle replacement would sustain the problems inherent to the model of private mobility that generates problems of public space occupation, traffic jams, traffic-related accidents, segregation of spaces or the requirement of large communication roads.

Material availability is one of the key biophysical relevant constraints which is also at play.1–3 In this work, we have compiled data on material requirements for 5 different types of electric batteries for electric vehicles which are characterized by different mineral dependencies: LMO (lithium-manganese), NMC622 (nickel- manganese-cobalt), NMC811, NCA (nickel-cobalt-aluminium) and LFP (lithium-iron-phosphorus).4 Their ESOIst and ESOIpou are derived in a static definition (over the lifetime and current levels of parameters) computing the energy intensities and accounting for material recycling rates (including an uncertainty analysis with relation to (1) Ea&b: energy losses from the energy stored in the batteries to the energy that actually drives and operates the electric vehicle; and (2) TDL: losses from the electrical grid to the charger and until the battery) (see results in table below for 200,000 km use batteries).

The Canadian oil sands are the third largest reserve of crude oil in the world. Two different types of crude are produced out of raw bitumen: synthetic crude oil (or ‘upgraded bitumen’) a light hydrocarbon used as a feedstock by simple refineries, and diluted bitumen (or ‘non-upgraded bitumen’), a very heavy crude that can be refined by complex refineries outside of Canada only. Whereas synthetic crude was for a long time the main output of the oil sands patch, the trend has changed dramatically since the early 2000s: annual production of diluted bitumen jumped from approximately 10 million of m3 in 1997 (45% of production from the oil sands) to 85 million in 2016 (62% of production). Past research on the EROI of oil sands was conducted in a context where synthetic crude dominated production from the oil sands. We propose to re-assess the EROI of oil sands-derived crude in the new context of a barely processed crude stream exported in large quantities to complex refineries in the Midwest. Our proposition involves a different methodology than the one used by our predecessors. Instead of estimating the EROI of the oil sands as a single entity, we perform two estimations at the mine-mouth, one for synthetic crude and a second for diluted bitumen production. We argue that doing so unravels a production and commercial dynamic unsuspected by past researchers and leading to an important re-assessment of the oil sands’ EROI. We focus on the methodology developed to estimate the EROI of synthetic crude and diluted bitumen and the difficulties involved. We will show how we used standard EROI protocol (Murphy et. al., 2011) and publicly available data to estimate the embodied energy of indirect inputs used in oil sands production. We will show how some unresolved accounting issued (such as embodied energy of wages) in the methodology of EROI leads us to propose different series of results depending on the energy inputs to be incorporated or not in the analysis.

Energy storage is usually discussed with reference to technological devices such as batteries, or fuels such as gasoline. In this presentation drawing on my recent book, I argue that energy storage and its relationship with human societies must be appreciated simultaneously in biophysical, cultural, and technological terms. Each distinct form of large-scale, socio-politically complex society evident in the historical record can be identified with a universal and ubiquitous form of energy storage. I explore three key historical transitions in ways that human societies have organized including – (1) the Neolithic transition, manifesting in the shift from foraging and hunting to agriculture and settlement; (2) the first industrial revolution, manifesting in the rise of coal-fired steam power; and (3) the Age of Oil, manifesting in the emergence of petroleum-fueled mass mobility. I draw on these transitions to explore the past, present and future role of storage and implications in a post-fossil fuel world.

The Canadian oil sands are the third largest reserve of crude oil in the world. Two different types of crude are produced out of raw bitumen: synthetic crude oil (or ‘upgraded bitumen’) a light hydrocarbon used as a feedstock by simple refineries, and diluted bitumen (or ‘non-upgraded bitumen’), a very heavy crude that can be refined by complex refineries outside of Canada only. Whereas synthetic crude was for a long time the main output of the oil sands patch, the trend has changed dramatically since the early 2000s: annual production of diluted bitumen jumped from approximately 10 million of m3 in 1997 (45% of production from the oil sands) to 85 million in 2016 (62% of production). Past research on the EROI of oil sands was conducted in a context where synthetic crude dominated production from the oil sands. We propose to re-assess the EROI of oil sands-derived crude in the new context of a barely processed crude stream exported in large quantities to complex refineries in the Midwest. Our proposition involves a different methodology than the one used by our predecessors. Instead of estimating the EROI of the oil sands as a single entity, we perform two estimations at the mine-mouth, one for synthetic crude and a second for diluted bitumen production. We argue that doing so unravels a production and commercial dynamic unsuspected by past researchers and leading to an important re-assessment of the oil sands’ EROI. We focus on the methodology developed to estimate the EROI of synthetic crude and diluted bitumen and the difficulties involved. We will show how we used standard EROI protocol (Murphy et. al., 2011) and publicly available data to estimate the embodied energy of indirect inputs used in oil sands production. We will show how some unresolved accounting issued (such as embodied energy of wages) in the methodology of EROI leads us to propose different series of results depending on the energy inputs to be incorporated or not in the analysis.

