The Chessboard of the Foundation Future - Nate Hagens

The Chessboard of the {Foundation} Future
Nathan John Hagens, Bottleneck Foundation
Hi all – I know this was a sledgehammer of a presentation, both in it’s content and it’s length.
So I thought for it to be worth anything at all to those in Boston, I’d write notes and context on
each slide and add some references. (For clarity I dropped 3 slides and added 4).
I can be reached at nate@bottleneck.us or njhagens@umn.edu with any questions.
Kindly, Nate
1
Images and content are working drafts Copyright ©2010-2017 EarthTrust

2200. C.E.
This talk is long. As such the most important topic will not be covered. Our most important goal
–from my perspective – is to sequentially have ~200-year plans allowing humans and healthy
ecosystems to continue to exist. I care about elephants, dolphins, hummingbirds and the
grandchildren of some of you in the room coexisting in the year 2200. Because that implies
many other positive deeper time futures remain open. The talk today discusses some
necessary stepping stones to get us to that point.
2

Fossil Fuel Consumption
Renewable energy forecast
It’s human nature to focus on the things we are
working on, we understand and we hope for.
We all focus on – and get distracted by – what’s in front of our eyes.
3

Renewables!
Climate
Change! Help
the
poor!
Technology
and growth
will solve it!
It’s finance
and debt!
Biodiversity
Loss!
Sometimes focusing on the things we know and care about cause us to miss the larger picture. Though I
typically say ‘we have to see the whole elephant’ this isn’t even the best analogy, for even if the ear or foot
are missing, people know its an elephant. Todays talk is about synthesis science. If ANY of energy,
money/economy, human behavior, environment or ecology are missing, the story, the situation, and ‘what is
logical for us to do’ are lost. A better analogy is a mouse in a cage. If any of the sides of the cage are missing,
the mouse escapes. Its why I try to cram so many slides into less than an hour. To give anything short of the
full story, gives nothing much at all.
4
Blow up from
previous slide

LENSES OF REALITY
1. Energy underpins everything
2. We’re taking more than our share
3. Our brains are still living in the savannah
I teach a systems-synthesis class at the University of Minnesota titled ‘Reality 101 – A Survey of the Human
Predicament’. It covers dozens of academic disciplines from anthropology to neuroscience to
thermodynamics, but the class content boils down to three central pillars/conclusions.
1] Energy underpins life in nature – and in human systems as well. The cost of human energy systems is going
up in coming decades and will mean the end of growth in human throughput.
2] Even before the main effects from climate change and ocean acidification manifest, humans are causing
the 6th great extinction, using 35%+ of NPP, etc. and causing largescale disappearance of wildlife.
3] We are products of natural selection, and our modern skulls still house stone-age thinking. Ultimately, we
don’t have energy or environmental problems per se, but a human mind mismatch with our modern world.
5

Today I will be focusing on:
~Introduction
~Lenses of Reality: Energy, Environment, Behavior
~The Stories underpinning our modern culture, politics, media
~Blindspots in current Philanthropic planning [no hissing, or eggs please]
~Conclusions
~Some Suggestions on what to do as Individuals
~Some Suggestions on what to do as Foundations
I’ll ‘speak’ fast. Don’t try to remember everything. The overarching point of the presentation is
that our species – and therefore culture – has enormous blindspots. Our cultural blindspots are
so ubiquitous that many of the assertions in this presentation will seem strange. This is
because we have also have blindspots about having blindspots ;-]
6

Energy underpins everything
We’re taking more than our share
Our brains are still living on the savannah
LENSES OF REALITY
1
2
3
7

Trophic Pyramids in Nature
Three hundred trout are needed to support one man for a year. The trout, in turn, must
consume 90,000 frogs, that must consume 27 million grasshoppers that live off of 1,000 tons
of grass. -- G. Tyler Miller, Jr., American Chemist (1971)
There are trophic pyramids in nature. Underpinning all levels is the energy from our sun. Sun to
plants, plants to herbivores, herbivores to carnivores. At each higher level there is an energy
conversion in which 90%+ of energy is lost. The biomass at the top is a tiny fraction of the
original energy at the bottom of the pyramid.
8

EXPENSE
INCOME
In nature biologists study ‘Optimal Foraging Theory’, which measures how much time and
energy organisms expend in order to obtain their ‘meals’. Animals that have a high surplus of
‘calories gained’ less ‘calories expended’ have survival and reproductive advantages.
9

Income minus expenses – ancestor style
Humans are part of nature and the energy return from the energy expended – for individuals,
and for tribes – has large correlation with their survival and success. Humans, and all human-
created systems, are subject to the same energy limits as any living system.
10

The Origins of Surplus
About twelve thousand years ago, we morphed from hunter-gatherers into stationary bands,
which grew to villages and eventually nations. For the first time, these tribes of our ancestors
had an energy surplus that we couldn’t eat immediately–in the form of storable, tradable grain.
The existence of this surplus allowed some members of society to do jobs unrelated to
agriculture. It doesn’t seem like it but this would be THE critical shift in human behavior,
organization, and impact.
11

Agriculture channeled more food energy through human societies. Fast forward a few thousand
years, and we see “surplus energy” directed towards non-basic needs. E.g. ~100,000 human
slaves over a 20-year period to quarry, shape and move over 6 million tons of stone comprising
the Great Pyramids of Giza in Egypt. Creative use of technology in the form of levers, pulleys,
sleds, etc., was necessary and important to this undertaking, but without the caloric
expenditures needed to power human muscle – generated from the rest of their society - such
structures could never have been built.
12

Enter stage right: our fossil helpers
Fossil carbon and hydrocarbons are not “different from” solar energy; they ARE solar energy,
stored from hundreds of millions of years’ sunshine by plants and animals which lived long ago..
13

Industrialization
Applying large amounts of
fossil energy to processes
humans used to do manually,
processes became ‘energy
inefficient’ but increased
returns to human effort/time
dramatically, e.g. profits.
Stored carbon enabled a shift to industrialized societies served by what are, in effect, energy
slaves. Technology based on combining various pulleys and levers had created the “spinning
jenny” which - operating by muscle power - could spin thread on 24 spindles simultaneously.
The invention of the spinning mule, which used the energy from a water-wheel near a river
increased this spindle count to over 100. But when steam engines burning coal were integrated,
the spindle count increased to over 1000, thus generating a far higher return on the same
amount of human input. Per human hour of work, our wages and profits skyrocketed.
14

Average human laborer
Average wages of $57 per day
The average American employee (including CEOs) makes $260 doing 8 hours of work per day.
Since U.S.A. is a rich nation, this is over 5 times higher than the world average earnings of $57/day.
15

How many man-days of work can you get
on the average global daily wage of $57?
Average
human
1
16

Average
human
Average
American
1 0.2
(American wages are around 5x the average for the world, so $57 only gets you 20% of one day
worth of work.)
17

Oil at $80 per barrel
Average
human
Average
American
5,912 1 0.2
A barrel of oil has 5.7 million BTUs of potential energy, which works out to 1700 kilowatt hours
of power. An average human generates about 0.6 kWh of power per work day. The math after
conversion works out to this: a barrel of oil does the same work as a man working for four
years. To get this amount of work, depending on market conditions we pay different amounts.
At 80 dollars, a barrel oil gives us the equivalent physical work of almost 6,000 co-workers
18

Average
human
Average
American
5,912 1 0.2
21,679
But at $20 per barrel, (the historical trend average of last forty years), we get almost 22,000 human
worker equivalents. No one thinks about this when they fill up their tank or fly in a plane.
This is why a carbon tax is a GREAT idea to mitigate climate change but NOT if we think it will also
stimulate the economy. If we take even one barrel of oil away from the economy we take the labor of
around 10,000 workers out of GDP at current prices. [since humans are way more efficient than oil,
this equates to about $700-$900 of GDP removed for each $50 barrel of oil removed – it’s
complicated] Reference: see final report pdf for details at this link
http://www.iier.ch/content/green-growth-oxymoron
19

150 Horse
45 Horse
0.1 Horse
1 Horse
One barrel of oil does the same amount of work as four years of human labor!
The average American uses SIXTY barrels of oil worth of fossil fuels per year!
If we combine the stored ancient sunlight present in coal and natural gas as well as crude oil,
the average American uses around sixty barrels of oil-equivalent of fossil joules per year. At a
[conservative] four years of work per barrel this implies the average American has around 250
invisible fossil helpers standing beside us each day, doing tasks we could never do without them
at a price thousands of times cheaper than our own muscles.
20

180x
400x
The “Trade” Underpinning Industrialization
The story of the industrial revolution is one of applying large amounts of cheap energy to tasks humans
used to do manually. Take the case of cow milking: using only manual labor to milk cows takes 20 min per
cow and results in total hourly purchasing power of 5 dollars [which can be allocated to wages, profits, or
cheaper milk]. However, a semi-automated machine cuts this time in half to ten minutes per human
worker, but adds 180x more external energy in form of machines and electricity. But this ‘trade’ almost
quadruples the wages/profits to $20 per hour. Finally, an energy intensive method of milking – fully
automated machines–requires only 3 minutes per human, but requires 400x more non-human energy.
This “trade” raises the profit per hour to $25, fully five times what humans could earn milking manually.
Imagine how many thousands/millions of processes we have applied this ‘Trade’ to in the past 150 years.
21

EVERY SINGLE GOOD OR SERVICE in our economies has one thing in common:
it requires an energy input in order to be produced.
No matter how you make a ‘cup’ –whether from a coconut, plastic, ceramic, metal, etc. you first
[and always] need a certain amount of energy to create it. Here’s a BIG cultural blindspot:
since we pay dollars for energy, most people just assume 50 bucks worth of oil is worth 50
bucks worth of cowboy hat, or tequila, or beef or household appliances. It is not – it is worth
hundreds to thousands of times more because of what else it can accomplish.
22

