Today we will briefly explore the work of atmospheric sciences researcher Tim Garrett. I first wrote about his work in my study Economic Growth And Climate Change — No Way Out? I concluded that there is no way out —you can't have economic growth and mitigate anthropogenic climate change by reducing CO2 emissions. If we make reasonable assumptions about the future, you can do one or the other (XOR, exclusive or).
This conclusion is contrary to the commonly accepted "wisdom" that we can have our cake (economic growth) and eat it too (reduce emissions). I must confess that this discussion is becoming more and more academic because there is overwhelming evidence telling us that humankind is not going to do anything about global warming in any case, i.e. humans will not substantially change their behavior. See my posts What Will The Humans Do?, For Humans, The Economy Is Everything and How To Think About The Future. Economic growth, if it is achievable, will always be the preferred path.
In addition to his work in the Aerosol-Cloud-Climate-Systems Group at the University of Utah, Tim has also done some groundbreaking work in helping us to understand the link between the global economy and energy consumption. Using reasonable assumptions—for example, we can not build the equivalent of about one new nuclear power plant per day as we de-carbonize—Garrett arrived at the same conclusions (exclusivity) about economic growth and mitigating climate change which I arrived at in my No Way Out? article, which is why I originally cited his work.
I'm going to keep this as simple as possible in so far as the degree of difficulty for the non-mathematician/non-physicist in Tim's published studies is extreme. Perhaps the best introduction to his first paper (Garrett, 2011) can be found in the first part of the abstract of his second paper No Way Out? The double-bind in seeking global prosperity alongside mitigated climate change.
In a prior study (Garrett, 2011), I introduced a simple economic growth model designed to be consistent with general thermodynamic laws. Unlike traditional economic models, civilization is viewed only as a well-mixed global whole with no distinction made between individual nations, economic sectors, labor, or capital investments. At the model core is a hypothesis that the global economy's current rate of primary energy consumption is tied through a constant to a very general representation of its historically accumulated wealth. Observations support this hypothesis, and indicate that the constant's value is λ = 9.7 ± 0.3 milliwatts per 1990 US dollar. It is this link that allows for treatment of seemingly complex economic systems as simple physical systems.
This graph is from Tim's website and illustrates the relationship λ (lambda) between the world't total accumulated wealth (C, the integral) and our ever-accelerating energy consumption rate (a, measured in 1021 joules per year). λ = 9.7 ± 0.3 milliwatts per 1990 US dollar. That's how much energy is required to increase the world's economic wealth as measured in 1990 dollars. The growth rate 1.87% for energy consumption is an average for the period 1970-2006. The average growth rate for the total accumulated wealth was 1.82% over that period. Note that this an empirical result and thus stands outside any particular theory or framework, although it falls out of Garrett's hypothesis (thermodynamic model) that some constant like λ must exist.
This is a fundamental result, a finding whose singular importance can not be overstated. Here's how Tim put it in an e-mail.
A consequence of global wealth being tied to its current capacity to consume primary energy reserves is that the inflation-adjusted GDP at global scales is tied to how fast civilization is able to accelerate its rate of energy consumption. This means that, if growing our primary energy consumption rate becomes too difficult, either due to reserve depletion or accelerating environmental disasters, then the GDP will necessarily fail. All our efforts to sustain real production will be more than offset by inflation and decay. This does not mean that energy consumption won't continue. In fact, it may even be higher than it is today. But declining energy consumption necessitates a collapse of the fiscally measurable exchanges that we account for in the GDP.
There are indications that decreasing oil consumption is already occurring, and this may presage a decline in other sources of fuel as well. In the past, Europe sustained its growth by replacing wood with coal. Perhaps in the future oil will cede to natural gas or nuclear power. But if so, these alternative sources will have to more than offset the decline in oil in order to sustain a positive inflation-adjusted GDP.
Bogus claims are made all the time that if we just use energy more efficiently or switch to "renewable" energy sources as we go, the global economy will continue to grow and grow. On the contrary, here is some of the fallout from Tim's linkage of the economic and physical worlds. This text is from Tim's website (cited in the text accompanying the graph above). I have reproduced it verbatim.
If the global economy is able to achieve gains in energy efficiency or energy productivity, it will accelerate energy consumption by accelerating healthy civilization growth into new energy reserves. Efficiency gains create a “super-exponential” acceleration of energy consumption and carbon dioxide emissions while growing the GDP. Expressed in terms of economic demand, this effect has been termed “backfire” or “Jevons’ Paradox”.
Growing global wealth requires increasing global emissions of carbon dioxide because both are linked to energy consumption rates. The two go hand in hand ... unless we change civilization’s fuel mix. If we are to simply stabilize CO2 emissions at current growth rates, this would require building the equivalent of about one new nuclear power plant per day.
If global warming becomes so severe that it causes civilization collapse despite our best efforts to avoid it, it will manifest itself economically through hyper-inflation.
Stabilizing atmospheric CO2 concentrations below a level of 450 ppmv that might be considered dangerous requires civilization to begin a collapse of its wealth almost immediately.
This is all very bad news for those making standard assumptions about economic growth in the 21st century. However, Garrett's use of the terms collapse (decay) and hyperinflation should not be understood as they are in textbook economics or in common usage. A "positive inflation-adjusted GDP" is possible in Tim's model only if energy consumption is rising at a sufficient rate. What would actually happen on the ground if humans fail to grow primary energy at the rate required is not well defined.
For example, Garrett is modeling the global economy. What might happen in one locale on Earth might differ considerably from what would happen in other places. Tim's model (as currently constituted) does not fully explain what happens during recessions when GDP shrinks and energy consumption falls off. (He tells me this may be a time-scale problem—recessions are relatively short, intra-decadal events.)
In a peak oil scenario—for example, the one outlined by former IEA analyst Olivier Rech in which the global liquids supply enters an inevitable, inexorable decline during the latter part of this decade—and assuming that substitutes (coal-to-liquids, gas-to-liquids, electric or natural gas transportation) do not come to the rescue, Garrett predicts that we will enter a phase of "hyperinflation and decay." This scenario directly implies a shrinking global economy (total wealth, as measured in cumulative GDP).
Does this constitute a collapse? I know some of you are very fond of that word, and no doubt a few will take the EOTWAWKI ball and run with it without fully understanding Garrett's difficult work. My own view is that the end of world as we know it (at least here in America) has already occurred. I expect to see further decay, although this deterioration may play out in ways we don't fully understand now.
I will finish up by quoting again from the abstract of Tim's second paper.
Extending the model to the future, the model suggests that the well-known IPCC SRES scenarios substantially underestimate how much CO2 levels will rise for a given level of future economic prosperity. For one, global CO2 emission rates cannot be decoupled from wealth through efficiency gains. For another, like a long-term natural disaster, future greenhouse warming can be expected to act as an inflationary drag on the real growth of global wealth. For atmospheric CO2 concentrations to remain below a "dangerous" level of 450 ppmv (Hansen et al., 2007), model forecasts suggest that there will have to be some combination of an unrealistically rapid rate of energy decarbonization and nearly immediate reductions in global civilization wealth.
And on that happy note, I bid you adieu.