Identification of a 50-year scaling relating current global energy demands to historically cumulative economic production

Garrett, Timothy J.; Grasselli, Matheus R.; Keen, Stephen

doi:https://doi.org/10.5194/esd-2021-21

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https://doi.org/10.5194/esd-2021-21

Preprints

16 Apr 2021

Review status: a revised version of this preprint is currently under review for the journal ESD.

Identification of a 50-year scaling relating current global energy demands to historically cumulative economic production

Timothy J. Garrett¹, Matheus R. Grasselli², and Stephen Keen³ Timothy J. Garrett et al.

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¹University of Utah, Department of Atmospheric Sciences, 135 S 1460 E, Rm 819, Salt Lake City, Utah, 84112
²McMaster University, Department of Mathematics and Statistics, vHamilton, ON L8S 4K1, Canada
³University College London, London, WC1E 6BT, United Kingdom

Received: 14 Apr 2021 – Accepted for review: 16 Apr 2021 – Discussion started: 16 Apr 2021

Abstract. Global economic production, or the GDP, has risen steadily relative to world primary energy demands, suggesting technological change is driving a gradual decoupling of society from its resource needs and associated pollution. Here show that in each of the 50 years following 1970 for which reliable data are available, one Exajoule of world energy was consumed to sustain each 5.50 ± 0.21 trillion constant 2019 US dollars, not of yearly production or physical capital, but of running cumulative production summed over human history. The half-century for which this fixed ratio held covers two thirds of historical growth in energy demands, so assuming its persistence, the implication is that society is not in fact decoupling from resource needs. Rather, it can be expected that future environmental impacts will be more strongly guided by past activities, or inertia, than is generally permitted within economic and climate modeling prescriptions that allow for policy to spur more rapid change.

Timothy J. Garrett et al.

Status: final response (author comments only)

EC1:
'Reviewer 1 report esd-2021-21', James Dyke, 17 May 2021

I have posted this comment on behalf of Reviewer 1
======

The paper draws very long-term conclusions about the future, namely that present sustenance cannot be decoupled from long-term growth. I disagree with that conclusion. I have three objections to the analysis. (1) This conclusion is based on an analysis -- using data from the last 50 years -- is based on introducing a new production function: [Y = w (dE/dt)] where Y is GDP, E is current energy consumption and w = W/E is "nearly a constant" (based on data for the past 50 years).

(1). I object to arbitrarily introducing a new production function (equation 3) without serious discussion. The discussion in the text, based on curves in Figure 1 is not nearly sufficient to justify equation 3. The standard Cobb-Douglas production function was introduced in 1928 for a good reason and the other production functions economists have introduced and tested since 1928, have histories also. I am not defending any of them, but the reasoning behind equation 3 cannot simply be based on the data represented by the curves in Figure 1.

(2). In another place, the authors note that the usual relationship for capital growth is [dK/dt = Y-C minus delta (capital depreciation)], where delta (the depreciation rate) is constant and C = cY where c also is assumed to be a constant. The last assumption is wrong. The ratio c = C/Y (the fraction consumed) may leave a significant surplus for capital investment now (and for the past 50 years) but 200+ years ago c was practically unity while the depreciation rate was smaller than it is now -- the surplus for investment or saving back then was virtually zero, and what surplus there was came from coal mines. In other words, until very recently almost everybody needed every bit of their income to buy consumables, mainly food and fuel (for light and heat). So, in the long run c is not a constant; it can (and will) decrease. Neither is the depreciation rate constant, by the way. Most people will spend their time playing computer games.

Also (3) the curve shown for capital stock K in Figure 1 is presumably based on prior work by Garrett but -- being central for the rest of the argument -- the underlying data also needs explanation and justification, especially since Garret's earlier work in this field has not been widely accepted. (That is not a criticism). The underlying capital stock K data for Figure 1 should be published.

In my opinion the paper, as written, is not convincing. I think it is potentially publishable, but only after the three points above have been addressed seriously.
======

Citation: https://doi.org/10.5194/esd-2021-21-EC1
- CC2: 'Reply on EC1', Richard Rosen, 24 May 2021
  
