What “lump of energy” fallacy?

by Chris Bertram on December 29, 2010

Brad DeLong has just posted a couple of links to articles that attack an article by David Owen in the New Yorker [subscription required]. Owen’s article relied heavily on the claim that increased energy efficiency doesn’t really deliver the hoped-for environmental benefits, because of something called the “rebound effect”. Here’s an explanation of that effect by James Barrett in one of the linked pieces:

In essence the rebound effect is the fact that as energy efficiency goes up, using energy consuming products becomes less expensive, which in turn leads us to consume more energy. Jevons’ claim was that this rebound effect would be so large that increasing energy efficiency would not decrease energy use….

Owen’s critics say that although the rebound effect is real, whether it is large enough to have the effects Owen claims is an empirical matter, and they are sceptical. Basically, they argue that the increase in energy consumption is not just down to lower prices but also to greater wealth, house size, etc. and so without greater efficiency, we might be consuming a whole lot more energy than we actually are. Basically: it all depends on the facts, and the jury’s out.

Ok, so now let’s do a little substitution in that sentence quoted earlier.

In essence the rebound effect is the fact that as labor efficiency goes up, using labor consuming products becomes less expensive, which in turn leads us to consume more labor. [The] claim was that this rebound effect would be so large that increasing labor efficiency would not decrease labor use….

The amended claim reads as the response those same economists might make to Luddites everywhere. “Don’t worry, the new technology will not put you out of work!” Or perhaps, more honestly, “even if the new technology puts some people out of work for a bit, it will not reduce and may even increase demand for labour, and people will be better off.”

Now I’m not an economist, just an interested consumer of what economists have to say, trying to make sense of that in my own dull-witted way. Professor DeLong hasn’t always been kind to me in the past, so, if he responds to this post, let me urge him to imagine himself in the role of the educator who is saying to the class: “if you have a question, don’t be afraid to ask it in case it is stupid, someone else is probably having the same thought as you, and you’ll help to clear things up.”

So my question is: why do [at least some] economists respond to the claim about energy efficiency with “its an empirical matter”, whilst chanting “lump of labour fallacy!” at people who worry that technological change will cost jobs? Why is one a matter of looking at the evidence, whilst the other is determined more or less a priori ?

[Disclosure: I’ve been led to some of these thoughts by following a comment to one of these articles by this guy, whose bona fides I cannot vouch for, but who seems, to this non-economist, somewhat interesting.]

{ 130 comments }

1

John Quiggin 12.29.10 at 12:20 pm

As the home team economist, I’ll say that it’s an empirical matter in both cases. The apparent contradiction can be defended along the following lines, though I don’t claim its 100 per cent convincing

1. In refuting the Lump of Labour fallacy, economists are simply pointing out (just as with Owen) that there is a “rebound” effect, as opposed to the fallacious belief that the economy “needs” a fixed amount of labour/energy services. That is, chanting “Lump of Labour” doesn’t prove that “no jobs will be lost” merely that “It’s not logically necessary that jobs will be lost”.

2. Granting that the effect of technological change on labour demand is an empirical question, the empirical evidence is that demand for labour has in fact risen faster than supply as evidenced by increasing real wages (this last step is pretty shaky for the US since 1970, but it seems unlikely that this particular case is a technology story (cue Hacker and Pierson)

3. While the same could be true, in principle, for energy, energy typically accounts for around 5 per cent of total costs, compared to 70 per cent or so for labour. So, in the presence of energy-saving technical change, you’d expect the direct effect to dominate.

2

Zamfir 12.29.10 at 12:31 pm

Because energy is produced at the cost of consuming other resources, but labour is (roughly speaking) not. Or more precisely, people produce new workers anyway, for other reasons than their value as workers.

So if you need less energy, you might choose to use the resources used to produce energy for other purposes. The engineers and concrete that would have made a new power plant can now make something else, say a bridge.

But if less labour is needed for a task, there is no option to turn the excess workers into non-labour resources (except steaks of course, but we have cultural prejudices against that). The only options are unemployment, or finding new useful tasks. Of those, the second is the only profitable one.

In that respect, easily extracted fossil fuels (as opposed to energy in general) behave more like labour. But as fuel gets harder to dig up, energy efficiency might lead to fuel being left in the ground because the price is not high enough to extract.

On the other hand, people don’t really stop having kids because their future value as workers is too low to raise them.

3

Chris Bertram 12.29.10 at 12:35 pm

Thanks Zamfir.

_On the other hand, people don’t really stop having kids because their future value as workers is too low to raise them._

Aren’t decisions like this a key part of the “demographic transition” story, actually?

4

Zamfir 12.29.10 at 12:49 pm

I dunno Chris. In most advanced economies children are not really expected to repay their parents for raising them. People choose to have less kids than their ideal because their own income (and time) would be stretched, not because the expected future payments from their kids is too low. Liquidity vs solvency, so to speak.

Arguably, the change itself from an old age mostly secured by your family to one secured by the state and savings is a driver of the transition. I don’t know if that is true.

But even in a society where people do rely on their kids for their old age, a lower expected income will not translate in less kids. If wages fall, people need more kids to take care of their old age.

5

Tim Worstall 12.29.10 at 1:00 pm

Worth noting that Jevons himself said it was an empirical matter as well. He claimed that increased efficiency would “tend” to increase usage but that still leaves open the possibility of it reducing it.

6

PHB 12.29.10 at 1:29 pm

The obvious fallacy with this particular argument is the notion that all else will remain the same.

Energy efficiency is going to increase the effective supply of energy. But global demand for energy is itself increasing. People living in poorly insulated houses have a choice between substituting spending on energy for spending on other purposes and freezing.

When energy costs rise, people turn to energy efficiency to keep them under control. Energy accounting was first developed in the 1970s in the wake of the oil price shocks. And it has become fashionable again with the latest round of price rises.

It certainly seems reasonable to argue that energy efficiency measures should be combined with use taxes on energy to ensure that reduced demand does not cause prices to fall. But the global energy demand picture strongly suggests that this is not going to be necessary.

7

Sandwichman 12.29.10 at 1:30 pm

Thanks so much for the link, Chris! As for my bona fides, I’m a clerk/cashier at a co-op grocery store in Vancouver who writes scholarly articles and books in his free time. For that very reason I value free time immensely as the ultimate source of wealth, as did Karl Marx and a chap named Charles Wentworth Dilke .

I am currently posting a series on the “zombie lump of labor fallacy-fallacy” at Angry Bear and Ecological Headstand, the third part of which (coming next Monday) will drive a proverbial wooden stake through the vampire heart of the zombie fallacy claim (if I may mix monster metaphors). Teaser: A strike of cotton spinners broke out in Glasgow in 1837. One gloomy evening, a strikebreaker named John Smith was murdered…

8

Thomas Jørgensen 12.29.10 at 1:44 pm

Well, since Jevons postulate was about industrial revolution Britan and coal, it is, in fact, a settled emperical question, and he was right – coal demand vent through the roof as steam engines got more efficient. The implications for future energy policy are twofold – Firstly, that increased energy efficiency is almost certainly an economically wise investment, as it will increase the value added to the economy from each KWH of primary energy production, and secondly, that as an anwer to climate change it is a gamble that may result in much less reduction that you would expect, no overall change, or even outright backfire – If we want to reduce carbon emissions the only certain way to do it is to replace fossile fuel energy supply with non-carbon sources.

There is a problem here – Our current investments in non-carbon emitting energy are not even in the ballpark of being ambitious enough to solve this problem. Now, from an engineering standpoint there is no particular reason industrial society has to run on fossile fuel – As proof of possibility, coal and gas fired plant could directly be replaced with nuclear fission reactors, no smart grid required, no RnD nessesary – this is 50 year old tech, well understood, proven and economical. But we are not building anywhere *near* enough.
Currently the world has 400 odd reactors of various sizes. In order to decarbonize world electricity supply we would need around 3000. of them. In order to decarbonize the entire economy via electrification of transport ect, double that.
Noone has nuclear build plans that ambitious. And nuclear is far and away the largest (and least resource intensive- nuclear build eats a lot of manhours but not much steel and concrete) low-carbon energy source – I can just about imagine sizing up that industry about 15 times, trying to solve climate change via renewables is a bondoogle that is doomed to fail.

-.— so basically the world is fucked. Eh. Someone talk me down ?

9

PHB 12.29.10 at 1:55 pm

Another problem I have with this type of argument is the fact that only rarely is the alleged decision maker actually aware of the cost implications of their actions.

I have never once consulted the current price of electricity before deciding to turn on a light.

Even if I did perform such calculations when deciding to add double glazing or whatever, how could I possibly take into account the expected price of energy over the lifetime of the device?

There are of course a small number of commodities for which the cost of energy is the principal determinant of price: chlorine, aluminium and so on. But people do not react to prices in the same way that large corporations do. It is completely logical for Alcan or ICI to work out the exact consequences of energy costs and factor them into their decisions. It is not logical for an end consumer to spend time considering the cost of electricity when turning on a light bulb.

This is the result of assumptions designed to enable the development of an economic theory being reified as assertions about human behavior.

Unfortunately the laws of mechanics that correctly model what happens when you pull on a piece of string do not necessarily work when you push.

10

Sandwichman 12.29.10 at 2:01 pm

Thomas@8. No, were not fucked at all. We’re only fucked if we continued to treat the Jevons Paradox and the lump of labor fallacy(-fallacy) as two entirely different things, subject to different logic and standards of evidence, as mainstream economists do. The two are intimately related; understanding the relationship between them will literally set us free.

11

c.l. ball 12.29.10 at 2:09 pm

The fallacy lies in missing the relative to what question. If energy efficiency were not increased while demand for energy rose, more energy would be produced at higher prices.

The environmental impact depends on what kind of energy is produced. If all the energy efficiency gains occur in CO2-producing forms, the environmental gains may indeed be flat. If energy were do cheap that I could cool my backyard, my consumption might increase. But if solar panels were providing that energy, the environmental impact would different from using coal-fired energy.

For labor, increased efficiency could yield flat or even lower wages, if demand stays flat or rises only modestly, but again the question is about what exogenous factors are present.

12

Tim Wilkinson 12.29.10 at 2:09 pm

(This somewhat pre-empted by the time it got posted, but:)

This ‘rebound effect’ seems kind of obvious, given certain parameter values, but seems to overlook two things: first, that energy efficiency is only one of the two ways to reduce harmful energy usage without reducing what we laughingly call our standard of living, the other being clean energy – which if it entirely superseded insalubrious kind would make this a non-issue; and second, that there is quite enough impetus to increase the usage of the kind of stuff that uses energy already – so some restriction on the development of all those gadgets we don’t yet realise is likely to be necessary anyway, given a need to reduce foul energy use and the absence of a sanitary-power fix.

But suggesting actual external limits is cheating, because there is an unspoken premise that the ‘free market’ is a constant, of course. And to do even more cheating:

Zamfir: But if less labour is needed for a task, there is no option to turn the excess workers into non-labour resources (except steaks of course, but we have cultural prejudices against that). The only options are unemployment, or finding new useful tasks. Of those, the second is the only profitable one.

Except that ‘unemployment’ is also sometimes called ‘leisure’, which is, as anyone who accepts, e.g., the existence of a Laffer function must agree, a good – and here ‘profitable’ means (or jolly well ought to mean – this my cheat) ‘producing a good’.

And that the ‘excess’ is not measured in workers, but in work (labour-time, intensity, etc). This also entailed by the existence of any non-trivial Laffer function. So reduction in labour doesn’t mean unemployed people (if you cheat).

The guy Chris links to has quite a bit of stuff to say about labour time and the distorted treatment of it under capitalism – in particular in his manuscript, which I found a bit hard to follow, and is probably not that easy to integrate with the existing canon (that’s idiosyncratic autodidacticism for you) but contains some fertile and apparently quite novel ideas (that’s i. a. for you). Taking the term ‘bona fides’ literally, I’d say his are beyond doubt (ditto). Taking it to mean academic credentials or recognition, I’d say not (“).

I certainly warmed to the fellow anyway, I can’t think why.

13

Tim Wilkinson 12.29.10 at 2:14 pm

(Ah, I see the Sandwichman is here in person. If you are still around, sorry to talk about you in third person – and slightly abashed looking at my remarks, which were intended to be complimentary but now appear presumptious in a number of ways…)

14

Chris Bertram 12.29.10 at 2:16 pm

“I have never once consulted the current price of electricity before deciding to turn on a light.”

Maybe not “consulted”, but I think anyone who grew up in the UK in the 1970s considered it, especially if they lived in a flat where you had to feed the meter with 50p coins.

15

Alex Tabarrok 12.29.10 at 2:31 pm

Zamfir is correct. Here is another way of expressing the same idea. An increase in energy efficiency is like an increase in energy supply. The “as if” increase in supply lowers prices which has two effects: the lower price increases quantity demanded and it also lowers quantity supplied because at a lower price it doesn’t pay to squeeze oil from the Athabasca tar sands for example.

The extreme rebounders are assuming that even a tiny decrease in price increases quantity demanded so much that quantity supplied doesn’t decline so we continue to use as much energy as before. But this is very unlikely. Demanded is not super-elastic (this would imply big decreases in energy use with a tiny increase in price and we don’t see that.) Thus, we can expect that energy efficiency will reduce energy prices which will reduce quantity supplied, i.e. more oil will remain sitting in the ground for a longer period of time.

As demand increase with ordinary economic growth, of course, the oil may come out eventually so energy efficiency delays but does not necessarily eliminate the use of the oil. (It could be a long delay, however.) And energy efficiency also contributes to higher wealth making demand increase faster than it otherwise would. Thus the basic point about energy efficiency not being the answer is probably correct. Fundamentally, we need an increase in carbon price not a decrease! Energy efficiency, however, can certainly be combined with taxes to easy the transition.

