The Necessity of Degrowth
Growth without expanding energy production results in vaporous nonsense
Before we move on, I'd like to take a minute and reflect on the last series of posts. In fact, these were all related.
The point of the first article was to point out that, despite all the news in the press about increasing renewable energy, it has so far not replaced any of our previous energy sources on a global level, not even biomass. Instead, renewable energy has merely been added to the global energy mix.
By definition, that's not a transition. A transition would involve a replacement of one energy source for another. That has not happened for any energy source on the planet, at least not so far.
What has happened is a degree of replacement within certain countries, as a reader pointed out to me. I was able to take a look at a few of these. In a number of countries, coal has, indeed, been replaced. That's the good news. The bad news is that it's been almost completely replaced by natural gas. While natural gas is less polluting than coal, it is still a finite, exhaustible resource, and it still adds carbon to the atmosphere.
Looking at the UK stats, this swapping out coal for natural gas has been the main story of the energy transition. There is some hope, however, as it looks like at least some of the energy formerly generated by coal is being generated by renewable energy sources, mostly wind. However, that's a small part of it, perhaps ten percent.
In the United States, as far as I can tell, the picture is a bit less encouraging. Here, it has almost been entirely a story of swapping out coal for natural gas 1:1. Renewable energy has been added to the mix, but the renewable energy is mostly new generation, not replacement.
I saw a recent news article about the Biden administration once again tightening the emission requirements for energy producers. From the article, it appears that these energy regulations, which have been slowly adopted and expanded over a number of years, make coal more expensive to use relative to natural gas for generating electricity, which is what has driven that transition. And, despite the price of solar and wind falling, it has still not displaced natural gas usage in the U.S.
I suspect that most countries in Europe have followed the UK model. That is, coal use has been largely swapped out for natural gas1, but at least some of the coal has been replaced by renewable energy sources. I suspect that in places that have a lot of potential for renewable energy—such as wind power in Denmark, or geothermal in Iceland, for example—there has been a greater supplanting of fossil fuels by renewables. At the same time, there has probably been less swapping out in countries which have domestic fossil fuel industries—and hence cheaper prices—such as the UK and the United States.
When we zoom out to the global level, presumably declining coal use in these countries has accompanied by increased coal use elsewhere, especially in developing countries, meaning that total coal use (and fossil fuel use in general) has remained more-or-less constant, or even increased, even in the face of expanding renewables. Why this should be is unknown, as one would think that developing countries in many parts of the world would have abundant sunshine and the decreasing cost of solar energy would make it a more competitive option for energy generation relative to coal. However, this does not seem to be the case.
Much of this has already been pointed out by Timothée Parrique. For example (my emphasis):
...the drop in the price of renewables did not reduce fossil fuels [sic] consumption. Globally, solar electricity capacity has more than doubled between 2016 and 2022 but this has happened in parallel to a 5% increase in the use of oil, gas, and coal who still represent 76% of the world energy mix. What some people call an “energy transition” is closer to an energy addition where renewables are added on top of their fossil predecessors.
Even solar panels are not true “carbon-free substitutes” ... if they require high-carbon energy to be manufactured, transported, repaired, and recycled. In that context, pointing to the price of solar is deceitful. It would be like hoping that a drop in the price of veggies put the fast-food industry out of business.
A response to Daniel Driscoll: Another slice of degrowth bashing
It is likely that the charts touted by data-driven economic status-quo advocates like Noah Smith and Hannah Ritchie which show economic growth increasing in the face of declining carbon emissions are a result of this switch. Since natural gas emits less carbon per watt than coal, this would explain why these countries are emitting less carbon, despite experiencing economic growth by using more energy. But this is not primarily due to renewables.
Of course, there is no American or British or Danish atmosphere—there is only one atmosphere for the entire planet, so unless a reduction of carbon emission is global, pointing only to specific countries is disingenuous, and clearly an attempt to mislead people. Not only that, but assuming that carbon is the only problem with the eternal-growth paradigm is also a bad-faith argument as Parrique points out in the article cited above (my emphasis):
This is what I like to call carbon monomania: an obsessive preoccupation with one single environmental impact. But reality is more complex: climate change, ocean acidification, biodiversity loss, freshwater change, land-system change, etc. – the ecological crisis is made of several interdependent dimensions. Achieving carbon neutrality is like solving one face of a Rubik’s cube – necessary but not sufficient. And watch out: trying to solve one problem might mess up another.
For example, electrifying a large car fleet may reduce greenhouse gases emissions but at the costs of more metal extraction, and...electric vehicles use six times more minerals than conventional cars. This is why sustainability is so complex: all faces of the Rubik’s cube must be solved together. The real puzzle for green growth advocates is to demonstrate that GDP can be sufficiently decoupled from all forms of resource use and environmental impacts.