How did the use of fossil fuels to power the economy come about and which forms of the solar flow were replaced by fossil fuels? We need to understand the beginnings of the fossil fuel era in order to cope with the very difficult transition to a just and sustainable economy at the end of the hydrocarbon era. Neoclassical economics is fundamentally inadequate, given its focus on economic growth and the insatiable consumer, to this task. BioPhysical Economics should include historical and institutional analyses to accompany the focus on EROI. 

1. Becoming more resource-efficient will not, in and of itself, lead to a sustainable and just ecological civilization. This is the Jevons Paradox, where more fuel-efficient machines actually increase the use of resources. 

2. We need to understand market structure. Neoclassical economics relies on the perfectly competitive model.  Unfortunately, the model is very remote from reality. Hydrocarbon production, from the earliest days of the English coal trade, have been highly monopolized. The use of the perfectly competitive model blurs important distinctions in the meaning of efficiency.  In order to understand what economists mean, we need to decipher the definition. 

3. A critical element is missing: The replacement of skilled labor by fossil-fuel-powered machinery. Coal replaced charcoal to provide heat, and nearly every manufacturing process requires heat. But fossil fuels are also used to provide motion. After James Watt patented his Sun and Planet Gear, the use of coal exploded. Coal allowed for greater control over skilled labor. Power in the form of mechanical advantage augmented the power of capitalists to control workers. Only by combining technical analyses of energy with those of resource efficiency, the degree of monopoly, and the transformation of the labor process can we understand fully the origins of the fossil fuel economy, and understand the dynamics of the transformation that awaits us in the near future.

Over the last few thousand years, humans have come to dominate and transform many earth processes and entered a new geological epoch, the Anthropocene. The hallmark of the Anthropocene is the great acceleration – the synchronous surge in many aspects of human activity, including population growth, resource extraction, energy use, CO2/CH4 emissions, climate change, and economic growth. On the one hand, these changes have led to a better quality of life for billions of people: reductions in poverty and malnutrition, and increases in health, welfare, information, communication, and education. On the other hand, the great acceleration has taken a dramatic toll on the planet; decreases in biodiversity, ocean fisheries, forests, estuaries, and other productive ecosystems, climate destabilization, and increases in pandemics, pollution and the potential for global violence. This recent transformation in human society and the global environment has been fueled primarily by fossil energy accumulated over 100s of millions of years. Humans have extracted and burned these stores in just a couple of centuries, using the energy to do the work of feeding the growing human population and consumption, supporting the expanding global agricultural-industrial-informational economy. We argue that the supply of finite fossil fuels, coupled with a decline in Energy Return On Investment for nearly all energy sources, will likely result in a“Great Deceleration” of human society as net energy reserves are dramatically reduced.

Energy companies, like companies more generally, routinely have to make investment decisions by comparing alternative investment projects.  In the face of the uncertainty of the current energy transition, traditional economic tools, such as discounted cash flow (DCF) analysis, that depend on long-term cash forecasting, offer limited, deterministic, and potentially misleading insights. Additionally, there are many pressures on companies to expand decision-making criteria to “ESG (Environmental, Social and Governance) considerations. But these are often qualitative with no clear standards, leaving investors often forced to make significant investments based on poorly understood and even self-defeating considerations. We explore the application of Biophysical Economics (BPE), an approach to economics based on the natural sciences, as an alternative to provide an additional lens that cuts through the uncertainty and political pressures to help companies navigate this uncertainty and make more robust long term investment decisions. The most immediately useful tool within BPE is the concept of Energy Return on Energy Invested (EROI).  Specifically, we compare an investment case in oil sands with one in microbial-enhanced oil recovery, applying the two methodologies in parallel.  Results from a traditional economic perspective weakly favor the oil sands, whereas biophysical economics strongly favors the microbial case due to its significantly lower energy requirement to produce the energy that it yields. A close examination indicates that EROI can be used effectively and practically next to DCF to provide better insights and identify cases that are fundamentally less sustainable for society.  We then consider how the concept can be applied more widely throughout society.

