The Corpus Callosum

Malthus Was Right

Well, maybe not Malthus, but Garrett Hardin and Paul Ehrlich — the
1960’s-era neomalthusian academicians — have been right on the
money.  There are hard limits to growth, and those limits are
upon
us.  This is the contention of Charles A. S. Hall and John W.
Day,
Jr., two systems ecologists who have published a paper in American
Scientist.

The paper is still behind a pay wall at the publication site, but a PDF
copy can be obtained href="http://www.esf.edu/efb/hall/2009-05Hall0327.pdf">from
Professor
Hall’s web site. (HT: href="http://www.theoildrum.com/node/5330#more">EROI Guy, @
The Oil
Drum. EROI Guy is
href="http://www.eroiinstitute.org/about/eroi-institute-biographies/">David
Murphy, a student of Charles Hall)

Here is the introduction to the article, as published at American
Scientist
:

href="http://www.americanscientist.org/issues/feature/2009/2/revisiting-the-limits-to-growth-after-peak-oil">Revisiting
the Limits to Growth After Peak Oil

In the 1970s a rising world population and the finite resources
available to support it were hot topics. Interest faded—but
it’s time
to take another look

Charles A. S. Hall, John W. Day

global population Thomas Malthus was perhaps the first economist to
indicate that there were limits to the human population that could be
sustained by the Earth’s resources. The 1970s were also a
period when
such limits on growth were widely discussed in research circles. In
both cases, an increase in energy use, particularly of fossil fuels,
has lead to greater food production, forestalling crisis. As a result,
such arguments have largely been silenced in current-day academia, to
the point where researchers interested in such topics cannot find a
department to work in, let alone funding. Hall and Day argue that this
is a mistake, that the problem has not gone away and will only take the
world population by surprise if it is ignored. They have re-examined
some of the data that led to the discrediting of the “limits
to growth”
theory and have shown that both resource use and costs have only risen,
and are no longer being mitigated by market forces. Although new
sources of energy have been found, they are much more expensive to
extract, a declining return on investment that Hall and Day think could
lead to large societal problems in the near future.

Peak Oil theorists make use of an important concept: Energy Return On
Investment (EROI).  This refers to the ratio between the
energy
used in the effort to obtain more energy, and the amount of energy that
is generated by that effort.  If the EROI is 1, the effort is
a
waste of time.  EROI is described in this article:

href="http://www.nytimes.com/2006/11/29/opinion/29homerdixon.htm?_r=1">The
End of Ingenuity
By THOMAS HOMER-DIXON
Published: November 29, 2006

MAYBE Malthus was on to something, after all…

…The debate about limits to growth is coming back with a vengeance.
The world’s supply of cheap energy is tightening, and
humankind’s enormous output of greenhouse gases is disrupting
the earth’s climate. Together, these two constraints could
eventually hobble global economic growth and cap the size of the global
economy…

..As the average E.R.O.I. of an economy’s energy sources
drops toward 1 to 1, an ever-larger fraction of the economy’s
wealth must go to finding and producing energy. This means less wealth
is left over for everything else that needs to be done, from building
houses to moving around information to educating children. The energy
return on investment for conventional oil, which provides about 40
percent of the world’s commercial energy and more than 95
percent of America’s transportation energy, has been falling
for decades.

From the Hall and Day paper:

The other big question about oil is not how much is
left in
the ground (the answer is a lot) but how much can be extracted at a
significant energy profit. The EROI of U.S. petroleum declined from
roughly 100:1 in 1930, to 40:1 in 1970, to about 14:1 in 2000. Even
these figures are relatively positive compared to EROI for finding
brandnew oil in the U.S., which, based on the limited information
available, appears likely to approach 1:1 within a few decades.

The authors’ main point is that the neomalthusian projections are
turning out to be valid.  This view has not been popular in
recent
years.  There probably are several reasons for this
denialism.  Perhaps one reason is that if one acknowledges
limits
to growth, then it would be prudent to moderate the rate of
growth.  Such moderation is not good for profits, at least in
the
short run. 

i-b15bd0625ea2093380608568dd148ab6-Economist commodity-price index 23 April 2009.gifHall and Day recognize that
the projections
of
scarcity were not borne out in the latter years of the 20th century,
and the first few years of this century.  Thus, there was a
period
of time during which the projections appeared to not hold.  In
2008, though, we did
see an alarming
rise in food prices
, accompanied by href="http://www.cnn.com/2008/WORLD/americas/04/14/world.food.crisis/">scarcity
and food
riots.  That has abated somewhat, due to the
dramatic decline
in
the price of oil, but it did demonstrate the principle.  Hall
and
Day now argue that the early neomalthusian projections have been
validated by recent events.

