The Three Chinas and World Energy Demand

[c1ue]

http://wattsupwiththat.com/2010/08/1...nd/#more-23379

In broad strokes, this summarizes the reality of how peak cheap oil impacts us today and in the near future.

Alternative energy will not bridge this gap without ongoing and intelligent development - this is not a matter of throwing money.

Guest post by Thomas Fuller




I have been broadly correct about two important things in my career as an analyst. (I wasn’t the only one and I wasn’t the first–just far enough ahead of the curve to make a difference.)

The two things were the demographic decline of much of Europe and the rapid adoption of the internet following the release of the world wide web. I was not studying or researching either topic at the time–the two phenomena leapt out of other research I was conducting and were obviously more important than what I was doing at the time, so I dropped what I was doing and started looking at them exclusively.
So now it’s time to try for the trifecta. (No, I really don’t care about that at all–but this is the third Capital Letter Issue that has jumped out at me, so what the hey…)

Inadequate projections of latent demand for energy are leading to poor decisions now and are muddying the debate about both climate change and energy policy for the rest of the century.

The U.S. Department of Energy and the United Nations both project global consumption of energy at 680 and 703 quads respectively by the period 2030-2035 (a ‘quad’ is one quadrillion btus, roughly the energy you could liberate from 36 million tons of coal).

However, consumption trends, if extended, are far higher–they could reach 2,100 quads by 2030, if adequate energy was available consistently and at decent prices. This is because of the confluence of several important demographic trends.

The overall population is rising–it will be about 8.1 billion in 2030, the equivalent of adding another China to the planet. The comparison is fairly apt, as most of these new humans will be born into societies that look like China does now, or like China did 15 or 20 years ago.
These new humans will be stepping onto the energy ladder and consuming vastly higher quantities of energy than did their parents–if it’s available. They will be moving from farms with no electricity into slums with a minimum of electricity–but shortly thereafter, development and globalization will start them on the road to refrigeration, television, washer/dryers, computers, motor scooters, cars, ad infinitum.

These new humans will be joined by yet another virtual China–existing people who benefit from the same processes of development and globalization and jump on the energy ladder with both feet and both hands.

Obviously, many of both type will actually be in China. But even more will be in places like Indonesia, Brazil, the Philippines, large swathes of Africa and the rest of the developing world.

They will want what they perceive as a modern lifestyle–in America that amounts to 327 billion btus per person per year in energy consumption. In Denmark, it’s a much more modest 161 billion btus. But in either case, latent demand for energy will far exceed the 700 quads currently projected by the DOE and the UN.

Assume 7 billion people will be on the energy ladder (changing from wood and animal dung on their way to coal, petroleum, natural gas, nuclear and hopefully arriving some day soon at the promised land of renewable energy). This means there are 1 billion people we have failed. (And I don’t want to ignore them–I just want to present believable numbers for this exercise.)

If those 7 billion consume energy as Americans do it comes to 2,289 quads. (The total will obviously be less, as they won’t all be near the top of the ladder by 2030). If they adopt a Danish model and develop towards that (efficient use of combined heat and power, high taxes on gas, generally high prices for energy, conscious drive to conserve), global energy demand will be 1,127 quads.

Although I would wish that people new to the modern world would automatically choose the far better Danish model, I predict that they will opt for the easier, softer American model and their energy needs will skyrocket.

However, in either case, we will need far more energy than is currently predicted. If they do not get it, they will not fully participate in what the modern world has to offer–education, good healthcare, clean air and water. Nor will they participate in the modern economy, further enriching the rich world with purchases of video games and expensive perfumes. We all will lose, although the losses of the poor will be heartbreaking.

It may well be that the DOE and the UN have correctly identified what governments are willing to build and provide in the way of new energy–but if they are correct, we are condemning billions of people to needlessly live a wretched existence that they would avoid if they could. Because using energy is not just a sign of success at development, or a reward for doing it right or a ‘welcome to the club’–it is often the key mechanism that enables development.

The poor–the two new Chinas–will fight and scheme to get the energy they need. They will burn coal, oil, whatever is available to escape the life sentence of the poor–lives that are nasty, brutish and short.
This conversation is not really about global warming at all. But it is certainly relevant to discussions of our planet’s future climate. China has doubled its energy consumption since 2000. There are two new ‘Chinas’ eager to do exactly the same, mimicking our behaviour of the last two centuries and following the original China’s current example.
The sources and quantities of energy we make available to the world will determine what our planet will look like in the medium term.

There’s no getting around that.

[Rajiv]

Re: The Three Chinas and World Energy Demand

http://wattsupwiththat.com/2010/08/1...nd/#more-23379

In broad strokes, this summarizes the reality of how peak cheap oil impacts us today and in the near future.

The overall population is rising–it will be about 8.1 billion in 2030

I don't believe that is going to happen. I predict a population collapse. We are teetering fairly close to the edge. The Russian wheat crop is just a sign of things to come.

