There’s been a long debate and mystery caused by economic accounting for the world’s energy use not being able to trace the trade in economic energy services, the amount of China’s energy embedded in our TV’s and the amount of of France’s energy embedded in Soviet block heavy industry… etc.
A country’s Share of the World’s GDP per Share of World Energy, measures
“Relative Economic Energy Dependence” ‘NEED’
a strong indicator of how much of its economy is fed by off-shore, mostly ‘fossil’, energy services, most oftennot being counted in national energy accounts. Countries do have different energy productivities, but World competition actively selects competitive energy uses wherever they are found. So like waves on a pond… the national accounts vary in relation to each other, and the global accounts are smooth and reflect the gradual changes of the system as a whole.
We see in Figure A strong diverging trends in GDP and Energy use for OECD and Non-OECD groups, along with converging steady trends for the ratio Energy/$GDP, over the past 40 years.
As the less developed remain smaller, but grow faster, the more developed are giving them development space.
The Energy/$GDP (intensity) is continuing it’s long historic path of quite steadily decline, NOT diverging, showing how smoothly the interlocked productivities of the world economy “level the playing field” for energy services, delivered to where they are most valued..
Figure B shows the NEED of the major 8 World Sectors shows much more variation, and you can see some of he fitting shapes that cause the total to be a straight line.
The US & Canada are close to the 1/1 average, but steadily rising
The EU, Japan and Australia are ~1.5/1 rather dependent on Off-Shore energy services, lacking abundant sources.
So the ridh “Energy Poor” economies need to purchase more and more of their energy in the form of energy services from their neighbors, as “how economies work”.
It causes a likely mistaken impression the EU is more “sustainable”, greatly outperforming the US & Canada.
National Energy Accounts don’t trace trade in energy services, only trade in energy materials, needing a “Shares of GDP” proxy measure as here to find it.
The National Energy Accounts are not set up to trace trade in energy services, only in materials, requiring a “Shares of GDP” proxy measure to find it.
It shows a very good reason why we all need to learn, as in Scope-4 impact accounting for the World SDG, the use of GDP as a proxy measure of average economic energy use, and also why it works so well. The “global economy” and it’s highly competitive use of world information on the most profitable uses of energy. It makes energy use a universal “currency” naturally, as a useful measure of GDP for many purposes, and the use of GDP as a proxy for energy use and environmental “externalities” resulting from our obtaining and using energy to alter the earth for our purposes.
Gamma ray bursts are the most high energy events commonly observed in the universe, associated with the formation of “black holes”, and creating very high energy x-rays. NASA provides good introductory information with a nice animation. Satellite instruments easily record the time and intensity of these events but can only rarely connect them a location. So they’re one of the more mysterious of cosmic events, also common and occurring a few a week.
The 1998 gamma ray burst study was of the data from NASA you see in the figure below, called “BATSE Trigger #551”, using the 6494 points recording gamma rays in Energy Levels 3 & 4, chosen for being less noisy. The object is to reveal the detailed shape of any underlying continuous processes involved, as seen in the second figure. To date, it seems, gamma ray bursts like this are only understood as statistical events, like “bursts of noise”, instead of as dynamic events with continuous processes .
You can see below the clear dynamics of the first of the three major burst events in the record, consisting of a sudden rise without evident developmental processes, followed by an abrupt shift to declining by a regular “S” curve progression, of the decline first speeding up and then slowing down. That connection of two highly differing dynamics is something like the “bursting of a bubble”, with the breach of the containment and the release of the pressure having very differing dynamics. That analogy may not apply to black holes, of course, but understanding two different dynamics is likely important to understanding what is physically occurring.
The other highly noticeable shape exposed is an apparently fairly regular 3 millisecond fluctuation in the cosmic gamma ray background. As to whether is a feature of the data or of the analysis, one can see it is bothquite regular and irregular enough. The regularized curves are shown in six colors, each one representing the same derivative regularization applied to a different subset containing concurrent 1/6th’s of the whole data. The vertical lines mark minima for every fluctuation in each of the regularized subsets. Continue reading Gamma Ray Bursts – dynamics reconstructed→
A “telling” image… connecting dots: the distribution of US household CO2 footprints, by income level from Weber and Mathews 2008
The average Co2 intensity is shown as ~1.0 kg CO2/$1 of income (the scales go to 100 tonne/yr CO2 and $100,000/yr income). That’s about twice the world average CO2 intensity, which was closer to = ~ 0.45 kg/$ GDP in 2004, (declining at 1.24%/yr historically). What it does nicely is confirm one of my most contentious conclusions from the Systems Energy Assessment (SEA) paper and so called “scope-4” assessment. It shows what it means to use average spending, like household “wages” as a baseline measure of average economic consumption impacts. Because the slope of the curve is so different from what I expected I think it remains to be confirmed. The US consumption intensity seems to be about double the world average. It doesn’t seem right but I don’t know what would cause that.