WAGES PROFITS
PEOPLEGOODS
This ‘trade’ of replacing tasks humans used to do manually with technology+energy has rippled
through our economies in the form of: higher wages, higher profits, lower priced stuff, and, via
cheap fertilizer being applied to increase land productivity, more food more people [Note: Our
agricultural system is now an enormous energy sink, requiring about ten fossil calories of input for
every one calorie of food on your plate. 50% of the protein and 80% of the nitrogen in our bodies
comes indirectly from natural gas via the Haber Bosch nitrogen fertilizer production process]
23

Historically most of our calories were consumed in our bodies – endosomatically. Because of
access to condensed ancient sunlight, today the vast majority of our energy use is ‘exosomatic’
– outside the body – via cars, planes, buildings, etc. The average American today consumes
around 215,000 calories per day, even though only around 3,000 are eaten. Todays average
Westerner thus has an energy metabolism of a 30 ton primate.
http://nautil.us/issue/1/what-makes-you-so-special/gasoline-and-fertility
24

90% of the physical work in human economic systems is done by fossil energy
Modern industry uses vast amounts of fossil carbon to do things humans used to do
If we add up all the physical work done in human economies, about 90% of it today is done not by
human toil or current sunlight, but by the ancient sunlight stored and condensed in fossil carbon.
Because fossil energy does so much of our work, the fact that only 5% of our GDP counts as
‘societal energy cost’ is misleading. A) we use thousands (or more) units of cheap energy to
replace tasks we used to do manually or in groups [think driving a car on a road vs walking or taking
a horse] and B) energy is heavily embedded in all of our products and supply chains and so
although we focus on just our electricity bill or filling up the gas tank there are multiple energy
inputs from ‘the Trade’ in any product we buy.
25

Global GDP Per Capita since 1000 BCE
Graph: Andrew Haldane, Chief Economist Bank of England
Human economies grew very little if at all for vast periods of our history– they were limited by the
[horizontal] land productivity – i.e. what nature provided from sun, wind, rain and soil. With
flammable fossils the model changed, as we could use land vertically [digging up historical
productivity] in addition to horizontally. Chief economist of the Bank of England recently gave a
speech [with forty pages of supporting graphs and data] on the amazing growth in human economies
in the last two centuries. In the 34 pages the word ENERGY was not mentioned once. (Blindspot)
http://www.bankofengland.co.uk/publications/Documents/speeches/2015/speech797.pdf
26

Graph: Andrew Haldane, Chief Economist Bank of England
Today’s average human is 13.70 times as wealthy as average person in 1800
Today’s Americans are 49.03 times as wealthy as average person in 1800
Global GDP Per Capita since 1000 BCE
The benefits from industrialization in the past two centuries have been breathtaking. Measured
by consumption of goods, wealth increased over 13x for the average human and 21x for the
average American. By extension, the average American consumes goods and services at a rate
almost 50x higher than the average human alive on this planet in the year 1800. We – even the
average consumers among us – live better than kings and queens of old. [those reading this pdf
are well aware that such consumption does not fully correlate with our well-being and happiness]
27

PHILANTHROPY
Our ‘energy surplus tower’ is very unlike that of our ancestors. For the past generation or so,
we spent about 5% of societies energy total to: find, extract and refine, and deliver the energy
services to the rest of society. This meant that 95% of the final use of energy could be applied
to a vast and diverse array of activities and pursuits, represented as the tower above. As we
shall see, as energy becomes more complex and costly, the red area on the bottom of the tower
expands, meaning less energy surplus for sectors above it.
28

Same gross energy: but
declining net benefits
Just as in nature, the benefits from various energy sources decline as the costs to obtain it increase. A
predator [cheetah above] will have much less surplus energy for survival/reproduction as it shifts from
gazelles to rabbits to mice [assuming same investment]. In the same fashion, humans have gone from
accessing the easiest [and cheapest and least environmentally damaging] first. In the 1920’s we
would get over 1,200 X the energy return on effort spent to find a barrel of oil. This has declined to
around 5:1 by around 2007 as we have to look deep under the ocean or use complicated fracturing
technology. Just like it would for a cheetah, this much higher ‘effort to find and obtain prey’ has
implications for human economies. See: A New Long Term Assessment of Energy Return on
Investment (EROI) for U.S. Oil and Gas Discovery and Production - http://www.mdpi.com/2071-
1050/3/10/1866
29

The Unwinding of the “Trade”
Because we use thousands of units of energy for each unit of original human labor in modern tasks, the
‘benefits’ from the task in the form of wages, profits and inexpensive goods are very sensitive to the cost
of the most important input into the production chain: energy. The above graph shows the profits using
three different milking technology stages and three different costs for energy. The ‘no extra energy
added’ example of manual milking -to be expected - shows no difference in profits from an increase in
energy use. Even the intermediate energy input shows only a small decline to benefits as electricity costs
triple from 5 to 15 cents. But the high energy-intensive technology undergoes a major impact. As
electricity costs double from 5 to 10 cents, the profits shrink from $25 to less than $5. More concerning
is at 15 cents, this ‘fully automated energy milking technology’ no longer shows a profit but has a steep
>15 dollar loss. Our global energy machinery and industry all falls on a spectrum from intermediate to
high energy intensity [high: think airlines, cement manufacturing, aluminum smelting, etc.]
30

Not your grandfather’s oil…
A thorough choreography of the costs and future production profiles of oil, coal, gas, and renewable
technology would take 181 slides itself. Suffice it to say that petroleum is the lifeblood of modern economies
and the easy stuff has largely been found/used. Globally what we call ‘crude oil’ by conventional definitions
has been in decline since 2005. Growth in global “oil” “production” has been in a] unconventional deposits
like shale oil and tar sands, b] as a byproduct of increasing amounts of natural gas extraction {which has less
energy density and joules per unit} and c] biofuels like corn ethanol.
“Peak Oil”, the time when global oil production starts a permanent decline, was a poorly named concept.
“Peak Benefits to Society” better describes the phenomenon of having to access higher and higher price
tranches of remaining hydrocarbons, combined with the multiplier effect of a civilization using thousands of
times of energy input for each human labor input. “Peak benefits to Society” is already a decade behind us.
31

Oil – you have to find it before you can use it!
Annually we are using over 5x more oil than we’re finding
Oil discoveries peaked in the 1960s. We keep finding oil, but the vast majority of what we are
finding is small to medium fields of the lower quality/more expensive to extract variety. The
Beverly Hillbilly days of just under the ground gushers are generations ago.
32

New Technology? Or Higher Price?
<$40
In the USA, the ‘shale miracle’ is mostly about accessing unconventional and more costly oil. While the
US still produces over 3 million barrels per day of ‘regular’ oil, the shale oil is more expensive for oil
firms, although economies of scale and new improvements have brought average full costs down from
80-90 per barrel closer to 50-60 since 2014. It’s important to recall that all the debate about the shale
miracle misses an important point – this is the source rock for hydrocarbons – after shale there are
really only the dregs left. Ergo, the story of oil for next five to ten years could be endlessly debated – for
the next twenty to fifty years, much less so. And as oil goes, so goes the rest of industrial economy, in
the sense that cheap oil makes everything else cheap, and expensive oil makes everything else more
‘energetically remote’ including roads [asphalt], chemicals, medicines, trucking, etc.
33

Other than the financial data of oil firms (and oil exporting countries), there is quite a bit of
hype and delusion about the true state of oil industry. This simple chart shows the oil and gas
drilling sector price index going from 100 in 1999 to 450 in 2013 down to 320 in 2017. The
quadrupling of costs of extraction followed by a 25% reduction in recent years is probably a
good proxy for the past 20 years. [the red line is oil price] What happens for long (or short)
periods of time when oil market price is below the price of extraction? We’re going to find out.
http://www.resilience.org/stories/2016-02-10/iea-in-davos-2016-warns-of-higher-oil-prices-in-
a-few-years-time/
34

For global geopolitical
context (of past 25
years), approximately
2/3 of worlds crude oil
is in the light shaded
area on this map.
No comment required.
35

Wait, so what is Money?
To fully understand energy we also have to grok money. Well what is money? In the textbooks
it is a] a medium of exchange, b] a store of value and c] a unit of account. While it is surely all
these things, from the perspective of the previous section, we can see that money is actually a
claim on future energy. No matter how you spend the 20 dollar bill in your pocket on or the
20,000 in your checking account that good or service will contain an embedded energy input.
36

Banks do not loan money, they create it
Since 1971 there has not been a single currency in
the world with a biophysical tether
As those in this room understand, most of our money in developed economies comes into existence via private
commercial banks – out of thin air. Banks not only loan money, they also create it. [ I wasn’t taught this in
Business School. ] Money is primarily an (imperfect) marker for real capital. And for most of last 100 years or
so, this didn’t pose much of a problem.
Debt is also very confusing to many people. The simplest explanation is this: think of debt as a claim on money
of the future. There are 2 lenses with which to view this, which give very different conclusions. The first is that
debt (and credit) is a zero sum game. For every debtor there is a creditor. All financial claims are owed or
owned. Under this lens wealth inequality is the natural thing to focus on as the problem from too much credit
growth (and it is a big problem). The 2nd lens is biophysical, less commonly understood, and a VERY big
problem. ALL debt no matter if it is owed or owned is in relation to natural resources [particularly energy] –
using this lens modern human culture is in the midst of the largest Ponzi scheme in history, as the number of
‘claims’ far outweigh their ability to be serviced (initially) and paid back (eventually).
37

Imagine helicopters full of hundred-dollar bills unloading their cargo over Boston. Some people
would be instant millionaires, others would get a cool hundred grand, and a million people would
have a spare thousand or two of pocket change. There would be new yacht and car purchases,
people would take vacations, and all that green paper would be a new call on some form of
energy and resources [and resultant environmental impacts]. At the time all these new billions
entered Boston, nothing had fundamentally changed in our energy/resource situation, but the
result was higher near-term energy use. The money in – energy out model. Seem familiar?
38