See also the two lectures by Jared Diamond given in 2000.

Modern Lessons from Ecological Collapses of Ancient Civilizations
and
When Do Green Values Pay Off For Big Business?

[ThePythonicCow]

Re: The Three Chinas and World Energy Demand

I don't believe that is going to happen. I predict a population collapse. We are teetering fairly close to the edge. The Russian wheat crop is just a sign of things to come.

My you're upbeat today <sarcasm>.

When Do Green Values Pay Off For Big Business?

Your second link is borked. I fixed it in my quote of your link above.

[Rajiv]

Re: The Three Chinas and World Energy Demand

My you're upbeat today <sarcasm>.

I am blaming Starving Steve for the pessimism!

[Rajiv]

Re: The Three Chinas and World Energy Demand

In particular, I am seeing what William Catton in 1994 called - The Problem of Denial

Abstract
The Basic Changes
Media Treatment
Flawed Accounting, Wishful Thinking
Myopia and Overshoot
Personal Experience
Denying Reality
Motivation for Denial
Conclusion
Endnotes
References


Abstract
Abundant evidence suggests industrial civilization must be "downsized" to curb damage to the ecosphere by the "technosphere." Trends behind this prospect include prodigious population growth, urbanization, cultural dependence upon ravenous use of fossil fuels and other nonrenewable resources. Consequent air pollution and global climate change. Despite prolonged Cold War distraction and entrenched faith that technology could always enlarge carrying capacity, these trends were well publicized. But there remain eminent writers who persist in denying that human carrying capacity (Earth's maximum sustainable human load) has now been or ever will be exceeded. Denials of ecological limits resemble anosognosia (inability of stroke patients to recognize their paralysis). Some denial literature resembles their confabulations (elaborately unreal stories concocted as rationalizations). Denial by opponents of human ecology seems to be a way of coping with an insufferable contradiction between past convictions and present circumstances, a defense against intolerable anomalous information.

[Starving Steve]

Re: The Three Chinas and World Energy Demand

Maybe if planners would RAISE the standard of living of the world's people, the birth rate would drop? After all, there seems to be a link or co-relation between poverty, ignorance, and fertility rates. And religion seems to just add to the problem of fertility rates, and religion just seems to prosper off of the dispair and ignorance of the people.

Maybe if people used MORE energy, they might live better and reduce their fertility rate? Maybe if we REDUCED the cost of energy, people might use more energy? And maybe if we built MORE atomic power plants and hydro-electric dams and natural gas-fired power plants, the price of electric energy might drop? Maybe if we built more natural gas-powered V-8 motors in cars and trucks and buses, we might LOWER the cost of living?

Give people the freedom to LIVE BETTER, and they might reduce their fertility rate?

You might not hear this on the college campuses of to-day, nor at the UN, nor in the Obama Administration, but the fact remains: LET PEOPLE LIVE BETTER WITH MORE OF EVERYTHING. Then, the world's birth rates might be reduced.

Please do not confuse this with Arthur Laffer's, supply-side economics. This is Starving Steve's common-sense: We do not need another tax break, but we do need a much higher standard of living. We can use MORE energy, not less, to live better.

Or does the world prefer to burn wood and burn dung and live in sewage, ride an animal to work, and read holy scriptures? Then don't blame me for the mess the world is getting into.

Shall we look at the world to-day; i.e, the Middle East, the Turd World, Africa, SW Asia? Why the floods? Why the droughts? Why the locusts? Why the disease? Why the low level of education there? Why the wars? Why the poverty? Why the inflation? And why the population growth in these regions? Anyone care to look at the per-capita energy consumption in these regions of the world?

Or maybe the reverse question: Anyone care to look at why the U.S. and Canada and the Western World prospered in the 20th C? Or maybe this is getting too abstract for the eco-bunch who now run universities, government planning departments, and energy planning departments?

(Teachers might want to make a copy of this blog and present it to their students to-day to discuss and to debate.)

[Ghent12]

Re: The Three Chinas and World Energy Demand

I don't believe that is going to happen. I predict a population collapse. We are teetering fairly close to the edge. The Russian wheat crop is just a sign of things to come.

See also the two lectures by Jared Diamond given in 2000.

Modern Lessons from Ecological Collapses of Ancient Civilizations
and
When Do Green Values Pay Off For Big Business?

Well those that have "credibly" predicted a population collapse or other major global crises since the 1970's have been perpetually wrong. Perhaps your version of this age-old prediction may come true, but somehow I doubt it.

[Rajiv]

Re: The Three Chinas and World Energy Demand

Well those that have "credibly" predicted a population collapse or other major global crises since the 1970's have been perpetually wrong.

I hope I am wrong as well.

But there are warnings that appear to be going un heeded. Meadows' work is worth revisiting

Beyond The Limits To Growth

"Grow or die," goes the old economic maxim. But in 1972 a team of systems scientists and computer modelers challenged conventional wisdom with a ground-breaking study that warned that there were limits - especially environmental limits - to how "big" human civilization and its appetite for resources could get. Beyond a certain point, they said in effect, the maxim could very well be "grow and die."