Turning back to the original question notice that oil is never really “unemployed” in this scenario. Any oil already produced will certainly be used. What does happen is that some oil may remain in the ground longer.

The analysis is the same for people. Most importantly, we would not expectthat labor efficiency would result in an increase in unemployment (in the long run once prices and wages have adjusted which we know can be tricky) . All the other effects, however, could happen.

16

chris 12.29.10 at 2:44 pm

That is, chanting “Lump of Labour” doesn’t prove that “no jobs will be lost” merely that “It’s not logically necessary that jobs will be lost”.

ISTM that in these types of situations it’s so extremely probable as to amount to an effective certainty that jobs will be lost; what you probably mean is that it’s not logically necessary that *net* jobs will be lost. But for political purposes, destroying someone’s job and forcing them to seek a new one is still not going to make you loved by that person, even if they succeed in finding a new job eventually. (For one thing, they’ll bear the costs of transition. A high-job-turnover economy imposes significant costs and risks on the labor force, for which they are generally not compensated at all; the benefits of labor mobility accrue pretty much exclusively to the employer class.)

On the other hand, people don’t really stop having kids because their future value as workers is too low to raise them.

I would venture to say that for the vast majority of people, decisions whether or not to have kids, or how many, are made without *any* reference to an economic cost-benefit analysis, let alone making it the major driving factor in the ultimate decision; and it’s obvious empirical fact that a quite considerable number of births aren’t planned at all. Economics in the conventional sense has little, if anything, to contribute to a study of the *causes* of the demographic transition (however important it may be to planning how to deal with the effects).

17

Chris Bertram 12.29.10 at 2:50 pm

Sandwichman @7 – you’re welcome. Sorry I didn’t spot your comment in the mod queue for a while.

18

Sandwichman 12.29.10 at 3:09 pm

Tim@13, Not to worry. The Sandwichman often refers to himself in the third person! And I read your remarks as complimentary.

19

Alex 12.29.10 at 3:09 pm

TLDR version: Jevons’ paradox makes perfect sense if energy is cheap and not really a limiting factor. If you’re trying to improve energy efficiency because you’re desperately short of it, though, by definition you’re hitting an energy constraint and you can’t use more of it. Same is true for lump of labour.

20

shah8 12.29.10 at 3:09 pm

You know… this thread is interesting.

Aren’t these “lump of” debates really a way to avoid talking about the real elephants in the room–pricing? That elites demand cheaper-than-it-should-be labor, or that society (mostly elites again) refuse to account for all of the expenses of getting that energy and pricing it accordingly, instead trying to make disadvantaged groups take the bulk of the expenses in toxin (insofar as this is about non-CO discussion)?

21

Gene O'Grady 12.29.10 at 3:30 pm

Back when I had a real full time job (in an academic medical center) one of my tasks for which I had no known qualifications but turned out to be pretty good at was tracking energy consumption and costs. Three observations:

(1) I not infrequently got proposals that were sent to the higher ups from energy conservation vendors to review. They always gave a figure for our actual energy (or water) rates to show how much they could save us. In every instance those rates were much higher than we were paying, usually by about forty percent, and no one above me in the pecking order had any inkling of that (actually my immediate boss did but he had other fish to fry).

(2) We had an ambitious program of changing out incandescent lighting to more efficient flo tubes (and changing out the ballasts, which is also important). The amount of energy and dollar savings, which could be quite precisely tracked, was far greater than anyone had expected. And there was no rebound effect, it was simply money and KWH and demand saved. What was the rebound going to be — double the number of lights because they were more efficient? In point of fact we reduced the number of lights because the energy saving program also asked what was really a necessary level of illumination where.

(3) It’s a little beside the point to say that no one checks the cost before turning on a light (and in our year in Italy we certainly became conscious of costs we’d never worried about in the Western US, and our neighbors who shared the meter were even more aware of them). I assure you that in this day and age if someone is thinking of installing a new MRI or changing out imaging equipment or modifying industrial processes they do in fact think of those costs, and that’s where the real savings or waste are possible.

22

Zamfir 12.29.10 at 3:36 pm

Except that ‘unemployment’ is also sometimes called ‘leisure’, which is, as anyone who accepts, e.g., the existence of a Laffer function must agree, a good – and here ‘profitable’ means (or jolly well ought to mean – this my cheat) ‘producing a good’.

Sure, lots of economic and GDP based reasonings give screwy answers by treating leisure time as zero value. But the lump-of-labour concept (not sure if it is always a fallacy) is used in contexts where people are losing entire jobs. Those people clearly prefer paid employment over full-time non-paid leisure.

Simply from observation, we know that full-time unwanted unemployment exists, and that it is a serious personal and social problem. On the other hand, it is relatively rare to find energy sources that are unused against the wishes of their owner, and it is definitely not a personal or social problem in itself.

23

Tim Wilkinson 12.29.10 at 3:43 pm

Just to reiterate, the business about ‘losing jobs’ really is a funny way of talking about things. Jobs are after all, a contingently (though saliently) associated pairing of things: work, which is (by Laffer logic) a bad; and an income, which is (by the same logic, and many others) a good. Jobs are also in most cases contingently rigid in terms of weekly hours worked (and I think I read somewhere that these are getting longer. Might have dreamt it.)

Obvious but true, and gets glossed over a bit when employment is treated as something like an end in itself. Just saying.

24

Tim Wilkinson 12.29.10 at 3:44 pm

That last comment crossed with Z’s – but I’m happy enough with it as some kind of response, really.

25

Thomas Jørgensen 12.29.10 at 3:48 pm

19: Wrong. One point of Jevons paradox is that more efficient use of energy means that each KWH used produces more value added to the overall economy, and this makes buying said KWH an economically sensible decision at a higher price, so the mechanism works just fine at any point along the price /demand curve of power supply.

26

Thomas Jørgensen 12.29.10 at 3:55 pm

Jevons would only break if the supply /demand curve for energy turned vertical – That is, if there was an absolute, inflexible limit on further energy supply disregarding the amount of effort thrown at the problem of increasing supply.. and that is not the world we inhabit. There is nothing preventing us from increasing primary energy supply pretty much without bounds. Eh. Up untill the point where we directly melt the crust via waste heat, that is.
(You think I am joking, right? I’m not. Feed thorium and U-238 into breeders, and planetary waste heat rejection becomes the upper limit on available power. Not a limit we are anywhere near at the moment but even with a world industrialized to the point where power production is on the same scale as total solar light landing on the planet we would have fissionable reserves for many thousands of years.)

27

Zamfir 12.29.10 at 4:10 pm

TW, market-based work is a lot more than a bad people accept to get income. For most people, their job is the main role or position they have in society, or one of the few main ones. For many people, being a parent is the only role that can really outweigh a job in giving meaning and position to their lives.

Of course, this is an artifact of the current societies we live in, not a universal truth. But it’s a deep part of our society, much deeper than economics alone.

28

Tim Worstall 12.29.10 at 4:11 pm

“Someone talk me down ?”

With the current generation of renewables, you’re right. But we’re not stuck with the current generation of renewables. We’ve certainly as much sunlight as we could possibly need hitting the planet. If we had 40% efficient solar PV cells (which we can make, expensively, at present, “multijunction” cells) and a storage/battery system (which we can make, expensively, at present, solid oxide fuel cells like the Bloom Box) and we then had the time to roll out that technology once we’ve managed to make it cheap (no, it’s not Moore’s Law but analagous, we’re talking about improving the manufacturing processes now, not inventing new sciency stuff), and we do have time, we’ve a few decades yet. For we don’t need to junk our current emitting ways, just to make sure that the next turn of the capital replacement cycle is no or low emission, then we’ll be just fine with renewables.

“I have never once consulted the current price of electricity before deciding to turn on a light.”

But people in aggregate behave closely enough that we can assume that you do. For higher prices (certainly higher as a portion of income) do indeed reduce aggregate consumption of energy. Sure, one light bulb, so what? But you do turn down (erm, turn up?) the air con when you leave for a three week vacation?

“Maybe not “consulted”, but I think anyone who grew up in the UK in the 1970s considered it,”

Very much so.

“Economics in the conventional sense has little, if anything, to contribute to a study of the causes of the demographic transition”

No, no, thrice no. The demographic transition occurs at a fairly predictable level of wealth. Economics has quite a lot to say about how that level of wealth is produced.

29

Matt McIrvin 12.29.10 at 4:14 pm

It seems to me that what’s being argued here is that an increase in energy efficiency by itself won’t reduce consumption. But if the price goes up, because of a tax or because of a decrease in supply, then you can use less by a variety of means: you can either do without the energy-intensive goods and activities you had before, or you can increase efficiency. And while increasing efficiency might save you less than doing without, the rebound probably won’t be so great that it offsets the effect of the price increase.

What does seem likely to me is that if your main motivating tool is just moral suasion, or some sort of “green living” identity-based campaign, then neither efficiency increases nor austerity measures are going to do a lot of good: you’ll just drive prices down and increase consumption by people who don’t give a fig about your moral argument. But, it’s true, this is really something that has to be determined empirically.

30

Matt McIrvin 12.29.10 at 4:14 pm

..”what’s being argued here” by advocates of the rebound effect, that is.

31

Zamfir 12.29.10 at 4:19 pm

Matt McIrvin: Sure, Jevons’ paradox has nothing to do with efficiency improvements triggered by artificial price increases. But it is a fair thing to point out when people argue for efficiency improvements as a direct means of combating climate change.

32

Miracle Max 12.29.10 at 4:48 pm

I am MaxSpeak and I approve The Sandwichman’s message.

33

Tim Wilkinson 12.29.10 at 4:50 pm

Zamfir @ 27 – yeah, to some extent (hence mention of Laffer logic) – but this I think looks much more true to those with high-status, fulfilling, interesting, exciting jobs. And these are generally better paid. And those pushing Laffer-based fiscal restraint the hardest are often doing exceptionally well on both scores.

Also, being (merely) employed is in large part a positional good.

And people in shit jobs get their bit of fulfilment and worth from all kinds of idiosyncratic interests and expertises, from their roles and activities in the local community, all sorts of stuff. When they have time. If they had a bit more time, they might be more ambitious, more accomplished, more informed, more organised, more politically engaged – ah…

34

Guido Nius 12.29.10 at 4:50 pm

Interesting discussion. It seems that it would anyway be wise to have more education around so as to control the population explosion. Having to cater for less people (or, more precisely: for less ‘more people’) seems the surest way to control both unwanted unemployment/decreasing value of labour and stretching the natural resources. Right?

With the right amount of contraceptives and well-reasoned egoism on the part of those able to have babies, we would get a long way. We can start in the West, it is not like there aren’t enough people from the East and South interested in going there. No need to make lots of babies to keep the thing running, I guess.

35

Matt Young 12.29.10 at 4:53 pm

Energy is globally liquid, labor much less so, comparisons are difficult.
Labor also has utility when sitting around the house. Though not observable with money, home labor is reducing household constraints. Oil does nothing when sitting in an oil tank.
Finally labor tries to outwit the economists, oil is simply dumb.

36

Thomas Jørgensen 12.29.10 at 5:07 pm

Tim: I really do not like the timehorizons on this. Turnover on most capital plant is 30-40 years. Add a couple of decades of RnD before starting to change what gets built as replacement capacity, and the planet cooks. The *minimal* sane response to climate change is to not build any new coal plants at all, starting today, and if that means building nukes now, because it is the only shovelready tech then nukes it is. This is most emphatically not what is currently happening. I realize that I come across as having being bitten by a mad reactor designer, but mostly I really hate coal, and think buring natural gas to produce baseload is utter (economic) madness and that does not leave a lot of choices left.

Is it radical to not want to commit society to another 40 years of demon coal?

37

PHB 12.29.10 at 5:15 pm

Chris @14

According to the theory, the customer’s concern should be directly and proportionately related to the price of electricity. I don’t think that makes a great deal of sense.

People who are barely making ends meet have to ask ‘do I need this’ not ‘can I afford this’. According to Owen’s theory, they are going to say ‘those CFLs have cut the electricity bill by 20%, we can now leave the lights on all day’. I don’t think that makes a great deal of sense.

Thomas @8

I don’t see the issue as being ‘factual’. While the increase in the use of coal is indisputable, the cause is certainly open to debate.

Considering the habits of early steam engines, the efficiency was the least of their problems. The propensity to explode without warning being a rather more significant drawback.

And in any case supply and demand only determine the actual price of a commodity in the short term. In practice supply is typically a function of demand. If demand causes the price of a commodity to rise, this encourages investment to increase supply.

In the case of coal, the most significant impact of steam in the early years was in the production and distribution of coal itself. Steam power was used to ventilate and drain coal mines. Later steam powered the railways that carried coal from the mines to the cities.

I don’t have figures for the quantity of coal used in steam engines vs that used to heat houses, but given the size and complexity of a steam engine and given the fact that every house needed coal for winter heating, I find it rather hard to believe that increased use of steam power was the dominant factor in the increasing use of coal.

A rather more reasonable explanation for the increase in coal use is that improvements in technology led to the increased supply and reduced cost of coal making it possible for more homes to afford to use it for fuel. At the same time the decreasing supply of wood made that more expensive as a fuel source in the cities. It is hard to see how the efficiency of steam engines would have had any effect on the outcome. We would expect the same outcome even if the efficiency of the engines had been unchanged.