?
We don’t think of it this way – but when we take on debt – as a nation, as a
company or as an individual, the debt someday has to be paid back with energy.
For most of the last century we had a shortage of money vs our available energy, technology
and opportunity. Many bright ideas and expansions could occur ONLY if there was sufficient
financial marker capital flowing through the system. And so it did, with no reference to the
underlying physical resources it was ostensibly representing. In 1971 the USA abandoned the
convertibility of its currency to gold and from then on, not a single currency in the world had a
biophysical tether. We can print money but we can’t print energy. The more money we print
today; the less energy we will have to spend it on tomorrow.
39

Up until the 1970s our debt and our GDP stayed relatively closely linked. But since 1970 our
debt has grown by more each year than our GDP. This is unsustainable, yet we need to continue
it in order to maintain current levels of consumption. Our debt is not just our government
debt. ALL monetary claims on energy are debt – public, private, household, corporate –
everything but financial [which in most cases does not represent real stuff]. Our financial claims
are getting further and further decoupled from what really exists. At some point, we must add
new debt to the system just to keep the system consuming at the same rate as the year before
– at that point we are transmuting wealth into income.
40

LENSES OF REALITY
1
2
3
As everyone in the room is environmentally focused, I won’t spend any time re-articulating our
giant challenges. But I will highlight one aspect – linked to the energy section above, that most
people neglect to include in analyses of the context of the carbon pulse.
41

Even before the larger – and longer-term - impacts of ocean and climate are felt, humans are
already causing the 6th mass extinction. Depending on the boundaries, we now appropriate
between 25 and 40% of the Net [modern] Primary Productivity
42

Megafauna biomass tradeoff as a driver of Quaternary and
future extinctions Barnosky et al 2008
But the larger story is that we are also using massive amounts of ancient solar productivity.
This increases the amount of food that can be grown – for all animal species. The above chart
shows that from the dawn of the agricultural revolution, humans + wild animal biomass has
more than doubled [see next slide for breakdown]. But the real gut-punch here is the solid
green line. Livestock – cows, pigs, sheep, goats –due to human preference and convenience –
have exploded.
43

1.3%
22.9%
75.9%MORE THAN
OUR SHARE
(of NPP, biosphere, etc.)
There are two major implications of this phenomenon. First is the fact that humans are ‘taking
more than our share’. Twelve thousand years ago, wild [terrestrial, not ocean] animals weighed
approximately 300 million tons, while humans – all several million of us – weighed 0.2 million
tons – wild animals outweighed us by a factor of 1500x! Today, wild [land] animals weigh
approximately 23 million tons, humans over 400 million tons and our livestock over 1,400
million tons!!! Wild animals are barely over 1% of all animal weight. We are – even before
climate change and other environmental risks- taking more than our share.
44

THE BIOMASS BUBBLE
10,000 B.C.E.0
2015 C.E.
~300 million tons
~1,850 million tons
Hardly anyone acknowledges this most
basic facet of our current reality
The second, and perhaps more shocking aspect of this is not the COMPOSITION of current
biomass vs historic but the ABSOLUTE SIZE. The estimates of total vertebrate biomass from start
of agriculture vs today, as referenced by Barnosky graph two slides ago but also from Smil –
Harvesting the Biosphere, is that the current size of ALL terrestrial animal species is about 600%
higher than it was 12,000 years ago. This ‘Biomass Bubble’ is a direct result of the Carbon Pulse
– a one-time “drawing down” of solar energy stored over hundreds of millions of years in an
enormous conversion of fossils to biomass. The fact that few have heard of this  Blindspot.
45

LENSES OF REALITY
1
2
3
Our modern skulls house stone-age minds. This has huge implications.
46

We are related to all life on earth
We’re all stardust, animated by our star, and the elements which move through us have been
other things in the past, and will be other things in the future. We are related to every single living
creature on this planet – some things – like mushrooms – only remotely [~38%], others like – cats
–diverged 80 million years ago but still share ~90% of our DNA. And others – on our own family
tree – bonobos, chimps and gorillas – over 98%. We are all part of the tree of life on Earth – and
are tethered to biology in various ways. Humans are animals – special and very ‘successful’
animals to be sure – but animals like all of our nieces, nephews and cousins in nature.
47

Low High
Medium
Golden Retriever Evolutionary “Shout-Loud-O-Meter”
Natural selection is the story of what survived during the billions of years of life on Earth. Dogs, to take
one example, evolved from wolves over 20,000 years ago [though the vast majority of dog types and
breeds were artificially selected – by humans – since 1800]. What were they ‘selected for’? Well –
watching my own dogs – they get very excited about balls and Frisbees – extremely excited about bones,
food and human scrap – but during the span of their lives the things that motivate them the most – are
pleasing/interacting with their human friends – and play with other dogs. All these things ‘shout loudly’
in their brains via feelings inherited from their ancestors who were selected [recently, by human
breeders]. On the other hand, having poetry read to them, or climbing trees, do not ‘shout loudly’ to my
dogs brains – because they have no historical analogue.
48

Low High
Medium
Adaptation Executors
Via the same mechanism, humans too were ‘selected’ for in the environments of our ancestors, which
for the majority of our 2x10^5 great grancestors was on the plains of Africa near Tanzania. The things
today that evoke strong feelings in us – all of us – were conserved during the bottleneck events of the
past thousands of generations. Things dealing with food and resource acquisition, salience and novelty
indicating things of value [in the past], sex and activities correlating with increasing odds of mating and
mating higher up the status hierarchy. etc. At the top of ‘what feels intense’ to us – are the feelings of
social jockeying for respect, spite, praise, and group cohesion. Above all we are social primates, and
conforming to one’s tribe, and vilifying those outside it, was STRONGLY conserved in our past. Sadly,
but understandably, ‘biodiversity’, energy depletion and climate change can be understood by our
relatively new ‘science’ brains in the neocortex – but this part of our neural software has no direct
access to our actual behavior centers in the old brain centers – it doesn’t even have the phone number.
49

Our Brains are like analog computers – with thousands of subroutines running at once
The mechanisms are our
neurotransmitters, endocrine and
hormone systems and ‘feelings’
The large-scale brain plan is genetic - we come largely prewired. [At local levels there are
specific connections and changes that occur due to epigenetics and experience]. Our genes
don’t cause us to seek resources or mates or fitness the way our ancestors did – instead we
seek the same feelings, usually neurotransmitters or hormonal response- that our successful [in
surviving and procreating] ancestors received. We are not fitness maximizers but ‘adaptation
executors’. Today this could mean a sudden yearning for Ben and Jerry’s Chunky Monkey,
vitriolic Facebook debates about Trump or being jealous of our neighbors’ new Tesla.
50

Optimism Bias
You’re all familiar with this. People naturally think they are better than average-teachers, students,
parents etc. This confidence exists not only in our self-regard but also in our attitudes towards the future
and things we don’t understand. Science shows that optimistic framings increase helper-T cells (immune
system boosters) and being optimistic and hopeful reduces the stress hormone cortisol.
[It’s one reason why the implications in this presentation are so easily rejected – not only do we prefer to
focus on stories that don’t require too much personal sacrifice and effort, but hearing things we don’t
fully understand or know what to do about causes a stress response. Yet without SOME kind of a stress
response, how are we going to actually mitigate the large problems we face??]
51

The Consensus Trance
We generally care more about what others think of us than we care about the truth. In the ‘Ashe
experiment’ a person was placed with a group of ‘confederates’ and asked which of the lines in Exhibit 2
matched the line in Exhibit 1. When the confederates all concluded it was line B, fully 2/3 of test subjects
agreed that –yes-line B was in fact the right answer –either because they were swayed or because they
were too afraid of going against consensus. [line A is clearly the right answer}. In one of many similar
experiments, called the ‘smoke filled room’, test subjects – when noticing the others in the room
disregarding smoke coming under the door, expressed no concern, despite fire in a building being one of
the most dangerous of modern circumstances. Social conformity is one of the most conserved and
intense aspects of hominid behavior. And this is a problem because we now live in a smoke-filled world…
52

“We have only two modes–complacency and panic”.
- James Schlesinger – Sec of Energy and Head of CIA
Future Blindness
In economics, a “discount rate” measures our preference for consumption in the present vs a
larger amount of consumption in the future. Human subjects significantly prefer immediate
consumption over delayed and this continues virtually over any pair of times into the future.
It’s as if we are blind to the future and only react to the future when the future finally arrives.
So many dynamic inconsistencies are involved with this bias – we promise to eg. Stop smoking,
lose weight, start exercising, save the environment TOMORROW, but when we wake up
tomorrow, tomorrow has somehow become ‘today’ and we put off these promises yet again.
Like all animals we are a species overly-focused on the present.
53

>
Virtual World Physical World
We Evolved to be Wrong
In the last decade a handful of themes have bubbled into our cultural awareness. Climate change for
one. But also a recognition that our brains are not quite as rational as economists assert. We have
hundreds of biases - The way our brains are organized leaves enormous room for mistakes and odd
reactions to the stimuli of the modern world. In fact, we have so many blindspots to our reality, that
our inability to see the blindspots becomes a blindspot of its own. Each of us lives in our own virtual
reality, because that’s the fun place to live – but our minds can [and do] create millions more
circumstances than actually exist in physical reality. The rest of this slidedeck lists some huge
important things that are hiding in our blindspots, including some which could make the difference
between human survival and demise. Between a realistic chance of attaining trillions of human
childhoods on earth versus far lower numbers.
54