Their story is an illustration of the classic interplay between
science, the business community, and public opinion.  In order
to
understand it, it is necessary to know some history.

An important contribution to neomalthusian theory appeared in 1972: a
book, The
Limits of Growth
, by by Donella
H. Meadows, Dennis l. Meadows, Jorgen Randers, William W. Behrens
III.   This was prepared for a group, The Club of
Rome. 
(An abstract,
in
RTF format, is available from href="http://www.clubofrome.org/eng/home/">The Club of Rome;
Wikipedia has an article on href="http://en.wikipedia.org/wiki/Limits_to_growth">The
Limits to
Growth
)

The Club has a href="http://www.clubofrome.org/eng/about/instant_information_docs/Briefing_Note-Mission_and_Activities_of_the_Club_of_Rome.pdf">briefing
note (PDF) that describes who they are:

The Club of Rome is an independent, not-for-profit
organization with an international membership. It draws on the insights
and expertise of its members from all regions of the world, from
different cultures and histories, from different fields of science and
public policy and from academia, civil society and the corporate
sector. Since its founding forty years ago, it has been promoting
interdisciplinary analysis, dialogue and action on the fundamental,
systemic challenges which are determining the future of humanity.

There was a backlash against the book, and it gradually fell from
public notice.  This backlash was  comparable to the
backlash
we see against the concept of anthropogenic climate change, in that it
was widespread, highly motivated, and highly illogical. 

Of course, it can be upsetting to see graphics such as this (based upon
the projections in The
Limits to
Growth
):

i-923b7f0b19ec7aa37ecbf5c6c83ccef4-Limits ot Growth Forecast.png

Hall and Day are careful to point out, as the original authors did,
that the timing of these projections is uncertain.  However,
the
model suggests that the post-2000 world will see a period of
disequilibrium.  Many things will change.  Sometime
in the
first three decades of the 21st century, we will see an inflection
point in the world death rate, roughly corresponding with decreases in
food per capita, industrial output per capita, and services per
capita.  Sometime around 2050, the population will start to
decline. 

Anyone who is even vaguely familiar with these kinds of mathematical
models will know that: the slopes, the timing or the inflection points,
and the relative positions of the peaks are susceptible to considerable
uncertainty.  Also, the slopes are not nearly so smooth as
they
look on the graph, when
experienced
on a human scale
(month-to-month, year-to-year). 
As a
result, everyday experiences will lead to observations that seem to
contradict the trends.  For example, if there is a major oil
field discovered, or  a news report about a new,
higher-efficiency type of solar panel, it could be temping to think
that new discoveries and technologies could permit indefinite expansion
of the economy.  

If one focuses too much on the minor
perturbations, and falls into the cognitive trap of href="http://skepdic.com/confirmbias.html">confirmation bias,
it
would be very easy to dismiss the entire model as bunk.

Of course, it is impossible to prove that there will not be new
discoveries and technologies.  But the question is: at what
point is is most reasonable to continue gambling on the belief that
discoveries and technologies will save us, and at what point is it most
reasonable to start taking precautions.  Hall and Day contend
that the model, so far, has been accurate.  They note,
however, that the model predicts a more dynamic phase to follow.
 Perhaps the model won’t hold up.  

After all, what evidence do we have that resource depletion is causing,
or is about to cause, limits to growth?

We know that the persons who would discredit neomalthusian ideas have a
conflict of interest: they want to make money.  But perhaps
the neomalthusians have a conflict of interest, too.  If so,
it is less obvious, but perhaps it exists.  So are there
others who have evidence to offer, evidence that would tend to confirm
the notion that there are is a hard limit to growth, and that we are
approaching that limit?

Consider this:

April 25, 2009
href="http://www.econbrowser.com/archives/2009/04/oil_shocks_and_1.html">Oil
shocks and recessions

Here I provide some more background on the relation between oil price
increases and economic recessions.

When I first began working on my Ph.D. dissertation in 1980, I was
intrigued by the fact that the oil embargo of 1973-74 and the collapse
in Iranian oil production after the revolution in 1978 were both
followed by global recessions. But when I called attention to the fact
there had been a sharp increase in the price of oil prior to 6 of the 7
postwar U.S. recessions up to that point, the general response was one
of skepticism…

…Was the oil shock of 2007-08 the sole cause of the recession?
Certainly not. But did it make a material contribution? In my opinion,
the answer unquestionably is yes.