Which brings me to the next series of posts. In those, I questioned whether growth really makes our lives better at all. I won't readjudicate that here, but I think the evidence is overwhelming that growth does not inherently produce better well-being for citizens—in fact, maybe the opposite. It all depends on the circumstances of the country we are discussing. Therefore, why do we have the growth paradigm at the heart of all our economies worldwide?
And finally, if we cannot replace existing carbon-based energy sources 1:1 for carbon-free energy sources—as we have not to date—then it stands to reason that an eternal-growth paradigm is no longer viable, at least not without destroying the stable climate of the Holocene. And continuing carbon-based growth is self-defeating, as the increasingly unstable climate will cause harvest failures, droughts, wildfires, stronger hurricanes, refugee crises and so on, which will negate the benefits of continued economic growth.
In an article pondering how eternal growth is possible on a finite planet, Smith argued that eternal growth is possible by transitioning our economies in to the Metaverse. While this sounds like a parody of the arguments against degrowth, I assure, you it is not. It is the actual argument he made2. Read it for yourself:
The more fun or useful stuff you can do in VR — games, business meetings, vacations, hangouts — the less you’ll have to suck up physical resources to do it in meatspace. The more you can transform your subjective world by overlaying it with AR, the less you’ll have to suck up resources transforming your physical environment to suit your tastes. Thus, the Metaverse can help continue the decoupling of physical resource use from economic growth. The logical endpoint of all this, of course, is personality upload — completely digital environments with no need for any physical resource use except what’s needed to sustain the simulation...
Imagine that sometime far in the future, with highly advanced technology, we create a complete, physically exact simulation of the planet Earth in 1600 A.D., complete with the minds of 554 million digitized human beings. And then suppose we simply run that simulation forward, as the digital people develop steam engines, railroads, tractors, cars, airplanes, and so on.
This is a very real increase in GDP! The digital people are seeing their lives improve, and they’re paying for the improvement in digital marketplaces. There’s absolutely nothing fake about that GDP; a digital car that a digital person pays for in a digital marketplace represents every bit as much economic value as the real-world equivalent.
Now, hold on a second, wasn't the fundamental impetus for economic growth to give people in developing countries a better standard of living? To give them all the things they currently lack—decent housing, access to medical care, air conditioning, adequate nutrition, sanitation, transportation, all that basic stuff? At least that's what we're told. Economic growth is necessary to give the teeming multitudes in the world's poorest countries a higher standard of living. This is the argument made, for example, by Branko Milanovich.
Yet, at the same time, we're told growth on a finite planet is only possible by disappearing into the Metaverse. How does that help the people who don't have adequate food, sanitation, housing, medicine, running water, artificial lighting, and so forth? And how does the Metaverse improve our living standards, anyway? Even if it hadn't been a colossal failure, retreating form the real world into a virtual online fantasy world hardly seems like a net benefit to humanity, besides the owners of the virtual world, that is. It relies on the notion that anything we pay for must, by definition, be beneficial to humanity in some way, which is something only an economist would believe3.
The whole argument is so dumb and self-contradictory. And besides, the idea that a virtual economy can just grow forever without using more energy or resources is highly suspect. This is from an article posted on Marginal Revolution, hardly a left-wing blog (my emphasis):
Data center developers in Northern Virginia are asking utility Dominion Energy Inc. for as much power as several nuclear reactors can generate, in the latest sign of how artificial intelligence is helping drive up electricity demand.
Dominion regularly fields requests from developers whose planned data center campuses need as much as “several gigawatts” of electricity, Chief Executive Officer Bob Blue said Thursday during the company’s first-quarter earnings call. A gigawatt is roughly the output of a nuclear reactor and can power 750,000 homes.
Electric utilities are facing the biggest demand jump in a generation. Along with data centers to run AI computing, America’s grid is being strained by new factories and the electrification of everything from cars to home heating.
Northern Virginia fact of the day
Not only that, but Smith resorts to outright straw-manning his opponents, viz:
The degrowthers want governments to curb their plans to improve living standards, or even reduce living standards outright, in order to preserve the planet.
This is a bald-faced lie. The whole point of degrowth is to ensure a high standard of living for everyone—not just the rich—even in the face of declining energy and resource use. It is Smith's favored economic liberalism—with it's austerity measures, recessions and extreme inequality—which reduces the public’s living standards in order to preserve the fortunes of the rich, not degrowth. And increasing GDP doesn't seem to increase well-being all; something Smith, like most economists, at least pays lip service to:
GDP isn’t a perfect measure of human well-being. It leaves out everything that doesn’t get bought and sold in a market — leisure time, sunshine, low crime, or the value you create when you clean your own house. It’s certainly not a measure of human happiness. It’s not even a measure of utility, in fact — if people get valuable stuff for free (like Facebook), that doesn’t get counted in GDP either. But as long as people keep creating more stuff that people want, and finding ways to make people pay for that stuff, GDP keeps growing.