The ‘Gene Agenda’
Our minds can look forward but our feelings
come from what worked in the past
The “agenda of the gene” is the emergent result of the evolved brain’s highly distorted worldview.
It was distorted to relentlessly err on the side of survival, but to err nevertheless. So we worry
more about snakes than car crashes, about being unpopular rather than nuclear war, about
acquiring “stuff” rather than preserving a healthy ecology. The gene agenda works really well for a
snail. It works less well for a population of reindeer on an island with no predators. And it is
spectacularly deficient as a paradigmatic basis for fire apes with nuclear launch codes. Our brains
incorporate a default “agenda of the gene”. This agenda is eventually suicidal to a species whose
constraints are removed. It is theoretically possible for self-aware beings to self-constrain, but we
aren’t doing it yet.
55

We use research, discuss and plan
using facts, science, opinions, etc.
56

Confirmation bias, Time bias
Consensus trance, authority bias
Nihilism heuristic, availability cascade
Need for certainty, recency effect
Reductionism ad absurdum
Optimism bias, etc.
THEN:
 Both poles allow one to 
suppress dissonance and
feelings of discomfort
57

“Let’s be realistic
and start working!”
When we hear something new or scary our brains usually react in two ways – Either we
disbelieve the information – ‘there’s no problem’ or we run all the way through it and say
‘there’s nothing we can do’. This is the case for many of the larger issues of our day, like climate
change, resource overshoot, energy descent etc. What these responses have in common is that
neither require the subject to change his behavior – they have successfully cognitively
suppressed any emotional discomfort. Denial and nihilism are functionally equivalent.
58

Energy
descent
Stable
Ecosystems
Dolphins
~…are largely due to a mismatch of our evolved brain attributes vs.
our modern reality. And this mismatch prevents us from addressing
the problems effectively. [or at all?]
The bottom line: our energy and
environmental problems are very real….but…
Our brains are a product of natural selection/evolution the same way as our arms and our lungs
are. The unique social and behavioral attributes of our brain play an enormous role in our
environmental issues:
~they explain why we have grown to almost 8 billion and have sought out energy and resources
~they explain why our cultural myths and stories are powerful enough to distract us from reality
~they explain why changing our behavior without an immediate foe/danger is so difficult for us
as individuals and as a global culture
~they explain the likely responses to limits to growth within and between nations.
~they offer insights and paths on how we might avoid the default trajectories this century.
59

An Important ‘side-story’
Enter the Superorganism….
Part of this synthesis science story is critical of the assumptions underpinning modern business
and economics, both macro [world] and micro [individual]. Instead I frame here the explanation
of our modern story using ‘Superorganomics’, a made up term that fuses together multiple
academic disciplines. Before we get to the key flawed assumptions underpinning modern
culture, lets take a brief side show to explain co2 emissions, population growth and the invisible
hand from the perspective of Superorganomics.
60

Maximum Entropy Production Principle
In nature there is a prevalent tendency called the Maximum Entropy Production Principle (also
Maximum Power Principle). It is described that organisms and ecosystems self-organize so as to
better access [and degrade] energy, usually incoming sunlight. In a forest transect, the coolest
temps are the old growth trees, and the warmest are the open areas where nothing grows. Life
requires energy gradients.
http://www.ler.esalq.usp.br/aulas/lce1302/life_as_a_manifestation.pdf
61

“Ultrasociality”
Humans are one of Earths few ‘ultrasocial’ species – others include mole rats, and most wasps,
bees, ants, and termites. Ultrasocial species have intergenerational care for young, and division
of labor – and cooperate in group goals – often agriculture. Our sociality manifests not only by
intensely caring about others around us, but we form alliances with other individuals and
groups in various hierarchies all the way up to global culture in the pursuit of ‘surplus’.
Google a pdf of paper: Gowdy/Krall – the Ultrasocial Origin of the Anthropocene
62

“What took place in the early 1500s was truly exceptional, something that had never happened
before and never will again. Two cultural experiments, running in isolation for 15,000 years or
more, at last came face to face. Amazingly, after all that time, each could recognize the other’s
institutions. When Cortés landed in Mexico he found roads, canals, cities, palaces, schools, law
courts, markets, irrigation works, kings, priests, temples, peasants, artisans, armies,
astronomers, merchants, sports, theatre, art, music, and books. High civilization, differing in
detail but alike in essentials, had evolved independently on both sides of the earth.”
Ronald Wright, A Short History of Progress (2004, 50-51)
63

Check list
Agenda of the Gene Preference Checklist
Temperature: 10 F___ 65 F ✓ 110 F ___
Wealth: prefer to be poor ___ prefer to be rich ✓
# of children wanted: zero ___ greater than zero ✓
Prefer: newspaper__ dial up___ dsl___ broadband ✓
Prefer to be: miserable ___ comfortable ✓
Need to be in town in 2 hours: drive car✓ walk__
Prefer to: win wars ✓ lose wars___
Care more about how your life is in: 2017 ✓ or 2027___
Prefer to be viewed as: more✓ or less __ successful than ones neighbor
Again, we are animals, and we have some natural biological preferences. We prefer to be not
too hot or cold but comfortable [and so prefer air conditioning or heat]. We prefer to optimize
time, and therefore appreciate speed, etc. Many of these basic preferences steer us unseen
towards more energy use. It’s important to note however that at least a decent chunk of our
daily preferences are based on what others are doing/preferring. Energy requirements for
humans are ultimately some part biology and some part culture.
64

ENERGY
Our gregarious natures, when combined with modern technological inventions and an ample
power supply, caused emergence of institutions and structures optimized for growth. Up until
the 1970s we merely expanded the boundaries of our physical world, using very high energy-
gain fuels and open lands. That model began to run into limits with OPEC and oil price spikes,
among other headwinds. (Notably, real wages, the Genuine Progress Indicator, energy use per
capita, and other metrics for the USA peaked in the 1970s)
65

ENERGY
The human economy then went on to two new pathways- 1] globalization and the outsourcing
of production and supply chains to their least costly area, and 2] turning to credit to accelerate
current consumption after the disconnect of money from the gold standard. With debt and
globalization we rapidly grew the size of the human energy spigot.
66

ENERGY
This model ran into a brick wall in 2008 as the financial disconnect from underlying capital came
crashing down, the bubble pricked by Lehman Brothers bankruptcy. Since 2008, we have continued
growing the energy spigot [at a slower pace] via a] central banks taking over the credit guarantee
mechanism, and b] general management of markets via “too big to fail” guarantees, artificially low
interest rates, direct liquidity to institutions at risk, ongoing central bank balance-sheet expansion and
government deficit spending. All of these ‘temporary’ measures continue ten years after the crisis
began. Additionally, to keep this energy spigot growing [which gives citizens more preferential energy
services] countries are changing the rules in order to gain more access. ~E.g. USA changing its
definition of intellectual property to recognize more GDP today vs the future, ~Italy adding
prostitution and cocaine sales to economic stats to keep their GDP/debt ratio above ECB minimums.
67

Number of connections =~ ½
of the square of # of nodes
10 connections
= 45 nodes
30 connections
= 450 nodes
There is a phenomenon in complexity science, in which the number of connections between
nodes is roughly equal to ½ of the square of the number of nodes. So 10 people – or companies
or countries –have 45 connections (roughly 10^2=100/2). But if the number of people (or
countries, or companies) triples to 30, the number of nodes goes up tenfold.
(30^2=900/2=450). In such a way, as our population and world economic growth and
complexity increased, the number of ‘connections’ increased exponentially. The relevance of
this is that EACH of these connections requires at least a tiny bit of energy [some much more].
Complexity growth is tied to the energy spigot.
68

SPIGOT = ENERGY AND NATURAL
RESOURCES SIZE
Five things influence the
size of the spigot (E):
1) Low cost of energy (C)
2) Better technology (T)
3) Complexity Nodes (N)
4) Cheap/free credit (M)
5) Government rules (G)
EC
SPIGOT-(Cross section view)
G T
M
G
C
M
E
T
Circa 1990 Circa 2020
N
N
Biophysical Social/non-caloric forcers
ENERGY
Mankind is currently functioning akin to a superorganism, in which the wants and needs of the individual are
suppressed in favor of the aggregate pursuit of ‘surplus’. In our agricultural past, ‘surplus’ meant grain and
crops – today it is digital representations of surplus – stocks, bonds, markets.
In order to keep the spigot widening, we’ll do basically whatever we can. The core drivers of the spigot’s size
are obviously the price of energy and the quality of technology [and implied, the affordability of consumers].
But we can use other ‘tricks’ to expand the size – we can issue credit from thin air, we can change rules, etc.
The above [speculative, but also insightful, imho] graphic indicates that the ‘strength’ of what comprises the
spigot is now weaker and more precarious than it was forty years ago. How long can we issue credit and rule
changes to keep growing the spigot, as energy gets more costlier to extract? What rule changes will there be
in the future to keep the energy spigot growing? What happens when it can no longer grow?
69

Tim Garrett – University of Utah
Renewable energy or no, the Amoeba is always hungry
The ratio of power to wealth has not changed in 50 years globally
Civilization can be modeled as similar to a simple heat engine. It can be shown that wealth
[time integral of GDP] has a constant requirement of 7 joules per thousand 2005 dollars. More
wealth needs more energy – renewable or not. This is perhaps why humans have generated
more CO2 emissions since 1989 than in all previous centuries.
70

The Human “Amoeba”
Individually, humans are people with dimension and complexity. In aggregate, humans are a nearly-
mindless heat engine which may be accurately described with simple formulae. [We might aspire to
more]. At the 1991 world agreement to reduce emissions to 1990 levels, atmospheric CO2 was
increasing at 0.5ppm per year. Now in 2017 it is 7x higher at 3.6ppm. In fact, about HALF of the energy
EVER used by our species in last 200,000 years has been used in the last 30 years. The Superorganism –
led by the invisible demand of ultrasocial billions - is hungry. The superorganism IS the invisible hand
described in economics.
‘Clean energy’ is not the simple answer to climate change. Because keeping everything else constant, it
will just contribute to a bigger heat engine. THIS IS THE CHALLENGE OF OUR ERA
71