38

ScentOfViolets 12.29.10 at 5:19 pm

Zamfir is correct. Here is another way of expressing the same idea. An increase in energy efficiency is like an increase in energy supply. The “as if” increase in supply lowers prices which has two effects: the lower price increases quantity demanded and it also lowers quantity supplied because at a lower price it doesn’t pay to squeeze oil from the Athabasca tar sands for example.

So . . . because those new-fangled helical cold lights are cheaper – in the long run – I should have three times the number of lamps in my house that I had before? Even though the initial purchase price is much higher than a regular incandescent bulb?

Empirical reality does not bear this out :-)

The same goes for any of a number of other items: if clothes became ten times cheaper few people would buy ten times as much so overall costs would go down. This came up relatively recently when talking about making cars more efficient in terms of mpg. In fact, there’s a ceiling; people already spend more than five percent of their day driving. If efficiency went up by a factor of twenty, they’d have to spend more than 24 hours a day driving to absorb all of the increase.

In short, like so many other propositions in economics that are known better in their natural language equivalents, this one really doesn’t make a lot of sense unless given a quantitative formulation you can plug a few numbers into. Which tend then tend to falsify any claims expressed in natural language.

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ScentOfViolets 12.29.10 at 5:22 pm

But we’re not stuck with the current generation of renewables. We’ve certainly as much sunlight as we could possibly need hitting the planet. If we had 40% efficient solar PV cells (which we can make, expensively, at present, “multijunction” cells) and a storage/battery system (which we can make, expensively, at present, solid oxide fuel cells like the Bloom Box) and we then had the time to roll out that technology once we’ve managed to make it cheap (no, it’s not Moore’s Law but analagous, we’re talking about improving the manufacturing processes now, not inventing new sciency stuff), and we do have time, we’ve a few decades yet.

And if string theory is correct, we might get flying cars with antigravity. Please. Don’t go there; you’ve done this before and it led to some general unpleasantness all around as I recall.

40

ScentOfViolets 12.29.10 at 5:41 pm

Matt McIrvin: Sure, Jevons’ paradox has nothing to do with efficiency improvements triggered by artificial price increases. But it is a fair thing to point out when people argue for efficiency improvements as a direct means of combating climate change.

So then I should have two refrigerators, a couple of dryers, etc? Iow, talking about increasing efficiency of energy use is content-free unless talking about specific devices and processes.

41

Tim Worstall 12.29.10 at 5:48 pm

“Add a couple of decades of RnD before starting to change what gets built as replacement capacity, and the planet cooks.”

But the R&D started a couple of decades back…..we have workable, if expensive, kit right now.

“Don’t go there; you’ve done this before and it led to some general unpleasantness all around as I recall.”

Not that I recall any unpleasantness around it. We really do have the building blocks of a viable renewables technology already. They’re not cost efficient enough yet but they’re becoming so fast. We really do have $80 solar cell/battery kits that will recharge a mobile phone and run a couple of light bulbs in some African hut. We do have 40% efficient solar cells, we do have fuel cell systems that work. It is true that standard (ie, 10% ish efficient) solar PV cells are decreasing in price at 4% a quarter (whether Cd/Te or Si).

My day job is in suppplying the weird metals that these technologies need: so perhaps I’m partial and/or biased. But at least some companies could see the way the wind was blowing and were working on the necessary technologies before Kyoto was even agreed, let alone signed. Westinghouse, as an example, had patents granted in 1991 on extraction methods for one of the necessary precursors for the fuel cells they spent a fortune on working on in the 90s (and that part of their technology turns up in that Bloom Box).

I am convinced that the general public (even those as highly informed as those here) don’t quite realise how far this whole field has come in the last couple of decades.

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ScentOfViolets 12.29.10 at 6:08 pm

And – as pointed out before – some of us are quite familiar with both the physics side and the manufacturing/market side. Cheap solar cells have been coming Real Soon Now for decades, in fact, since at least the 1970’s. Ditto for “batteries” of all kinds.

The reality is, they’re not here, and there’s no reason to expect them any time soon, and for what turn out to be rather fundamental reasons . To expect them to be competitive with nuclear power in the near future is just wishful thinking.

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Thomas Womack 12.29.10 at 6:18 pm

The examples that ScentOfViolets gives as clearly ridiculous are driven essentially by land pricing: you don’t buy twice as many clothes because that would require buying twice as many closets so a larger house, you don’t buy two sets of white goods because that would require a kitchen of twice the size so a larger house. Nor does doubling my wealth make me buy twice as many books, partly because I’d need twice as many bookcases so a larger house, and partly because it is a very lucky person whose book-reading is not constrained more by lack of time than lack of books.

Looking at my iphone, I probably do buy ten times as many apps now that they are 59p instant purchases; I would be very interested to know how the book-buying habits of people with Kindles change, where the cost is about the same but there’s no space problem.

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Tim Worstall 12.29.10 at 6:20 pm

But it doesn’t have to reach cost competitiveness with nuclear.

It has to reach cost competitiveness with the grid: grid parity.

http://en.wikipedia.org/wiki/Grid_parity

We’re just not that far away in some places. Supposedly, already reached it in some places that use oil to generate electricity (Hawaii is mentioned there, so I assume Jamaica as well).

BTW, I’ve nothing against nuclear here: I don’t mind or care who uses whatever power generation systems. My point is just that if renewables do become cheaper than grid (which as I argue isn’t all that far away) then the climate change thing rather goes away: especially if we do something sensible like have a carbon tax to put the externalities into market prices.

My major point is that if we do have cheap renewable power then worries over fossil fuels simply go away.

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Chris Bertram 12.29.10 at 6:38 pm

Thomas Womack @43

Whatever the merits or demerits of Scent’s wider point, this

The examples that ScentOfViolets gives as clearly ridiculous are driven essentially by land pricing: you don’t buy twice as many clothes because that would require buying twice as many closets so a larger house

is wrong.

According to Juliet Schor’s recent book, _Plenitude_

bq. In 1991 Americans bought an average of thirty-four dresses, pairs of pants, sweaters, shirts, underwear, and other items. In 1996 that number had risen to forty-one. By 2007 per-person consumption had soared to sixty-seven items. (p.29)

As prices drop, there’s more churn. People buy the now cheap fashion items and discard them quickly. (Though actually they aslo get more and bigger closets too.)

46

AcademicLurker 12.29.10 at 6:46 pm

As prices drop, there’s more churn. People buy the now cheap fashion items and discard them quickly. (Though actually they aslo get more and bigger closets too.)

regarding cheap clothes specifically, accompanying drops in quality should be considered. I once made the mistake of buying a T-shirt and some shorts from Old Navy. They both began disintegrating after a few washes.

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Thomas Jørgensen 12.29.10 at 7:00 pm

Cost projections of renewables are.. eh, dicy. Imagine you had a time machine set to 1970 and you could go back and tell greenpeace and the other activists that were instrumental in putting the brakes on the original drive for atomic energy that in 2010 wind would still be a marginal technology and solar would be utterly insignificant in terms of global energy production. How much proof do you think you would have to bring back to convince them?
Bluntly, the historical role of wind and sun has been to act as greenwashing for energy policy that amounted to the continued use of coal.
Who has low-carbon electricity grids today? The French. The Swiss. Sweden. Norway. Iceland. Apart from Iceland, which has cheap geothermal, all of those grids are based on largescale hydro and the fissioning of atoms. Those technologies deliver. The green techs never have, and I dont think they can.
Consider what is needed to bring about a world where there are no coal fired power plants left, and only very few gas plants – all of which stand idle at least 90% of the time.
This means terawats of low carbon power. Nukes can get us there. They are expensive to build, but the expense is almost entirely labour rather than land or physical materials, and none of the material components of a reactor are particularily rare, so a radical expansion would not run into hard resource constraints or run out of suitable locations to locate them in. (tough in the medium term, fast reactors do become nessesary)
I tend to ignore renewables entirely because to me, the scale of the problems they adress are simply not relevant – It is not the energy demands of african villages that are causing AGW, it is demands of the industrialized world, and the Ruhr valley and the coastal provinces of China are not going to be powered by wind and sun in any meaningful sense, and you are not going to light up London, Tokyo and New York by putting solar panels on top of the skyscrapers. Coal has to go, and that means we need a technology that can directly replace it. Today. not in 2030.

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Nickp 12.29.10 at 7:01 pm

Chris Bertram @45

Is that clothes purchases per year or the total contents of the average American closet?

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someguy 12.29.10 at 7:02 pm

ScentOfViolets,

I really don’t think that was what Alex Tabarrok is claiming. He is pretty much rejecting the extreme rebound position.

See here-

“The extreme rebounders are assuming that even a tiny decrease in price increases quantity demanded so much that quantity supplied doesn’t decline so we continue to use as much energy as before. But this is very unlikely. Demanded is not super-elastic (this would imply big decreases in energy use with a tiny increase in price and we don’t see that.) Thus, we can expect that energy efficiency will reduce energy prices which will reduce quantity supplied, i.e. more oil will remain sitting in the ground for a longer period of time.”

Yes there will be some feedback via energy efficiency contributing to higher income levels. But I am pretty sure he feels that would be a very small factor in rising energy consumption. I think he would agree that only small portion of the higher income level generated by energy efficiency would result in more energy consumption. Your higher gas mileage might result in you driving a few more miles. But most of it would be directed in other directions. Say an extra day at the Spa and yes the Spa uses energy but the cost is mostly labor.

I am guessing that he feels that ordinary economic growth is what really generates energy demand swamping out any energy efficiency feedback mechanism.

I base this on the below-

“As demand increase with ordinary economic growth, of course, the oil may come out eventually so energy efficiency delays but does not necessarily eliminate the use of the oil. (It could be a long delay, however.) And energy efficiency also contributes to higher wealth making demand increase faster than it otherwise would. Thus the basic point about energy efficiency not being the answer is probably correct. “

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Omega Centauri 12.29.10 at 7:08 pm

15,19 As demand increase with ordinary economic growth, of course, the oil may come out eventually so energy efficiency delays but does not necessarily eliminate the use of the oil. (It could be a long delay, however.)
Long term, with a geologica store like oil, how much is ultimately produced depends upon the tradeoff in the value recieved from the commodity, versus the cost of extraction. We have increasing amounts of “reserve” as we climb the cost of extraction curve. If the value recieved is the energy content of the oil, there is a limit, where the energy required to mine a deposit exceeds the energy it produces. If the oil is used for other purposes, like chemical feedstocks, or even specialty niche fuels that particular limit may not apply. But in any case higher efficiency of use leads to a higher market clearing price, once the short term price flucuations have settled down, and that means society can afford to dig into somewhat less favorable ores.

41: Sure we have 40% efficent PV. Very expensive, suitable only for satellites, and for concentrated uses (using a lense or reflector to concentrate the sunlight 100s or thousands of times). But even if they were magically made cheap, at what rate would we be able to manufacture them? I think these multi-junction cells consume some pretty scare metals. You say you work in the supply area for these things. How far could the supply go before extraction of scarce specialty metals would put a ceiling on production? And if we have such a ceiling, and we used the supply for say 1000 times concentrated solar recievers, how many gigawatts of peak supply could we produce in a year? Some people claim these things cannot scale up to the sizes needed for largescale replacement of fossil fuels, but I’ve never seen any numbers to quantify where the limits lie.

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Small problems 12.29.10 at 7:08 pm

In the argument about energy use, no one seems to realize that the third largest consumer of oil behind China and the civilian United States is the United States military. Yes, a mechanized military really does use a huge amount of oil.

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piglet 12.29.10 at 7:21 pm

The Jevons effect is real and it has been empirically observed as well as making logical sense. I am surprised there should be much debate about that. If a resource can be exploited more efficiently, its cost declines and therefore it becomes economical to use more of the resource. For example, if you save energy money by insulating your home, you might discover that you can now afford a heated pool. Or you can now afford gas for two efficient cars instead of one old gas-guzzler. This is precisely the kind of thing that happens empirically. To be sure, the size of the effect is an empirical matter. This is a qualitative heuristic, a rule of thumb, not a quantitative theory that allows any kind of precise prediction. Like just about anything in economics that is valid, I might add.

The Jevons effect can be counteracted by increasing the unit price of the resource (e. g. by taxing it). This again is logically sound and empirically confirmed. Increasing the cost will make sure that efficiency gains result in less use of the resource rather than more careless consumption. This is the reason why European gas taxes have been far more effective than US efficiency standards in reducing per capita oil consumption.

“While the same could be true, in principle, for energy, energy typically accounts for around 5 per cent of total costs, compared to 70 per cent or so for labour. So, in the presence of energy-saving technical change, you’d expect the direct effect to dominate.”

That statement seems to me a non sequitur. If anything, the opposite should be true. If energy cost is low anyway, way even care about efficiency?

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Chris Bertram 12.29.10 at 7:48 pm

Nickp @48 those are purchases each year. (She cites US Census Bureau for 2005 and earlier years, and American Apparel and Footwear Association for 2007.)

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chris 12.29.10 at 8:15 pm

The demographic transition occurs at a fairly predictable level of wealth. Economics has quite a lot to say about how that level of wealth is produced.

An interesting point, but not really what I was getting at. Attempts to use economics to answer the question of “why do people at X level of wealth start having fewer kids?” by calculating the RoI of reproductive decisions are muddle-headed and silly.

Of course if you just accept the observed fact that people at X level of wealth do, in fact, start having fewer kids, then you can analyze and predict how they get to that level of wealth in the first place. But that’s not the kind of trying to use economics as a substitute for psychology that I was talking about (and that seems to show up in, e.g., comments 2-4).

