[kublikhan]

$this->bbcode_second_pass_quote('', 'T')HE energy required to produce a unit of GDP is falling in most countries around the world. As countries industrialise, energy-intensive businesses make up a bigger share of the economy. Peaks generally correlate to the high point of heavy industry, before lighter industry and higher value-added businesses (such as services) begin to replace old-fashioned smokestack manufacturers. This often coincides with gains in energy efficiency, too. According to BP’s "Energy Outlook 2030", globalisation will lead to a similar level of "energy intensity" across the globe by 2030, despite wild divergence in the past, as energy is traded freely and consumption trends and technologies spread.

[Pops]

I'll say right off the bat that I think the GDP number is not just bogus but rigged.

I don't know where the numbers came from but I think this chart speaks volumes:



But looking at the chart you posted Kub, I think it is telling that the curves bend in sync with the explosion in digital financial markets.

We hear all the falderall about "service" economies but every one of those automated, computerized trades, hedges, RE tranch transfers is chalked up as 'economic activity' just the same as when the neighbor kid (or a tornado) breaks out a window necessitating replacement or someone buys a house at a short sale or Borders sells all it's books at a loss.


Link

[kublikhan]

I don't think all of the decline in energy intensity is because of cooked books. I think there is a real trend that has been going on for decades where we can produce more economic output for less energy input. Some of the gain comes from shifting to less energy intensive industries. Some comes from efficiency improvements. For example, AC seer ratings have gone up, houses are better insulated then they used to be, cars are more fuel efficient, some nations have invested in nice mass transit systems, etc.

Also, if you look at the second article, it mentions how fluctuations in energy consumption does not mirror fluctuations in GDP exactly. Of course energy consumption has an effect on GDP, but energy consumption is more volatile than GDP is, both on the up swings and the down swings. I remember some posters awhile back saying the decline in energy will match the decline in GDP 1-1. That does not seem to be the case.

[Keith_McClary]

$this->bbcode_second_pass_quote('', 'T')HE energy required to produce a unit of GDP is falling in most countries around the world. As countries industrialise, energy-intensive businesses make up a bigger share of the economy. Peaks generally correlate to the high point of heavy industry, before lighter industry and higher value-added businesses (such as services) begin to replace old-fashioned smokestack manufacturers. This often coincides with gains in energy efficiency, too. According to BP’s "Energy Outlook 2030", globalisation will lead to a similar level of "energy intensity" across the globe by 2030

[kublikhan]

BP is saying all countries are seeing their energy intensity drop, including developing countries. Check out the graph in my very first link. China went from about 1.2 tonnes of oil equivalent per unit of GDP in 1960 to about .2 tonnes today, or about 1/6th as much. The world average did not drop nearly as significantly. It went from something like .25 tonnes in 1970 to about .15 tonnes today.

[The Practician]

Maybe when the world economy isn't Imploding due to a massive and unpayable debt overhang, I will have time to listen to these sorts of fairy tales. As far as I know, gov't debt counts towards GDP. I am fairly certain asset price bubbles do as well.

You may be able to decouple energy intensity and GDP, But I have my doubts that you can separate it from a relatively smoothly functioning industrial society.

[Pops]

$this->bbcode_second_pass_quote('kublikhan', 'I') don't think all of the decline in energy intensity is because of cooked books.

[The Practician]

$this->bbcode_second_pass_quote('Pops', '
')
OTOH, if I simply look at actual use per person in the US and forget about using GDP as a measure of anything (since it measures everything so effectively measures nothing ) I'm left with the impression that we are not becoming more efficient at all, in fact our transport is less efficient and our housing is just treading water.

[kublikhan]

Energy Intensity is not a measure of per capita energy consumption. It is units of energy per unit of GDP. But even using per capita energy consumption, even that went down. We are using less energy per capita today than we did in 1978. We got more efficient, but per capita energy consumption is down. Jevons was wrong. Also, GDP has been skyrocketing while energy use per capita is down:

Long-term real growth in US GDP per capita 1871-2009

[The Practician]

$this->bbcode_second_pass_quote('kublikhan', 'E')nergy Intensity is not a measure of per capita energy consumption. It is units of energy per unit of GDP. But even using per capita energy consumption, even that went down. We are using less energy per capita today than we did in 1978. We got more efficient, but per capita energy consumption is down. Jevons was wrong. Also, GDP has been skyrocketing while energy use per capita is down:

Long-term real growth in US GDP per capita 1871-2009

[Keith_McClary]

$this->bbcode_second_pass_quote('kublikhan', 'B')P is saying all countries are seeing their energy intensity drop, including developing countries. Check out the graph in my very first link. China went from about 1.2 tonnes of oil equivalent per unit of GDP in 1960 to about .2 tonnes today, or about 1/6th as much. The world average did not drop nearly as significantly. It went from something like .25 tonnes in 1970 to about .15 tonnes today.

[kublikhan]

Some have complained that GDP is too all encompassing. Others that we don't know how much of that fall in energy intensity came from efficiency improvements vs other factors. So I got figures that break down the energy intensity per sector and how much came from efficiency improvements.

