kent klitgaard: internal and biophysical limits to growth in the second half of the age of oil
DESCRIPTION
Kent Clitgaard, professor of economics at Wells College, spoke at the CEC Joint Public Advisory Committee's forum on Greening North America's Energy Economy in Calgary on April 24, 2013. More at http://www.cec.org/JPACenergyTRANSCRIPT
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INTERNAL AND BIOPHYSICAL LIMITS TO GROWTH IN THE SECOND HALF OF THE AGE OF OILKent A. Klitgaard
Wells College
Aurora, New York, USA
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THE DILEMMA OF ECONOMIC GROWTH
Are We growing too fast and to slowly at the same time?
Too fast to reduce carbon emissions? Too slowly to reduce unemployment and
poverty?
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LIMITS TO GROWTH AND THE BASIC ECOLOGICAL ECONOMICS MODEL
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I. DEFINITION OF EROI (SOMETIMES EROEI)Energy return on investment for an activity: Energy delivered to society EROI = __________________________ Energy put into that activity
Usually consider energy invested from society
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DECLINING EROI
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ECONOMIC THEORIES OF SECULAR STAGNATION
A Fossil Fuel-Driven Economy (with a large energy surplus) Produces a large economic surplus
ES = Value of Output – Σ (subsistence consumption + replacement investment)
This surplus seeks investment Inability to absorb surplus leads to short-term
recessions and long-term stagnation (slow growth)
Statistical Trace: unemployment and excess capacity
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EXPLANATIONS OF PERIODS OF PROSPERITY
1. Epoch-making Innovations -Absorb large amounts of economic surplus -spin-off industries -Examples --steam engine --railroad --automobile ----all fossil-fuel intensive 2. War and its aftermath
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REAL GDP GROWTH
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ENERGY AND GDP GROWTH
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GDP AND THE ENERGY MIX
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CARBON DIOXIDE EMISSIONS
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CARBON DIOXIDE EMISSIONS BY COUNTRY
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CARBON EMISSIONS PER UNIT OF GDP
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PERCENTAGE CHANGE IN GDP
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PERCENTAGE CHANGE IN GDP: US & MEXICO
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PERCENT CHANGE IN GDP: US AND CANADA
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EMPLOYMENT AND GDP GROWTH
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PERCENTAGE GROWTH IN GDP AND ENERGY
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OIL PRICES AND RECESSIONS
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THE NEW NORMAL?
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A PRESCIENT QUOTE?
“When we, systems dynamicists, see a pattern persist in many parts of a system over long periods, we assume that it has causes embedded in the feedback loop structure of the system. Running the same system harder or faster will not change the pattern as long as the structure is not revised”
--Donnella Meadows, Dennis Meadows & Jorgen Randers
The Limits to Growth 30 Year Update
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WHAT STRUCTURAL CHANGES CAN NORTH AMERICA BRING ABOUT?
Smaller scale, more local production Limits to speculative finance Work sharing More equality (internationally and intra-
nationally Getting by on less energy Sustainability can be neither Soviet-style
heavy industry nor globalized monopoly finance capitalism