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Tim Worstall 12.29.10 at 8:28 pm

“I think these multi-junction cells consume some pretty scare metals. You say you work in the supply area for these things. How far could the supply go before extraction of scarce specialty metals would put a ceiling on production?”

Multijunction cells require, over and above silicon (which is not in short supply) gallium, germanium and indium. I don’t know enough about indium to comment, but Ga and Ge can be extracted from, say, the residues of alumina production in orders of magnitude larger than we produce today.

(For example, virgin Ga production is of the order of 100-200 tonnes a year, almost all of which comes from those Bayer Process plants which turn bauxite into alumina. And yet only 6 or 7 of the 50 odd alumina plants have the required capture circuits. And bauxite to alumina is by no means the only place we could get gallium from.)

Germanium? Current world consumption is again in the 100-200 tonnes per year (virgin material, without recycling) range and there’s a couple of billion tonnes of coal fly ash out there grading maybe 100 ppm Ge. And yes, we do know how to extract it (umm, not just we as in me, but “we” more generally).

Scarcity of “rare” metals really isn’t a constraint. Current extraction techniques might be, those who are currently doing the extraction might be, but actual shortage, over time, of specific metals?

No, not a problem.

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Laurel 12.29.10 at 8:43 pm

@ScentofViolets and @Gene O’Grady: the mistake you’re making is in assuming that the rebound effect must be confined to the relevant item. The cleanest examples – like AC in the original article – do show high elasticity in demand for that specific item. It becomes more efficient, thus cheaper, thus more used, thus consumes more total energy. That’s not necessary for an aggregate energy rebound. If your hospital saves money on the energy associated with the lights, maybe there’s room in the budget for some fancy new equipment that uses energy. If your personal utility bills drop, maybe you buy new clothes, which you then use energy to wash and dry. Or you save enough money for a plane ticket somewhere. In the aggregate, this is more or less what people do. The fact that some examples don’t work out that way within the confines of that individual item (light bulbs being a prime example) doesn’t mean it doesn’t happen in the aggregate.

None of this is a particularly strong argument against efficiency in your own personal decisions, especially since you can decide to pay attention to over-all lifestyle efficiency rather than focusing narrowly on specific items. It does suggest, though, that without pricing changes efficiency won’t reduce consumption in the aggregate.

BTW, I quite liked the point in the original article that energy is now highly leveraged, rather than unimportant, even though I find it implausible. If energy is highly leveraged, shouldn’t we see very substantial changes in production/consumption/prices with relatively minor fluctuations in energy prices? That doesn’t seem to be the case.

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Omega Centauri 12.29.10 at 8:48 pm

Tim @55″Scarcity of “rare” metals really isn’t a constraint. Current extraction techniques might be, those who are currently doing the extraction might be, but actual shortage, over time, of specific metals?

No, not a problem.”
Thats interesting. The only data point I have is anecdotal. One of the half dozen or so concentrated solar photovoltaic startups is about a mile from here. When I visted them 1 year or so back, they were aghast at my usggestion they use multi-junction to improve the economics of their product. “It has to be scalable to large enough size to take over the energy world!”. Now, the last time I looked at their website, they are using multi-junction cells.

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piglet 12.29.10 at 8:53 pm

if clothes became ten times cheaper few people would buy ten times as much so overall costs would go down.

It has already been pointed out that this is wrong but it is worth thinking about. Our great-grandparents owned way fewer pieces of clothing than we do nowadays, and the reason for that is that they were much more expensive to buy or make. There is something after all to all the talk about supply and demand.

This came up relatively recently when talking about making cars more efficient in terms of mpg. In fact, there’s a ceiling; people already spend more than five percent of their day driving. If efficiency went up by a factor of twenty, they’d have to spend more than 24 hours a day driving to absorb all of the increase.

A good example of Jevons’ paradox in action is the observation that cars, especially in the US, have become way bigger, heavier, and more powerful. They have, in a sense, become more energy efficient but rather than using the efficiency gain to decrease gas consumption, the manufacturers decided to make them bigger for roughly the same gas intake. Gas prices were too low for consumers to care about gas savings, they would rather drive bigger cars. That is precisely what the Jevons principle predicted. And the reason European and Japanese cars didn’t follow the same trend is their higher cost of energy.

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ScentOfViolets 12.29.10 at 9:37 pm

But it doesn’t have to reach cost competitiveness with nuclear.

It has to reach cost competitiveness with the grid: grid parity.

http://en.wikipedia.org/wiki/Grid_parity

First, you might want to check the accuracy of that page in the discussion sections:

The fully-loaded cost (cost not price) of solar electricity is $0.25/kWh or less in most of the OECD countries. By late 2011, the fully-loaded cost is likely to fall below $0.15/kWh for most of the OECD and reach $0.10/kWh in sunnier regions.

I wonder how this was counted as it’s absolutely out of reality… (at least for Czechia) …even if counting with “energy cannibalism” (dotations via cheap fosil or nuclear energy for manufacturing solar plants) I’m unable to get under aprox $0.40/kwh (fosil&nuclear E costs aprox $0.03-0.05/kwh) Not even counting with electricity transportation/regulation costs, which are huge for solar (building and maintaining extra stabilization gas powerplants) —Preceding unsigned comment added by 90.177.73.67 (talk) 12:26, 10 November 2009 (UTC)

The paragraph about the companies of 1366 technologies and Abengoa need to be modified or removed. This gives the impression of a marketing message for the two companies rather than unbiased and neutral information about solar’s grid parity —Preceding unsigned comment added by Vishshri (talk • contribs) 03:03, 26 November 2009 (UTC)

That being said, the rest of the above is a non sequitur verging on a tautology. Solar and nuclear both have already reached “grid parity” in any of a number of locations in the sense your using the term: remote mountain tops, the interior of Antarctica, etc. I think that most people are concerned with “grid parity” in places like Boston, Tokyo, etc, and at a time when the exhaustion of fossil fuels and the effects of global warming make nuclear power cheaper than oil, etc.

Iow, yes, “alternative energy” is competing with nuclear power.

BTW, I’ve nothing against nuclear here: I don’t mind or care who uses whatever power generation systems. My point is just that if renewables do become cheaper than grid (which as I argue isn’t all that far away) then the climate change thing rather goes away: especially if we do something sensible like have a carbon tax to put the externalities into market prices.

My major point is that if we do have cheap renewable power then worries over fossil fuels simply go away.

Yeah, that’s the tricky part of your modus ponens though, isn’t it. If p=>q is true and p is true, then q is true. I will certainly grant you the conditional, that’s a triviality. The big handwavy step here is showing that p is true.

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ScentOfViolets 12.29.10 at 9:52 pm

As prices drop, there’s more churn. People buy the now cheap fashion items and discard them quickly. (Though actually they aslo get more and bigger closets too.)

regarding cheap clothes specifically, accompanying drops in quality should be considered. I once made the mistake of buying a T-shirt and some shorts from Old Navy. They both began disintegrating after a few washes.

Exactly. Buying twice as many clothes does not equate to having twice as many in your wardrobe if they are being bought more often because they wear through more frequently. [1]

The other point is the obvious one: no one is saying that dropping the price won’t cause demand to go up, cetaris parebus. What is being said is that the demand is not unitary, and in particular, at the far end, highly elastic. Iow, if some device becomes twice as energy efficient, more energy is consumed by these devices only if more than twice as many of them are put into use as a consequence.

In still other words, something to be determined empirically, product by product.

[1]In the clothing example, if prices drop by a factor of two, more money overall will be spent on clothes only if demand goes up by more than a factor of two, instead of, say, 1.3 or 1.8. So you’ve got to have several pieces of data not in evidence here before you can make that sort of determination.

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Zamfir 12.29.10 at 9:55 pm

Piglet, I think people are using “Jevons’ paradox” for two different claims: on the one hand that there is some noticable long term price elasticity to energy, and on the other hand that energy has a particularly high elasticity, even larger than 1.

The first claim is easy to show, but also not particularly controversial. It’s just something negawatt advocates tend to quietly ignore in calculations.

But Jevons himself made the second claim: that energy is so price elastic that efficiency gains will result in increased absolute consumption. But this harder to show, even in a milder form that most but not all of a gain in efficiency is counteracted by increased consumption.

Sure, increased efficiency and increased power use have historically gone together, but causation is much harder to show than correlation. Especially as we are interested in a longer term, the time scales where businesses change their work flow and replace their machinery.

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ScentOfViolets 12.29.10 at 9:56 pm

“While the same could be true, in principle, for energy, energy typically accounts for around 5 per cent of total costs, compared to 70 per cent or so for labour. So, in the presence of energy-saving technical change, you’d expect the direct effect to dominate.”

That statement seems to me a non sequitur. If anything, the opposite should be true. If energy cost is low anyway, way even care about efficiency?

What?!?!? This is merely an example to show that the general principle is false, and why.

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ScentOfViolets 12.29.10 at 10:05 pm

“I think these multi-junction cells consume some pretty scare metals. You say you work in the supply area for these things. How far could the supply go before extraction of scarce specialty metals would put a ceiling on production?”

Scarcity of “rare” metals really isn’t a constraint. Current extraction techniques might be, those who are currently doing the extraction might be, but actual shortage, over time, of specific metals?

Really? Recall what you said earlier (and what prompted my initial reply):

a storage/battery system (which we can make, expensively, at present, solid oxide fuel cells like the Bloom Box)

And a even a cursory familiarity of the field shows you just how far off your statement about “rare metals not being a constraint” really is:

The Bloom Energy Server uses thin white ceramic plates (100 × 100 mm)[5] which are claimed to be made from “beach sand” but are, according to Bloom’s patent description, scandia stabilized zirconia (ScSZ) . . . Scandia is scandium oxide (Sc3O2) which is a transition metal oxide that is sold between US$1400 to US$2000 per kilogram in 99.9% form. Current annual world wide production of scandium is less than 2000 kilogram. Most of the 5000 kilogram used annually is sourced from limited former Soviet era stockpiles.

The rare metals are oft times really that – rare. And expensive. And limited.

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ScentOfViolets 12.29.10 at 10:07 pm

if clothes became ten times cheaper few people would buy ten times as much so overall costs would go down.

It has already been pointed out that this is wrong but it is worth thinking about.

Really? Since I appear to be missing this despite repeated scans, could you show me the post where this was shown to be wrong? Or should I simply assume that you’re . . . wrong?

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John Quiggin 12.29.10 at 10:12 pm

I think Matt McIrvin @29 has the main issue right.

OTOH (and switching somewhat from my initial response @1) my guess is that the long-run price elasticity of demand for energy services is about 1. To translate from economese, if we experienced an exogenous doubling of energy efficiency across the board, we would probably end up doubling our consumption of energy services, and using about the same amount of energy.

So, a techno-optimist view that we can ignore CO2 emissions and wait for spontaneously generated improvements in energy efficiency to solve our problems makes no sense.

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Zamfir 12.29.10 at 10:17 pm

JQ, do you a have a particular reason to assume that?

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Lemuel Pitkin 12.29.10 at 10:41 pm

[Again without strikethroughs. Moderator, feel free to delete the previous one.]

What a great question! Some thoughts:

1. We have to be clearer about the exact claims. Let’s call e(X) the elasticity of demand for input X with respect to an X saving innovation. We expect e(X) to between minus 1 and 0, where minus 1 means that the entire impact of the innovation is to reduce demand for X, and 0 means that the entire impact of the innovation is to increase output of the final product. (In theory e(X) could be positive.) Call labor L and energy E. Now, the lump of labor claim could mean e(L) = minus 1, or e(L) <0, i.e. it could be the strong claim that labor saving innovations reduce employment pari pasu, or the weaker claim that the short run effect of labor saving innovations is to reduce employment at least somewhat. Similarly, the rebound claim could be the strong claim that e(E) = 0, that energy saving innovations do not reduce energy consumption at all, or the weaker claim that e(E) > minus 1, i.e. that energy saving innovations reduce energy consumption less than proportionately. So if you think that e(L) and e(E) both generally take some intermediate value between 0 and minus 1, that would imply rejecting the strong forms of both the lump of labor and rebound claims, without any inconsistency. (Of course it would also mean accepting the weak form of both claims.)

2. There are three reasons e(X) might be greater than minus 1. First, there is substitution in production: To the extent that greater efficiency in the use of X lowers its price, there will be a tendency to substitute toward more X intensive production methods. Second, substitution in consumption: Again, to the extent that X saving innovations lower the cost of X, and to the extent this is passed on to the final cost of goods incorporating X, that may lead to greater consumption of relatively X intensive goods. Finally, the economy as a whole may be X constrained, so that greater efficiency in the use of X leads to an increase in total output rather than reduced consumption of X. Mainstream economists, who mostly think about the allocation of a fixed set of resources via the price mechanism, tend to focus on the first two mechanisms. (Old and Post) Keynesians give more attention to the third, which does not depend on any relative price changes.

3. We usually think of labor supply being exogenous, while energy supply responds to demand. This is not as straightforward a claim as Zamfir makes it out to be, tho, since the evolution of labor supply depends not just on fertility decisions, but also on individuals’ decisions about whether to participate in the labor force. To the extent that people’s choices between work and nonwork activities (education, childrearing, retirement) are influenced by the wage, and the wage is influenced by the demand for labor, labor supply will look more like energy supply. Nonetheless, in conventional growth models (the Solow model and its many offshoots) longterm growth is assumed to be a function of the exogenous growth in the labor supply, the savings determined rate of capital accumulation, and the rate of labor augmenting technical change. In this framework, which you will find in every macro textbook, we can reject even the weak form of the lump of labor claim: The entire effect of laborsaving innovations is to raise the growth rate. Just because this is a feature of every mainstream growth model doesn’t mean it’s true, of course, but it does help explain why economists are so much quicker to reject the lump of labor argument that analogous claims about energy.

