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I read through the comments expecting the typical HN takedown of the whole bogus idea that energy must become cheaper as a fraction of the economy in order for

I read through the comments expecting the typical HN takedown of the whole bogus idea that energy must become cheaper as a fraction of the economy in order for it to keep growing. But surprisingly, nobody more economically literate than me has done so, so I guess it falls on me. We already have experience with an economic input which is required for practically all production becoming less important to the economy as efficiency increases, it's called labor. And as efficiency of labor usage increases, the price of labor goes up, not down, see Baumol's Cost Disease. So no, the fact that the price of energy will go up with gdp does not mean the growth is "illusory", and the fact that an "extremely prestigious" econ professor did not point this out is a bit fishy.

jbay808 7y ago
I'm not sure this is quite a takedown of the author's point. In fact, I'm surprised at how many people on HN seem to be misunderstanding this. The author is saying that physics puts a fairly solid cap on the amount of power we can produce on earth. That's the basic point. What does a finite energy-consuming, exponentially growing economy look like? If we accept that all economic transactions consume some energy, and the economy is growing (so the number or the value of economic transactions is increasing), then once we've hit our physical constraint on power generation, how does growth continue? Only if the energy required per unit of transaction-value continually decreases. So the price of energy must continue to drop, measured by the relative to the value it provides. The author then points out that this is a contradiction because the price of energy would have to rise, and therefore that the problem is in the assumption of continuing exponential growth.
- cinquemb 7y ago
  >then once we've hit our physical constraint on power generation Are we supposed to accept this? Because I do not. I think the way that we allocate resources towards energy collection/generation/consumption is a bigger constraint than what physics can currently allow.
  - stouset 7y ago
    This is covered in an earlier post of his. At current growth rates, we’ll start noticeably heating the Earth in only a few hundred years. Not from the greenhouse effect, but from literally saturating the Earth’s capacity to radiate excess energy as heat into space. This is a raw physical limitation. How we use and how we generate the energy are irrelevant details. The only thing that matters is Earth’s ambient temperature, the additional wattage being used planetwide, and the Earth’s radius. Past a certain point, Earth’s equilibrium temperature will rise well past current levels, and rapidly.
    - cinquemb 7y ago
      > How we use and how we generate the energy are irrelevant details. Just as irrelevant as assuming the basis behind current growth rates where it is impossible to mitigate agaisnt "literally saturating the Earth’s capacity to radiate excess energy as heat into space". All of this is based on assumptions. You can't just accept one set of assumptions that underlie a model and throw out others that could refute it (well one could, but it isn't intellectually honest).
      - mnl 7y ago
        That's the great thing about thermodynamics, you can determine bounds for a few magnitudes in a physical system ignoring all the details about its evolution. For instance you can't disrupt the 2nd law, so at some point it's actually true that it is impossible to mitigate overheating and you won't be able to improve Stefan-Boltzmann law (except for increasing our emissivity, at night I'd guess). You can try to play with mass transfer but more thermal escape is not a good idea and a heat exchanger with extraterrestrial masses won't work. I know it's hard to take and that physicists sound arrogant when they do this, but that's how it is.
        cinquemb 7y ago
        "Wavelength- and subwavelength-scale particles,[1] metamaterials,[2] and other nanostructures are not subject to ray-optical limits and may be designed to exceed the Stefan–Boltzmann law."
- scatters 7y ago
  The price of energy and the energy intensity of an economy are not the same thing. This is because the price of energy is the cost at the margin: the cost of producing one additional unit of energy. Since a rational economy exploits cheap sources of energy first, this price is necessarily no less than the cost of production of each unit of energy actually consumed. So there is no contradiction.
- paraschopra 7y ago
  One of the points that the author misses this post (but addresses in other places) actually the cost of dealing with waste and entropy. Even if energy becomes incredibly cheap, there's a certain cost to dealing with waste that for now we haven't baked into economic models (because we could simply throw it away). If energy usage, no matter how cheap, keeps on growing, waste will also keep on growing.
- jeremysalwen 7y ago
  Again, we already have experience with a finite labor-consuming exponentially growing economy looks like. I don't know how this comment is a rebuttal, since it doesn't address any of the points I made. Especially since it repeats a line of reasoning, whose premises clearly apply to labor, but whose conclusions are clearly incorrect in the case of labor. "So the price of energy must continue to drop" simply does not logically entail from the preceding premises.

