Energy Transition & the Luxury Economy

That’s the best! It starts with an earthquake
Birds and snakes, airplane
and Lenny Bruce is not afraid.”

REM, It’s The End Of The World As We Know It

Yesterday I spent a good part of my day listening to and reading Simon Michaux, who I now consider to be one of the most important thinkers in our world. I really cannot exaggerate its importance. He should be a household name. Before yesterday, I had only the faintest familiarity with the man and his ideas. But now it’s as if I’ve crossed a bridge and see the world in a new light. That new light is characterized by something as close to certainty as I can have about anything. One is almost never 100% sure of anything. It’s good to keep an open mind. But sometimes some things are very, very close to certain. That is the light in which I now see the popular narrative about the energy transition. That narrative is simple false. Not just a little fake, but it is dramatically false That is, not only the capitalist industrial civilization – as we know it – will not continue in a similar form as that now, using only renewable energy sources, but it cannot continue at all. It’s basically over. He is running on fumes. The days are numbered, and those days are few. Much less than most people imagine. Much less than we are ready for, or are still preparing for.

I was already on the point of this near absolute certainty, and I’ve been on that point for years, but then Richard Heinberg recently came out and said that the energy costs of the energy transition were such that necessarily there is “pulse” of fossil energy consumption, and associated greenhouse gas emissions, associated with massive building of ‘renewable energy’ infrastructure and devices. If I understand correctly what Heinberg is saying here, he is saying that for a considerable number of years, as the world builds this ‘renewable’ energy infrastructure, the result will almost certainly be add, rather than a reduction, in greenhouse gas emissions—rendering an ‘energy transition’ completely contradictory to its stated main purpose. After all, as people like Kevin Anderson have been saying for years, emissions reductions have to start nownot ten years from now or longer.

What Richard Heinberg didn’t mention in that article is that theoretically it is plausible that all such renewable energy infrastructure can be extracted, smelted, manufactured, transported and installed without increasing greenhouse gas emissions if humanity has had to dramatically reduce energy consumption quite quickly in many every another sector of the economy. But we are really the kind of people who would give up cars, global mass tourism and the luxury-based and luxury-dependent mode of economy for the sole purpose of replacing the infrastructure of -fossil fuels with renewable energy infrastructure? I mean, we really are going to put this mass building of renewable infrastructure as our own on priority as culture and civilization—to the point of making giant sacrifices in other energy sectors?

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But there is still another deeply related question. And this is what Simon Michaux answered. The question is… It is even possible to replace enough of the world’s fossil energy with renewable energies to maintain a capitalist-industrial technological economy like the one that surrounds most of the world? In a nutshell, Michaux says no. Not possible — certainly not in a time frame that counts. He says we simply do not have an adequate supply of the metals and minerals needed to do this. And he makes a very strong case for it, with ample documentation.

We can manufacture some of that infrastructure and some of those devices (eg, electric cars, solar panels, wind turbines…)? Yes, but they will not exist in a quantity enabling a technological civilization as we know it to continue. Period. Full stop.

So what does this mean, then?

Speaking for myself, this means it is the beginning of the end of the world as we know it — in almost every aspect. There cannot be an easy and smooth transition of our energy systems. Which means it is the beginning of the end of the economy as we know it.

The popular version of the “energy transition” has been a story of maintaining an economic, technological and socio-political regime with only a few relatively minor adjustments, rather than a dramatic transformation. That story simply does not stand up to scrutiny. Nor, therefore, the concept of “climate action” and climate politics that pervade activist circles today. All this requires not some minor adjustment, but a rather dramatic overhaul (and transformation) at its core.

Two key facts, and closely related to each other, emerge in the light of both the Heinberg Pulse and the Michaux Monkeywrench1. These are:

  1. Energy decline (and thus economic decline, measured in GDP/GWP) is inevitable in the near term.
  2. We are living in the last days of what I call “the luxury economy”.