  Again, as I indicate in my other comment, the culprite that determines all the energy consumption trends is the type of technologies invested in each year over the past, which consumes somewhat varying amounts of energy from year to year, but which has a finite lifetime. Given the typical rate of global growth over the past decades, the typical energy consuming technology might only be 10-20 years into a 50 year lifetime, to use rough but illustrative numbers. This could be a piece of industrial equipment, a power plant, or a building heating system. Energy consuming vehicles tend to turn over at a faster rate, of course, than once every 50 years. That implies that typically if no new policies are introduced by governments to phase out existing energy consuming technologies, or if market forces do not lead to existing energy consuming technologies being abandoned prior to their normal lifetime, the well-known slow but steady 1-2 percent per year declining trend of total energy use in a given year per dollar of GDP will continue unabated. This is the rough trend that these authors show, however it is precisely expressed. Overall, macroeconomic production functions have little to do with these consumption trends for energy technologies. This argument applies to both fossil fuel consuming technologies as well as to renewable energy consuming technologies. The fairly steady ratio that the authors find between annual energy consumption and cumulative GDP is mostly a coincidence, and a simple product of these slow long term trends for the very slow turnover of energy consuming technologies. Obviously, in terms of cause and effect, only the fraction of any year's GDP that is directly invested in energy consuming technologies cause a fraction of future year's energy consumption until that piece of technology is retired. Thus, macroeconomic arguments alone can never explain these trends. Once either the governments of the world or market forces cause more efficient energy consuming technologies to be invested in more rapidly than typically happened in the past, then this fairly constant ratio can change. The author's analysis shows that this has not yeat happened in the past. But if this article is to be published, it must be completely revised so that it focuses on the types and rates of investment in energy consuming technologies in each year in the past compared to total GDP in each year. This will allow the authors to explain the trends they find by disaggregating the causes and effects of the trend in terms of technology and not abstract arguments.
  
  Citation: https://doi.org/10.5194/esd-2021-21-CC2
CC1: 'Comment on esd-2021-21', Richard Rosen, 23 May 2021

It has been long known that the ratio of energy consumption to annual GDP has been falling at somwhere between 1-2% per year, depending on the year. This implies that energy consumption will slowly fall with respect to cumulative production as well. But this is merely a matter of math and not a cause and effect relationship, since the technologies used for production many decades ago can not affect energy consumption today, except to the extent that a few of such technologies still consume energy. Whatever the lifetime is for old energy consuming technologies, this fact would say little about how fast energy consumption could be made to drop each year in the future. With strong energy efficiency policies in place, energy usuage could be made to drop much faster in the future than it has averaged in the past. For example, all electric vehicles which are good for mitigating climate change are far most energy efficient than the currently fleet of vehicles. All electric vehicles could be phased in within 20 years. Similarly, old buildings could be rapidly renovated to reduce their energy consumption. The authors demonstrate that there is a lot of "momentum" built into the energy/economic system, with a fairly constant "velocity" in the past. With enough policy "force" applied to the system, this velocity could be greatly slowed down, as we all hope will happen as climate change is rapidly mitigated, to use a Newtonian metaphor! Thus, the world is not constrained by past energy consumption trends.

Citation: https://doi.org/10.5194/esd-2021-21-CC1
AC1: 'Response to Richard Rosen', Timothy Garrett, 01 Jun 2021

The comment was uploaded in the form of a supplement: https://esd.copernicus.org/preprints/esd-2021-21/esd-2021-21-AC1-supplement.pdf

Citation: https://doi.org/10.5194/esd-2021-21-AC1
AC2: 'Response to Reviewer 1', Timothy Garrett, 01 Jun 2021

The comment was uploaded in the form of a supplement: https://esd.copernicus.org/preprints/esd-2021-21/esd-2021-21-AC2-supplement.pdf

Citation: https://doi.org/10.5194/esd-2021-21-AC2
RC1:
'Comment on esd-2021-21', Peter Haff, 08 Jun 2021

The arguments of this paper represent a conceptual break with standard views of the role of energy in modern society. As such, its claims are likely to be controversial. However, if the thesis of this paper holds up, it would stand as a significant advance in our understanding of the limits to human control of energy consumption by the global human-technology system (abbreviated in this review as the “world system”). In their explanations in the paper, and in author commentary on this site responding to reports of other reviewers, the authors’ have defended their methods and conclusions to my satisfaction. I recommend publication of the paper following the authors’ response to specific points and recommendations made at the end of this report.

Below I outline my understanding of key points in the paper in order to emphasize why I think they represent an important contribution to clarifying the nature of the human-technological “world system”, and why in my opinion the paper deserves publication.

The authors’ conclusions, based on their analysis of economic time series, imply that global energy consumption cannot be manipulated at will, at least not without radical disturbance of the modern world system. This should not be unexpected since energy is not like other commodities, but plays a special role in any dynamic system. Thus, for the world system, the energy slice of the economic pie, perhaps totaling to 10%, is unique, in that it pervades and powers every other sector. Removing half of a 10% energy sector would not be a 5% overall economic effect, but more like a 50% effect, or larger, somewhat like the consequence for a person of the removal of one half of their rather small volume of blood. The authors report the counterintuitive result that the current rate of energy consumption by the world system is proportional to world economic production (“GDP”) summed over all past years. This implies that current energy consumption is driven not just by recent economic activity, where human influence on energy use is most obvious, but also by activity performed in the distant past, whose consequences remain with us today.