And these:

i-e3f6c0357a0905dd8d88f3598d499462-Figure 1_0.png
(source)

i-c86b6470a4f2a447b72ce063a51ddb12-Recessions and Oil Spikes.png
(source)

To some extent, the relationship between energy prices (with the price
of motor fuel serving as proxy) and economic activity tends to be self
correcting.  The most recent price spike has been followed by
a substantial reduction in economic activity.  The prices have
fallen is response.  But so far, there has not been a recovery
this time around, even though the prices have fallen.  For
example, in March 2009, cargo href="http://www.calculatedriskblog.com/2009/04/truck-tonnage-more-cliff-diving-in.html">truck
tonnage declined by 2.5% in the USA.  The href="http://www.istockanalyst.com/article/viewarticle/articleid/3195514">Baltic
Dry Index (index of ocean shipping costs) remains severely
depressed, although it has recovered a bit lately.    

i-9bd3583b96e5f675163486126ca9aaa7-BDI.jpg

What these findings imply, is that as economic activity improves (if it
ever does), energy prices will go back up.  This will happen,
in part because because capital expenditures for oil and gas
exploration have gone down.  We will face increasing demand,
with decreasing supply.  

href="http://www.businessweek.com/magazine/content/09_07/b4119034606428.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis">Exxon:
Juggernaut or Dinosaur?

…Yet despite its seeming invincibility, Exxon is surprisingly
vulnerable. Interviews with industry analysts, consultants, and current
and former employees cast doubt on its strategy and growth prospects…

…Not only is Exxon producing less oil but it’s also having difficulty
replacing the oil it pumps from the ground. In 2007 the company
replenished just 76% of the approximately 1.52 billion barrels it
produced that year, according to its Securities & Exchange
Commission filing. The 2008 numbers, to be reported this month, seem
certain to be worse. That’s because the SEC considers only those
reserves that are economically viable at the price of oil on the last
day of the year. On Dec. 31, 2008, a barrel of crude sold for $44.60,
less than half the 2007 yearend price of $95.98. The lower the price of
oil, the lower the percentage of Exxon’s reserves that would clear the
hurdle…

Krugman says that he is worried about the current href="http://news.cincinnati.com/article/20090424/BIZ01/904250360">recession
becoming L-shaped:

I’m in the camp that really worries about the
L-shaped recession. We level off but we don’t get the recovery. We hope
it isn’t, but it has all the markings of it. This looks like the kind
of slump that has all the markings of where normal recovery forces are
very, very weak.

It’s hard to see where recovery comes from. Almost always the way a
country recovers from a financial crisis is with an export boom. The
problem is that we have a global crisis this time. So who are
we going to export to, unless we find another planet to take our stuff?

[emphasis added]

Repeated energy price shocks have the potential to limit any nascent
recovery (especially considering the price of interplanetary transport,
if we do find another planet as a trading partner).  Even
without overt price shocks, a steady decrease in EROI will functions as
an increasingly onerous tax on all energy-requiring activity…which is
pretty much every activity there is.

If you expand your view to include the many other potential
activity-limited resources (in addition to oil) it is difficult to see
the way out.  For example, converting all the world’s vehicles
to fuel cells would lead to depletion of known reserves of platinum in
15 years.  Sure, new technology might get us around that
particular problem, but there are many limiting resources, and many
potential causes of depletion.  And it only takes one
rate-limiting factor, to cause a massive slowdown of economic activity.

New Scientist has a review of the many potential
resource limitations href="http://www.newscientist.com/article/mg19426051.200-earths-natural-wealth-an-audit.html?full=true">here,
with some nice graphical representations.  A more extensive
review, focused on metals, is in PNAS: href="http://www.pnas.org/content/103/5/1209.full">Metal
stocks and sustainability.

Providing today’s developed-country level of services
for copper worldwide (as well as for zinc and, perhaps, platinum) would
appear to require conversion of essentially all of the ore in the
lithosphere to stock-in-use plus near-complete recycling of the metals
from that point forward.

One could argue that it is not likely that the entire world will get to
the point that everyone is using as much metal as we use per capita in
the USA.  But that leaves us with a problem.  The
problem is this: we are, to some extent, depending upon increasing
international trade and development to get us out of this recession.
 If there are hard limits to growth in developing nations,
then there is a hard limit to the extent to which we can hope for this
to solve the economic crisis.

Comments

  1. #1 Alex Besogonov
    April 29, 2009

    Why there are hard limits? We have _plenty_ of different resources, including practically limitless supply of nuclear energy.

    These projections are on the same level as early 20-th century forecasts that London will be buried under a layer of dung by the end of the century.

  2. #2 Matt Springer
    April 29, 2009

    All this is only inevitable if population groth continues an exponential climb. But it shows no signs of doing so. Europe is shrinking already, the US population would be constant at best if not for immigration, China’s demographics are about to crater, and India is probably not far behind.