‘nuff said. [Cape Canaveral, FL]
72

Some Prevalent Stories
Underpinning Modern
Human Cultures
"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." -
Mark Twain
Whether they are true or not, human beings have always lived as part of a story. We are now at a key
transition point for our species. The rules (and stories) we used as guides that got us from naked apes to
superspecies, now lead directly through the woods, over a rocky outcropping, and off a cliff. In order to
start telling new stories that shine light on the other path - the one that lead to happier places, we first
need to catalogue and assess the flawed stories society currently assumes to be ‘real’. Our upcoming
book notes 60 ‘flawed assumptions’ underpinning modern cultures – here are 15.
73

#1– Society Runs on Money
Our institutions and policies are based on the dual premise of money and growth. Future
analysis is largely of the type: money in: energy out. Common thinking is if we have enough
money we can solve most of our problems.
74

Energy and growth
Growth is 98+% correlated with addition of primary energy inputs, and the higher-quality energy the higher the
correlation. The above left shows GDP vs various energy types. One might say – how do we know its not the other
way around- that GDP creates more energy use? Think of this simple example – if you have a car factory and make
10,000 cars this year and want to make 10,100 next year, you will need extra energy at multiple steps of the process
to process the steel, move things around, clean the mess from extra materials etc.
The graph on the right shows how consistent, uninterrupted access to electricity strongly correlates with economic
output. Those countries with frequent intermittence of electricity access are far poorer.
75

Reality: Money is the map, energy is the territory.
Yes – the world does run on money as that is what greases the skids and pays the bills. But
money is only the map – energy – and non-renewable natural resources are the territory.
Money represents the surplus provided by our complex technology fueled by super inexpensive
fossil carbon. Our economies are: energy in: energy [and waste] out.
76

#2 - Labor and capital explain economic
growth, wealth and productivity
(as described in all economics textbooks used in all universities around the world)
There are various formulas in economics that explain how our ‘wealth’ comes about. A famous one is
the Cobb-Douglas formula, by which labor and capital and a productivity factor explain our economic
riches. Originally, the 19th century economists accurately recognized that land and land productivity
were the key parameters underpinning wealth. During a transitional phase, labor and capital were
introduced without recognition that ‘land productivity’ had gone vertical for the first time in history, due
to introducing millions of years of past biomass productivity. Modern economists missed the
importance of this, and currently in books around the world, macroeconomic analysis get reduced to
labor and capital, quite counter to the recognition of limits of nature recognized by early economists.
The predominant view: growth, wealth and productivity are solely products of labor and capital. [which
is really silly even if one doesn’t grok energy, for ‘capital’ can’t be defined physically. It’s all a mess.
77

…. energy is not just another commodity…
By now you know this is far from the truth. We need an energy input for EVERY good and
service produced in our economies. Without energy, or with too expensive of energy, the labor
and capital components become mostly irrelevant.
78

Energy does all the work needed to combine
other inputs and cannot be substituted other than
with other types of energy
79

REALITY: Labor and capital are variables both DEPENDENT on energy. (Cheap) energy
largely explains modern productivity and economic growth. In terms of productivity, $10
worth of gasoline is worth $1,000s in cupcakes, pencils or cheese.
80
Both labor and capital – the drivers of wealth and productivity according to economists
and taught in business schools, are dependent variables. Dependent on energy inputs.
Download pdf: The Underestimated Contribution of Energy to Economic Growth - Ayres

#3 : Debt doesn’t matter
Generally money is a claim on energy. Debt is a claim on future money, making it a claim on
future energy. Textbooks claim that debt is neutral to our economies – just an ‘intertemporal
exchange of consumption preferences’ between two parties. Again – macroeconomics is
wrong….and in the error lies systemic risk.
81

Adding debt to bring consumption forward in time has become a global habit. At over 300%
debt to GDP globally it’s much like a family making $100,000 per year, spending $120,000 per
year and owing over $300,000 in debt, and needing to borrow more each year in order to pay
their current bills. Very much like that.
82
Source: Institute for International Finance Apr, 2017

REALITY: GDP (output) per unit of debt is declining globally
Source: Fed, BLS, IIER
Debt doesn’t have to be a bad thing. If we borrow a million dollars to build a factory that makes
something people want, need and can afford – and still turn a profit, it was a good idea to
borrow the money to build that productive capacity. To be sustainable each new dollar of debt
must generate at least a full new dollar in income or a ratio of 1/1. But the USA is around 0.2
and all industrialized nations are well below 1. A debt productivity of 0.2 means in order to
grow our economy by 1 trillion next year, we would need to first BORROW 5 trillion. Our
modern economies can no longer grow without access to debt. Which means our economies
are somewhere between a game of musical chairs, and a Ponzi scheme.
83

# 4: The American Dream is based
on hard work and cleverness
84

REALITY: Americans have used more fossil slaves
than any other country
In the last decade, the last 50 years, the last 200 years, since the dawn of time, the USA has
used more fossil slaves than any other country on Earth. At ~250 human workers of coal oil and
natural gas PER American per year, that is quite some subsidy to our ‘way of life’ which some
say is non-negotiable. We led the world on the way up – could we lead the world on a
prosperous descent?
85

# 5: Joules, BTUs, etc. are all fungible and interchangeable
????
Baleen whales are adapted to eating small schooling prey like krill, and would not be able to
switch to eating, say, swordfish even if they were plentiful.
By the same token, our existing societies are adapted to run on oil.
86

>>
REALITY: Energy has different properties and costs.
Kinetic and potential energy. Energy density, power density, intermittence, variability, EROI,
carbon intensity, spatial distribution, portability, storability, practicality etc. are some of the
relevant categories on why ‘all joules are not equal’.
A common example is ethanol made from corn. Ethanol attracts water and destroys small
engines, only has ~70% of the energy content per gallon as gasoline, and is not really an energy
source but a conversion of soil, fertilizer, diesel (tractors), sunlight, water, and natural gas into a
liquid fuel at a very small energy gain. A gallon of corn ethanol contributes benefits to our
economies perhaps a hundredth what a gallon of gasoline does, or less.
87

# 6: Renewables can replace fossil fuels
Many assume we can seamlessly replace fossil fuels with low
carbon technology without much underlying change to our
consumption habits or social and political arrangements.
88

Perhaps one of the most important characteristics of an energy
source is how little [or much] energy is required to procure it
As Nafeez mentioned, each energy technology has an Energy Return on the Energy Invested into
it. All our sources can be aggregated into a ‘societal energy surplus’. The above conceptual
graphic shows energy returns in blue. If you subtract the energy costs in red, you get the life
cycle energy profit for a technology [or a system]. Today many new renewable energy techs
show promising energy returns, even higher than the equivalent fossil e.g. new coal plant would.
89

A.B.
But we have to remember that ALL of todays infrastructure and commerce exists because of the
vast energy surplus provided by coal, oil and natural gas of the last generation. The section ‘B’
above – the roads, the helicopters, the supply chains, the semi-trucks, the bridges and highway
infrastructure, etc. are all sunk costs created during an era of cheap abundant fossil fuels. This
support base allows for all of the new technology that is added incrementally to the system.
{Point 1 in the next slide]
90

1. New technology and renewable energy are possible due to existing societal energy surplus.
2. Fossil carbon underpins all mining, extraction, industrial processes needed for renewables. An oak
tree or a chicken is renewable. A solar panel is not ‘renewable’. It’s ‘rebuildable’
3. The problem of renewables is not the headline cost per kWh, but that they’re a bad match with the
demand-driven system our culture has built in last 50 years - A significant switch to renewables will
exaggerate the downward trajectory in economic output for advanced societies.
4. No combination of fossil and renewable energy will maintain economic growth for much longer given
our debt overhang. Renewable energy will face the same barriers in coming years as fossil energy and
many other sectors of society – a lack of funding.
5. If we can’t continue to grow, we have a date with a debt tsunami that will reduce size of economies
6. 1/3 or more of societal energy uses would have to be set aside if we dedicate energy to invest in new
energy.
7. Currently, scaling renewable energy is not replacing FF, but building a larger heat engine
8. ~80% or so of USA energy use (after conversions) is non-electric. Most renewables are electric
91
This is a really deep discussion with moving boundaries. We have really clever new RE tech,
batteries etc. are getting better and cheaper – but the issue that few acknowledge is: if ANY
energy combination – low carbon or no- cannot continue economic growth, we have large
physical haircuts coming in next 10-15 years, after which we’re going to need energy of all kinds
–solar panels, oil, natural gas, wind – everything. (hopefully not coal).