4. So it would seem that the arguments, while formally similar, are actually quite different. Going back to point 2, substitution effects are probably more important for energy, i.e. if the rebound claim is true, it’s because energysaving innovations lead to a lower price of energy which in turn leads to a shift toward more energy intensive products and processes. Whereas the wage is not very responsive to labor supply and demand in the short run, so substitution effects are weaker, but output as a whole is much more likely to be constrained by the labor supply. So the lump of labor claim is false (if it is) because laborsaving innovations led to higher output and/or growth.

5. On the other hand, the classical economists (Ricardo, etc.) believed that it was land (roughly equivalent to energy) that was typically the binding constraint. For most of the 19th and 20th century, both resource saving innovations and the opening up of new sources of raw materials for capitalist exploitation made this look like an obsolete doctrine. But it may be more relevant in the future. It’s notable that recessions now are typically preceded by accelerating oil prices, instead of accelerating wages as they were a few decades ago. In which case, we might find ourselves in a world where DeLong et al. are wrong on both counts, and fairly strong versions of the rebound and lump of labor claims are both true.

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PHB 12.30.10 at 12:34 am

I think it is pretty obvious that there is going to be a limited rebound effect. But the idea that it is going to cancel out the gain is pure nonsense.

Equally nonsensical is ScentOfViolets obsession with Nuclear Power as the be-all solution. The problem with nuclear power is political. Unfortunately the proponents of nuclear power lied their asses off (technical term) during the 1950s and 1960s. Nuclear power was nowhere near as safe as claimed and the designs they peddled were definitely not ‘fail safe’ in any meaningful sense.

The main reason that solar power was expensive in the past was that the production processes were based on using silicon wafers and refining silicon is very expensive. Modern processes offer adequate performance at a much lower price. Instead of starting with a crystalline lattice, nanotechnology is used to produce self-assembling inks.

At the moment the cost of solar cells makes the rate of return rather marginal. But as with the cost of LED bulbs, we can expect them to come down. Nice thing about solar is that it is pretty easy to balance out the energy used for air conditioning with the energy delivered by solar for the typical two floor house.

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john c. halasz 12.30.10 at 1:05 am

“labor-augmenting technical change”- Er, you mean “labor-productivity augmenting technical change”?

Going back to Jevons, his (half-)thinking about coal was that, (as the principal source of energy), it represented a basic constraint on the expansion of the economy, such that increased efficiency in its use, would result in greater expansion of railroads, iron production, etc. What’s odd, given his provenance, is that he didn’t consider the possibility of external trade, in raising a panic about the supply constraint of coal limiting industrial growth, (though, in fact, British coal production didn’t reach its limits until Maggie Thatcher, when the industry was liquidated, though, er, for less than fully economic reasons).

More generally, though energy is a key resource, in that it plays a key role in the transformation of materials and the productive augmentation of raw labor-power, it’s obviously not the only natural resource constraint and such natural resource constraints are traded-off against each other. Or, in other words, there is no single physical measure of productive surplus, which is why we substitute money, as a measure of costs and surpluses, (“profits”), however imperfect and even down right delusional that may be.But insofar as natural resource (and environmental and ecological) constraints become increasingly binding piling up more bucks will be of little avail. Knowledge intensive development and promulgation of efficiencies become crucial. But what then does that mean for the organization of “capital”?

I’m sure that Tom Walker knows this. The reason work reduction doesn’t occur is that, assuming constant labor income, i.e. a higher real hourly wage, it implies a de-valorization of capital, i.e. a lowered rate or ratio of exchange for each “unit” of capital for each hourly unit of labor, (leaving aside subsidiary effects, like possibly greater qualitative productivity of labor with less burdensome hours). And since investment is profit-driven and productivity-enhancing investment responds to both the level of wage-based AD and the pressure of wage-costs, such a reduction in aggregate labor hours implies, mutantis mutandis, a reduction in investment and innovation, (if not an out-right capital strike). Excess labor hours, both, if somewhat contradictorily, those demanded of the employed and the maintenance of a certain rate of unemployment, are required by the “system”. Or, in other words, “full employment” and reduced hours is a “dialectical” relation, which interacts with other such relations.

@12:

Oh, you poor dear. All that time and effort wasted on Nozick! Without bothering to read the thing, I’ll just remark that, though the realization of a surplus through exchange, other than the trade-off of use-values, may be normatively suspect, but it’s still the functional economic rationale of exchange, (given the division-of-labor and whatnot), even if exchange is not the only or even most important way of realizing productive surpluses. (It’s a systemic structural-functional matter, which doesn’t even require any of that Pareto optimism clap-trap).

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Chris 12.30.10 at 1:08 am

Nice thing about solar is that it is pretty easy to balance out the energy used for air conditioning with the energy delivered by solar for the typical two floor house.

In the long run, don’t we need to move away from two-floor houses separated by wide expanses of lawn that force everyone to drive past miles of each others’ lawns that they don’t actually use for anything but running a gas-powered lawnmower over? (In the process bringing them close enough to each other to do some shopping on foot, commute on public transit, etc. Maybe even trade in some of their separate, rarely-used large appliances for centralized facilities like laundromats, if they’re really radical about it.)

That’s sort of why cities are more energy-efficient and use less resources per unit population in the first place, isn’t it? If people were face to face with the real cost of having your own washer and dryer and exercise machine so it can be idle 95% of the time, maybe they wouldn’t think it was worthwhile.

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john c. halasz 12.30.10 at 1:23 am

Just to be clear, I fully agree with Tom’s praise of “laziness”, (in roughly the same sense that Erasmus praised folly). It’s just that such “laziness” doesn’t exactly constitute or result in effective power.

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Sandwichman 12.30.10 at 2:05 am

John@69 “I’m sure that Tom Walker knows this.”

I don’t presume to know everything, John. What your saying, though, sounds to me a bit like what Marx was talking about in the Grundrisse chapter on capital: http://ecologicalheadstand.blogspot.com/p/grundrisse-capital-like-property-rests.html

John@71 “Laziness” is as laziness does. Walter Benjamin talks somewhere about pouring just a little oil in the right place rather than dumping a whole bunch all over the machinery. Back when I was a paid researcher there was always pressure to produce “deliverables” long before one could possibly have conducted deliberation.

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gmoke 12.30.10 at 2:31 am

Saw Steve Cowell of Conservation Services Group a couple of weeks ago at MIT. He gave a very information dense talk in the course of which the Jevons Paradox came up. It is a difficult problem in the energy efficiency business but as there is a rebound effect there is also a proportion of people who use much less energy than average after efficiency measures have been installed. This is something a very small study of homeowners who installed solar on their houses back in the late 1970s found. They had significantly higher energy savings than predicted, probably because they were energy conscious in the first place and more so after they got their solar. Whether the super-efficient households compensate for the rebounders is the crucial question.

The history of CA’s energy efficiency programs over the last thirty years or so may also be a refutation of the Jevons Paradox as their electricity use went down while the GDP and standard of living rose. Some say this happened because of the shift from manufacturing to service jobs but it should be studied. Art Rosenfeld would probably have a good handle on it.

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bob mcmanus 12.30.10 at 2:49 am

separated by wide expanses of lawn that force everyone to drive past miles of each others’ lawns

You can have my lawn which is dirt and weeds anyway.

I won’t give up my trees, which are the essence of good neighborhoods, which cool my house, store water and sunlight, house birds and squirrels, for your concrete neon jungle.

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Different John 12.30.10 at 2:52 am

Violets – I work for a concentrated photovoltaic company that has built several commercial sites in the U.S. and overseas. We use triple-junction cells and anticipate moving to 4-junction cells in a couple of years. Raw materials in this tiny subset of the solar business would not be a constraint even if the subset was 100 times as big as it is.

The biggest issue is the fact that worldwide 1 year demand for all CPV cells can be supplied by perhaps a single-digit number of weeks of manufacturing at a single site, but of course you still have to pay for the facility etc. for the full year even if you use it for 1/15 of a year (although of course not at the same rate as if you were running it flat out.) Believe me, costs would be much lower, dare I say within 50% of competitive, if we could sell 10x as much in a year as we do. And we reduced the cost of our product by more than 20% via non-manufacturing-volume related means in the last year… and don’t forget how heavily coal and oil are subsidized in the U.S.

The future won’t be dominated by one energy technology as most of the 20th century will be. I expect there will be solar of several types – CPV mainly makes sense in high desert regions (Antarctica is a wonderful place for CPV, surprisingly), but flat panel and heat exchanger solar technologies may have larger roles to play – wind, lots of nuclear, hydroelectric (the best storage mechanism for nuclear energy that’s produced at night is to pump water to the top of a dam with it; this is better than 90% efficient, IIRC) and perhaps wave and tidal as well.

When people talk about the Jevons effect and cars, I’ve noticed they forget that gasoline costs are actually not a major part of per-mile vehicle costs, perhaps 20% at $3/gallon compared to wear-and-tear, and furthermore, more miles means more time spent driving, which is a pretty big cost – perhaps the dominant cost – as well. I drive an old Honda Insight that gets 52-55 mpg, and I can assure you that I don’t drive significantly more than I did in my old Ford Escort that got 30-33 mpg.

Most driving, and indeed most energy consumption, is necessity-based; getting to work, the supermarket, keeping the house at 64 degrees when the daily high for the months of December – February averages 53 degrees; if you made heating/insulating systems 2x as efficient, I doubt those thermostats would go up to 75 or 80.

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Sandwichman 12.30.10 at 3:58 am

Brad DeLong confesses he finds it “hard to know what to do with this”

http://delong.typepad.com/sdj/2010/12/i-confess-i-find-it-hard-to-know-what-to-do-with-this.html#tpe-action-posted-6a00e551f0800388340148c7298cf0970c

My advice to Brad is that he go to the source rather than skimming the gloss. I think Chris gives a fair gloss of my argument. But a gloss is only a gloss. I would welcome Brad’s critique of my original presentation of the argument, presented in Chapter one of Jobs, Liberty and the Bottom Line and in the essay, Time on the Bottom Line on my Ecological Headstand blog.

gmoke@73 appears eager to embrace the microeconomic evasions of what is macroeconomic argument. You save money on energy. You spend it on consuming more of other things that use energy. Your energy bill is lower. Your energy consumption (including indirect consumption) is higher. I’m not saying this outcome is inevitable. But it becomes inevitable is you block the increased consumption of leisure time as “not contributing to economic growth.”

This is not just an argument about energy, jobs and leisure time. It is also an argument about policy and accounting conventions. If the institutions perversely select against good outcomes, you’ll get bad outcomes.

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Gene O'Grady 12.30.10 at 4:38 am

No. 56, I actually did the support services budgets, so I know where the savings went. They did not go into new energy consuming equipment — funding and approvals for that were in a completely different world.

Interestingly, utility savings sometimes did go to preventing layoffs of maintenance staff, and some of their work went into better routine maintenance of utility systems, which produced further energy efficiencies.

I continue to be frustrated (and frankly Brad DeLong is worse on this than CT) with the use of hypothetical models that happen to confirm the modeler’s assumptions at the expense of actual experience of the world.

Kind of like when Paul Krugman was still puffing California energy deregulation and I was looking at the daily reports of plants off line and knew that the models were a coverup for obvious market manipulation and fraud.

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Omega Centauri 12.30.10 at 6:07 am

One thing about supply of energy. Many (most?) economies have a roughly fixed supply of low cost energy from environmental flows. Usually this is in the form of hydro-power. But, wind is a future candidate for this category as well (a limited number of high quality sites). After that the usual economies of scale don’t work as expected, i.e. longterm cost as a function of rate of production strongly increases, rather than decreases. We have an even worse problem with energy stores (fossil fuels), which are approaching depletion. Costs of these are likely to rise because of a combination of accumulated past consumption, and the current rate of consumption (which if it goes up, forces more current production from lower quality ores).

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Chris Bertram 12.30.10 at 7:55 am

My reponse to Brad, cross-posted from the comments at his blog (and languishing in moderation for the moment).

Many thanks for responding, Brad. You’ve actually answered my question when you write:

bq. “I say that–at least among those economists I speak too, whether of the left, of the center, or of the right–it is simply not the case that one set of issues is settled by examination of history and evidence and the other settled by a theoretical a priori argument. Both are settled by examination of history and evidence.”

That’s fair enough. But I don’t think it is true as an approximation of the behaviour of economists in public debate (including and especially on the internet), where the claim about labour is, indeed, simply wheeled out as an indubitable axiom that only an idiot would question.

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Tim Worstall 12.30.10 at 10:05 am

“And a even a cursory familiarity of the field shows you just how far off your statement about “rare metals not being a constraint” really is:

The Bloom Energy Server uses thin white ceramic plates (100 × 100 mm)[5] which are claimed to be made from “beach sand” but are, according to Bloom’s patent description, scandia stabilized zirconia (ScSZ) . . . Scandia is scandium oxide (Sc3O2) which is a transition metal oxide that is sold between US$1400 to US$2000 per kilogram in 99.9% form. Current annual world wide production of scandium is less than 2000 kilogram. Most of the 5000 kilogram used annually is sourced from limited former Soviet era stockpiles.

The rare metals are oft times really that – rare. And expensive. And limited.”

Erm, excuse me but I do find this extraordinarily amusing. For you’ve just used the one “rare metal” in which I am the world expert. No, really, ’tis true, I am the, not a or an, expert in the supply, market for and uses of scandium. I handle, in an average year, around 50% of the world’s usage.