If you click on the words “energy descent” above, you will be brought to a Wikipedia article on that subject. The energy landing is there defined as “a process by which a society either voluntarily or involuntarily reduces its total energy consumption.” My argument is that we are alreadyinevitably, enter descent energy on the basis of both voluntary and involuntary processes—, even if global net energy consumption temporarily continues to increase. That is, the increase in global net energy consumption has peaked, and we are only just discovering that this is so. Continued global net energy use will begin to decline measurably in a lot near future, whether we like it or not. (But we are partially choice who begins this process voluntarily … even though involuntary processes compel him regardless of our choice. So here is a bit of a paradox, since we seem to have neither measuredly nor voluntarily started the energy descent or inadvertently. Think of it as discovering a big hole in the hull of the ship we’re on. The ship has not yet begun to sink. But the gouge is there, however. Heinberg’s ‘pulse’ and Michaux’s monkey wrench are serving as a light on the situation we are in. The ship called Normal will no longer float. It’s coming down. And pretty soon “the (popular) narrative” will also change, and we will no longer pretend otherwise. But right now we are at the point of this knowledge as a civilization. The narrative needs to change, because it does false.

What is the “luxury economy”?

I define a luxury economy as an economic way of access to livelihood which depends on luxury goods and services in order to avoid economic and social collapse.

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I can think of no better way to convey this concept of luxury economy than to start with this graph.

In 1840, roughly 70% of Americans worked in agriculture. In 2020, only 1.3% of Americans were working in agriculture. Agriculture, as a means of livelihood, is the epitome of economic activity based on needs (economic sector). People have to eat, after all. But technological ‘advances’ in agriculture (mostly in the form of farm machinery) have enabled a dramatic change in the labor intensity of agriculture, and this graph mainly tells a story of the replacement of practical human work with machine work – or dramatic. increase in “units of productivity” per hour of human labor. As human labor became less and less necessary for food production, and as technological ‘developments’ had a similar impact on most other sectors of economic activity based on necessities, luxury-based and luxury-dependent forms of economic activity allowed displaced workers access to livelihoods by providing. jobs in the production and distribution of goods and services that would have been considered luxuries in 1840 — or 1900, or 1940. Historically, the US economy has become increasingly dependent on non-essential economic activity in a downward trend that resembles the same process that occurred in agriculture, making the US one of the leaders in dependence on “luxury economy” simply to provide access to livelihood among its citizens.

Modern luxury economies are machine-centric, and rely heavily on exosomatic energy. Needs-based economies are simpler and use proportionally more endosomatic energy. Endosomatic energy is the energy you use to swing a hammer or spin a bicycle. Exosomatic energy is the energy used by your car engine or your farm tractor. The future economy will use proportionally more endosomatic energy.

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Of course, people differ dramatically in what they consider “essentials” and what they consider “luxuries”. In my opinion, if I were pressed to provide an example of energy- and material-intensive luxury, I would have to include cars quite high on my list, even if some people’s lives would be dramatically disrupted if they were forced to live without a car. Another prime example of luxury goods and services would be jet travel. And these two items are among the biggest factors in fossil fuel consumption and greenhouse gas emissions. Living without cars can be challenging, but it doesn’t result in starvation or abject misery in most cases. And, importantly, we can rearrange things so that life without a car is much, much easier.

The future of our economies, everywhere in the “developed world” (aka, the global north, the rich world) will and must become much less dependent on the supply of luxury goods and services—and especially those luxury goods and services that are energy intensive, whether or not they use fossil fuels directly.

The transition to a smaller, slower and energy-efficient economy will be much smoother and more enjoyable if we make this transformation deliberately, intelligently and voluntarily. If we expect to be forced to do this by unavoidable—but unavoidable—circumstances, it will be an unimaginable catastrophe.

Unfortunately, governments are unlikely to lead the way by adopting policies that enact and enable voluntary energy (and economic) descent. Indeed, they seem unlikely to adopt such policies—for now. Probably, we will have to start acting as communities, outside of the governments, to imagine and carry out this transformation before the governments. This will require a paradigm shift in politics — a shift from state politics to the politics of local communities acting largely outside of government. Only then, I suspect, will governments begin to consider taking this journey with us. But we shouldn’t depend on it, I think. As I often say, a leopard is unlikely to change its spots.

Let us lead as free people, regardless. To be free, one must first be able to imagine freedom.

1 The Heinberg Pulse is the energy cost of the ‘energy transition’ — which recognizes that greenhouse gases must add in the near future to build a renewable energy infrastructure in the near future—, if the popular image of ‘energy transition’ is adopted.

the Michaux Monkeywrench it is the monkey wrench thrown into the theoretical gears of the “energy transition” when we recognize that the world cannot possibly provide enough rare and rare-ish metals and minerals to allow the popular vision of an “energy transition” to proceed.

Teaser photo credit: By Usien – Own work, CC BY-SA 3.0,


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