In any case, none of these household impacts being funded by businesses are being counted as impacts of operating businesses by the widely used sustainability metrics! That disclaimer of responsibility seems mostly to be for historical reasons, though, and for the simplicity of accounting for information coming from different places. It also shields business sustainability decisions from having to deal with quite the whole problem at first. Sustainability decisions will later be found to need to deal with it, of course, appearing now to start with a limited task, like a start-up problem, a bike with training wheels.
For the 2010 & 2011 SEA studies of a typical wind farm business plan, we tested what would happen if we were to include this discounted part of the business footprint as having a “world average” CO2/$ intensity. Our including it increased the total measure of energy and CO2 impacts for the business by 400%, as human services actually proved to dominate this seemingly technology centered business. With this new information on the US household impact distribution, I’d now need to say US businesses might actually have footprints 800% larger than presently being counted.
It seems we’re in the middle of quite some learning process! ;-)
This exploration of a pivotal world issue, on which the success or grand failure of our present global development strategy rests… is an example of the wide range of penetrating treatments of important topics covered in the Research Journal “Reading Nature’s Signals“. It document’s Jessie Henshaw’s current application of the the natural systems identification and organizational exploration methods that originated with a discovery in the 1970’s of how transitions in the continuity of natural processes expose the design of the systems and how they are changing, introduced in: The Physics of Continuity = ladders of change
We have a responsibility to use both the words of science and also the methods, when choosing methods of “Sustainable Development” to rely on for our effort to save the earth. It’s often not easy to do. Ask any scientist. It’s often as hard as sitting down to write a great poem, a different kind of creativity but just as demanding. This article discusses the correct scientific method for defining measures of “decoupling” our growing economy from its growing impacts on the earth.
That’s the part of the “Decoupling Puzzle” I can actually answer, offering a way to scientifically define an SDG for Post 2015 “economic decoupling”, and the measure of compliance. See also to the PDF file and XLS file to see the details of the model. It’s a bit different from the approach shown in the UNEP report on decoupling . What I define is an evidence based scientific measure of a growth economy departing form its reliance on growing resource use. It could be used in regulating the economy’s approach of our best understanding of the natural limits of sustainable development:
“A world Decoupling Rate that would assure, within planetary boundaries, adequate development space and “carrying capacity” to fulfill the intent of the SDG’s.”
How to transform the economy to create growing wealth without growing resource use is left to the reader or other discussions, though I give a hint to what that “entirely new kind of wealth” might be at the end.
We start with the historic records that display the past “growth constants“ of the world economy. Figure 1. shows GDP, Energy use, CO2 and the GDP energy efficiency of the economy all growing together, with growth rates that are in constant relation to one another. That is the “coupling” of GDP and resource use that needs to be “decoupled”.
That evident constant growth rates and their proportionality (i.e. the “coupling”) is called “natural” because throughout history people have noticed it, tried to explain it, and also tried to change it, all to no avail. This coupling of these measures of the whole economy has continued as if measures of a growing person’s “height and weight”, growing at different rates, but still growing together. It has seemed to be just how the economy works.
As a systems ecologist, myself, I see them as displaying humanity’s natural rate of whole system learning, limited by coordinating all parts of human innovation and development efforts, while struggling to expand at the fastest accelerating rate possible. Systems ecology, then, does not consider economic growth as a “monetary progression” but as an “organizational progression”, a process of “whole society” building on its past to create a new future. This historical record is “how we’ve been doing it” so far, and now that we’ve found it unsustainable we need to change to something different.
…”growth” is a process of our learning how to coordinate doing what we want.
To measure a departure from that we start with the “Economic Growth Constants”:
GDP (3.13 %/yr), Energy use (1.89 %/yr), and Energy Efficiency (1.24 %/yr) . The linkage between the GDP and Energy curves, is the “EnergyCoupling Rate” (60.4 %/yr the ratio 1.89/3.13), how fast energy use grows relative to wealth.