REALITY: Renewables CAN replace fossil fuels to power a human
civilization, just not THIS civilization
1. We can have a vibrant and meaningful society using mostly ‘renewable’ energy – a rough
guess would be 1/4-1/3 current size. A combo renewable/FF society might be 50% todays.
2. Residentially, we’ll have to do things when the wind blows and sun shines and not bake 2
turkeys at 3 am if we have a craving to, etc.
3. We’ll need to keep fossil carbon industry going to maintain high quality liquid fuels OR turn
the $100 trillion of built machines to electric – this won’t be affordable to masses.
4. Longer term, hydropower sites will be the place for heavy industrial activities globally, they
are the only places with sufficient steady baseload power to justify a factory
5. Solar will be the key driver of hot climate needs and mid-day peaks -Wind will provide the
rest. We’ll have excessive overcapacity in wind and solar, producing 3x times demand at
certain times, and less than 10% at others. It’s all a cost vs benefit issue.
6. We need to start now in either case. But with a systems view.
92

#7: Demand creates its own supply
A common myth in our energy and climate literature is that the physical energy supply of the
future is based on human DEMAND, not on any fundamental biophysical analysis.
“These adjustments to the USGS and MMS estimates are based on nontechnical considerations
that support domestic supply growth to the levels necessary to meet projected demand levels."
Energy Information Agency – Annual Energy Outlook 2009
93

Supply has to be procured using energy and stuff
Future energy supply has to be created not from demand, but from physical supply. Building
wind turbines, fracking oil and gas etc. And all of these fields, locations, costs in energy and
dollar terms all need to be considered. A new well in North Dakota requires ONE HUNDRED
train cars of sand, 1200 truckloads of water, etc.
94

Reality: Future energy supply will fall short of future energy demand. And
energy supply determines the supply of every other physical resource.
Oil at $20/barrel
~22,000 workers
Oil at $80/barrel
~6,000 workers
Moore’s Law states that the # of transistors in a square inch doubles every year due to technological
efficiency. In the micro sense, things get more efficient. But in a macro sense there is another force at
play. As the total cost to access primary energy increases: Big physical projects will get exponentially
harder to due to: increasing scarcity of mined energy carriers, decreasing quality of
mined energy carriers, increasing energy remoteness of usable large-scale material inputs and
unraveling complexity. Just like there is a big difference between net and gross income, there is an
important difference between gross and net energy that is mostly hidden from us. That cookie jar will
always be just out of reach.
95

#8 : Cost, price and value are the same. MC=MR
We tend to see the market price of something and assume that is close to its cost and close to
its value
96

REALITY: Cost is biophysical. Price is economic. Value is societal
COST PRICE VALUE
In the case of oil the cost to produce it is well above the price that consumers can afford. But
given what it does for us-for medicine, petrochemicals, lubrication etc. it is worth orders of
magnitude more than the current market price.
97

The above graphic is an idealized example to illustrate this point. On the left we have nearly a full endowment of a
resource, e.g. oil, but due to lack of money, or technology, or infrastructure, the extraction straw is still small, and the
market price is $80, implying scarcity through an economics lens. In the image on the right, it is 50 years later, and
the ‘size of the straw’ (consumer demand) is much larger because of larger infrastructure and equipment requiring
this commodity. But the last 10 years have seen an orgy of money/credit creation in order to pay for expensive
resource inputs and new complex piping and machinery to slurp up the hydrocarbon dregs faster. Because of this,
the world is awash in debt, and prices are deflating, because affordability is declining – people are poorer. In this
situation, oil is very cheap (to consumers). At $50 per barrel, there is no obvious economic signal of scarcity. And
there’s still plenty of oil coming out of the straw. No worries – energy independence must be on the horizon! But the
straw is now much closer to the bottom of the reservoir. At some point in the near future in this example, there will
be an ominous slurping sound – and prices will react sharply and chaotically at that time.
98

#9 : Our real cost of capital is declining
Given that we view the world in monetary terms, the ‘cost of capital’ is the [central bank
influenced’ market interest rate, which since the Great Recession has been very low – in fact
last year over 30% of global government bonds had NEGATIVE interest rates.
99

REALITY: Our real cost of capital is increasing!
Energy is the real driver of productivity and wealth – the cost to extract energy has been
trending up sharply the last twenty years. But we still make investment decisions based on the
interest rate, not the cost of energy extraction.
100

#10: Technology will offset resource depletion
“We wanted flying cars but we got 150 characters” –
Peter Thiel – billionaire venture capitalist
Figure: Internet could use 20% of total energy by 2030, (Alex Kirby, Climate
News Network, Aug 19,2016)
Much of our modern technology are ‘apps’ and devices that give us short term stimulation
rewards. Even things like Uber which are large time savers allow us to arrive at a destination 30
minutes earlier and we often spend that time checking Facebook and Twitter. What % of our
new inventions are just for brain-pleasing rewards? We tend to think we are headed for a Star
Trek future, but perhaps the Star Trek future is what we’re looking at now?
101

As long as human cultures maximize GDP, efficiency and better
tech will build a larger global heat engine.
Imagine a breakthrough technology. E.g. $20 air conditioners. Via the rebound effect, more
new people will buy air conditioners or upgrade old ones or buy several. The money they saved
on ‘cooling’ can now buy other gadgets, more trips, clothes, etc. There are now ‘more brain
services’ available to more people, but there is also a higher demand on that energy spigot of
the superorganism.
102

Human Labor
Replacement
New resource
Conversions
Resource/Energy
Efficiency
New
Energy
Tech
Technology can be broken into 4 types. 1) tech that applies energy to a process that humans
used to do manually, 2) new tech that didn’t exist pre-industrialization (e.g. Facebook), 3) new
tech allowing us to use existing resources more efficiently 4) new energy procuring/harvesting
tech.
103

Human Labor
Replacement
New resource
Conversions
Resource/Energy
Efficiency
New
Energy
Tech
Reality: In majority of cases new tech is just a vector
for more energy use
These technology types create a
larger demand for primary energy
The majority of technology falls in first 2 camps, and, with a market economy and 7 billion
trying to get more, ends up being a vector for MORE energy use not less. It’s true that e.g.
power plant efficiency or new solar or geothermal technology don’t contribute to this, but
those improvements are only at the margin. If energy prices triple, a 20% [which is large]
improvement in efficiency only reduces the cost to 240% of original. [100%300% followed by
20% savings= 240%].
**Note: under a different cultural aspiration than growing GDP (and associated limits),
technology and efficiency both become very important for environment.
104

“We have in our hands now… the technology to feed, clothe, and supply
energy to an ever-growing population for the next seven billion years…”
Julian Simon, famous economist
#11 : There are no limits to growth
This presentation has one overarching theme which is decidedly unpopular among almost all
demographics: The fact that there are limits to growth and that we are happening upon them
now. ALL of our institutions and policies are based on growth continuing at least through this
century. All of our programs for development to the global South include a theme that global
GDP will continue higher, raising living standards across the board. These assumptions are
increasingly divorced from reality.
105

Lowest quintiles of incomes in almost all OECD countries
have been hit by significantly declining incomes.
Source: Census.gov
The above graph is a common one in USA, Europe, Japan, etc. It shows how the bottom quintile
of wage earners fared since 2000. They have 12% less income after inflation. For them growth
ended over a decade ago. [it is interesting to note that 1999 marked the low price for oil, when
it cost only $10]. [[also, the high energy costs and increased complexity doesn’t crimp thing in a
quarter or a year but is like a series of body blows that occurred in many of the years of this
century, when oil has averaged being many multiples of its historical trend. For the top -no big
deal – for most people – costs went up way more than incomes.
106

Income development 2002-2014, U.S. census data (www.census.gov), graphic IIER
Reality: For 95% of people growth is already over
..yet all governments continue to plan for growth…
But it’s not just the bottom quintile. ALL sectors of US population EXCEPT the top 5% have less
after inflation income than they did in the year 2000. For most people (and these data are very
similar in Europe) ‘growth’ is a thing of the past. The above left graph explains why either
Bernie or Trump were likely to win the election. Most people are hurting relative to their past.
And yet no matter what happens to economy, new forward looking forecasts always resume the
2.5-3% growth into the future assumptions.
107

Global GDP from O A.D. Source Angus Maddisson, IIER calculations
Long Term Economic Growth 0-2000 C.E.
Long Term – Growth wasn’t the norm
~100-1000 C.E. no growth, and decline
~1350-1400 C.E. a sharp decline
All of modern economic theory was invented and articulated during the period contained in the
red box above. The early economists attempts to turn economic science into physics were
assisted by continued access to the one-time carbon pulse. But this energy flux underpinning
our society is not repeatable, and our institutions would be wise to develop some scenario
planning on ‘what if’ that blue line doesn’t continue skyward.
108

OECD-Long Term Baseline 2014
REALITY: There is no government or institutional
body with long term flat or negative growth forecasts
These assumptions continue well into the 21st century – as far out as models go. The OECD
assumes the world economy, in real terms, will be over 3 times larger than it is today by 2050.
[Of course they do this in monetary terms without reference to the underlying copper, oil, steel,
water, trees, plastics, Prozac, etc. required]
109

#12. Climate models paint plausible fossil fuel
and economic scenarios
Our ‘money in, energy out’ delusion carries over into climate modeling as well..
110

From IPCC Ar5 WG3 Chapter 6
http://www.ipcc.ch/pdf/assessment-report/ar5/wg3/ipcc_wg3_ar5_chapter6.pdf
The extension of the 20th century trends into the 21st century, using a ‘money is the map’ lens
goes to some silly extremes. The cost of air travel in the IPCC models doesn’t change for the
next 80 years because humans are getting so rich, their time becomes so valuable they can’t
afford slower travel modes like walking and bus. So then everyone chooses to fly, leading to 8x
more per-capita flying by 2100, powered by Coal-to-liquids. [the amount of coal required and
cost of conversion would be prohibitive today to make it non-economic. It’s possible we could
improve on the CTL technology but to get 200 million barrels a day of oil via coal is fantasy land]
111

RCP scenarios are economically implausible. But..
The designers of the RCP’s started with targets for radiative forcings and then created economic
scenarios that would produce them. These scenarios are completely divorced from biophysical (and
economic) reality. [even though its plainly stated in the literature, the climate change research
community hates drawing attention to this fact because it might acknowledge there are serious issues
with the approach, and make people think climate and OA are not both dire and urgent. This does
NOT mean we aren’t at catastrophic risk from impacting the biosphere – it DOES mean that most of
the Armageddon climate scenarios focused on 2100 are based on faulty economic assumptions.
(though looking past the arbitrary 2100 boundary to inevitable longer-term earth-system CO2 effects,
there is still plenty to worry about).
112

Reality: The economic inputs to climate models are delusional.
Fossil fuels will quit before we fire them. But will that suffice?
THE CARBON PULSE
From a longer term perspective, we are somewhere between the 2 red stars in the carbon pulse. From the
perspective of climate change we hope we are near the top star – from the perspective of the economy, we
hope we are nearer the lower star. In any case, from the perspective of the civilization’s metabolism, fossil
fuels will leave us (ie. deeper and more complex extraction won’t be at costs that allow continued economic
growth) before we ‘leave them’ [read: voting to not access energy services]. However, even as
decarbonization is beginning, the amount of CO2 in the atmosphere continues to accelerate upwards despite
global efforts -2015-6 were unprecedented increases. The open question is: to save oceans and climate, will
this decline happen fast enough and will it be supported by enough renewable tech for stable societies?
Bottom line: the economic inputs to climate models are way too aggressive and the natural science inputs
are [probably] way too conservative. What to do?
113