That same team of researchers (minus one) has just released an historic update to The Limits to Growth. The new book - Beyond the Limits: Confronting Global Collapse, Envisioning a Sustainable Future - is instant must-reading. The authors use updated computer models to present a comprehensive overview of what's happening to the major systems on planet Earth and to explore probable futures, from worst- to best-case scenarios. The book is rigorously scientific, yet very engaging, and it is especially well-suited to educational settings. We strongly recommend it to our readers, and present the Preface here.

Donella H. Meadows is a systems scientist and journalist who teaches at Dartmouth College, as well as an IN CONTEXT contributing editor. Dennis L. Meadows is a Professor of Systems Management and directs the Institute for Policy and Social Science Research at the University of New Hampshire. Jørgen Randers, a policy analyst and President Emeritus of the Norwegian School of Management, is Chairman of the Norwegian Bank for Industry, the Norwegian Institute for Market Research, and Åke Larson, AS. The following is reprinted with permission of Chelsea Green Press. The book can be ordered from them for $19.95 plus $3 shipping, Route 113, PO Box 130, Post Mills, VT 05058-0130, Tel. 802/333-9073.

Twenty years ago we wrote a book called The Limits to Growth. It described the prospects for growth in the human population and the global economy during the coming century. In it we raised questions such as: What will happen if growth in the world's population continues unchecked? What will be the environmental consequences if economic growth continues at its current pace? What can be done to ensure a human economy that provides sufficiently for all and that also fits within the physical limits of the Earth?

We had been commissioned to examine these questions by The Club of Rome, an international group of distinguished businessmen, statesmen, and scientists. They asked us to undertake a two-year study at the Massachusetts Institute of Technology to investigate the long-term causes and consequences of growth in population, industrial capital, food production, resource consumption, and pollution. To keep track of these interacting entities and to project their possible paths into the future we created a computer model called World3.

The results of our study were described for the general public in The Limits to Growth. That book created a furor. The combination of the computer, MIT, and The Club of Rome pronouncing upon humanity's future had an irresistible dramatic appeal. Newspaper headlines announced:

A COMPUTER LOOKS AHEAD AND SHUDDERS

STUDY SEES DISASTER BY YEAR 2100

SCIENTISTS WARN OF GLOBAL CATASTROPHE.

Our book was debated by parliaments and scientific societies. One major oil company sponsored a series of advertisements criticizing it; another set up an annual prize for the best studies expanding upon it. The Limits to Growth inspired some high praise, many thoughtful reviews, and a flurry of attacks from the left, the right, and the middle of mainstream economics.

The book was interpreted by many as a prediction of doom, but it was not a prediction at all. It was not about a preordained future. It was about a choice. It contained a warning, to be sure, but also a message of promise. Here are the three summary conclusions we wrote in 1972. The second of them is the promise, a very optimistic one, but our analysis justified it then and still justifies it now. Perhaps we should have listed it first.

1. If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next 100 years. The most probable result will be a sudden and uncontrollable decline in both population and industrial capacity.

2. It is possible to alter these growth trends and to establish a condition of ecological and economic stability that is sustainable far into the future. The state of global equilibrium could be designed so that the basic material needs of each person on earth are satisfied and each person has an equal opportunity to realize his or her individual human potential.

3. If the world's people decide to strive for this second outcome rather than the first, the sooner they begin working to attain it, the greater will be their chances of success. (Meadows et al., 1972)

To us those conclusions spelled out not doom but challenge - how to bring about a society that is materially sufficient, socially equitable, and ecologically sustainable, and one that is more satisfying in human terms than the growth-obsessed society of today.

In one way and another, we've been working on that challenge ever since. Millions of other people have been working on it too. They've been exploring energy efficiency and new materials, nonviolent conflict resolution and grassroots community development, pollution prevention in factories and recycling in towns, ecological agriculture and international protocols to protect the ozone layer. Much has happened in twenty years to bring about technologies, concepts, and institutions that can create a sustainable future. And much has happened to perpetuate the desperate poverty, the waste of resources, the accumulation of toxins, and the destruction of nature that are tearing down the support capacity of the earth.

When we began working on the present book, we simply intended to document those countervailing trends in order to update The Limits to Growth for its reissue on its twentieth anniversary. We soon discovered that we had to do more than that. As we compiled the numbers, reran the computer model, and reflected on what we had learned over two decades, we realized that the passage of time and the continuation of many growth trends had brought the human society to a new position relative to its limits.

In 1971 we concluded that the physical limits to human use of materials and energy were somewhere decades ahead. In 1991, when we looked again at the data, the computer model, and our own experience of the world, we realized that in spite of the world's improved technologies, the greater awareness, the stronger environment policies, many resource and pollution flows had grown beyond their sustainable limits.