Bloom is a customer (through another company, not directly). I subsidised some of the research into why and how you might use scandia stabilised zirconia rather than the yttria, ceria alternatives.

The “beach sand” is where you get the zirconia from. The scandia (the Sc2O3, not Sc3O2) is, in the Bloom design, 11 mole %. The prices look a little low (they have shot up this past year) and yes, the bulk of supply comes from Soviet era stockpiles. From an old plant attatched to a uranium extraction plant at Aktau on the Caspian Sea.

But now we come to the point I was making above:

” Current extraction techniques might be, those who are currently doing the extraction might be, but actual shortage, over time, of specific metals?

No, not a problem.”

Current extraction techniques are indeed a limit on both the volume and price of the Bloom Box and similar. But that doesn’t mean that over time they are the limiting factor.

Much of my work this year has been going around the various alternative sources we could get our scandium from. The Clarke Number is around 22: meaning that 22 parts per million of the Earth’s crust is scandium. There are some 800 minerals that contain it but unfortunately there are very few where it is anything more than a trace (and those where it is more than that, like thortveitite, are themselves vanishingly rare).

So it’s not possible to find a new mine for it (despite some floating stock market adventures to do just that). It needs to be extracted as a by-product of some other process (just as we do with indium and germanium from zinc mining, rhenium from copper.molybdenum deposits, gallium from bauxite to alumina, tellurium from copper slimes and so on). And as I say, much of my work this year has been going around those purported alternatives in the literature and seeing which ones actually work.

And most in the literature don’t work out in economic terms: there is scandium in both columbo-tantalite and cassiterite which fortunately concentrates at the tantalum extraction plants. But this would provide perhaps a tonne a year from all put together. And so on.

But one does indeed work. We’ve built a pilot plant (in this part of the metals world this means processing a few hundred kilos of something to end up with a gramme or two, proving that the chemistry works) and shown that extraction is entirely possible from the wastes of the Bayer Process. But it’s expensive.

The next step is to make that process cheaper….economic at the sort of price that solid oxide fuel cell manufacturers will be happy to pay. And yes, we’ve even managed that (although I’m sure you’ll understand the reasons why, us not having yet built the plant, I’ll not tell you exactly what it is).

Now, that process uses the 50 million odd tonnes a year of stuff that is thrown away by an extant industry. A source that has somewhere in the 1.5 to 2 billion tonnes of accumulated waste just sitting around and gently poisoning people. Within that annual waste stream is 750-1,500 tonnes a year of my beloved scandium.

This is all well known by the way, it’s only the trick of getting it out at a resonable price which is as yet not in the extended literature available to anyone on Google.

And yes, we are currently in the running around talking to bankers/stockbrokers phase in order to get the cash to build the plant which will extract scandium from these wastes.

Apologies for this extremely long and well off thread comment. But I really do want to try and hammer home this point that while current extraction techniques might mean that certain “rare” metals are both rare and expensive, this does not mean that all extraction techniques which might be used over time will mean that said rare metals will remain both rare and expensive.

As, in the example that SoV has decided to use, my own work rather shows. It’s entirely possible for us to pump out 50 tonnes, 100 tonnes, 300 tonnes, a year of scandium at a price where its use in the Bloom Box or equivalent makes economic sense.

For, and this is the real point, extraction technology is no more static than any other form of technology.

I am absolutely willing to agree that we cannot use more iron atoms than there are iron atoms on the planet, more scandium atoms than there are on Earth. But we are so far away from those limits that they’re irrelevant. Extraction costs are the only relevant limit we face as yet.

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Guido Nius 12.30.10 at 10:26 am

80 comments and not a mention of Malthus (Ricardo, yes). It’s number of people that is binding variable and it’s been empirically demonstrated that better access to education is automatically improving that variable. Better to invest in education than in energy efficiency.

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PHB 12.30.10 at 10:52 am

Chris @70

In the long run, don’t we need to move away from two-floor houses separated by wide expanses of lawn that force everyone to drive past miles of each others’ lawns that they don’t actually use for anything but running a gas-powered lawnmower over?

Well does not take a great deal of electricity to power the lawnmower and one would expect it runs off batteries anyway.

I don’t see the problems with suburban living that Atrios does. We already have electric car technology that is more than adequate for typical run-around-town and commuting purposes.

At any rate, most people don’t want to actually live in high rise blocks. Particularly here in the UK where they are associated more with low quality council housing rather than Manhattan Penthouse living. But if they did, you are going to need rather more solar panel area than you can fit on the roof.

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J.V. Dubois 12.30.10 at 12:22 pm

I can’t believe that all these smart people are so very dumbfounded of this idea. It is pretty clear that Jevon’s paradox easily holds and that Brad DeLong is wrong. As for some other debates, let us bring our ide to some extreme – let’s imagine that the energy efficiency of the oil based engines is increased 100 times. So now instead of 25 miles per gallon you are basically able to drive 2 500 miles per gallon. What would this mean? It could mean that people in 3rd world earning only a $1 a day could start to use advantages of transportation (such as bus or train). Oil could be used for production of electricity maybe even putting other sources of energy (such as nuclear) out of usage. The other surprise is that the cost of the barrel could actually increase. If you increase consumption efficiency by a factor of 100 you may increase the price of the oil 10 fold and still remain in vastly better shape than before. This could lead to such things as synthetic production of carbon based fuels (from agriculture) or mining for oil in the region previously uneconomical.
Some of you may object that there is a difference between increased efficiency of the light bulb (or air conditioning) and increased efficiency of fossil fuel engine with regard to fossil fuel consumption. While the former has no impact on overall energy source portfolio (as electricity may come from large pool of potential energy sources) the increase in the efficiency of the engine would have exactly the Jevon-like impact described in previous paragraph. So let’s follow the same train of thought as previously and imagine that we suddenly come up with the bunch of energy-saving technologies which will increase the efficiency of all energy consumption devices 100 times (better light bulbs, better heating, better air conditioners etc better engines etc.). Since Jevron law holds this would basically mean the boom in the energy appliances – maybe we would start hauling stuff into space (with new more efficient propulsion) or we would install street lamps all over the country, or we would be able to live farther from the work using very fast (and energy costly) transportation on a daily basis. No matter the source, we may easily think that the demand for the energy would behave the same way as it behaved during the 19th century – it would surge. This would mean that the price of the energy sources (per kWh) would increase (nobody would mind it that much since the added affectivity per kWh would easily offset the increased costs per kWh). What would be the effect? Given the finite amount of fossil fuel sources we would likely see the shift of energy source portfolio to support this increased demand. However the nominal fossil fuel consumption would not shrink – on the contrary it would rise. With higher price per kWh it would make more sense to drill oil on places now too costly to do so and burn it. We would feel more green in the terms of % usage of alternative source but we would still be larger carbon producers than today.

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Marc 12.30.10 at 1:31 pm

There are massive, massive subsidies associated with the US suburban lifestyle. A fair assessment of external costs (such as catastrophic climate change) that reflected the real costs of energy usage could very well change the calculus – not to mention thinking about the long term water usage (e.g. Phoenix, Las Vegas). At 5$/gallon and 20 mpg in an SUV, for instance, a 50 mile commute each way – typical of edge cities in the west – would be of order 6,000$ /year. That’s at the level where it changes behavior.

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Thomas Womack 12.30.10 at 2:52 pm

Six thousand dollars a year is almost exactly the price of a season ticket on the train from Cambridge to central London, and the trains from Cambridge to central London in the mornings are pretty much filled with season-ticket holders; on the other hand, these are people commuting from one of Britain’s most pleasant dormitory towns to a place with really unusually lucrative jobs, whilst I doubt people are commuting fifty miles into Phoenix to do derivatives pricing and quantitative analysis.

The difference in rent for similar houses between Ely and Cambridge used to be almost exactly the price of the season ticket between them, though has now grown wider.

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Tim Worstall 12.30.10 at 2:55 pm

“At 5$/gallon and 20 mpg in an SUV, for instance, a 50 mile commute each way – typical of edge cities in the west – would be of order 6,000$ /year.”

That’s true, and such gas prices do indeed change behaviour in Europe.

But from the Stern Review the climate change externalities of a gallon of gas are of the order of 80 cents (8.8 kg CO2 emissions from US gallon of gas x $80 per tonne CO2 from Stern Review as externalities cost and some rounding).

Certainly there should be a Pigou Tax (as Stern suggests) of the amount of he externalities….as Greg Mankiw has been saying for years. 50 cents to a $ on a gallon of gas.

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chris 12.30.10 at 3:02 pm

Well does not take a great deal of electricity to power the lawnmower and one would expect it runs off batteries anyway.

Out of curiosity, where do you live? I don’t think I’ve ever seen an electric lawnmower in the US. Maybe they’re just less noticeable because they make less noise than the gas-powered kind.

At any rate, most people don’t want to actually live in high rise blocks.

Not when it’s artificially cheap (or regulatorily mandated!) to use land inefficiently and drive long distances every day, no (and *especially* not in the US where living in a city is a marker of low class and, as a result, urban public transportation and other services are rather awful, not to mention having almost entirely desperately poor people for neighbors — and classmates if you have any children; throw in the US’s actively perverse system of school funding and of course nobody with any children wants to live near the poor if they aren’t so poor themselves as to be unable to afford to leave).

Unhide the costs of sprawl and people might find density more worthwhile, and of course, the more non-poor people live in cities, the more pleasant they will become in a number of ways (in particular, having more political clout in favor of improving the quality of both the accommodations themselves, and the public services that serve them).

Instead, under current US political systems, the cities are actually subsidizing the suburbs (because the suburban residents commute into the city and use city facilities and services, but then go home to avoid paying most city taxes).

But if they did, you are going to need rather more solar panel area than you can fit on the roof.

Not a problem — if more people are living in a smaller area, that leaves a larger area where they *aren’t* living, which can be used for solar power, farming, a national park or anything else you like. The real tragedy of low-density residential isn’t the wasted gas or even the wasted time of commuting (although those are certainly bad — today’s worker has a lot of hours of *unpaid* work-related time commitment in addition to the paid hours whose wage has not increased commensurately with productivity), but how much land it takes away from all those non-residential uses. House, 2 trees, house, 2 trees, repeat 1000 times is a *very* poor substitute for a national forest when it comes to enjoying the beauty of nature, even if you do have to drive half an hour to reach the national forest. The same goes for low-density (car-oriented) commercial and its vast acreage of parking lots.

P.S. On the other hand, maybe someone will eventually invent a cheap solar panel you can park on without damaging it (obviously, only the empty parking spaces would actually provide power, but most US parking lots are mostly empty most of the time, so that isn’t actually that much of a handicap) and then the suburbs can produce some of their own energy.

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Substance McGravitas 12.30.10 at 3:47 pm

At any rate, most people don’t want to actually live in high rise blocks.

Where I live, it seems most people do. Has to do with decent development and zoning.

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ScentOfViolets 12.30.10 at 4:12 pm

That’s fair enough. But I don’t think it is true as an approximation of the behaviour of economists in public debate (including and especially on the internet), where the claim about labour is, indeed, simply wheeled out as an indubitable axiom that only an idiot would question.

Exactly. I took the original question as rhetorical. I even had a brief flash of particular “public economists” when I read that. The usual suspects of course.

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ScentOfViolets 12.30.10 at 4:20 pm

Violets – I work for a concentrated photovoltaic company that has built several commercial sites in the U.S. and overseas. We use triple-junction cells and anticipate moving to 4-junction cells in a couple of years. Raw materials in this tiny subset of the solar business would not be a constraint even if the subset was 100 times as big as it is.

Why did you bother saying this since it doesn’t address the original objection at all? There are any of a number of rare and precious materials that aren’t a bottle-neck because there’s not much call for them. And they still wouldn’t be if you increased their use a thousand-fold.

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ScentOfViolets 12.30.10 at 4:33 pm

Apologies for this extremely long and well off thread comment. But I really do want to try and hammer home this point that while current extraction techniques might mean that certain “rare” metals are both rare and expensive, this does not mean that all extraction techniques which might be used over time will mean that said rare metals will remain both rare and expensive.

Sigh. Tim, do you know anything about how this sort of conversation works? You’ve made a claim, a claim which is imho rather easily debunked.

But rather than work on making your case, you’re offering up vague bromides and telling me I’ve got to prove you wrong.

In a word, no. I claim those particular ingredients are rare and expensive, and indeed have pointed to the literature that says this is the case. You’re only response has been to say that might not always be true. That’s unconvincing to say the least.

As, in the example that SoV has decided to use, my own work rather shows. It’s entirely possible for us to pump out 50 tonnes, 100 tonnes, 300 tonnes, a year of scandium at a price where its use in the Bloom Box or equivalent makes economic sense.

For, and this is the real point, extraction technology is no more static than any other form of technology.

No, you haven’t “proved” anything. You’re just speculating and then daring me to prove you wrong.

I am absolutely willing to agree that we cannot use more iron atoms than there are iron atoms on the planet, more scandium atoms than there are on Earth. But we are so far away from those limits that they’re irrelevant. Extraction costs are the only relevant limit we face as yet.

Heh. Right. And those rare elements aren’t rare at all, all we’ve got to do is figure out an efficient way to filter them out of common sea water. But why stop there? There are indeed a finite number of iron atoms on Earth. But all we have to do to make more is figure out an economically efficient way to fuse oxygen and other higher elements. Not only do we create iron in the process, we get free energy as well!

Please, stop it. Next you’ll be on about flying cars – sure they’re not ready yet, but that doesn’t mean the technology won’t eventually be there! That sort of thinking doesn’t help national energy policy at all.