The abundance of cheap energy, in the form of fossil fuels, has been a key driver of the economic development of modern societies. Hence, the transition towards renewable energies at a global scale – mainly solar and wind – will be one of the most powerful forces that will shape the globalized economy of the 21st century. In order to understand the dynamics at hand, we construct a Stock-Flow Consistent model combining the insights from (i) EROI curves for global wind and solar potential [1][2], (ii) a simple energy-economy model assessing the feasibility and implications of the energy transition [3] and (iii) a global model incorporating the interactions between the economy, finance and climate dynamics [4]. The model is a system dynamics model of the global economy treating explicitly the interactions between sectors (energy, banking, households, public and rest of the economy) and the feedback loops between flow dynamics and accumulation or depletion of stocks.
This stock and flow consistency, similar to conservation laws from the natural sciences, ensures that unsustainable financial developments are accounted for in the overall dynamics. This is fundamental given the recent importance given to green finance. Our new model shares a certain number of similarities with the one of Jackson and Jackson [5] but differs in several aspects. First, our model is not UK- specific but at world level and is based on very different EROI curves. Most importantly, it explicitly includes the major role which the State has to play in the energy transition and its financing. Thanks to this, we can discuss the feasibility of the energy transition, together with several financing strategies and their impacts on debt, inflation, employment, and income distribution.

1. [1]  Dupont, E., Koppelaar, R. & Jeanmart, H. Applied Energy 209, 322–338.

2. [2]  Dupont, E., Koppelaar, R. & Jeanmart, H. Applied Energy 257, 113968.

3. [3]  Dupont, E., Jeanmart, H. & Germain, M. Biophys Econ Sust 6, 2.

4. [4]  Giraud, G. et al. Ecological Economics 147, 383–398.

5. [5]  Jackson, A. & Jackson, T. Ecological Economics 185, 107023.

All economies require physical resource consumption to grow and maintain their structure. The modern economy is additionally characterized by private debt. The Human and Resources with MONEY (HARMONEY) economic growth model links these features using a stock and flow consistent framework in physical and monetary units. Via an updated version, we explore the interdependence of growth and three major structural metrics of an economy. First, we show that relative decoupling of gross domestic product (GDP) from resource consumption (or declining energy intensity) is an expected pattern that occurs because of physical limits to growth, not a response to avoid physical limits. While an increase in resource efficiency of operating capital does increase the level of relative decoupling, so does a change in pricing from one based on full costs to one based only on marginal costs that neglects depreciation and interest payments leading to higher debt ratios. Thus, economies with higher debt ratios might only appear to be more decoupled. Second, if assuming full labor bargaining power for wages, when a previously-growing economy reaches peak resource extraction and GDP, wages remain high but profits and debt decline to zero. By removing bargaining power, profits can remain positive at the expense of declining wages. This indicates an increased tension between capital and labor when resource consumption stagnates. Third, the distribution of intermediate transactions within the input-output table of the model follows the same temporal pattern as in the post-World War II U.S. economy. These results indicate that the HARMONEY framework enables realistic investigation of interdependent structural change and trade-offs between economic distribution, size, and resources consumption.

Life cycle sustainability assessment (LCSA) methods (namely environmental life cycle assessment-eLCA and life cycle costing-LCC) has previously been used for estimation of net energy indicators. While eLCA’s life cycle energy/material inventory has enabled more detailed estimation of energy inputs and outputs for net energy indicator calculation, LCC based monetary evaluation of energy cost and output has also been adopted for net energy indicator assessment, due to relative accessibility of reliable economic data (in comparison to energy inventory data), close association of energy cost/prices within an economy/society, and the ease of harmonization of units for measuring energy inventory items in monetary terms (labour, land, machinery and other energy inventory items are often more easily quantified in monetary terms).   