That conclusion came as a surprise to us, and yet not really a surprise. In a way we had known it all along. We had seen for ourselves the leveled forests, the gullies in the croplands, the rivers brown with silt. We knew the chemistry of the ozone layer and the greenhouse effect. The media had chronicled the statistics of global fisheries, groundwater drawdowns, and the extinction of species. We discovered, as we began to talk to colleagues about the world being "beyond the limits," that they did not question that conclusion. We found many places in the literature of the past twenty years where authors had suggested that resource and pollution flows had grown too far, some of which we have quoted in [our] book.

But until we started updating The Limits to Growth we had not let our minds fully absorb the message. The human world is beyond its limits. The present way of doing things is unsustainable. The future, to be viable at all, must be one of drawing back, easing down, healing. Poverty cannot be ended by indefinite material growth; it will have to be addressed while the material human economy contracts. Like everyone else, we didn't really want to come to these conclusions.

But the more we compiled the numbers, the more they gave us that message, loud and clear. With some trepidation we turned to World3, the computer model that had helped us twenty years before to integrate the global data and to work through their long-term implications. We were afraid that we would no longer be able to find in the model any possibility of a believable, sufficient, sustainable future for all the world's people.

But, as it turned out, we could. World3 showed us that in twenty years some options for sustainability have narrowed, but others have opened up. Given some of the technologies and institutions invented over those twenty years, there are real possibilities for reducing the streams of resources consumed and pollutants generated by the human economy while increasing the quality of human life. It is even possible, we concluded, to eliminate poverty while accommodating the population growth already implicit in present population age structures - but not if population growth goes on indefinitely, not if it goes on for long, and not without rapid improvements in the efficiency of material and energy use and in the equity of material and energy distribution.

As far as we can tell from the global data, from the World3 model, and from all we have learned in the past twenty years, the three conclusions we drew in The Limits to Growth are still valid, but they need to be strengthened. Now we would write them this way:

1. Human use of many essential resources and generation of many kinds of pollutants have already surpassed rates that are physically sustainable. Without significant reductions in material and energy flows, there will be in the coming decades an uncontrolled decline in per capita food output, energy use, and industrial production.

2. This decline is not inevitable. To avoid it two changes are necessary. The first is a comprehensive revision of policies and practices that perpetuate growth in material consumption and in population. The second is a rapid, drastic increase in the efficiency with which materials and energy are used.

3. A sustainable society is still technically and economically possible. It could be much more desirable than a society that tries to solve its problems by constant expansion. The transition to a sustainable society requires a careful balance between long-term and short-term goals and an emphasis on sufficiency, equity, and quality of life rather than on quantity of output. It requires more than productivity and more than technology; it also requires maturity, compassion, and wisdom.

These conclusions constitute a conditional warning, not a dire prediction. They offer a living choice, not a death sentence. The choice isn't necessarily a gloomy one. It does not mean that the poor must be frozen in their poverty or that the rich must become poor. It could actually mean achieving at last the goals that humanity has been pursuing in continuous attempts to maintain physical growth.

We hope the world will make a choice for sustainability. That is why we have written our book. But we do not minimize the gravity or the difficulty of that choice. We think a transition to a sustainable world is technically and economically possible, maybe even easy, but we also know it is psychologically and politically daunting. So much hope, so many personal identities, so much of modern industrial culture has been built upon the premise of perpetual material growth.

A perceptive teacher, watching his students react to the idea that there are limits, once wrote:

When most of us are presented with the ultimata of potential disaster, when we hear that we "must" choose some form of planned stability, when we face the "necessity" of a designed sustainable state, we are being bereaved, whether or not we fully realize it. When cast upon our own resources in this way we feel, we intuit, a kind of cosmic loneliness that we could not have foreseen. We become orphans. We no longer see ourselves as children of a cosmic order or the beneficiaries of the historical process. Limits to growth denies all that. It tell us, perhaps for the first time in our experience, that the only plan must be our own. With one stroke it strips us of the assurance offered by past forms of Providence and progress, and with another it thrusts into our reluctant hands the responsibility for the future. (Vargish, 1980)

We went through that entire emotional sequence - grief, loneliness, reluctant responsibility - when we worked on The Club of Rome project twenty years ago. Many other people, through many other kinds of formative events, have gone through a similar sequence. It can be survived. It can even open up new horizons and suggest exciting futures. Those futures will never come to be, however, until the world as a whole turns to face them. The ideas of limits, sustainability, sufficiency, equity, and efficiency are not barriers, not obstacles, not threats. They are guides to a new world. Sustainability, not better weapons or struggles for power or material accumulation, is the ultimate challenge to the energy and creativity of the human race.

We think the human race is up to the challenge. We think that a better world is possible, and that the acceptance of physical limits is the first step toward getting there. We see "easing down" from unsustainability not as a sacrifice, but as an opportunity to stop battering against the earth's limits and to start transcending self-imposed and unnecessary limits in human institutions, mindsets, beliefs, and ethics. That is why we finally decided not just to update and reissue The Limits to Growth, but to rewrite it completely and to call it Beyond the Limits.