One obvious criticism of this claim of historical determinism is the observation that physical devices and systems of long past years that no longer function, or that no longer even exist, cannot continue to consume energy today and thus cannot contribute to current energy use. The authors’ explanation of the enduring influence of past production on current energy consumption is that individual system components existing today, together with their potential energy demands, are generated not just through recent production but also in consequence of many years of prior production. This seems to me a reasonable argument. Thus, the magnitude of current energy use (i.e., the system’s metabolic rate) depends on the total value of production achieved along the specific trajectory of the system’s historical development, because that production necessarily generated incremental additions to past metabolic base rate that made possible the existence and performance of those populations, cultures, plans, patterns of organization, tools, inventions, wars, and other factors that did in fact elevate consumption over time to the level seen today. That is, construction of the system, a result of chronic non-zero GDP, represents more than accretion and organization of material into a complex growing edifice, but also requires a continuous and dedicated flow of energy to support what has been created. Thus, a suitable and growing metabolic base rate E has to be maintained at all times in the system’s history. In the simplest model the background energy demand that sustains this construct—the world system--would simply be proportional to the total production. Although old material construction disappears with time and technology becomes more efficient, complexity and size of the system continue to increase, suggesting that energy demand of these latter factors outweigh what is lost through decay and increased efficiency of specific devices and systems.

Another general critique that might be raised is that the authors emphasize physical principles in their analysis of large-scale societal energy-use rather than turning to more standard tools of economics. However, an approach informed by physical requirements that are applicable to any dynamic system may be more suitable for broad, global analyses where smaller-scale details fade away, than methods based on economic assumptions and models calibrated to influences of national or local markets and to cultural behaviors. Thus, for example, the law of energy conservation, the 2^nd law of thermodynamics and the requirements of dimensional consistency in equations and variables reveal their utility when applied at global scale. Models that employ non-scalable relations or manipulate quantities that cannot be clearly connected to basic physical variables may be useful tools for specific applications where careful calibration is possible, but these approaches will generally be less useful for questions that require extrapolation outside the restricted problem-space for which they were designed.

The conclusions of the paper, if they stand up to future criticism, have substantial implications for future human well-being. They point to a fundamental challenge facing efforts to manage world energy consumption. The proportionality of current energy use to total past production suggests the difficulty of redesigning a system when the past holds sway, a point illustrated in microcosm by the expense, disruption and political resistance that often accompanies attempts to renew or replace urban infrastructure in long established cities. Change, by contrast, can be much easier to effect when it occurs as growth, i.e., a positive GDP—in the above example perhaps outward expansion of the city—rather than as a reconstruction of legacy systems which, through lack of access to other sources of energy, are forced to disrupt and cannibalize the extant metabolic energy flows that sustain their existence.

Two main points I take away from the paper are: 1. That the influence of the past infuses an intrinsic conservatism into the dynamics of the world system, according to which it tends to resist change; and 2. In such a physically enforced conservative environment, significant change and the production of novelty are made possible only by injecting energy into the world system faster than it is dissipated by its underlying metabolic processes, i.e., by increasing the rate of world energy consumption and in the process adding to total past consumption.

Some further specific comments and suggestions:

Title: I would change the title of the paper to something more compelling. Many in the ESD community who might be interested in its arguments may pass over what may appear as a discussion of the minutiae of economic production. For example: “Lotka’s wheel and the long arm of history: how old technology and forgotten ideas determine the value of today’s global rate of energy consumption”, or, perhaps: “ ‘The past isn’t dead. It’s not even past’: how old technology…”. (Faulkner).

I might also suggest adding a sentence or two emphasizing (as per the urban infrastructure example above) that change and novelty ride on the back of dE/dt, not E, the latter of which supports business as usual.

Line 30: “wit units”. There are a few typos in the text. These should be removed using a fine tooth comb; they indicate momentary lapses of attention, a condition which leads to doubts in readers’ minds about bigger issues.

Line 31: The paper states that it focuses only on global quantities, but use of “Gross Domestic Product” or “GDP” with no qualifier may cause confusion. Perhaps settle on uniform use of “Gross World Product” or “global Gross Domestic Product” instead?

Line 57: Clarify explanation of why the relation between W and E is not simply one of correlation.

Line 73: “non-integer exponent of E”. Perhaps expand discussion here slightly to illustrate the problem of scaling with variables or exponents that have been determined simply by familiarity and/or calibration rather than by relation to actual physical process. This can also help emphasize the value, where it is appropriate, of a physical framework in place of traditional, non-physical models. In general this paper is a good venue to expand the argument for treating (some) economic problems in a framework that manifestly respects, or at least does not contradict, physical law.