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ScentOfViolets 12.30.10 at 4:38 pm

I found this comment rather telling:

This is all well known by the way, it’s only the trick of getting it out at a resonable price which is as yet not in the extended literature available to anyone on Google.

Iow, Tim concedes the literature totally supports me, but there’s some secret stuff only he and a few others know tha’ts about to turns everything there on it’s head.

But he can’t tell me what it is either, just that it exists, trust me. Anybody else have a problem with this style of proof?

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Substance McGravitas 12.30.10 at 5:18 pm

Sigh. Tim, do you know anything about how this sort of conversation works?

I think a lot of people do. Good luck!

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ScentOfViolets 12.30.10 at 5:32 pm

Good on you, Substance. There’s far too much of this nonsense where people demand you prove the opposite of what they claim, or prove that they’re wrong, or . . . anything but actually doing the hard work of convincing other people.

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peter ramus 12.30.10 at 5:55 pm

Still,

Erm, excuse me but I do find this extraordinarily amusing. For you’ve just used the one “rare metal” in which I am the world expert. No, really, ‘tis true, I am the, not a or an, expert in the supply, market for and uses of scandium. I handle, in an average year, around 50% of the world’s usage.

It’s just under the wire, but who doesn’t think this deserves nomination for the 2010Marshal McLuhan Reveal Award?

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Lemuel Pitkin 12.30.10 at 6:59 pm

80 is great. It’s so satisfying to have people with genuine expertise taking part in these conversations.

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gmoke 12.30.10 at 8:20 pm

Sandwichman @ 76 wrote:
“gmoke@73 appears eager to embrace the microeconomic evasions of what is macroeconomic argument. You save money on energy. You spend it on consuming more of other things that use energy. Your energy bill is lower. Your energy consumption (including indirect consumption) is higher. I’m not saying this outcome is inevitable.”

Mebbe I am confusing micro with macro. However, my intention was to inject a little real world into what almost always devolves into an abstract discussion. People who are actively working on energy efficiency down on the ground are concerned about this problem and wondering about its extent and reality. Steve Cowell calls the rebound effect the “snap back.” I don’t know of any studies that look at “snap forward” although I do know that some energy efficiency studies show that notifying neighbors of their relative success in saving energy contributes greatly to maintaining energy efficiency efforts over time.

Whether that keeps people from building more McMansions or taking more intercontinental vacations is another question altogether.

98

Tim Wilkinson 12.30.10 at 8:31 pm

Well then, just to restate some points (e.g. from ## 11 and 12):

To the extent that energy production can be done cleanly, there is no issue, so we assume for simplicity what is obviously untrue: that it can’t (and that there is therefore no point discussing it).

To the extent that people (including producers of gadgets etc with ability to ‘stimulate demand’) would rather like to increase their usage of various energy-intensive stuff including gadgets not yet invented or available, we may expect that they will do so pro tanto as they become more able to afford it.

To the question of whether it is possible to reduce energy consumption (thus emissions) to a safe level, while holding constant usage of energy-consuming stuff at (a) current levels, (b) currently expectable (probably increased) levels assuming no ‘rebound’ effect, by improving energy efficiency, the answer is probably no, I suspect.

The situation is worse if it is the case that reducing energy consumption will lead to a drop in price which stimulates greater energy consumption, i.e. a rebound effect – which would include the introduction of new and previously unsaleable energy-consuming gadgets. So the chances are that even if the answer to the above were yes, the answer to an augmented question that incorporates a long-run rebound effect is still probably no.

But luckily we are not behind a veil of ignorance about particular facts, nor bound by principles that preclude ‘interference’ in the operation of teh free market. So emissions could be controlled directly, and there thus is no need to stick to the bizarre method of (a) trying to work out parameters for engineering an optimal market equilibrium on the basis of some bullshit model of which not even the broadest outline shape is agreed on, (b) not actually doing anything much about it except hope for greater fuel efficiency.

So presumably the unsurprising conclusion to the wide-enough-to-b-we should cap or ration emissions, or increase prices by some equitable imposition of a tax burden, or whatever, so as to keep them at a safe level – and such a regime can be monitored and tweaked rather than decided once and for all on 30 Dec 2010. And if it is the case that improved energy efficiency (and clean energy production, which we may now reintroduce to the model) enables us to maintain an existing – or even increasing – level of usage of energy-consuming stuff while reducing emissions to safe levels, then so much the better (well actually I personally would very much like private motorcars for example to go out of use, but apparently some other people like them, and have votes and the ability to riot).

—————

And as far as Luddism and the Lump is concerned, even if there were a ‘lump of labour’, making it smaller (what a shite choice of metaphor – a fixed lump, but it gets smaller) might actually be quite nice if, e.g., incomes could be maintained at the same time, and if no-one has to be marginalised and left unfulfilled in unwanted idleness as a result.

Except that not only time occupied, but complexity, moderate challengingness, internal rationale, creativity, intelligibility, joy, fun, human flourishing, the absence of RSI, etc are arguably all ways of quantifying labour, or at least important properties of it, and decreasing those through increased automation would pro tanto be a distinctly impoverishing move. Some kinds of automation may not do that, of course, and may even have an opposite effect.

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Tim Wilkinson 12.30.10 at 8:36 pm

-So presumably the unsurprising conclusion to the wide-enough-to-b-we-

So presumably the unsurprising conclusion to the wide-enough-to-be-practical issue is that we

100

Tim Wilkinson 12.30.10 at 8:36 pm

the curse of the hyphens can cut both ways.

101

Thomas Jørgensen 12.30.10 at 9:05 pm

This entire debate is besides the point.

Noone is arguing that increased energy efficiency is a bad idea, as even in the extreme case where rebound effect utterly annihilates all reductions in emmisions the gains in terms of economic gain and human welfare would justify the effort on its own.

Conversely, an argument that negawatts will stop global warming is, quite obviously, equally wrongheaded.
Even if the rebound effect is zero and extremely high savings in energy consumed per unit of wealth created -lets say, on the order of, oh 76%- materialize, the billions of human beings currently languishing in extreme powerty will not stay there over the coming decades, and total primary energy use will thus go up in despite the crashing emissions from the first world such an outcome would produce. And if the energy inputs used, globally, continue to be fossil, the planet fries.

This argument can the extended to other policies as well. As big a fan as I am of nuclear, reactors only help with AGW if their construction means the closure of fossile fuelled generation capacity. Windmills that are backed up by natural gas plant fry the planet, and making RnD bets on particular technologies to reduce emissions amounts to asking politicians make engineering decisions, which will mostly not work out well.

Basically, the only *political* decision the world can make which will reliably put a stop to AGW is to leave the coal and gas in the ground. Carbon taxes, renewable incentives, ect. It is all a mugs game.
A carbon plan that would work would be a 30 year schedule for the dynamiting of all fossile fuel fired generation capacity and a complete ban on on the construction of any new such that did not capture 100% of its emmisions from day one of operation.

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Sandwichman 12.30.10 at 9:35 pm

“If we are concerned about our great appetite for materials, it is plausible to seek to increase the supply, to decrease the waste, to make better use of the stocks that are available, and to develop substitutes. But what of the appetite itself? Surely this is the ultimate source of the problem. If it continues its geometric course, will it not one day have to be restrained? Yet in the literature of the resource problem this is the forbidden question. Over it hangs a nearly total silence. It is as though, in the discussion of the chance for avoiding automobile accidents, we agree not to make any mention of speed!” — John Kenneth Galbraith, address to Resources for the Future, 1958

No! No! No! We NEED to consume more.

>Why?

Because if we don’t economic growth will stagnate and unemployment will result.

>But what if instead we reduced the hours of work to maintain full employment (like Keynes suggested during the war)?

Ha! You’re committing what economists deride as a lump-of-labor fallacy. The amount of work to be done is not a fixed quantity. Human wants are insatiable.

>So why then does the government have to stimulate the economy with deficit spending and tax cuts?

Because if it doesn’t economic growth will stall and more jobs will be lost.

>If we need growth to create jobs but our resources are limited, won’t we run out some day?

Of course not. We just have to ensure that our improvements in energy efficiency outstrip the economic growth we need to create jobs.

>Has that ever happened in the past?

No. But that doesn’t mean things can’t be different in the future…

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Thomas Jørgensen 12.30.10 at 10:08 pm

Eh.. you can make a very cognent argument that at the very least large segments of the first world is overconsuming to the point where overall quality of life would improve if less time was spent working to buy the latest gadgets and more time spent reading in the park or whatever cheap pleasure rocks your boat.
You /cannot/ in good concience make that argument about the world, as a whole. Most of the world is grindingly poor in ways that cause immense and unnessesary human suffering – Increasing global energy production and overall industrial output is a moral imperative. Reliable electricity, kitchen gadgets, running water, trains. – These are not luxuries, they are the things that unshackle women and men from unceasing drudgery. And there are a lot of people in dire need of that liberation.

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etbnc 12.30.10 at 10:16 pm

Re: electric lawn mowers:
I’ve been using an electric mower in North Carolina for a few years now. I use extension cords, but newer models have batteries.

I’d rather keep goats, but I live next to a busy road where I think they’d be in danger.

I do appreciate the point about not growing a mostly useless, often ill-adapted, ornamental ground cover at all. One of these days I hope to create some terraces on the grassy hillside to grow vegetables and more useful plants.

Just thought you might want that data point. Do carry on, y’all.

Cheers

105

ScentOfViolets 12.30.10 at 10:37 pm

80 is great. It’s so satisfying to have people with genuine expertise taking part in these conversations.

Chuckle. If I had known how easy it was to be declared an expert[1], I wouldn’t have wasted so much time in grad school. Nice to know that a guy whose in the biz can be considered an expert even though he doesn’t know basic metrics used in that biz, or fails to offer up a scrap of proof for anything he says ;-)

[1]Then again, some of these same people don’t know that natural gas is hydrocarbon, so being called an expert in the field is being damned with faint praise.

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ScentOfViolets 12.30.10 at 10:46 pm

This argument can the extended to other policies as well. As big a fan as I am of nuclear, reactors only help with AGW if their construction means the closure of fossile fuelled generation capacity. Windmills that are backed up by natural gas plant fry the planet, and making RnD bets on particular technologies to reduce emissions amounts to asking politicians make engineering decisions, which will mostly not work out well.

Indeed.

Basically, the only political decision the world can make which will reliably put a stop to AGW is to leave the coal and gas in the ground. Carbon taxes, renewable incentives, ect. It is all a mugs game.

And ironically, you have countries like Germany where the blocking of nuclear power in preference to developing alternatives just leads to more coal being used.

I suspect that realistically speaking, the use of coal, oil, natural gas (er, hydrocarbons) and the like for energy production won’t stop until it is no longer profitable to do so. After that, well, expect all sorts of self-congratulatory “green” regulations.

107

Henri Vieuxtemps 12.31.10 at 2:29 am

Second LP 96; thanks, Tim.

108

Billikin 12.31.10 at 6:27 am

Tim Wilkinson: “Except that ‘unemployment’ is also sometimes called ‘leisure’, which is, as anyone who accepts, e.g., the existence of a Laffer function must agree, a good”

What about boredom?

Sandwichman: “As for my bona fides, I’m a clerk/cashier at a co-op grocery store in Vancouver who writes scholarly articles and books in his free time. For that very reason I value free time immensely as the ultimate source of wealth”

Leisure as opportunity. Leisure also has a meaning of the enjoyable use of free time. Both are goods.

Boredom is an unenjoyable use of free time. Perhaps we can say that boredom is the experience of opportunity cost.

Leisure is not a synonym for unemployment, because unemployment typically means the loss of opportunity.

109

Chris Bertram 12.31.10 at 8:39 am

Thomas Jørgensen @103 writes

“You /cannot/ in good concience make that argument about the world, as a whole. Most of the world is grindingly poor in ways that cause immense and unnessesary human suffering – Increasing global energy production and overall industrial output is a moral imperative. Reliable electricity, kitchen gadgets, running water, trains. – These are not luxuries, they are the things that unshackle women and men from unceasing drudgery. And there are a lot of people in dire need of that liberation.”

That’s an interesting and plausible challenge I think. But it does rather raise questions about which output needs raising and where. Is there a moral imperative for North Americans to work increasingly long hours to earn the money to buy increasing amounts of more or less disposable clothes that they don’t really need, produced by Chinese factories at some considerable environmental cost, a cycle that nonetheless raises former Chinese peasants out of poverty? Maybe not. Is there a moral imperative to get Africa out of poverty? Certainly yes.

I’m reminded a bit (sorry about this) of the Bjorn Lomborg move which says: the money that climate change mitigation costs would be better spent raising the global poor out of poverty, a move which fails totally in the absence of a plausible mechanism to channel the savings into assistance.

But I think another post on this exact issue might be good idea.

110

Thomas Jørgensen 12.31.10 at 10:31 am

The rise of the poor world out of poverty is happening entirely on its own – there is no *need* for a mechanism to link economic development for the poorest 6 billion with the tactics we use to combat global warming, the point is merely that any proposed policy for dealing with it that does not take the aspirations of the wast majority of humankind into account is doomed to failure from the start, and any policy which would deny those aspirations is Evil.
So what can be done? Well, for starters, I would really very much like the great powers to start taking the technology transfer aspect of the Nonproliferation Treaties seriously. The Nuclear weapons powers are already obligated, by treaty and law, to assist all signatories to the NPT with the civil use of atomic energy, but this obligation has been continually ignored from the word go.

111

PHB 12.31.10 at 11:08 am

peter @ 95

It’s just under the wire, but who doesn’t think this deserves nomination for the 2010Marshal McLuhan Reveal Award?

