jesse --
I'll extend the argument you're advancing: we recapitalize the financial system by monetizing the value of risk-adjusted intellectual property.
IP has value when it can move from idea to actualizable. For instance, the principles of internal combustion were known for centuries; only when materials science was able to manufacture large amounts of material which allowed the manufacture of internal combustion engines was the modern industrial age able to begin.
the IP behind alternative and clean energy technology still remains largely the purview of American-based researchers and inventors. While we've underfunded education and basic research in basic science and engineering related to alternative and clean energy for decades, investment now will lead to significant returns in the middle to long term (10 - 100 years).
That being said, the transition will be painful, and two years from now I anticipate that my life, and those of all around me, will be much different than it is now.
what we need to do right now (besides moving towards a green econamay...tahts a no brainer.) is set up the eyes we need to watch the rullign calss...they WILL try and put in artifcial caps..their power dose not come from them haveign an abundance, their power coems from the rest of us beign beneath them.if we are no longer beholden to them....well they jsut can't have that.
they will happly send us into a new dark age if it means their dreams of a return to the fudal system woudl eb fufilled.
ABUNDANT GREEN ENERGY IS A NEW ECONOMIC BASIS FOR MONEY.
BUY A WOOD BURNING STOVE!!!
THE NATURE OF MONEY IS BROKEN.
PUT ALL YOUR MONEY IN GOLD!!!
Repeat ad infinitum.
Half of this post is making out some pretty sharp shadows on the cave walls. The other half is pure lizard brain thinking.
The wood stove, hoard food & gold reaction is essentially the Drill Baby Drill, crash deleveraging, get the money and run policies that McCain/Palin are proposing. Smart in the very short term for individuals who are on the ground floor and the right position. Utter disaster for everybody mid-to-long term. Not gonna work outside rural areas, and approaching the eat your seed corn ideas.
Things are gonna be rough, but unless we work collectively thing are going to be catastrophic.
"Renewable Energy" is the tip of the iceberg, for the big change.
One of the crucial points you are missing is that free energy shifts the means of production from big oil to a dispersed collection of individuals and collectives. Utilities will be closer to brokers than suppliers....
SteveK --
1. I wrote that nine months ago. I put it up now to point out I predicted this crash back when. And have posts going back over a year calling what would happen very damn precisely.
2. Plan for success. Of COURSE I believe in planning for success. I have a number of plans both well thought out and in development to take advantage of what it happening now.
But you damn well better have a GOTH plan. If you don't, you're either naive, or have never truly been in the shit.
*laughs*
Nothing wrong with being prepared to survive. I recommend it. Do I expect to use it? No. I've never treated a patient for a major car accident who expected to be lying there upside down, bleeding to death, either. That is why they're called accidents.
Plan for success. Be prepared for failure. And always have a GOTH plan. *grins*
3. I didn't miss the last point at all. I asked y'all to think and comment.
I've been thinking about this for a while. I have enough to write or lecture on this for DAYS. In fact, I was just giving a mini-lecture a few minutes ago. On on how this all relates to the future of the Utility business. *laughs*
Anyway, I'm not putting up what I think; letting it stay open for people to comment.
I appreciate hearing your thoughts.
... But that's just the tip of the Iceberg.
We are not going to be driving around bio-diesel SUVs to our McMansions heated by FREE ENERGY! We're going to be living in smaller places, taking mass transit, and have less "stuff".
The core of the next economy is making less things and energy more worthwhile. I'm not talking diminished expectations, I'm talking making things smarter, more versatile, and more efficient, and providing novelty that does not consume resources.
Think about your cell phone. While it is nominally the same "thing" as a Western Electric dial phone, it is almost indistinguishable form it as well. In most likelihood it's a camera, videocam, possibly a TV, a stereo and a computer. Think about a studio apartment where everything is that way. Very smart, and efficient, well insulated, well soundproofed, less food but better tasting, few bookshelves but innumerable books and videos. When you buy something, you'll recycle to thing it replaces completely. In some regards the metric will be "less, better stuff".
Now the economy will be tricky, designs and concepts will be copied in hours. The amount of IP won't matter, the rate of production and reliability will.
Providing the basis for this will drive the economy more than energy.
This is what I'm talking about:
http://www.huffingtonpost.com/
20...t_n_133495.html
But the tipping point is when Brad wants to live in one as well.
(I doubt that will happen with Bradgenlena but it will happen w/ Warren Buffet who lives modestly, and more importantly the "next Warren Buffet" will assume that this is the natural order of things, that's why he'll be the "next Warren Buffet".)
i'm looking at things as they all go to hell, deeper and far more quickly than even the most dour of the economists predicted. . .
fuck it. i know how to be poor. i was brought up that way.
not looking forward to it at all, but, i know that it's doable.
Jesse -
I think you are about 5-7 years optimistic in your belief that we'll be off foreign oil; I think it'll be 15-20 years instead of ten. In my mind, scalability just isn't quite there yet - give it 5 more years, then a decade of massive build-out (assuming we can find the capital to do it), and a few years of stabilization after that.