The idea and fallacy of “Decoupling”
is to weaken that linkage between earth and economy to zero, changing what has long been a constant coupling rate of 60% by successive reductions to 0.0%, just by continuing to dramatically improve the efficiency of resources use as before. Many people believe new technologies should revolutionize development to do that, other’s think innovation will create products people prefer that just don’t consume energy to produce or to use. What both would agree is that 60% needs to decline toward 0.0%
We could define that transition as a “Decoupling Rate”, the rate at which the Coupling Constant of the past declines toward ‘0.0’. That would allow continued growth in wealth without adding to what we now see are globally unsustainable scales of energy use impacts on the earth. Defined for energy use alone would serve to define it not just for the impacts of fuel extraction and consumption, but also ALL the impacts of a material kind we cause by using the energy we extract for creating economic products.
So.. that would be generally inclusive of all economic impacts
that needed energy to be produced.
Scope-4 impact measures add up the total environmental inputs resulting from business, personal, or policy choices. That’s so we can compare different choices, and make the better one. Sounds like what sustainability metrics should do!
Standard sustainability metrics, however, collect impact information by where they occur,
not by what choices cause them…
So our whole metric system needs to be rethought. Today if a business decision involves employing six new machines and six new people, all that is counted are the impacts of the machines. The impacts of hiring the people or paying the investors or the government… aren’t counted. Nature sees all the kinds of impacts incurred by business decisions exactly the same way, though! It was our accounting community, going back centuries it actually seems, that decided to count one and not the other.
The omitted impacts are actually not hard to scientifically estimate for scale. That’s what Scope-4 accounting does. As you work with it you find more and more ways having the numbers right results in big changes the terms of discussion. The core scientific issue then, is having a metric that does not associate environmental impacts of business with the choices that cause them, but with the locations where the information is collected. That inconsistency may be as fundamental to economic accounting as to have originated in how business records were kept in ancient times on clay tablets.
The [ e = mc^2 ] LAW OF SUSTAINABILITY
ln(e) / ln($) = c
It says our growing earth impacts and growing earth economy are directly coupled.
The natural constant observed, [c], is the coupling of GDP and Energy use, as a measure of everything physical the economy does. It’s expressed as a ratio of their growth rates (here as a ratio of their natural logs). That coupling has been a constant [0.6] for a long time. You see it clearly in the figure below, showing a 40 year official world record for the economy’s growing Energy use and GDP.
It says that our increasing use of energy for altering the planet to make money grows only a little slower than GDP, at 0.6 times the growth rate of GDP, AND that this direct coupling has not shown any tendency to change over time! People imagine that ‘efficiency’ changes the coupling, but even with growing efficiency the ratio has actually quite constant. You’d need global efficiency in energy use to double every ~20 years like GDP generally has to really make a difference, so having growing value in a steady GDP is far more possible.
Of course, like e=mc^2, it’s not possible to tell quite where the natural constant observed comes from. That’s a big part of the scientific interest. Natural constants are emergent properties of the system, seemingly here a natural rate of societal innovation and adaptation, like a “natural learning speed”. The benefit of the constant is giving us a better way to measure inclusive sustainability, using the mathematical implication that:
— average shares of GDP pay for and are responsible for causing
average shares of GDP earth impacts —
The power of this rule the direct coupling between responsibility for shares of Earth Impacts and shares of Earth GDP. It’s a measure that combines all the impacts of extracting energy and all the impacts caused by using energy, i.e. everything the economy does, with financial earnings from the economy. When the data is aggregated correctly, it allows a complete accounting of the GDP impacts, and “closed accounting” for shares of responsibility for them. So that for whole supply chains, one can measure their share of exhausting all our resources, forest and species loss, paving over productive land, etc. Delivering goods for an average dollar of GDP causes an average share of the whole economy’s impacts.
Scope 4 CO2 assessment
The science for applying this constant natural coupling of money and GDP impacts was published in 2011 in a research paper “Systems Energy Assessment” found at the SEA resource site. More detailed research notes are in the article What’s “Scope 4″. The physics is sufficiently general and inclusive that the same technique can be comfortably use globally, to assign responsibility for all impacts of GDP on the earth, and have a way to “internalize all externalities” that can start and remain valid as it is incrementally improved, as in “A World SDG“.
The real tragedy is that this bias in our business impact metrics assigns TOTAL responsibility for environmental impacts to the people who are paid to do them, who would not do them unless they were requested and paid for by someone else.
So then ZERO responsibility is assigned to the people choosing to request and pay for the impacts, communicating their requests for them by the transfer of money.