Line 127: “provided the system is in its phase of growth”. This caveat may not be needed. Thus, using a biological example, mature organisms whose growth has stopped nonetheless still consume energy at a steady rate, E, determined by their size (total production), but their “GDP” is zero. For such systems where E is nominally a constant (no growth), minor wear and tear might be fixable by the system, but accumulating insults to functionality with age, or more catastrophic impacts which the system is ill equipped to combat using already spoken for metabolic energy supplies, may eventually make it impossible for the system to survive (maintain its metabolic rate) in the absence of access to increased sources of external energy. The constraint of a constant metabolic rate makes organismal longevity a challenge, and in the end a losing battle (as in the case of an organism). The results of the present paper suggest that a continuing increase in energy consumption is a necessary condition for the long term survival of world civilization. Of course it is not a sufficient condition. A state of chronic acceleration cannot last forever and limiting effects that are outside the scope of this paper will eventually have their impact.

Finally, the other reviewers raise interesting points that together with the responses of the author help to clarify the arguments of the present paper. I believe the authors can further improve their paper by incorporating into it some portion of their written responses to these reviewer/commenter suggestions. I hope my own review is similarly serviceable, and that, after manuscript revision, which I believe does not need to involve a major rewrite, ESD will proceed to publication of the manuscript.

Citation: https://doi.org/10.5194/esd-2021-21-RC1
- CC3:
  'Reply on RC1', Richard Rosen, 08 Jun 2021
  
  While I agree with the basic substance of Peter Haff's review, I still think it does not focus quite enough on the physical energy consuming technologies that are still functioning today, compared with those that were invested in during the past and are no longer being used. Thus, it would be interesting to extend this article under review to a sector by sector analysis, for the main energy consuming sectors, namely transportation, buildings, and industry. Obviously, there are still many buildings that were built by components of long past GDP expenditures that having boilers and furnaces still in operation for 50 years, the time period analyzed. In constrast, there would be basically no significant number of vehicles comprising the transportation sector still operating after 50 years. Since the data for the energy consumption of each of these sectors exists (at least approximately in the US), it would be even more interesting to see how the ratio the authors highlight between current year energy consumption and cumulative GDP evolve for each of these three major sectors separately yielding the weighted average ratio for the entire economy. Again, while this trend line has (unfortunately) been amazingly constant in the past, as I said in my first comment, government policy could slowly but surely force this ratio to decline somewhat faster if the introduction of new more efficient energy consuming technologies (like electric vehicles and renovating old buildings with more insulation) were accelerated relative to those trends in the past. The paper would be more interesting if some analysis were done as I suggest for each major energy consuming sector separately. We would surely find a different trend line for each.
  
  Citation: https://doi.org/10.5194/esd-2021-21-CC3
  - AC3: 'Reply on CC3', Timothy Garrett, 11 Jun 2021
    
    Richard Rosen suggests " it would be interesting to extend this article under review to a sector by sector analysis, for the main energy consuming sectors, namely transportation, buildings, and industry.... to see how the ratio the authors highlight between current year energy consumption and cumulative GDP evolve for each of these three major sectors separately yielding the weighted average ratio for the entire economy. "
    The statistical premise required for taking an average is that the quantities in question are independent. Transportation, buildings, and industry are not independent, because, for example, people drive to work. In the limiting case that transportation were subtracted entirely from the system, it would clearly have a non-zero impact on both value and energy consumption everywhere else in the economy.
    Calculating non-linearities associated with inter-sectoral interactions, those that prevent simple averaging, would be nearly impossible to do with any fidelity. This is why, for this submission, the human system is considered only as a whole. Taking this approach reveals a nearly fixed relationship beween energy consumption and historically cumulative production.
    
    Citation: https://doi.org/10.5194/esd-2021-21-AC3
- AC4: 'Reply on RC1', Timothy Garrett, 22 Jun 2021
  
  The comment was uploaded in the form of a supplement: https://esd.copernicus.org/preprints/esd-2021-21/esd-2021-21-AC4-supplement.pdf
  
  Citation: https://doi.org/10.5194/esd-2021-21-AC4

Timothy J. Garrett et al.

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Short summary

Current world economic production is rising relative to energy consumption. This increase in “production efficiency” suggests that carbon dioxide emissions can be decoupled from economic activity through technological change. We show instead a nearly fixed relationship between energy consumption and a new economic quantity, historically cumulative economic production. The strong link to the past implies inertia may play a more dominant role in societal evolution than is generally assumed.


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