But, I have read your articles; I have read Stirling's and Ian's; and hae been reading Roubini's, Barry, and Bonddad for a couple of years, and I, like you, yanked all my shit earlier this year, and as a matter of fact, even closed out my savings account and keep it home in the safe - not in gold, but hard cash, as I'm seeing some deflationary effects that make me believe cash may be king here for awhile.
Hard times are just about upon us, I wish it would've waited out the year as I still had a few measures I wanted to put into place, but que sera, sera.
Now, to start a better exercise regime so that I don't balloon up over the winter (but I've got a good dog to keep me active), and to spend some time thinking about replacing my (entire) lawn next spring with a garden rather than the 20% I have now.
Most of all, Jesse, I like your sense of optimism. Reading your posts make me feel that even if it's the end of the world as we know it, we can still all feel fine (thanks, REM). I know that greatly boosts me psychologically, and I hope it does for others as well.
Cheers!
sweaterman...personaly i think jesses numbers are right on...you will eb amazed at what we can do if we don't ahvea fuckign choice.
the only question is can we get big busniess out of the way of inovation.
I am frequently a few years early on the really big stuff, just so folks know.
Better to be slightly early, than too late. *smiles* Too late, and the face-eater has you for dinner, see...
SteveK --
There's a bigger challenge in changeing people's expectation, values, and behaviours than there is in building a new energy infrastructure. If you're old enough, some of the work was started during the 1970s. The evil reaction of the Reagan Revolution still sticks in my craw. Americans were quite certain and vehement that they were not going to give up "the American Dream" (however false and artificial it might be) quietly. Remember, the geopolitics of energy have not changed much at all since the 1970s. And while the effects of the use of fossil fuel was not as pronounced in 1978 as it is in 2008, I was using simulation software that considered the effects of C02 as a greenhouse gas in high school. The call to action isn't any different now: it's just more urgent.
Unless one is very careful with regard to changing values, we could end up with something much, much worse than the Reagan Revolution this time. Attach Barbie Palin and her Rethuglican pals are the tip of the iceberg of the population who would react negatively to the adoption of "green" values.
I still agree with Jesse's basic premise: we have a real opportunity here, and we can make positive change, for both America and the global community.
Most of the reasoning is spot on, I think, including that the nature of money and what it's based on is broken and has to change.
Though I strongly disagree with one major point, which is "free green energy".
Because there's no such a thing, and there won't be for a very long time.
Mankind already eats up the majority of the daily energy input Earth gets from the sun. What this tells us is that we'll have to massively reduce our total energy consumption before things get better. And there's serious reason to fear that the coming wars will mostly be fought to reduce the current energy demand - though it won't be said this way and their actors will mostly be unaware it's what their wars really are about (in other words, there are very real causes to worry the next wars will end up leaving a sizable part of mankind turned into soil fertilizer, or just ashen remains of past societies).
Having green free energy will take decades, though we might nearly be there when this century comes to a close. (though of course, truly free energy we won't have, or not before even way longer)
Jesse is, of course, not the only one here who's been harping on this stuff (here and elsewhere) since Day One and before.
But the sad case is that there are too few people in power on our own side who get it. Tuesday, I was part of a 14-person symposium convened by CAF in DC to address some of these very subjects. The group included some of the smartest people I've ever met. Half of them are names you'd recognize instantly.
And I found myself, toward the end of the day, having to explain this very idea -- that we have to create an entirely new basis for money -- to them. Most of them had a hard time grasping the idea that for a century, every penny of wealth America has came out of the ground as coal or oil. That energy has been the basis of our entire economy. Everything else was built on our ability to turn that resource into Stuff.
The conversation goes on via e-mail, and some of them still don't get it. I'd be feeling damned depressed by the whole experience -- except that during that same trip to DC, I went to at least three other meetings where people did seem to get it, and are organizing around it. There's a lot of energy there, and we will not be caught flat-footed when the next phase of the crisis hits.
We've got a long way to go. The most important thing we need to be doing right now is over-writing the failed conservative economic story with a new progressive one that talks about the common good, and the government's essential role in creating wealth, and how we can build a whole new economy on new sources of energy.
I want to add a rebuttal to Clueless Joe. We don't eat 100% of the solar energy that hits this planet, or anything like it. As long as growing food and building houses in certain ways were the only ways nature allowed us to capture solar energy, our ability to convert sunlight into energy was limited by the amount of arable land on the planet -- a number that is shrinking precipitously even as our population grows.
But the vast majority of the earth's surface is not arable. The sunlight that hits the Mojave Desert or the mid-Atlantic waters is wasted as far as its usefulness to humans is concerned. But now that we're learning how to capture and use that, we can greatly expand that resource.
I don't know where all this talk of "free energy" comes from, either. There will be massive capital costs upfront (as there were with dams and old-style plants); and maintenance, operation, and distribution costs. Still, I guess it will be "free" in the sense that we won't be beholden to the Arabs or the Chinese for the blood that keeps our economy going -- which makes it free in the imperial sense, if not an economic one.
Needless to say, I agree with everything Sara said.
My only comment is on Free v. non-free Energy.