In criminal law, as when paying to have a crime committed, requesting and paying for it is considered the principle direct cause of the crime. The person paid to do it may be penalized equally or not. As far as physically causing economic externalities, in the court of environmental responsibility, it really should be decided the same sophisticated way.
What Scope-4 accounting does, then, is start from the complete list of things a decision pays for. It could become a tremendously long list, with lots of things only known from the money spent rather than from exactly how the service was provided. So for those you need to do research on what default assumption to make in case in case more detailed information does not become available. I’m still waiting for people to study it themselves and compare results, but I think the proof is completely convincing that absent other information the necessary default assumption is not “zero” but “average”.
If you get stuck in deciding what to count, just remember, businesses don’t pay for things except for business reasons, so you need to count *everything*.
You then think about the different categories of spending, and what their “direct” (material) and “indirect” (economic demand) impacts are.
The initial rough estimate rule for economic impacts is to count them at 90% of the world average per $GDP, like around 7000BTU/$.
Make sure you use inflation adjusted $’s and state the index year.
That’s easy to do, and lets you reserve your time for estimating the direct impacts, according to the added information you can collect.
So for the energy content of purchased fuels, for example, you’d count BOTH the direct energy content of the fuel, AND the economic energy impact of the spending, at 90% the world average. The reason is that the fuels come from nature, and the spending goes to people, paying them for the consumption they do to bring you the fuel.
If done correctly, the bottom line is a unique pie slice share of the world’s impacts
for delivering your share of GDP.
Another one to think through is how to estimate the impacts of retained earnings, used for either financial or business expansion investment. The economic impacts of that spending needs to be estimated with a multiplier over time… The whole purpose is to truthfully estimate the types and scale of consequences for our economic decisions.
More discussions can be found searching the journal or the web for “Scope-4” or “SEA-LCA” as interchangeable names for the same group of accounting methods.
Today our measures of business environmental impacts address the size and efficiency of business technology use, traceable from local business records. We’re not even trying to measure what’s traceable from what a business pays for throughout the whole economy. So in effect, the global impact is counted within a narrow local boundary, making the measures scientifically undefined, and highly misleading. Why it matters is that business, investor and policy decision makers then don’t know what impacts their decisions really have, and the research says most of any business’s real impacts are global. So we need to understand why the world economy seems to work so smoothly.
What’s counter intuitive for solving it is that the world economy not only LOOKS like a whole system, it also WORKS as a whole system. What you know is 1) all parts of the economy are supposed to be and 2) seem to act as if 3) they are competitively efficient. Otherwise 4) they lose their access to energy use, and the energy goes to someone else. Smooth working competition like that is 5) needed for a world system to work as smoothly as global data shows, and 6) making there no better assumption than that differences from global average efficiency are temporary. So unless someone can say why not, I think we have to treat energy use as being predictably proportional to GDP. That’s been peer reviewed as a general principle, that one can rely on the range of local or international variations being likely to be relatively small (maybe +/- 10%) for any globally connected part.
so…. there’s a LARGE miss-match
between the effects we see and the ones our money really causes
the scientific basis for the SEA-LCA “SCOPE 4” accounting principle,
That: Every dollar spent can be shown likely to pay for such widely distributed services throughout the world economy, that at least as a first assumption, it also pays for an equal shareper dollar of the whole world’s economic activity and impacts.
In principle, shares of GDP seem to carry equal shares of responsibility for what the economy does to produce GDP
The worst part of “A Glass Half Hidden” is the clear chance of discovering “An Iceberg of Risks” missing from the view.
Scope 1, 2, & 3 only count the impacts of the primary technology chains that businesses rely on to operate, and ignore the usually much larger impacts of the many chains of business services consumed too. That’s the iceberg of hidden responsibilities of business cause, being ignored due to using an unscientific method of measurement, i.e. counting only the impacts you see, and not accounting for the one unseen (what Scope 4 finally does). So there’s also a hidden iceberg of bigger than expected changes in plan to take care of too… that we’ve been unaware of needing for having a sustainable economy. It explains why our efforts so far still result in the economy degrading of the earth ever faster as we delay making meaningful change. The job doesn’t change, just how directly we’re able to address it.
What’s really hidden is that it’s our money that is directly paying for all the economy’s impacts, making us financially responsible. Now we also really need to know the total bill. Having a habit of not looking at what our money was used to pay for, we’ve been lulled asleep by the way money launders all the information on what our money pays for to deliver what the economy provides.
