Is energy the true currency?: Degrowth

The date we went into debt

In 2022, Earth Overshoot Day fell on July 28. That is the date humanity consumed more biological resources than the planet regenerates in a year. Everything after July 28 was deficit spending — drawdown of soil, fisheries, forests, and atmospheric capacity. The energy economists want a better energy source. The market traditionalists want to price the externalities. We wonder whether either camp has considered that the problem is the growth.

Nicholas Georgescu-Roegen, the Romanian-born economist who brought thermodynamics into economic theory, said it in 1971: the second law of thermodynamics applies to economic processes. Every transformation increases entropy. More growth means more transformations. More transformations means a planet progressively less hospitable to the life on it. The energy economists know the physics and believe clean energy solves it. We believe it solves the carbon problem while leaving the throughput problem intact. Consider lithium. Mining it requires 500,000 gallons of water per ton. The Atacama Desert holds the world’s second-largest reserves and is one of the driest places on earth. The carbon math improves. The water math does not.

Costa Rica has higher life expectancy than the United States, literacy above 97 percent, and one-fifth the ecological footprint. The market traditionalists say Costa Rica is poorer. By what measure? At what cost? Global material extraction tripled since 1970. It cannot triple again. Both other camps are drawing plans for a warehouse that does not exist.

Where we concede ground: We cannot ask the Global South to accept austerity imposed by the North that burned its way to wealth.

What would change our mind: A major economy sustaining 3% GDP growth for twenty years while cutting total material throughput 30%, with honest import accounting.

Read the full synthesis: Is energy the true currency?