# 13 : What’s happening is someones fault
We naturally blame other demographics for our problems and stresses, as this
focuses our response (and has historically galvanized/unified our social groups
towards action). Uniting and defending our tribe [and its views and rights] is one of
the STRONGEST human traits. We blame the rich [or the poor], the Republicans, the
Chinese, the Muslims, the tree-huggers etc. for our problems. It’s true there are
assholes of all stripes in the world. But there are also lots of good people – in all
these demographics.
114

REALITY: What’s happening is largely because fossil slaves are asking for pay raises
Simply put, no one is to blame for our general ecological predicament, though we are all
complicit. The larger theme is that, in effect, our fossil slaves have been getting pay raises
these past 20 years, and this will continue. The monetary and fiscal response to this has
had externalities of greater wealth inequity and lots of poor people barely getting by. Our
institutions and aspirations aren’t set up for that. To make matters worse, science has
made it very clear that our fossil slaves, while they don’t complain or sleep, do poop and
breathe. On that count we want to fire them immediately but doing so –despite being
nigh impossible - has pretty large implications for our social arrangements. And so we
blame…
115

# 14: Absolute wealth is more important than
Relative wealth
Jones
Jones
In interest of time, I’ve left out some key ‘stories’ that you would all agree with me on. Many of these point
to monkey traps where ‘escaping’ offers a lot of low-hanging fruit for behavior and culture change that allows
for significantly less energy use.
One of these is our tendency to focus on RELATIVE sensations as opposed to absolute. Neuroscientist Colin
Camerer points out that as individuals we are highly attuned to changes in stimuli rather than the absolute
levels. This is true when we are just experiencing everyday things. But it is especially true when we compare
what we have and what we experience to others. Most people would e.g. rather have a 3000 square foot
house with all their neighbors houses being 2000 s.f. than have a 4000 s.f. house if all their neighbors lived in
6000 s.f. houses. We, living in this supernormal stimuli smorgasbord of a culture, overly focus on the 10-15%
we are ‘behind’ our neighbors rather than the 5000% we are ahead of our ancestors [and likely our
descendants]. It’s perceived relative status that is core driver of our ecological predicament.
116

Reality: After physical needs are met, happiness is
only loosely correlated with money/energy
Hagens, based on Inglehart 2006
This is good news for resource/throughput based future scenarios. It’s important to recall that
Americans use 90x more energy than our bodies need. Indeed we use 38x the energy as the
average Filipino yet by subjective well-being studies have the same % of ‘very happy’ people
[this is due to fact that most Filipinos are poor, but so are their neighbors]. You’ve all seen the
declining psychological returns to ‘more’ graphs. Once someone’s basic needs are met, there is
very little incremental happiness to more money/stuff. [I can attest to this managing money for
billionaires and watching the clerks making $25k per year joking and laughing as they processed
the trades/ as well as in my own life]. Sooner or later pro-social, pro-future people will arrive at
the essential question of our time: what is all this energy FOR?
117

For my own part I make a fraction of what I did twenty years ago, and have very little money
saved. However I ‘get paid’ in things other than dollars – I get paid knowing that I’m working on
things of true meaning and not frivolity or pecuniary fluff. I get paid by the smiles and nods of
understanding from my students, etc. The only time I feel ‘like a loser’ is when my former Wall St
buddies come to visit, bragging about this or that purchase or trip to Africa or things I could not
remotely afford to do today. But as soon as they are gone, and I again surround myself with
students, farmers and friends working on these challenges, I feel both normal and very happy.
There is a silver lining here that we don’t need all this stuff to be happy and live lives of meaning.
118

Given these prevalent societal stories,
what might be some central blindspots
underpinning modern Philanthropy?
The philanthropic community, like all other parts of society, tends to pick up a lot of
unexamined assumptions from the consensus view.
As we’ve noted, many of these are clearly wrong when seen through a biophysical lens. That
has implications for both its working assumptions about probable future scenarios, and the
projects which might be most productive to focus on to achieve desirable humanitarian and
environmental outcomes.
119

Blindspot?: We assume information gets passed upward to a wise group of
men and women who integrate it all to make the best decisions for society.
I.e. there’s an aggregate intelligence in our governments and institutions
that’s wise and knows what’s going on.
120

How our brains think
about the ability to parse
complex issues
We personally experience qualities of consciousness, consideration, and thought. That causes
us to mistakenly attribute these same single-mind qualities to groups of people. Moreover, our
deep “feelings” are those of a tribal hunter-gatherer, with confidence that passing information
to the tribe will result in the best possible decision-making.
As such we naturally feel that an individual human is on a spectrum of ‘ability to comprehend
the big picture’ midway between a simple blood cell and a world population of ~8 billion
headed by governments, institutions etc.
121

LOW
HIGH
LOW
VERY
HIGH
LOW
LOW
A single human cell
A kidney
A person
A small group of colleagues
A nation of humans
A world of 8 billion
The “Ability to Parse and
Understand Complexity”
Spectrum
The reality is quite different. A full-on human can deal with more complex propositions than a
kidney cell could. That is, the ability to parse complexity goes up at the higher level of
organization because evolution required it. Conversely, past tribe size, groups of humans tend
to get dumber in many ways as the size goes up, and at the scale of billions we cannot grasp
complex situations and function akin to an amoeba. The exceptions are, of course, reductionist
pursuits like quarterly earnings, GDP etc. But this doesn’t work for non-reductionist situations
like achieving world peace or protecting the environment. Evolution made the sweet spot of
dealing with complex propositions between individuals and small groups.
122

The Reality: Thinking doesn’t happen outside individual brains. There
is no one driving the bus
We thus tend to assume that more facts and better information will naturally result in better policies on
the large scale. But complexity doesn’t get passed up the status hierarchy. As the scale of human groups
get larger, the propositions which can be meaningfully considered are progressively simplified. Even
those few of the worlds billionaires and politicians who grasp what is going on are powerless to stop
it/explain it. Which is why a] social and physical safety nets need to be built ahead of time and b] new
methods of activism/steering that take the Superorganism into account are necessary. The main point
here: individuals and small groups have far more power than they ‘feel’ they do to influence events.
Philanthropy section of society represents one of the only soils fertile enough for such initiatives. It’s
what societal surplus SHOULD be directed towards. Paying good forward. With speed and intelligent
foresight.
123

Blindspot?: The Energy
regime that enabled surplus
to create foundations and
fueled their continued growth
and income will continue
There’s a tendency to consider money rather than energy. But money is only “real” in the short
run and is a loose proxy for future energy (and thus raw materials) which society assumes must
exist due to human “demand” for that energy.
124

Our annual “interest” derives from a civilization
with more energy and raw materials each year.
That will reverse itself. There is thus a finite time
to turn the 1’s and 0’s in bank hard drives into
impact investments or results which will survive
the bottlenecks. SPEND DOWN should be an
active and robust topic.
Pension funds were constructed assuming a 7% long-term return on investment – this is
extremely unlikely to continue and is going to cause all sorts of chaos in coming decades. Already
there are severe shortfalls and this with SP500 near all-time highs and with global credit
mechanism still mostly functional.
Viewing the world from a biophysical lens gives significantly different conclusions about the future
of finance and surplus. Philanthropists peering through this lens might arrive at fresh, if radical,
ideas on how to use assets to impact change, while the money era narratives still dominate.
125

1) I want to be re-elected. More social
status/access for me
2) I have no answers for the real questions
3) I don’t even want to acknowledge the
problems at hand
4) I don’t want to admit that I have no idea
5) I will do what I think keeps me in power
Blindspot?: Leadership and change will come from the top
In times of stress there are large risks to electing leaders who say what people want
to hear, rather than stating the facts and making things better.
126

REALITY: Modern culture, markets and democracy implicitly votes for
more access to low entropy goodies. Leaders will mostly respond to
crises going forward. Leadership and steering will come from ‘below’.
Populist causes will tend to directly or indirectly demand maximized access to energy
and resources, and this powers the superorganism’s low-entropy-seeking tropisms.
Foundations tend to ‘respond to events’. It’s possible a riskier project profile, using
intelligent foresight looking 2-3 steps ahead will provide outsized results.
127

Blindspot: We assume more science and facts will improve our situation
Science and facts are great, and we should continue taking them seriously. However, we’ve had
more than enough to act since at least the early 1970’s, and half the energy burned by our
species since the dawn of time has been consumed since 1989.
128

REALITY: The Enlightenment Model has Failed so
far other than local issues.
We are evolved to ‘feel like” passing information to other members of our tribe will – in and of
itself – somehow result in optimal fairness and the best outcomes. This was generally true
during most of human history, but at this point it represents a disconnect from reality.
Despite this, some version of “enlightenment” is still pursued by many as though it constitutes a
mechanism for directed change on large scales. However, our problem isn’t an information
deficit, it’s the way humans think, individually and en masse.
We tend to treat human behavior as we wish it existed rather than as it does.
129

Blindspot: Activism is working
130

Like all inter-animal communications, we commonly use scientific warnings for
cementing group identity and for elevating one’s own status, rather than actually
accomplishing environmental and social goals. There exists considerable unconscious
emphasis on what “feels right”, evolved heuristics and tribal acceptability.
Does this actually serve the foundations’ goals? [What things might I say today, which
even if they were true would automatically cause you to reject everything else I said?]
We assume modern activism is successful because we tend to gauge it by relatively-increased
social visibility rather than its actual effects. Often it’s organized around goals which have no
practical effect if achieved, but “feel like” victories. Most social-issue progress has been
enabled by the ever-increasing total societal wealth of the last 250 years. The level of
“distributive fairness” has actually gone down, but absolute wealth increase has obscured that.
In terms of the natural world (6th mass extinction, climate change, acidification), the sum total
of any ameliorating effect from activism is not only invisible, but we’re still losing ground. By
that bottom-line real-world criterion, Social activism has for the most part failed.
131