Negative values indicate falling intensity(less energy use), positive values indicate rising intensity(more energy use):
$this->bbcode_second_pass_quote('', ' ')
Highlights Summary of Intensity Changes - Total Energy 1985-2004
Simple E/GDP Ratio: -27%
Economy-wide Energy Intensity Index: -10%
Transportation: -14%
Industrial: -19%
Residential Buildings: -9%
Commercial Buildings: +12%

While this is an impressive record of achievement, the simple E/GDP ratio measure of energy intensity overstates the extent to which energy efficiency improvements have occurred in the economy, because factors that affect intensity that are unrelated to the efficiency of energy use are included in the ratio. As indicated in Figure 1, between 1985 and 2004, energy intensity, based on total energy and as measured by our newly developed index fell by 10%, considerably less than the simple E/GDP ratio would indicate. This 10% change over this 19-year period corresponds to an average annual percentage reduction in energy intensity of 0.56% per year. Other explanatory factors unrelated to efficiency improvements contributed to a decline in energy use of 17% between 1985 and 2004.

Issues Related to Other Explanatory Factors. Although the system of indicators tracks energy intensity over time, it also identifies and isolates other changes that are going on in the economy that have no bearing on the efficiency with which energy is used. These changes are referred to as structural changes. These structural elements give rise to a change in energy use per unit measure of output, but do not reflect improvements in the underlying efficiency of energy use. For example, the electronics industry may grow much faster than the steel industry over time, and since electronics are substantially less energy intensive than steel, this growth creates the impression that the manufacturing sector is less energy intensive than before.

[Pops]

$this->bbcode_second_pass_quote('kublikhan', 'E')nergy Intensity is not a measure of per capita energy consumption. It is units of energy per unit of GDP. But even using per capita energy consumption, even that went down.

[The Practician]

$this->bbcode_second_pass_quote('kublikhan', 'S')ome have complained that GDP is too all encompassing. Others that we don't know how much of that fall in energy intensity came from efficiency improvements vs other factors. So I got figures that break down the energy intensity per sector and how much came from efficiency improvements.

Negative values indicate falling intensity(less energy use), positive values indicate rising intensity(more energy use):
$this->bbcode_second_pass_quote('', ' ')
Highlights Summary of Intensity Changes - Total Energy 1985-2004
Simple E/GDP Ratio: -27%
Economy-wide Energy Intensity Index: -10%
Transportation: -14%
Industrial: -19%
Residential Buildings: -9%
Commercial Buildings: +12%

While this is an impressive record of achievement, the simple E/GDP ratio measure of energy intensity overstates the extent to which energy efficiency improvements have occurred in the economy, because factors that affect intensity that are unrelated to the efficiency of energy use are included in the ratio. As indicated in Figure 1, between 1985 and 2004, energy intensity, based on total energy and as measured by our newly developed index fell by 10%, considerably less than the simple E/GDP ratio would indicate. This 10% change over this 19-year period corresponds to an average annual percentage reduction in energy intensity of 0.56% per year. Other explanatory factors unrelated to efficiency improvements contributed to a decline in energy use of 17% between 1985 and 2004.

Issues Related to Other Explanatory Factors. Although the system of indicators tracks energy intensity over time, it also identifies and isolates other changes that are going on in the economy that have no bearing on the efficiency with which energy is used. These changes are referred to as structural changes. These structural elements give rise to a change in energy use per unit measure of output, but do not reflect improvements in the underlying efficiency of energy use. For example, the electronics industry may grow much faster than the steel industry over time, and since electronics are substantially less energy intensive than steel, this growth creates the impression that the manufacturing sector is less energy intensive than before.

[kublikhan]

$this->bbcode_second_pass_quote('Pops', 'T')he fact remains each American used 8 tons (+/- .5 ton) of oil equivalent energy per year those last 30 years.

Do we have more stuff? Sure.
Do we use less energy? Not really.

We used the energy savings to make more stuff to get those pesky landfills completed, if that's improved energy intensity then OK. Jeavons could have been Sam Waltons patron saint:
Pay less, Buy More! WalMart! I'm being a bit contrary, of course we've learned how to be more efficient and that makes things cheaper. On the macro level and as far as conservation and PO go it doesn't matter since we just turned around and wasted the proceeds on beanbag chairs and exurban commutes.

[Plantagenet]

$this->bbcode_second_pass_quote('kublikhan', 's')teady state capitalism is a farce

[Pops]

$this->bbcode_second_pass_quote('kublikhan', 'I')'m afraid Pops you seems to be stuck in an economic quandary. On the one hand you want to keep our capitalist system, at least the basics. On the other hand, you want to dispatch this senseless drive to turn energy and resources into landfills.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('kublikhan', '
')To summarize this data, energy intensity in the US dropped 27% between 1985 and 2004. Efficiency improvements were responsible for roughly 1/3rd of that drop. The other 2/3rds came from other factors, such as a larger share of manufacturing coming from low energy electronics instead of high energy steel.

[Pops]

$this->bbcode_second_pass_quote('kublikhan', 'C')apitalism cannot function in a steady state, it needs growth to survive. This was discussed in the Crisis of Capitalism thread.

I'm afraid Pops you seems to be stuck in an economic quandary. On the one hand you want to keep our capitalist system, at least the basics. On the other hand, you want to dispatch this senseless drive to turn energy and resources into landfills. I'm afraid you can't have it both ways. The 2 go hand in hand.

This is a good paper on the subject of why steady state capitalism is a farce:
Beyond growth or beyond capitalism?

[kublikhan]

$this->bbcode_second_pass_quote('Pops', 'T')hat's a good article Kub but it leaves out one thing and of course that's energy and more to the point, peak energy.

All the economic philosophers since the industrial revolution have taken for granted that energy growth will continue forever the article merely overlays the idea that no growth would be a choice. You and I both agree that we won't have the luxury of making a choice, growth will stop when the oil slaves are gone.