And there's the tell: As long as we keep finding ways to make people pay for stuff. You have to pay for more and more stuff all the time, and pay more money for it, and that is what drives GDP. But it doesn't improve well-being does it? I think Ran Prieur hit the nail on the head (8/24/23):
First, there is no limit to how much the economy can grow by expanding the definition of "growth" to include more and more vaporous things. Second, actual human prosperity will continue to decline, except for the very rich.
We saw this during the pandemic. While billions of people around the world were put under unprecedented stress and couldn't work, and while millions of people were sick and dying, the wealth of the world's richest people skyrocketed: "According to the Bloomberg Billionaires Index, 131 billionaires more than doubled their net worth during the pandemic. At the same time, close to 97 million people — more than the population of any European nation — were pushed into extreme poverty in just 2020, ...The global poverty rate is estimated to have gone up from 7.8 percent to 9.1 percent by late 2021.4" The world's ten richest people alone doubled their net worth to 1.5 trillion as the stock market soared, even in the face of unprecedented death and disruption to the global economy5. And, as I noted previously, food bank usage increased 1000 percent in the UK even as the economy doubled in size.
Thus, it should be clear that economic growth is orthogonal to people’s well-being, at least under the "economics as usual" paradigm. Meanwhile, as we saw previously, people's lifespans actually increase during recessions due to things like less air pollution, less car crashes, and more leisure time, including more time to exercise and cook at home.
So, maybe it's time we rethink economic growth, especially if we're serious about a true energy transition as opposed to merely an energy addition as we've had thus far. Recently, Current Affairs interviewed a Japanese economist named Kohei Saito who wrote a best-selling book in Japan about degrowth. From the interview:
First of all, I’m not saying...that we have to give up all the technologies. I explicitly admit we need renewable energies and electric vehicles…So, degrowth is not about going back to nature without any kind of Zoom, computer, iPhone, and so on. But at the same time, we have to question whether we need to buy a new iPhone every two years...
In the U.S., for example, education is commodified, and we have to pay a lot of money to go to university, and students have loans. Also, we have to pay a lot to go to a doctor because medical care is privatized and commodified. Public transportation is poor, so we have to buy cars, and we again have to have loans and so on.
So, our entire economy is commodified, and that means that we have to pay for everything, no matter how necessary these things are for everyone. And so, you need money and have to work harder, but jobs are precarious; wages are low, so you work longer hours, and when you still don’t have enough money, you have little time to spend with your family and friends, and so you’re unhappy.
So, my proposal is in a degrowth economy, all those basic services and goods must be decommodified. Education should be free. Medical care, public transportation, electricity—all these things should be as cheap as possible. And then you don’t really have to work so hard, and you don’t have to worry so much about your housing, future, and applications. These are the things that can make you feel much more happy and secure. That kind of public abundance can actually be realized without constant economic growth. Degrowth is a kind of new radical abundance.
To me, this sounds better than retreating into virtual fantasy worlds in order to keep imaginary numbers growing forever on a finite planet like Smith proposes. Don't you think? But that would involve socialism (Saito even uses the term 'communism'), which is why the rich and their spokespeople like Smith and Ritchie must oppose it at all costs: We can't let it happen here!
Often from Russia, which is rather problematic right now. BTW, much of the uraniaum for nuclear reactors comes from there as well.
To some extent he's right, as economic growth and energy use are not perfectly correlated 1:1. This is my complaint with a lot of the "collapse" crowd. However, neither are they uncorrelated to the extent that Smith and most economists imply.
In fact, we have abundant evidence that things like social media are eroding our mental health, not to mention undermining democracy and enabling the rise of fascism. What about expenditure cascades and positional goods? Does that make us better off? What about rising prices for necessities like housing and prescriptions? What about “influencers.” Do we really need them? And then there are things like ultraprocessed junk food, alcoholism, vaping, online gambling, and other addictions. You would have to be insane to believe that anything we pay for makes life better. Either insane or an economist—but I repeat myself.
Noah Smith is a deranged retard. He is, of course, very popular.
"The more fun or useful stuff you can do in VR — games, business meetings, vacations, hangouts — the less you’ll have to suck up physical resources to do it in meatspace. The more you can transform your subjective world by overlaying it with AR, the less you’ll have to suck up resources transforming your physical environment to suit your tastes."
This is the kind of argument only a robot like Noah Smith could find even remotely reasonable or attractive.