Based on understanding that continuity of human civilization/development depends on the capacity of humanity to continually derive enough net energy for continuous survival/sustenance, the fulfilment of any sustainability aspiration or sustainable development goal will be dependent on the amount of net energy available to the society, hence LCA/LCSA derived net energy indicators can be direct or indirect/proxy metrics of capacities of organizations/sectors/economies/societies/nations to fulfil their sustainability aspirations or sustainable development goals, via the production and use of different products, improvement of various industrial processes and changes in behavioural patterns and activities.  Consequently, this study seeks to establish the extent of relationship between net energy and different environmental, social and economic impact categories listed within the United Nations Sustainable Development Goals (UN SDGs) by listing previous associations identified and suggesting net energy-based indicators for measuring the progress of different impact categories within the 17 UN SDGs.

Many researchers quantify the immediate material and energy requirements of achieving various levels of human satisfaction, but less work has considered society’s embodied energies from the past and their requisite role in establishing present economic and biophysical stability. Country-level energy consumption accumulated over time represents an investment that establishes present material and social infrastructures which in and of itself contributes greatly to quality of life. Decades of unequal magnitudes of energy consumption between nations have generated ongoing economic and social structural disparities, for example, in the form of infrastructure development and social gains. We show that magnitudes of energy investment correlate with achievements in human quality of life proxies. For example, a country’s attainment of a cumulative energy investment (CEC) of ~5000 GJ/capita may ensure predictable levels of wellness across an array of quality-of-life proxies (Fig. 1). Nations that have reached this level of energy investment could potentially leverage these existing structures as an opportunity to scale down rates of energy per capita consumption to help reduce their biophysical perturbations. 

In the fullness of time, the Earth will be devoid of exhaustible fuel sources. By then, an entirely new power grid will need to be in place. It will presumably resemble the Largest (aka most productive) Sustainable Power Grid (LSPG) consistent with the laws of physics and chemistry. Although the absolute need for such a grid is still far in the future, it is none too soon to start planning the whole and constructing parts of it. Some of that is happening already, with wind and solar farms springing up in favorable locations. Yet three obvious questions remain: (#1) How productive can the LSPG be expected to be, (#2) how soon should it be built, and (#3) what sort of penalty will have to be paid if it remains incomplete when the need finally arises. We address these and related questions with the aid of a simple dynamic model.

An examination of historical data on per-capita GDP, energy use, and debt revealed a heretofore unnoticed relationship among these three quantities. Prior to 1960, world GDP and energy use are tightly correlated, but after 1960, GDP starts to diverge from energy use, with GDP continuing to grow while energy use levels off. The magnitude of the divergence is found to be directly proportional to the magnitude of the accumulated debt. Nearly identical behavior is observed for individual countries. Analysis of these and other economic data indicates that the divergence between GDP and energy use is a financial artifact related to debt growth and not the result of improving energy efficiency as is commonly perceived. This implies that the true GDP of an economy is determined solely by its energy consumption and that there has actually been very little global per-capita economic growth since 1970 when per-capita energy use plateaued.  

    In order to understand the relationship between GDP and energy, a new theory of value is proposed. The theory considers the economy as a system of labor exchange, rather than production and consumption. In such a system, economic growth is not possible when work is carried out by human labor alone. It is only when humans utilize non-human energy to do work that economic gain is achieved. In effect, energy acts as an additional source of labor (Le), reducing the amount of human labor (L) needed to produce a product. Based on this theory, an analytical expression for GDP is derived: GDP = 1+ Le/L. It is shown that the data presented are consistent with theory predictions. This indicates that economic activity is the consequence of energy use, not the other way around.

The concept of equilibrium, as developed in the latter half of the 19th century, has played a key role in modern economic theory.  However, much progress has been made recently in the study of equilibria and systems that operate far from equilibrium.  To anyone who has followed recent developments in the study of dynamic systems, it is clear that an economy is a complex adaptive evolving system operating far from equilibrium.  I believe that it is time for biophysical economists to re-examine the nature and role of equilibria in the context of the dynamic operation of an economy, and to develop a modern theory of economic equilibria.  In this presentation, I will explore the nature of one kind of economic equilibrium using a nano-economy.  I will start with a brief definition of a nano-economy, and a brief description of a remarkable class of nano-economic models.  These models demonstrate the same equilibrium-seeking dynamics that are also operating in the major free economies of the modern world.  From there we will explore some aspects of the kind of equilibrium found in such nano-economies, with a particular focus on the equilibrium-seeking role of entropy.  Starting with a definition of the current state of the model, we will expand that to a definition of key variables, and a mathematical representation of the space of all possible states as we vary the total capital in the model.  We will then explore the boundaries of the aggregated state space and the relative density of states within various parts of the state space, linking these ideas to concepts in physics.  We will finish with a discussion of equilibrium in this system, and the dynamic behaviour of the model as it seeks equilibrium.