References

Donella H. Meadows et al., The Limits to Growth (New York: Universe Books, 1972).

Thomas Vargish, "Why the Person Sitting Next to You Hates Limits to Growth," Technological Forecasting and Social Change 16 (1980), pp. 179-189.

------------------------------------------------------

Love And The Revolution

Unlike most scientific books about our relationship to the environment, Beyond the Limits is willing to break several taboos. For one, it is willing to be optimistic - to say that it is possible to overcome the manifold obstacles between here and sustainability. For another, it is willing to use words like "love" and "revolution," meaning by the latter not a violent uprising but an historical transformation, not unlike that from agricultural to industrial civilization.

What are the elements of the sustainability revolution? They go beyond good information, new technologies, democratic participation, and sound policy. The authors close their book with a description of five "tools" that are generally not mentioned in most supposedly "serious" studies of what we must do: visioning, networking, truth-telling, learning, and - as they explain in this excerpt - loving.

One is not allowed in the modern culture to speak about love, except in the most romantic and trivial sense of the world. Anyone who calls upon the capacity of people to practice brotherly and sisterly love is more likely to be ridiculed than to be taken seriously. The deepest difference between optimists and pessimists is their position in the debate about whether human beings are able to operate collectively from a basis of love. In a society that systematically develops in people their individualism, their competitiveness, and their cynicism, the pessimists are the vast majority.

That pessimism is the single greatest problem of the current social system, we think, and the deepest cause of unsustainability. A culture that cannot believe in, discuss, and develop the best human qualities is one that suffers from a tragic distortion of information. "How good a society does human nature permit?" asked psychologist Abraham Maslow. "How good a human nature does society permit?"

... It is difficult to speak of or to practice love, friendship, generosity, understanding, or solidarity within a system whose rules, goals, and information streams are geared for lesser human qualities. But we try, and we urge you to try. Be patient with yourself and others as you and they confront the difficulty of a changing world. Understand and empathize with inevitable resistance; there is some resistance, some clinging to the ways of unsustainability, within each of us. Include everyone in the new world. Everyone will be needed. Seek out and trust in the best human instincts in yourself and in everyone. Listen to the cynicism around you and pity those who believe it, but don't believe it yourself.

- Donella H. Meadows, Dennis L. Meadows, and Jørgen Randers

[thunderdownunder]

Re: The Three Chinas and World Energy Demand

Steve ...... How absolutely correct you are, Educate Women and skill them with knowledge and the standard of living rises, when this occurs birth rates fall.(Woman like their comforts and new choices) If Birth rates fall below 1.8/ Family total population goes into reverse. It is calculated that Japan with a 1.2 rate will have a total population of ONE person in the Year 3500.
We are having this discussion on the main news networks in Australia (Google Dick Smith). It is causing more angst than Global Climate (NB: I never said 'warming' or 'Change')
The most avid haters of Lower population, it is no surprise, is Big Business because it means No Growth/no Profit increase.
The Third World is, as it is, because it is not given the tools to grow.
It is a mathematical certainty using rule "72" that in a finite World with finite Resources we DO NOT Have a Population problem but we have a Time decay problem.
The Algorithm is simple but NONE want the Answer shown to them.
I've said it before and I will say it again so you all can ponder it ...................
Everything is Energy -it is life. Go Steve!!!

http://www.abc.net.au/news/stories/2...11/2979958.htm

http://abcaustralia.com/tv/qanda/vodcast.htm

[gnk]

Re: The Three Chinas and World Energy Demand

Steve ...... How absolutely correct you are, Educate Women and skill them with knowledge and the standard of living rises, when this occurs birth rates fall.(Woman like their comforts and new choices) If Birth rates fall below 1.8/ Family total population goes into reverse. It is calculated that Japan with a 1.2 rate will have a total population of ONE person in the Year 3500.
We are having this discussion on the main news networks in Australia (Google Dick Smith). It is causing more angst than Global Climate (NB: I never said 'warming' or 'Change')
The most avid haters of Lower population, it is no surprise, is Big Business because it means No Growth/no Profit increase.
The Third World is, as it is, because it is not given the tools to grow.
It is a mathematical certainty using rule "72" that in a finite World with finite Resources we DO NOT Have a Population problem but we have a Time decay problem.
The Algorithm is simple but NONE want the Answer shown to them.
I've said it before and I will say it again so you all can ponder it ...................
Everything is Energy -it is life. Go Steve!!!!

I think it's too late for that. The standard of living should have been raised for all 40 years ago - since then, the world's population has nearly doubled. Think of that. It took all of human history to reach a global population of about 3.5 billion in 1970... and merely 40 years later, the population is over 6.8 billion. And most of them do not live a western industrial life.