Blindspot: We accurately parse scientific propositions
We generally don’t choose between physical realities, we choose between simplistic narrative
representations of physical realities.
132

We use social sorting mechanisms to solve physical world problems
>
Things we hear from other people “shout louder” than science or logic. Most people, lacking the
ability to distinguish between complex propositions, sort them by their conformance to the beliefs
of their peer group. If a new proposition is encountered, we ask “who said this, who believes it, who
wants ME to believe it, and how would it affect me to believe it” rather than “what is the scientific
case for this?” Even rational propositions in society advance primarily via non-rational support.
And even those who understand the science have a hard time adhering to it, because the neocortex
of the brain has no direct line to the motivating deep-brain circuits. It simply feels more important to
conform to the social signals of one’s ingroup.
133

Blindspot: Increased fairness is the primary goal.
Fairness is a wonderful thing: I believe that as well as feel it. I think fairness should be a main humanitarian priority.
But since we’re not capuchin monkeys, we aren’t limited to considerations of immediate fairness, but can and should also
consider real fairness. For instance, it could “seem fair” for a farming village to convert its seed grain into beer, as long as it
was distributed equally. But this would assure starvation the following year, which is arguably unfair to everyone, including
the future generations which wouldn’t exist.
This is perhaps the most sensitive issue: nearly everything groups of people aspire to is couched in terms of increasing
fairness for those humans now alive, even if logically it has little to do with fairness.
For instance, the remaining oil and high-quality ores are the “seed grain” of desirable human futures, and can be wasted or
can ease the transition to a sustainable world. Currently we are, in effect, turning it into beer because it “feels fair” to do so,
even if it desperately impoverishes future generations.
We might wish to consider “maximized fairness” rather than immediate distributional and process fairness. Yet our outraged
social feelings are much the same as those which cause Capuchins to scream.
134

Americans ~2016
When we think of fairness – which is pretty much constantly – it’s about those who are our
ingroup contemporaries. Yet that’s a pretty small group to be “fair” to, in the scheme of things.
135

Top 5%
As noted, only the top 5% of Americans are still experiencing “growth” in the form of increasing
wealth. That can feel pretty unfair.
136

All 7.5 billion Humans
~2017
Americans
However, Americans are a small mega-wealthy minority compared to all humans now alive. It
would be good to try being fair to them too.
This can’t be done by raising their level of wealth to that of the current American lifestyle; there
simply isn’t enough affordable oil and ores left to do so, even if the environmental costs were
not prohibitive.
137

Humans alive today
Likely to be born next
few centuries
But even all the humans alive today are a small (and, on average, wealthy) minority compared
with the people still likely to be born.
138

Humans alive today
Likely to be born
Contingent human lives
A Trillion?
And that says nothing of the people who should be allowed to live. Without the massive pollution and
exponential biomass bubble of the carbon pulse, there would have been nothing standing in the way
of a future with trillions of human lives lived on a healthy planet. These peoples’ existence sounds like
science fiction to us; we give it no thought. Yet based on the human success prior to fossil-fueled
industry and the average lifespan of mammal species, trillions of human childhoods should have been
in the cards. Perhaps they still could be. But they exist in one of our blind spots.
THIS is what the stakes are, and where considerations of humanitarian fairness might be most
reasonably applied, but are not.
139

Humans alive today
Likely to be born
Our biological
cousins?
And humanitarian fairness is not, at least in principle, the only kind we might pursue. Imagine
the size of the pyramid if other conscious species were included, whose existence is also
contingent upon what we do this century.
140

Humans alive today
Likely to be born
Our biological
cousins?
Our brains perception of “Us vs Them” is drastically different than the environment we evolved in
It might be good to be at least a “little bit fair” to all these others, even though we have no
evolved impulse to do so. Because every human today is part of the .1%.
141

Fairness is important, but a focus on immediate fairness of process and
distribution might blind us to paths that are far more fair for human lives overall
Boundaries?
It’s at least conceptually possible for us to learn to be happy to share. Indeed, it might provide a
deep meaning which is largely absent in careers and society today.
And the Philanthropic community is one of the few players who might affect this...
142

I left this slide out in Boston as I didn’t have the courage to show it. (My courage w a dachshund on
my lap in front of a fire, returned)
In environmental, and new economy circles (and elsewhere), there are a large % of people working on
how a new more sustainable economy that includes externalities and ecosystem services
costs/benefits, more wealth equality, less pesticides etc. might look like. All this criticism and analysis
is creative and positive. But of all the millions of things our society needs, this ‘blueprint’ that might
be adopted after a crisis/revolution/reset hits is but one. It might even be the most important one,
but given human behavior, financial/economic backdrop, there is no actual mechanism for making the
‘wished for’ changes manifest. We can –and should -use science and governance and systems theory
to outline what a better system looks like – but this should be maybe 5-10% of the efforts/funds, as
there are so many other things that need to be done that aren’t.
143

The philanthropic community has incorporated the ubiquitous societal “optimism
bias” into its consensus worldview, adhering to visions of the future consonant
with the same neoclassical economists and narrow-boundary analysts it critiques.
This leaves us planning for futures unlike those which will actually unfold.
So there’s a problem. The philanthropic community, while questioning some assumptions of society,
has adopted many others. This has led to a situation in which it is basing its decisions on many of the
same flawed assumptions which are leading current societies toward abrupt discontinuity.
This is not inevitable. The philanthropic community is benignly-motivated and highly educated and
could, potentially, learn to see into our consensus blind spots to help navigate humanity, and the
natural world, though the resource, energy, and cultural bottlenecks of the mid-21st century.
If so, this process will start with un-learning a number of things and learning to see a bit more of the
reality which is hiding in plain sight.
144

For most of history humans appropriated primary capital from nature, turning it into useful
things as secondary capital and then having some sort of monetary marker – gold, beads,
wampum, etc - that acted as a lubricant for commerce. Groups of people self-organized to
maximize this surplus, usually tethered to physical output like grain.
146

In this crazy age, we no longer seek to maximize grain or any physical surplus but rather ‘surplus
value’ in the form of stocks, bonds, commodities, etc. The dead sea creatures and swamp plants
from hundreds of millions of years ago have allowed a very misshapen, enormous, modern
human trophic pyramid. We’ve used ~1/2 of the high quality ores and energies, increasingly
moved (in USA) towards services instead of manufacturing, and built at outsized FIRE (Finance,
insurance, real estate) triangle at the top.
The “carrying capacity” of sustainable energy and material flows is dwarfed by the scale of
energy and material usage at the all-time peak of human industrial output.
147

Natural resource extraction needs ever-higher prices to continue. Populations of people expect
lower prices. We have papered over this problem with a flawed monetary system which draws down
our finite resources ever-faster to simulate “growth”. We are living quite a bit beyond our means.
148

Fossil ‘magic’ increasingly went more towards
productivity than to wages
Chart: Emmanuel Saez, published in Forbes.
Technology has provided us with wonders. But one dark side of tech is that it increasingly is
cheaper for owners of capital to hire robots than people. Most of our wealth comes from the
energy slaves doing 90% of the work. But rather than splitting the wealth from their efforts
more or less equally to members of society, it flows to those who claim that work as their own.
Thus, the owners of a company get the benefits of burning more fossils, while employees may
get a pink slip. This mechanism for wealth transfer is mostly invisible to us.
149

Increasing substitution of human labor for mechanical
(under current trends) will impoverish higher % of humans
We are likely to see more wealth inequality, not less, while trends continue. John Maynard Keynes
said almost 100 years ago that in 100 years we would work 10 hour work weeks because we’d be so
rich. Well we are, but we don’t. GDP has been used as an ad-hoc measure for distributing fossil
carbon largesse, with “jobs” as its mechanism. If we add the fact that robots are increasingly putting
humans out of work, I expect we’ll start to have very different conversations about the difference
between ‘jobs’ and ‘work’. Conversations about ‘universal basic income’ and the like will become
more common.
150

The changing of our labor force has been pretty significant. For the first time in history of USA
there are more bartenders and waitresses than manufacturing employees and these are both
dwarfed by government employees. The labor participation rate for 25-54 year old males is at
lowest of last 50 years and is lower than most of OECD. 63% of Americans don’t have enough
savings to cover a $500 unexpected bill. All these statistics explain why either Bernie Sanders or
Donald Trump would be our president –because relative to past decades people are hurting,
and they don’t understand why, so blame it on politicians/parties.
151

THE COMING ACCORDION BETWEEN OIL AND MONEY
When the cost of the marginal barrel of oil is higher than the market price, this creates the conditions for
super-volatility. We will undershoot as credit/affordability declines, which will crimp investment in drilling
and infrastructure spending which will set stage for next price spike. This will [plausibly] result in higher highs
and lower lows in prices until/when the credit mechanism runs into a wall. It is a safe assumption that energy
costs – and therefore prices will generally trend higher for the rest of this century temporarily offset by fiscal
dislocations. Another blindspot.
152

The highly energy intensive stuff/activities is going to
become prohibitive for most places/people
The medium and long term implications for this are stark: those technologies and processes which
replaced what humans used to do manually by using the highest number of “fossil slaves”, will
start to become less profitable, and eventually unprofitable, as total energy costs rise. High energy
intensive activities like aluminum smelting, airtravel, cement, chemicals etc will take a hit. New
intermediate and lower tech processes will become necessary with higher-cost energy inputs.
Counter to convention, this will tend to be bad news for robots and good news for manual labor.
153

The Chessboard of the Foundation Future - Nate Hagens

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