1. University of Otago Department of Physics EMAN 410 Energy Management, 19 September 2008 Energy and long-term sustainable development in New Zealand Dr John Peet

3. … How could we make NZ more Unsustainable ……? Paramount national goal – economic growth Fossil fuel use – increasing Greenhouse gas emissions – increasing Carbon neutrality target – going backwards Transport fuel use – more motorways, airport extensions, more airliners Water abstraction and use – growing Rivers – depleted and polluted Rich/Poor gap – widening Housing affordability – decreasing Industry – moving overseas Debt - heavy and increasing (especially overseas debt) State of the Environment 2007 – not good Soil erosion – continuing Forests – conversion to dairying Ruminant animal numbers - increasing Biodiversity – trying hard but arguably losing Pests - possums, rabbits, stoats, wilding pines – no improvement Population policy (… what population policy…?) etc……etc……etc…..

4. A Caution ….. It aint so much the things we dont know that get us into trouble. Its the things we know that just aint so. Artemis Ward (Charles F Brown) late 19 th Century

5. Strong and Weak Sustainability Weak Sustainability – human-made and natural capital are substitutable Strong Sustainability – human-made and natural capital are usually complements, not substitutes Absurdly Strong Sustainability – human- made and natural capital are not substitutes, and little or no technological progress in the future is possible.

7. Related standpoints to take into account: Oikonomia (Economics) – Management of the household Oikologia (Ecology) – Natures household Oikumene (Ecumenism) – The inhabited earth/known world, considered as a whole

8. SO … what is to be sustained in sustainable development? Two very different answers to this question (Daly, 2003): 1.Utility should be sustained. In practice, surrogates such as Consumption are commonly used, expressed as dollars per capita spent on goods and services. (Weak sustainability position) 2.Physical throughput should be sustained, so that the throughput of resources available to future generations is no less than at present, i.e. Natural Capital is kept intact. (Strong sustainability position)

9. Then just what is the problem? If Utility depends upon Consumption of goods and services, and if Consumption presupposes Production of those goods and services, and if Production requires transformation of Resources taken from the Environment, (i.e. that to which value is added),then The relationship between resource use, transformation processes and consumption is central to the ability to achieve SD.

10. The circular flow model of macroeconomics and the place of markets

11. Circular flow economic model of the NZ economy

12. Economics - 1

15. How to develop policy that addresses the whole issue of sustainable development coherently, rather than just one or more parts, incoherently? I start from the position enunciated by Ernest Rutherford many years ago: All science is either physics or stamp collecting

16. Relevant lessons from Physics: F = ma – Newtons First Law of Motion (1680s) dS/dT 0 – The Second Law of Thermodynamics (the Entropy Law) (Carnot, 1824, Clausius, Thomson, Gibbs etc, 1860/70s) e = mc 2 – Einsteins Mass-Energy relationship (Relativity - 1904) iћ Ψ/t = HΨ – Schrodinger Equation (Quantum Mechanics - 1926)

17. Treasury opinion (around 1988) in relation to moving the then Ministry of Energy functions into a section of the Ministry of Commerce: 4 The key issue in both the Policy Framework for Energy Management and the Strategic Business Plan is whether or not energy is sufficiently different to other goods and services to justify a specific energy policy ….. We consider that although energy is both essential and strategically important, it is not unique in these attributes.

18. Goods & Services – Energy & Matter Useful Inputs Useless Waste

20. The Real (biophysical) Economy Hall & Klitgaard, 2008

21. Energy Transformation System Net Energy There is a net flow to The economy if, and only if, E is greater than F, or if E/F is greater than 1. E/F is the Energy Return on Investment, EROI

22. Some current EROI data Global oil EROI roughly 26:1 in 1992, about 19:1 in 2005 Running average EROI for US domestic oil dropped from about 100:1 in 1930s to about 12:1 today Oil used within the US for products exported to import oil had an EROI about 30:1 in 1970, about 20:1 in 2005 Ethanol from corn EROI in the US is at best 1.6:1 and at worst less than 1:1 (Brazilian cane ethanol around 7 or 8:1) Biodiesel EROI around 3:1 Oil shale EROI around 6:1 Tar sands EROI around 1:1 Coal liquefaction EROI around 3:1 Nuclear debatable but around 5 – 15:1 Wind energy EROI around 15 – 20:1 Data from Hall et al, 2008 and Cleveland, 2008

23. Consequences of the transition to lower EROIs Irrespective of which resources and technologies are used, lower EROI values mean that, to maintain anything like current outputs of liquid fuels (for example), much higher levels of investment and maintenance than in the past will be needed. The energy and resource requirements will mean less economic output available for consumption, especially discretionary consumption.