Do we have the resources to satisfy everyone's needs in a western industrialized life?

Are we ready to change our debt based permagrowth monetary system and investment goals, and pension actuarial tables to accomodate a stagnant world population?

I say we won't. But that doesn't mean the issue won't be thrust upon us. The world will face manmade tragedies involuntarily. There is no political will to address a costly potential problem... only an actual one. And then, it's too late.

I'm with Rajiv here.

[we_are_toast]

Re: The Three Chinas and World Energy Demand

The talk on this thread that we can simply raise everyones standard of living by using rapidly depleting fossil fuels, makes me more confident than ever that humanity lacks the common sense to avoid a population crash well before 8.5B.

[thriftyandboringinohio]

Re: The Three Chinas and World Energy Demand

Too many monkeys on the rock.

[c1ue]

Re: The Three Chinas and World Energy Demand

When Do Green Values Pay Off For Big Business?

Jared Diamond lost all credibility with me - see this:

http://www.stinkyjournalism.org/late...pdates-149.php

Mr. Diamond is in the category of Thomas Friedman: sounds nice, but has an agenda and is not reliable for facts or analysis.

[Rajiv]

Re: The Three Chinas and World Energy Demand

Well those that have "credibly" predicted a population collapse or other major global crises since the 1970's have been perpetually wrong.

You should also read what Matt Simmons wrote in 2000 - Revisiting The Limits to Growth: Could The Club of Rome Have Been Correct, After All?

In the early 1970’s, a book was published entitled, The Limits To Growth, a report of the Club of Rome’s project on the predicament of mankind. Its conclusions were stunning. It was ultimately published in 30 languages and sold over 30 million copies. According to a sophisticated MIT computer model, the world would ultimately run out of many key resources. These limits would become the “ultimate” predicament to mankind.

Over the past few years, I have heard various energy economists lambast this “erroneous” work done. Often the book has been portrayed as the literal “poster child” of misinformed “Malthusian” type thinking that misled so many people into believing the world faced a short mania 30 years ago. Obviously, there were no “The Limits To Growth”. The worry that shortages would rule the day as we neared the end of the 20th Century became a bad joke. Instead of shortages, the last two decades of the 20th Century were marked by glut. The world ended up enjoying significant declines in almost all commodity prices. Technology and efficiency won. The Club of Rome and its ”nay-saying” disciples clearly lost!

The critics of this flawed work still relish in pointing out how wrong this theory turned out to be. A Foreign Affairs story published this past January, entitled Cheap Oil, forecast two decades of a pending oil glut. In this article, the Club of Rome’s work was scorned as being the source document which led an entire generation of wrong-thinking people to believe that energy supplies would run short. In this Foreign Affairs report, the authors stated, “....the “sky-is-falling school of oil forecasters has been systematically wrong for more than a generation. In its dramatic 1972 The Limits to Growth report, the group of prominent experts known as The Club of Rome wrote that only 550 billion barrels of oil remained and that they would run out by 1990.”
.
.
.
.
.
For a publication that is almost 30 years out of print, it is fascinating that anyone still even remembers what the book said. I have occasionally been privately amused at the passion this Club of Rome work still evokes. As I have heard this study thoroughly discredited, I have wondered whether the anger this book still creates is the equivalent of getting livid at a bartender “the morning after,” when one’s headache was so wicked. Could the core angst this work still generates result from a backlash or an embarrassment by these same critics for embracing these shortage concepts and then being proved wrong?

The first time this “Club of Rome” topic caught my attention was after I addressed the International Association of Energy Economists at their annual meeting in Dallas, Texas, on Election Day, 1994. At this program, I spoke of the pending end of all three “bubbles” which had kept such an overhang on energy supplies and kept prices so low: the oil bubble, the gas bubble, the drilling rig bubble (there had been a huge surplus of equipment.) I also addressed the pending volatility in our energy market now that NYMEX pricing had taken over (I called it a new driver of the Energy Bus.) I thought it was a pretty good talk, But, the question and answer session brought forth not a single question. There was total silence from an obviously disbelieving audience. So I clearly missed the mark.

As I was leaving the hotel where the program was held, someone approached me and said, “I listened to your talk!” He paused. I was unsure whether to answer with “Thanks!” Before I could respond, the person then said, “Your thesis was interesting. You are obviously a Malthusian; a “Club of Romer” or a classic chronic believer in shortages!”

I knew then that my message had been totally missed. My talk never made any reference to any form of shortages. I was merely warning that era of the vast energy excesses was almost gone. In an attempt to put my talk into more simplistic language, I responded “No. In fact, I am not a Malthusian at all, I am an Agrarian. I study cycles of commodities. Most happen to be agricultural. The patterns are always the same. Demand for a particular crop ends up growing too fast. Supplies then get short and the price soars. The farmer quickens his planting cycle to capture these high prices just as demand is starting to fall due to being too high. This creates a larger glut. Prices then plunge. The farmer stops planting. As supplies then dwindle, low prices begin to stimulate demand. As a result, commodities swing back and forth, rocketing from peak to bottom and back to peak. It happens to virtually all agricultural products.”