I point out that while I do use the words in one place use the word "free" before energy in my post, what I said first was "ABUNDANT GREEN ENERGY IS A NEW ECONOMIC BASIS FOR MONEY."
Later I talked of "free energy from the sun, and unlimited free energy" but what I'm speaking of here assumes sunk capital costs. Indeed in the example I gave of the ten year old with the solar cells and the windmill in their backyard, making enough power to cover their basic cost of living and selling the excess back into the grid, all this assumes they:
a) have a roof over their head,
b) have medical care,
c) there is a grid,
d) there is an economic system which values energy as the primary source of value,
e) inexpensive and efficient solar and wind systems are available and legal regulations encourage them for homes, and so on.
My point is that just as with computing and telecommunications, the initial capital costs will likely be HUGE. However as solar, wind, and hydro become part of people's daily lives, the cost per watt of producing energy is likely to drop enormously.
I can buy unlimited long-distance service on a cell phone throughout the United States for under $100 per month today. It was possible a few years ago if you knew where to look. Five years from now the cost will be $20. Ten years from now people will have the equivalent of at least a T1, and more likely a T3 coming to their homes, for the same $20, throughout the United States including the rural areas. Unlimited phone service of course will come with the unlimited Internet service over the massive broadband which connects us all.
This is a function of Moore's law. In precisely the same way, we are assured massive improvements in effectiveness in our energy systems. Ten years from now the average home will be easily able to power all of its needs off-grid, OR, the utility company will be able to supply power through the grid for a fraction of the cost at which it does so now using these new modern tools.
I agree with the ideas - but I have a tough time seeing how they're going to happen, & not just short-term either.
Governments are now doing what they can to "fix" that "broken" money, which will remove the immediate need to replace it with "clean" money - & the impulse will remain even if their initial efforts fail. I think industry will indeed convert - from "sweet" to "sour" oil as the former runs out. That is the easy way out (at least in the short-term, which is the time-scale the corporate culture operates in). Pricier "sour" oil means more profit for the usual suspects, whereas conversion deprives them of an energy-monopoly that's been, to put it mildly, quite good to them for a very long time.
Oil is getting cheaper by the day right now. The capital for this grand project simply doesn't exist any more - it's all the capital that's been wiped out in the 2008 Crash-Dive. In hard times, what little funds remain tend to get focused on the bare necessities; the sort of conversion plan you're putting forward here would be exponentially larger than the cost of the wars in Afghanistan & Iraq combined (& those aren't going away any time soon, I fear).
Clean energy has been held back for decades now - & it simply isn't able to sustain heavy industry, nor will it in the next 20 years.
I do not share your optimism. Vested interests in petroleum have a near-monopoly on the political & economic centres, & they can make much more money riding an increasingly scarce oil supply down than they can converting to power that can't be metered. Nor do consumers have the spare funds to pay for all the materiel & labor needed for a conversion to "green" energy - or for that matter the will to do so.
It's not that I disagree, it's that I can't see any way to get where we want to be from here: the public will is absent, & so is the money.
This idea would've been a lot more viable circa 1985 than circa 2009.
I look at it from the POV of what we really CAN do now, not what we really OUGHT to do. Tell me why I'm dead wrong, & you'll make me a happy camper.
It's true that the world is running low on money even faster than it's running out of oil at the moment. But there are several places we can go.
The first is the oil companies themselves. We can levy taxes -- ad valorum taxes, consumption taxes, higher sales taxes, well-enforced corporate taxes, whatever -- on the production, sale, and consumption of oil. As long as it's our main remaining generator of wealth, we need to redirect as much of that wealth as possible to finance the transition process.
The second is the existing rich. It's not that the remaining money doesn't exist; it's that a very small percentage of the population holds an obscene proportion of it. So we tax the shit out of them, too, and use that as a revenue stream for rebuilding the country.
The third is a straight-out carbon tax, which is another way of turning carbon into gold for the purposes of the changeover.
And then there's good old Keynesianism, which is making a powerful resurgence. There aren't many people left to borrow it from; but there are always the grandkids, who won't have a future worth living in unless we get with the program and find a way to do this now. This worked to finance WWII, and it'll work again.
It can be done -- but our first step is to stop throwing money by the trillions at people who already have too much of it. And our second is to reclaim the idea of the common good, and the revolutionary idea that it's worth taxing people to achieve it.
I think my greatest concern is with respect to our world's use of petroleum- and natural gas-based fertilizer used for nitrogen-fixing of crops.
We produce a lot more food and fiber than we would naturally otherwise, and, as playing with commodity prices to raise the cost of foodstuffs and making a resulting higher profit than usual becomes untenable for the foreseeable future, the next market to be dandied with will eventually be the means to provide adequate levels of nitrogen-fixing to produce the rate of crops desired.
It's only when we find an adequate to superior model here that we'll finally break the back of our petroleum-based economy.
Does anyone know of an alternative to the commonly-used Haber process that can get us close to the amount of fertilizer necessary to keep so much of our world fed?
If so, please say so here, and soon, so I can at least get a good night's sleep.
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