We combine elements of our previous work to generate a computer-assisted procedure to give the various stakeholders of the Lerma-Santiago basin (the second largest river basin in Mexico) a greater say in the economic and environmental decisions that affect them.  The basic concept of the project is to represent the most important aspects of the basin in a series of images and graphs that can be displayed simultaneously, and which represent historical reality as well as future scenarios.  Our model is based on a computer model/visualization Charles Hall constructed for the country of Costa Rica.  Two important issues are represented by this complex evolving image.  First, the data are linked: e.g. one cannot have agricultural expansion without deforestation and/or increased use of fertilizers.  Second, the simulations are an extension of displayed past patterns, so that mostly they seem intuitively reasonable.  With the simulations, one can “joystick” a quite different future.  Thus if one stakeholder group is interested in e.g. conserving natural forests it has implications for agricultural production,  economic change, and nutrients.   If citizens do not like some of the consequences they can make their complaints explicit.  Then the scientists involved have to show and defend (or change) the relations they have built into the model, give the studies that support that and make their case.   This can be done with a layered approach to each graphlet, where it is possible to click on the graphs and examine the empirical and modeled relation between and among variables.  Ideally, this contributes to the ability of stakeholders to examine the explicit, quantitative relations behind the impacts of their own, or someone else’s, decisions.  The stakeholder then sees the impact of his or her assumptions about the relation.   We perceive this entire process as bringing the political decision-making process out from “behind the curtain” and into direct stakeholder scrutiny.

Worldwide crises are nothing new.  Periodic bottlenecks created by worldwide disturbances have been part of human history since the beginning of the human species. 1st Millennium AD cultures experienced at least three major disturbances. One in particular, the so-called AD536 Event has been widely studied. It resulted from sudden global cooling caused by volcanoes in the midst of a global warming trend and resulted in the deaths and impoverishment of millions of people.  Anthropologists and political scientists have independently identified about 200 regional habitats worldwide.  Each has its own political economy and regional peculiarities that are recorded by archaeologists and historians as centuries-long chronologies of chained periods. Each period was adapted to the conditions of the political and economic region during its time.  The adaptive traits shared with the modern world economy are hegemonic social organizations and locally customary means of managing information.  These commonalities obviate differences in economic and ecological scales making them possible decision path models for the modern world-system past and future. Given the current realized and impending world crisis, the decision paths typically followed in the evolution of civilizations through and past troubling bottlenecks should be of interest to futurists and policymakers.  Key to understanding these decision paths is a clear view of the global and local relations of a given time period and place.  These global-local relations can be viewed as fabrics whose threads are the dimensions of information or knowledge upon which they operate during their period.  This paper discusses numerical methods to arrive at these fabrics.

Ultimately, the implicit goal of ISBPE must be to develop a science of economics that commands wide respect and brings the global domination of neoclassical economic theories to an end.  Such a new science must be consistent with the currently known and emerging principles of science, consistent with relevant empirical evidence, and consistent with the widely held hopes for a just and lasting future for humankind.  We have a very long way to go to achieve this goal.  We need to articulate that goal in more detail, identify the missing pieces of such a science, and focus our energy and our intellects on developing those pieces.  Drawing inspiration from the recent paper by Professor Xi Ji of Peking University, which contains the broad strokes of such an agenda, we can begin the process of identifying some of the specific pieces that are needed, and, at the same time, we can scour the modern sciences and other contemporary and historic sources for insights and inspiration that have, until now, been largely neglected by neoclassical economists.  First and foremost, we must address the elephant in the room.   A shrinking economy is an inevitable condition of our future existence.   We do not have a viable theory of money that will work in a steady-state or shrinking economy.  Then, following the path indicated by Professor Xi, in place of the principles, tools, and techniques of NCE, we must a) articulate the fundamental principles of economic science, b) we must develop an economic theory consistent with those principles, and c) we must work to develop the tools and techniques that embody those principles, that will be taught to future economic students in universities around the world, and that will be used by analysts in the government departments and corporate headquarters of the world.  We will know when we have attained that lofty goal when the first degree-holding graduate of economic science is hired as CFO of a major corporation.