I continued, “the only difference between agriculture and energy is that it takes a few months to plant wheat compared to around seven years to plant and then harvest a new energy field. So the cycles are simply longer! Therefore, ten years from now, all you guys will be discussing the likelihood of $200 oil just as demand is dropping and supplies are on the rise!”

I was quite pleased with this quick response and thought it also captured the essence of what I had tried to tell this skeptical audience earlier that afternoon. But the person to whom I delivered this impeccable logic merely responded, “I’ll be damned, I could have sworn you were a classic Malthusian!” and then walked away.

Through this humorous exchange, I was accidentally introduced to the whole Club of Rome notion. While I vaguely remember hearing about the work in the early 1970’s, before this Dallas encounter, I had never focused on what it was all about.

Since becoming aware of this Club of Rome work in 1994, I continually hear the “Club of Rome” shortage thesis raised by various energy economists who thoroughly condemn the work as being absolutely wrong. But I have never given any thought to what the Club of Rome’s specific predictions actually were, nor have I ever known who this “mysterious” Club plotting the end of the world even was.

The primary reason I have never pursued more knowledge about this work is that I have never subscribed to the theory of the world ever encountering a permanent energy shortage. “Running out of oil” has never borne any relationship to my growing concern over the past decade that “not all is well in the energy world.”

My energy worries have always centered on the simple prospect that demand could some day start outstripping supply. This is a totally different problem than running out of energy. Both are definite problems, they merely address different issues.

The two problems actually bear no relation to one another. Running short of daily supply is a little like food and famine. The world has never run out of food, yet we have suffered regional famines since the beginning of time. These are merely logistical distribution
problems.

My curiosity about what the Club of Rome actually predicted in this The Limits to Growth book was triggered this past spring after hearing a talk by James Wolfenson, head of the World Bank, at a Global Harvard Business School Conference in Berlin. Mr. Wolfenson gave the keynote opening address to a group of 1200 HBS alumni from around the world, gathered to discuss “A World Without Walls: The Challenges of a Global Economy.”

His talk focused on the acute need for the affluent population of the globe to never
overlook or forget the less fortunate parts of the world. As he eloquently stated, there are only 1.2 billion people now living in the highly developed countries of the world. 250 million are in the United States, 500 million living in the expanded Europe and 350 million in Canada, Mexico and the Pacific Rim countries of the OECD. For this group, affluence is not only on the rise, it has also never been better.

But Mr. Wolfenson then warned of the risks inherent by overlooking the 4.8 billion people living in the less developed or transition economies of the world. An astonishing 2 billion of these people live on less than $2 a day! One billion live on less than $1 a day! Abject poverty abounds throughout these less fortunate countries. In our modern global society, with global telecommunication, Mr. Wolfenson warned that it is not reasonable to even think that we can maintain this great gap between the well to do and the impoverished for another 50 years.

In Wolfenson’s opinion, the great challenge of the next several decades is to narrow this prosperity gap. Doing this will not be an easy task. But it must be done.

As I heard these grim statistics, it forced me to re-think an in-depth research I did in the summer of 1997 on the “Insatiable Energy needs of China.”

The prime conclusion I reached after doing this China research which entailed an extensive analysis of what happens to energy use when a poor country begins to prosper, is that energy growth always goes hand in hand with countries switching from being poor to becoming even slightly affluent.

As I finished this China study, it left me wondering whether the world really had the sufficient resource base to allow China to achieve its dream of economic success. From the work I did on per capita energy use, if China ever becomes the equivalent of Japan in 1960, let alone finally convert its vast body of people to the prosperity of the United States today, this transition would consume so much energy that it raises the question of whether such added energy really exists. At the least, it would strain the world’s energy resources to its limits.

Within months of finishing the China Energy Report, the Asian ‘flu invaded the world.
Suddenly, the notion of China (or any Asian country) continuing to grow began to seem remote. So I unintentionally forgot the primary conclusions of this China study.

On my way back from Berlin, I kept thinking about the implications of the poor population of the globe finally becoming normal citizens of the world. This led me to muse about the whole Club of Rome issue. The more I mused, the more I began to wonder whether this group might have been correct in their concerns after all. Perhaps they were only wrong in their timing by 30 to 50 years. Or perhaps this group envisioned that by 2000, the world would have closed the gap between the rich and the poor, thus creating the shortages which their report warned would occur.

As soon as I returned to the U.S., I had our librarian find a copy of the book which the Club of Rome produced almost 30 years ago.

WHAT THE LIMITS TO GROWTH ACTUALLY SAID

After reading “The Limits to Growth,” I was amazed. Nowhere in the book was there any mention about running out of anything by 2000. Instead, the book’s concern was entirely focused on what the world might look like 100 years later. There was not one sentence or even a single word written about an oil shortage, or limit to any specific resource, by the year 2000.