Only if SoV is nominated for the 2010 Holy Grail Black Knight refusal to admit defeat award.

112

Chris Bertram 12.31.10 at 11:09 am

_any proposed policy for dealing with it that does not take the aspirations of the wast majority of humankind into account is doomed to failure from the start, and any policy which would deny those aspirations is Evil._

I don’t disagree with that, though as you now express the point it is somewhat orthogonal to the topic of this thread.

I took you to be saying something a little different. Let me frame it like this: there’s a Marxian complaint about capitalism which goes something like this: capitalism is progressive, for a period, because of the way it develops human productive power. But the trouble is that it also has a bias in favour of greater output and against using technology improvements to liberate people from the burden of working for long hours. Now, according to this complaint, we’ve now reached a point where reducing labour time rather than increasing output is what ought to happen, but the systemic imperatives of capitalism block that from happening.

Now I took Sandwichman to be making _something like_ the Marxian complaint (though it doesn’t have to be specifically Marxian) and you to be objecting: “no, no, we haven’t reached that point: increasing _output_ rather than reducing labour burden is the moral imperative because so much of the world is _poor_.”

Now that’s a reasonable move to make, though, I think, a defeasible one. But, as I say, maybe a different post and thread would be the place to have that discussion.

113

Tim Worstall 12.31.10 at 2:34 pm

“Sigh. Tim, do you know anything about how this sort of conversation works? You’ve made a claim, a claim which is imho rather easily debunked.”

I’d be fascinated if you did debunk me then. Would save a lot of my time and a lot of investors money to know that I’m wrong before I go build the factory really.

“Iow, Tim concedes the literature totally supports me, but there’s some secret stuff only he and a few others know tha’ts about to turns everything there on it’s head.”

Well, no, what you quoted was not the “literature”, rather a not very good news report which managed to get the name of the oxide itself wrong. Google for “scandium red mud” and you will see page after page of reports from people who have worked on various schemes for extraction: at least one of which on that first page I (in part) paid for.

“But rather than work on making your case, you’re offering up vague bromides and telling me I’ve got to prove you wrong.”

No, not vague bromides. This is more an example of how the world of minor metals works. People invent new technologies for extraction all the time. Before 1968 mixed copper oxides and sulphides were what we know as “dirt”. Then the SW/EX process was invented and because we could now economically recover the copper from them they became ores.

In the 1950s Johnson Matthey extracted gallium and germanium from the gases given off by burning coal. Then a mine was discovered in DR Congo. When that was mined out we turned to getting our gallium from the Bayer Process (bauxite to alumina) and our germanium from bag dust from zinc smelting. It’s hugely likely that we’ll go back to getting our germanium from coal again: because the collection via electrostatic precipitators of fly ash means that the first stage of that old Johnson Matthey process is now being done already for environmental reasons (and better, the preparation of such fly ash for use as a replacement for concrete means extracting the Ge bearning faction again, meaning we’ve already had two levels of concentration done for us “for free”).

Aluminium itself was hugely expensive until the 1880s, when the technology to extract and then produce the metal cheaply was designed.

It simply is true that as extraction technology advances then metals become easier and cheaper to extract.

And as to scandium remaining “rare”, a little datum for you. People out there mine platinum and gold resources at concentrations of 1 ppm. 1 gramme per tonne of rock. Given that your vegetable patch is around 20 ppm scandium, that red mud I talk about is 100 – 200 ppm Sc, it’s just not rare, is it? Nor is it going to be beyond the wit of man (even this one) to work out how to extract it.

114

PHB 12.31.10 at 6:13 pm

Tim @ 113

‘Tis but a scratch’.

115

ScentOfViolets 12.31.10 at 6:31 pm

Well, no, what you quoted was not the “literature”, rather a not very good news report which managed to get the name of the oxide itself wrong. Google for “scandium red mud” and you will see page after page of reports from people who have worked on various schemes for extraction: at least one of which on that first page I (in part) paid for.

Uh-huh. You got a cite for that? Any sort of proof that these new processes really exist other than your continuing evidence-free assertions? I know it’s hard for you to believe, but it’s not my job to do your research for you. You do whatever on-line stuff you need to do to prove your assertions and you post it.

“But rather than work on making your case, you’re offering up vague bromides and telling me I’ve got to prove you wrong.”

No, not vague bromides. This is more an example of how the world of minor metals works. People invent new technologies for extraction all the time. Before 1968 mixed copper oxides and sulphides were what we know as “dirt”. Then the SW/EX process was invented and because we could now economically recover the copper from them they became ores.

Sigh. Tim, until you actually bother to do the research, until you actually get off your lazy behind and do some work and post your results so that the rest of us can check, you’ve given no reason for anyone to believe what you say is true. This is sort of a basic point, that whole academic thing.[1]

Since you don’t get this – or are pretending not to get this – there’s really no point in you posting any more of your rah-rah drivel. Like I said at the very beginning.

[1]Speaking of research, I don’t find anything that bolsters Tim’s claims, but I do find that – ugh! – he’s a libertarian (that explains a few things, should have figured that one out for myself) who among other things has a weird way of counting and is an apologist for those Argentine “reforms” that gave the people so much grief. And he says things like:

“Yes, the left is that portion of the population that is innumerate.”

Given his performance here, that’s especially hilarious. I’ll just mark him down as the usual libertarian looneytunes and sort him out that way. Certainly puts his ill-informed comments in context – I wouldn’t be surprised to find out he’s a rah-rah spacehead as well.

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ScentOfViolets 12.31.10 at 6:35 pm

It’s just under the wire, but who doesn’t think this deserves nomination for the 2010Marshal McLuhan Reveal Award?

Only if SoV is nominated for the 2010 Holy Grail Black Knight refusal to admit defeat award.

Chuckle. Nice to know what your standards of proof are. Explains a lot, doesn’t it? That’s why you knew Saddam had WMD’s.

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ScentOfViolets 12.31.10 at 6:42 pm

And as to scandium remaining “rare”, a little datum for you. People out there mine platinum and gold resources at concentrations of 1 ppm. 1 gramme per tonne of rock. Given that your vegetable patch is around 20 ppm scandium, that red mud I talk about is 100 – 200 ppm Sc, it’s just not rare, is it? Nor is it going to be beyond the wit of man (even this one) to work out how to extract it.

Wait a minute – you’ve claimed that these new and much cheaper processes already exist as engineering. You’ve even said that you just need the money to build the plant. Are you retracting that claim now? Or indeed, saying that you never made it in the first place?

This is exactly like all the go-rounds you get with the spaceheads.

118

SamChevre 12.31.10 at 7:38 pm

Somehow, when I google for “scandium red mud”, I get rather a lot of results.

So, for the Black Knight, here you go: Links

119

ScentOfViolets 12.31.10 at 9:06 pm

Sigh. I claim Elvis is alive. Just Google on Elvis is alive. Gee, looks like a bunch of results just came up. So Elvis must be alive, right? According to your logic?

Now, do any of these links say what Tim says? You know, about this new, and much cheaper, more economical process?

Or are you being willfully obtuse? Now that I know the politics in play here, and since such simulated obtuseness is a favorite libertarian ploy . . . I’m going to predict that you’re some sort of libertarian.

Googles . . . prediction confirmed. Gee, what were the odds? And these guys wonder why there aren’t any conservatives in academia.

120

Sebastian 01.01.11 at 1:00 am

“Sigh. Tim, do you know anything about how this sort of conversation works? “

Yes, we all do. This is the point in the conversation where ScentofViolets, having been shown to be wrong will now invoke the burden of proof on the person he is arguing with and continue making unproven assertions of his own. That happens in pretty much every conversation in which SoV appears. There could probably be an internet rule that SoV cannot appear in a thread for more than 5 comments without invoking or alluding to the burden of proof.

No I am not providing cites. ;)

121

Tim Worstall 01.01.11 at 2:30 pm

“Tim’s claims, but I do find that – ugh! – he’s a libertarian “

Blimey.

My political views now mean my metallurgy is suspect.

It was quite right of D2 to correct me (quite vehemently as I recall) when my statistical knowledge about Iraqi deaths were shown to be nonsense, I’ve had various corrections from John Q over the years on my knowledge economic but this is the first time I’ve been told that my free market boosterism influences chemistry.

122

ScentOfViolets 01.01.11 at 5:53 pm

That’s funny; I didn’t know that I said that. I’m merely noting that the refusal to supply any evidence for what you say and insist that the other guy prove you wrong is a typical libertarian tactic. Surprise! Though I didn’t know it . . . you turn out to be a libertarian. And also someone who doesn’t seem to know much about anything. No math, no science.

I’d say it’s been pretty well established that you’re not going to post any evidence to back your claims.[1]

The only question now is why you refuse to post any evidence. Other than the obvious supposition that no such evidence exists, of course.

In any event, since you’re not actually posting anything substantive about your claims, I’d say it’s pretty well established that they’re just so much bunkum. Nothing more need be said on my part except to cheerfully point out your behaviour every time this comes up in the future.

[1]I’d forgotten that this was the tosser who claimed that no one knows if (home) recycling really saves resources because no one had done any studies on what those 5 to 10 minutes a week spent on that chore could have been used for otherwise. And then refused to admit that this made every other such economic analysis – i.e., just about all of them – suspect.

123

Chris Bertram 01.01.11 at 7:07 pm

Can I call time on the SoV/Worstall threadjack now? Thanks.

124

bianca steele 01.01.11 at 7:29 pm

Chris Bertram @ 112
But growth and innovation happen when the effects of productivity improvements become available more broadly and get to the people who are able to use the extra time to think about new ideas and to implement them.

And here it seems like we run into an obstacle set up by Marxism[1] rather than capitalism. Because the Marxist theory is that revolution doesn’t happen unless everything and everyone is blocked, and so Marxism seems to have a problem thinking about change. The emphasis on only doing things that will bring about a Marxist revolution as soon as possible seems to derive from the era when Marxism was directed from Moscow (the earlier part of the Cold War), and now is obsolete. The saying I’ve heard is, “The worse, the better.” But the denial that anything can improve for anyone other than the capitalist seems to persist, and so does the denial that new social developments can be of any importance.

I’ve no doubt that there are more sophisticated analyses possible using Marxian ideas, but that one is still around. It oddly puts Marxism on the same side as a hard version of conservatism (or maybe not so oddly, because it merges Marxist anti-liberalism with conservative anti-liberalism, and conveniently merges US with European definitions of liberalism, besides).

[1] I said in the other thread that I don’t know a lot about Marxism—so why am I pretending to know something about it here? Well, I do know a little about Marxism, so it might be more accurate to say I don’t understand Marxism. (And have found no one able to teach me more about it in a way that makes sense to me. Which is fine. Other people may have spent decades developing their own understanding, and may need decades more to write it out in a way that makes sense even to them. And even after that, their way of thinking about it may not make a whole lot of sense to me. So, I can spend decades trying to understand their much better understanding of Marxism, or I can admit that I don’t actually know a lot about it.)

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ScentOfViolets 01.01.11 at 7:39 pm

Can I call time on the SoV/Worstall threadjack now? Thanks.

Chris, if you look up at my first comment, you’ll see that’s pretty much what I’ve asked for:

And if string theory is correct, we might get flying cars with antigravity. Please. Don’t go there; you’ve done this before and it led to some general unpleasantness all around as I recall.

I think the best way to stop these sorts of threadjacks are to have some sort of rule where when someone gets called on these assertions they have to actually produce some evidence, cites, whatnot or else get bounced. A “put up or shut up” rule if you will. Hey, if it’s good enough to be the accepted scientific procedure it ought to be good enough for Crooked Timber :-)

126

Tim Worstall 01.01.11 at 8:57 pm

“Can I call time on the SoV/Worstall threadjack now? Thanks.”

Sure. Your property, your rules.

Apologies (as already expressed above).

127

Martin Bento 01.01.11 at 11:16 pm

Though I have no dog in the SOV/Worstall debate, I think I should note in closing that a Google for “Tim Worstall scandium” appears to confirm his claims to prominence in the industry.

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ScentOfViolets 01.02.11 at 12:08 am

Er, Martin, you mean it confirms his claims to prominence in the market. If Tim wants to claim that there’s some new, much cheaper refinement process, fine. But I expect him to provide verifiable links and sources. He hasn’t despite repeated requests to do so, which in my book is trolling.

129

Sebastian 01.02.11 at 12:52 am

You certainly would know SoV.

130

Tim Wilkinson 01.02.11 at 6:44 pm

Well if that unedifying little episode hasn;t killed the thread entirely:

Thomas Jørgensen @103 – Keeping the energy and labour issues separate, this

if less time was spent working to buy the latest gadgets and more time spent reading in the park or whatever cheap pleasure rocks your boat

more or less ignores the issue of distributive justice, where this:

Reliable electricity, kitchen gadgets, running water, trains. – These are not luxuries, they are the things that unshackle women and men from unceasing drudgery. And there are a lot of people in dire need of that liberation

introduces them into the conversation. Of course the question of poevrty and the third world is omnipresent – but if the current dire climate change warnings are accurate, this:

[@101]even in the extreme case where rebound effect utterly annihilates all reductions in emissions the gains in terms of economic gain and human welfare would justify the effort on its own

comes out false, and this:

Increasing global energy production and overall industrial output is a moral imperative

is entirely dependent on the availability of non-CO_2 liberating energy. The distributive question of reductions in western consumption to offset increases in the 3rd world is likely to be a live one gven that at least in the short term, there will not be enough clean energy to go around.

billikin @108: see #33. Obviously there are various issues here, but they aren’t by any means settled, certainly not in favour of the status quo.

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