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I doubt the economist agreed with this - or maybe there'd been a little too much alcohol consumed: "then GDP continues to grow while energy remains at a fixed
by kbutler 9y ago
I doubt the economist agreed with this - or maybe there'd been a little too much alcohol consumed:
"then GDP continues to grow while energy remains at a fixed scale. This means that energy—a physically-constrained resource, mind—must become arbitrarily cheap as GDP continues to grow and leave energy in the dust.
Economist: Yes, I think energy plays a diminishing role in the economy and becomes too cheap to worry about."
This inaccurately conflates two concepts - decoupling economic growth from energy (we see this in computing, as you carry an 80s supercomputer in your pocket) and the cost of fixed resources in a growing economy.
A necessary, fixed resource increases in cost as GDP increases. That is, if there are only 100 works by van Gogh, and the available cash goes for $100 to $100,000,000, people will be willing to pay more $ for the fixed set of van Gogh works.
The cost of the fixed resource depends on the economic efficiency of that resource, and may go up or down as a percentage of GDP. Limits to energy efficiency hypothesized in the article would suggest that energy costs would go UP as a percentage of GDP (and inescapable energy demands would thus form the limit of economic growth).