The members of the “Club or Rome” were also not a mysterious, sinister, anonymous group of doomsayers. Rather, they were a group of 30 thoughtful, public spirited-intellects from ten different countries. The group included scientists, economists, educators, and industrialists. They met at the instigation of Dr. Aurelia Peccei, an Italian industrialist affiliated with Fiat and Olivetti.

The group all shared a common concern that mankind faced a future predicament of grave complexity, caused by a series of interrelated problems that traditional institutions and policy would not be able to cope with the issues, let alone come to grips with their full context. A core thesis of their work was that long term exponential growth was easy to overlook. Human nature leads people to innocently presume growth rates are linear. The book then postulated that if a continuation of the exponential growth of the seventies began in the world’s population, its industrial output, agricultural and natural resource consumption and the pollution produced by all of the above, would result in severe constraints on all known global resources by 2050 to 2070.

The genesis of this book was a series of early meetings being held by The Club of Rome in 1968. These meetings culminated in a decision to initiate a remarkably ambitious undertaking. The task was to examine the complex problems troubling “men of all nations; poverty in the midst of plenty, degradation of the environment, loss of faith in institutions, uncontrolled urban spread, etc.”

“Phase One” of the project of the predicament of mankind took shape in 1970. The group commissioned a team of Economic Modelers at MIT to forecast, in approximate terms, what pressures the globe would undergo if the current growth trends continued for another 100 years. This research was financed by the Volkswagen Foundation.

At the time, the technique of conducting computer based integrated modeling was quite new. The technique was called “System Dynamics”, where various inter-related elements and positive and negative feedback loops influence the various ingredients and outputs of the model.

The initial results of this modeling work were sufficiently alarming that Club of Rome participants decided to publish them, and call the book The Limits to Growth. The book was published by Potomac Associates, a non-partisan research and analysis organization seeking to encourage lively inquiry into critical issues of public policy.

The book painstakingly acknowledged that the model’s work was still “preliminary.” Much more detailed analysis was needed to hone in on the issues this model raised. The decision to publish the results, as rough as they were, was driven by a desire to quickly get the issues into the public domain. This would hopefully command critical attention to the work and spark debate in all societies about the changes needed to avoid the catastrophic elements that the model indicated would occur by 2070, absent any changes.

While many readers concocted various “imaginary” assumptions, the book’s conclusions were quite simple.

The first conclusion was a view that if present growth trends continued unchanged, a limit to the growth that our planet has enjoyed would be reached sometime within the next 100 years. This would then result in a sudden and uncontrollable decline in both population and industrial capacity.

The second key conclusion was that these growth trends could be altered. Moreover, if proper alterations were made, the world could establish a condition of “ecological stability” that would be sustainable far into the future.

The third conclusion was a view that the world could embark on this second path, but the sooner this effort started, the greater the chance would be of achieving this “ecologically stable” success.

The book, in its entirety, is beautifully written. It takes only a few hours to read. I would highly recommend it to anyone. It is an interesting mixture of simple, tried and true economic laws,combined with a terrific dose of logic. Without a doubt, there are some serious doomsday elements laid out which our world would face if the conclusions of this modeling work were ignored, and key trends continue to rise at exponential vs. linear rates. But, the book essentially lays out an optimistic outlook on how easily these limits to growth can be altered if a real effort to accomplish this is made at an early stage, rather than attempting such changes too late.

The most amazing aspect of the book is how accurate many of the basic trend extrapolation worries which ultimately give raise to the limits this book expresses still are, some 30 years later. In fact, for a work that has been derisively attacked by so many energy economists, a group whose own forecasting record has not stood the test of time very well, there was nothing that I could find in the book which has so far been even vaguely invalidated. To the contrary, the chilling warnings of how powerful exponential growth rate can be are right on track. The thesis that it is easy to misjudge this type of growth has also been proven by the volumes of misguided criticism that the report engendered.

The world is now 30 years into this 100-year view. It did grow as fast as the book warned. The gap between rich and poor never narrowed. Instead, the gap between the “haves” and the “have-nots” grew by a significant measure. It is interesting to contemplate how horrified the book’s authors would be today, given the population trends that happened post 1972. The current strain on many of our precious resources is already becoming serious. It would have been far worse by 2000, given the rate of expansion which happened to the world’s poor population, had these people also begun to significantly improve their standard of living at the same time. An accidental safety valve for many potentially scarce resources turned out to be the widening of the rich/poor gap.
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Re: The Three Chinas and World Energy Demand

You should also read what Matt Simmons wrote in 2000 - Revisiting The Limits to Growth: Could The Club of Rome Have Been Correct, After All?

This is revisionism.

While the "Limits to Growth" didn't per se explicitly make the catastrophic predictions as some like Dr. Paul Ehrlich, equally they did nothing to refute or put into perspective the '70s Malthusian movement.

In political terms, this is called using the dummies.