jbay808 7y ago

I'm not sure this is quite a takedown of the author's point. In fact, I'm surprised at how many people on HN seem to be misunderstanding this. The author is saying that physics puts a fairly solid cap on the amount of power we can produce on earth. That's the basic point. What does a finite energy-consuming, exponentially growing economy look like? If we accept that all economic transactions consume some energy, and the economy is growing (so the number or the value of economic transactions is increasing), then once we've hit our physical constraint on power generation, how does growth continue? Only if the energy required per unit of transaction-value continually decreases. So the price of energy must continue to drop, measured by the relative to the value it provides. The author then points out that this is a contradiction because the price of energy would have to rise, and therefore that the problem is in the assumption of continuing exponential growth.

cinquemb 7y ago
>then once we've hit our physical constraint on power generation Are we supposed to accept this? Because I do not. I think the way that we allocate resources towards energy collection/generation/consumption is a bigger constraint than what physics can currently allow.
- stouset 7y ago
  This is covered in an earlier post of his. At current growth rates, we’ll start noticeably heating the Earth in only a few hundred years. Not from the greenhouse effect, but from literally saturating the Earth’s capacity to radiate excess energy as heat into space. This is a raw physical limitation. How we use and how we generate the energy are irrelevant details. The only thing that matters is Earth’s ambient temperature, the additional wattage being used planetwide, and the Earth’s radius. Past a certain point, Earth’s equilibrium temperature will rise well past current levels, and rapidly.
  - cinquemb 7y ago
    > How we use and how we generate the energy are irrelevant details. Just as irrelevant as assuming the basis behind current growth rates where it is impossible to mitigate agaisnt "literally saturating the Earth’s capacity to radiate excess energy as heat into space". All of this is based on assumptions. You can't just accept one set of assumptions that underlie a model and throw out others that could refute it (well one could, but it isn't intellectually honest).
    - mnl 7y ago
      That's the great thing about thermodynamics, you can determine bounds for a few magnitudes in a physical system ignoring all the details about its evolution. For instance you can't disrupt the 2nd law, so at some point it's actually true that it is impossible to mitigate overheating and you won't be able to improve Stefan-Boltzmann law (except for increasing our emissivity, at night I'd guess). You can try to play with mass transfer but more thermal escape is not a good idea and a heat exchanger with extraterrestrial masses won't work. I know it's hard to take and that physicists sound arrogant when they do this, but that's how it is.
      - cinquemb 7y ago
        "Wavelength- and subwavelength-scale particles,[1] metamaterials,[2] and other nanostructures are not subject to ray-optical limits and may be designed to exceed the Stefan–Boltzmann law."
scatters 7y ago
The price of energy and the energy intensity of an economy are not the same thing. This is because the price of energy is the cost at the margin: the cost of producing one additional unit of energy. Since a rational economy exploits cheap sources of energy first, this price is necessarily no less than the cost of production of each unit of energy actually consumed. So there is no contradiction.
paraschopra 7y ago
One of the points that the author misses this post (but addresses in other places) actually the cost of dealing with waste and entropy. Even if energy becomes incredibly cheap, there's a certain cost to dealing with waste that for now we haven't baked into economic models (because we could simply throw it away). If energy usage, no matter how cheap, keeps on growing, waste will also keep on growing.
jeremysalwen 7y ago
Again, we already have experience with a finite labor-consuming exponentially growing economy looks like. I don't know how this comment is a rebuttal, since it doesn't address any of the points I made. Especially since it repeats a line of reasoning, whose premises clearly apply to labor, but whose conclusions are clearly incorrect in the case of labor. "So the price of energy must continue to drop" simply does not logically entail from the preceding premises.