24. Energy in the Economy Hall, Powers & Schoenberg, 2008

26. A possible (post Peak Oil) future?!

27. Economics - 2

28. Questions relevant to Sustainable Development Are people satisfied and happy? – (sufficiency and equity) Can more well-being be achieved with less throughput? – (efficiency of the transformation process) Are ecosystems healthy, resilient and thriving? – (environmental sustainability)

29. The Daly Rules (1990) The Output Rule – wastes... should be kept within the assimilative capacity of the local environment: The Input Rule – for renewables - harvest rates of renewable resource inputs shall not exceed the regenerative capacity of the natural system that generates them. – for non-renewables - depletion rates shall equal the rate at which renewable substitutes are developed by human invention and investment.

30. Resource efficiency is the answer?

31. The IPAT equation Total Social Impact = Population x Affluence x Technology Impact or I = P x A x T Where I = impact P = people A = GDP/people T = Resource use/GDP

32. A (very) simple example

33. Peak Oil & Climate Change Geology and Physics tell us that Peak Oil is close or already reached - and because of Climate Change we must reduce our net CO 2 emissions anyway Two radically different views framing the current debate: – Economics and Politics – transition to alternatives view. Result: biofuels, liquid fuels from coal, carbon capture & sequestration etc. – Ecology and Physics – energy descent view. Blind faith in the market looks unwise, so … – Chart a new course for the rest of the 21 st Century? – Could Contraction and Convergence or Power Down be better options?

34. Peak Everything? The real issue, it can be argued, is not so much Peak Oil alone, as it is Peak Consumption of Stuff! (e.g. Richard Heinbergs Peak Everything, 2007)

35. Timescale for sustainability? Jericho is about 10,000 years old Athens is about 7,000 years old Damascus is about 5000 years old London is about 2,000 years old (timescale for mainstream finance and economics – at most, maybe 5 – 10 years, often only a few months, or even a few days!) (….. And your timescale…..?!)

36. My timescale!

37. We cannot know what technologies we will have available to us even 100 years into the future. We can, however, make some commonsense assumptions to guide sustainability thinking. These include: Humans will be here Most current cities will be here Food will be grown Materials and energy will be required Human basic needs will not have changed We will not have Star Trek technology!

39. Responses to Limits to Growth (1972) With current and near current technology, we can support 15 billion people in the world at twenty thousand dollars per capita for a millennium – and that seems to be a very conservative statement Herman Kahn The material conditions of life will continue to get better for most people, in most countries, most of the time, indefinitely. Within a century or two, all nations and most of humanity will be at or above todays Western Living standards. Julian Simon

40. Limits to Growth? Meadows, Randers, Meadows Limits to Growth: The 30-year Update, Figure 4-11 Scenario1: A Reference Point (cf Figure 35 in (original) 1973 Edition) 2008

41. In the mainstream (neoclassical) economic approach, a primary purpose of the economy is to achieve efficient allocation of resources. The REAL economic problem may be rather more complex (Daly 2003) : A good allocation of resources is efficient (Pareto optimal); a good distribution of income or wealth is just (a limited range of acceptable inequality); a good scale does not generate bads faster than goods and is ecologically sustainable.

42. Economics - 3

44. Complex systems such as governments and large institutions are more like frogs than bicycles A Mant Intelligent Leadership, 1999 One can take a bike to bits, clean and oil it, inspect and service the parts and reassemble it, confident that it will work as well as before One cannot treat frogs like that!

45. Reminder ….. It aint so much the things we dont know that get us into trouble. Its the things we know that just aint so. Artemis Ward (Charles F Brown) late 19 th Century

47. For every human problem, there is a neat, simple solution, and it is always wrong H.L.Mencken It is better to be approximately right than precisely wrong Warren Buffett It is better to deal incompletely with the whole than wholly with the incomplete Herman Daly Pray to God, but row away from the rocks Hindu proverb Systems thinking guidelines:

48. Shifting Mindsets Growth is always good. Markets alone can solve all problems. We are separate from nature. Problems are caused by the behaviours of others. We exist in a world of limits. Markets dont measure everything that is important. We are an integral part of nature. Often the structure of systems causes problems. Percent of people accepting Dominant MindsetEmerging Mindset Time Copyright, 2001 -- Sustainability Institute

49. The Earth Charter is probably the best and most comprehensive currently-available set of basic values to provide an ethical foundation for a 21 st Century mindset. We must join together to bring forth a sustainable global society founded on respect for nature, universal human rights, economic justice, and a culture of peace. www.earthcharter.orgwww.earthcharter.org and www.earthcharter.org.nzwww.earthcharter.org.nz

51. A final (?) caution …. "It has often been said that, if the human species fails to make a go of it here on Earth, some other species will take over the running. In the sense of developing intelligence this is not correct. We have, or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned. With coal gone, oil gone, high-grade metallic ore gone, no species however competent can make the long climb from primitive conditions to high-level technology. This is a one-shot affair. If we fail, this planetary system fails as far as intelligence is concerned. The same will be true of other planetary systems. On each of them there will be one chance and one chance only." cosmologist Fred Hoyle