    Resource exhaustion (petroleum specifically) is a problem, but not one that can’t be overcome with technology so long as the population isn’t increasing.

  3. #3 abb3w
    April 29, 2009

    As Matt notes, Alex, the key is the expectation of exponential growth.

    Nuclear power has several limiting factors; key is our current use of a once-through fission cycle, and that increasing the (currently minor) fraction it comprises of our power use will exhaust supplies faster. Reprocessing and breeder reactor use will (resource-wise) be absolutely necessary.

    However, there’s also major social limiting factors: deploying in socially unstable locales leads to (localized) population implosions and environmental poisoning. That is: if nuts want terror weapons, nearby nuclear power makes radiological weapons easier to obtain. REPROCESSING makes both radiological and fissile weapons easier. So far, engineering of societies has generally been in the “miserable failure” category, so the solution has been Carter/Reagan based: don’t reprocess, and limit tech spread. But this only slows the cork moving out of the Djinn’s bottle, and doesn’t stop it.

    Short term (from what I can see), wind turbine deployment is wiser, with possibly “clean coal” tech especially with CO2 recapture and (ideally) solar/algal reprocessing.

    But there’s going to need to be a lot of little pieces to making a big solution.

  4. #4 Joseph j7uy5
    April 29, 2009

    The population growth does not have to be exponential in order for us to hit limits. Moreover, even in the USA, the population is growing at something like 0.8%. Even though that seems like a small number, it still results in exponential growth.

    More importantly, if the population does stop growing, then the population itself becomes a limiting factor in economic growth. That is not to say that you cannot have economic growth without population growth, but it is much more difficult.

    But more imminently, the problem is the reduced EROI. This is not the same as predictions that London will be buried in dung. Conflating these is not helpful.

    Wind power is going to be important, but it is not as cheap as oil is now, and the investment required to come anywhere close to the current energy supply is not forthcoming.

  5. #5 Jim Thomerson
    April 29, 2009

    Energy decisions are made on economics more than on thermodynamics. Consider pumpback hydropower. Water, lifted up to the reservoir by the sun, flows through the turbines, generating electricity, into a downstream reregulation pool. Generators are then used as motors to pump the water back upstrean so it can come down again. During pumpback the dam is using electricity rather than producing it. I would think it takes more electricity to get the water back upstream than it generated coming down. This is clearly energy inefficient. However, electricity is subject to periods of peak demands. If the power company can sell electricity during peak power at 3 cents and buy it back at 2 cents off peak, then the power company can afford to do pumpback. And who cares about energy efficiency while making money?

  6. #6 Russ Finley
    April 29, 2009

    A lot of water has gone under the bridge and at this point the entire overpopulation argument has boiled down to providing women with the education and means to voluntarily plan family size and timing.

    (consumption per person) X (# of people) = (total consumption). You have two variables and because they are both growing, you have an exponential result.

    http://biodiversivist.blogspot.com/2009/04/overpopulation-number-one-problem.html

  7. #7 musa
    May 1, 2009

    I found this article to be most unfortunate. The errors in logic and facts were dizzying. The authors try and link population to all manner of ills, a neo-malthusian idea that has been discredited long ago, but still seem to keep sticking around. Unbelievably, they discuss The Population Bomb, a book mostly famous today for its comically absurd predictions. Similarly, Hardin’s thesis is widely regarded by commons scholars to be overly simplistic at best, and empirically wrong in many cases. They imply that oil price spikes in the 1970s were due to too much demand (and too many people I guess). Um…no. It was geopolitics that caused those spikes, and the OPEC cartel shutting off the spigots to protest Western actions toward Palestine. They state that people in Bangladesh live in risky coastal areas because the country is just too crowded. I wonder what they would make of The Netherlands, a country with similar population density, that mostly sits below sea level, but with few problems with natural calamities. The Dutch provide a fine empirical refutation of their spurious contention that population pressure produces this exposure to risk. I could go on in this vein, but what is most unfortunate is that they are right about our dangerous dependence on oil, and its finite reserves. This disturbing state of affairs, however, has little to do with population growth. Instead, it lies in the nature of economic development, and the massive disparities of wealth that it has produced. Too bad people like Hall and Day keep dragging out these Malthusian canards, which obscure the real reasons for our troubles. Beware when ecologists try to do social science – the results are never very pretty!

  8. #8 Paul
    June 1, 2009

    Oil shock causes recession? It is simply correlation, not causation.

  9. #9 Danny
    June 1, 2009

    We’ve already hit hard limits. I want to live in a 5 bedroom mansion with a swimming pool, and tennis courts, and drive a Ferrari. But i can’t :(

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