It is indeed a little ‘strange’ that a very basic scientific principle of measurement, that every scientist knows quite well already, would be overlooked in defining the world’s units of measure for saving the planet.
Scientific ways to measure things, need to measure the whole thing.
Sustainability metrics very largely don’t so that, lacking a scientific way to determine the scale of hidden impacts, the method for measuring economic impacts defaulted to the ancient practice of just counting what you have direct information on. The reality is that the great majority of business impacts actually don’t c come from what is most visible, but from widely distributed uses of the economy that businesses have no records of, paid for by employing all sorts of business services. The problem is that whether you know about them or not, the risk exposure to serious emerging economic liabilities… is exactly the same.
Here’s a new graphic to help picture the problem. It helps to shift from thinking about counting the energy “uses” a business and its suppliers operate with (i.e. traceable for Scope 1,2 or 3, and so on the visible side of the “glass half hidden”), to thinking about the energy uses its revenues are “paying for“, but often don’t have records of (Scope 4, on the hidden side). It’s the total of energy uses paid for that make a business both financially responsible and directly exposed to the emerging economic risks of physically causing economic liabilities and the harms done. It’s a serious major overlooked sustainability business risk. If 80% of the CO2 produced by uses of business revenue actually come from its services, and not its technology,
…it’s all the same to the investor exposed to the risks for the business as a whole.
For risk exposure it’s essential to measure the total impacts on the earth a business is financially responsible for, as that’s where the risk comes from. Just choosing not to count all the ones your revenue goes to pay for moves the risks to the hidden side of the “glass half-hidden”… but still leaves you just as exposed to the very substantial economic risks of business devaluation many see ahead. Continue reading How full is a “Glass Half Hidden”?→
“Sustainable Cities” is the topic to being the upcoming Open Working Group 7 on SDG’s, Jan 6-10 2014, in the UN’s marathon effort to decide “what we should do with the earth”. Our cities, as brilliant as places of creativity as they are, find themselves “in a fishy stream…” See also the final World SDG proposal on the global application of the general principle, that we all are responsible for our shares of the abuses of the economy as a whole … in proportion to our owning, investing in and using it.
The World SDG uses a method of calculation for any person’s or business’s share of world GDP, for estimating their total share of responsibility for world economic impacts as “users” called “Scope-4 Accounting“. The legal view of responsibility is different from “cause and effect” in that, legally, both the people paying for, benefiting from or authorizing a tort harm may all be held as equally responsible as the person actually doing the harm, as familiar for hiring others to commit a crime.
Fishing in a fishy stream…
“Sustainable Cities” started with Caring for our Cities as Commons Neglecting The upstream burden of their wealth and the World as Their Greater Commons
A scientifically better way to measure the true scale of economic footprints is as fractions of the whole. It’s easy and accurate for scale, treating fractions of world GDP as shares of world resource use and impacts too(1). Cities thrive as hubs of creativity and growing concentrations of wealth, cells within a greater whole. Without self-restraint, growing parts can become cancers on the whole, profiting by conquering others, not by caring for their world. A city’s limit is then exhausting their world, as done by ancient Rome, the Mayans and others.
New York City with ~1/10th of one percent of the world’s population has a $1,350 billion/yr GDP, ~2% share of world GDP, so causing ~2% of world economic resource demands and impacts, with its plan for real repeated doubling of all three. Wealth earned on New York’s 13 sq mi uses the products of ~380,000 mi2 of farm land around the world, ~2% of the world’s, with resource pressure causing ~2% of the world’s 1,460 mi2 of deforestation. Its services produce~2% of the world’s CO2, ~141,750 million lbs/yr, ~170,000 lbs. per NYC resident.
The question is, what would make New York and other cities turn from consuming to caring for the world they generate their wealth from(2)? Now each World Capital, as islands of high GDP, is growing its impacts on the world by growing amounts each year, as if as innocently as living by a lazy stream grabbing floating bags of money going by now and then.. Jessie Henshaw
Jessie is an environmental and human systems scientist quite familiar with defining units of measure. She’s been doing advanced research on emergent organization in nature and economic systems for over 30 years. The scientific basis for this measurement method is a peer reviewed research paper
The Need to redefine our Units for Measure and how to begin
Getting the incentives right:
To be effective in getting the results we want, we need to get the incentives right, a matter of understanding both how people make decisions and how the economic system works and would respond. That involves knowing how to measure what decision makers want to know about. For investment decisions, for changing how we use the earth one thing they’d want to know is their possible future liabilities for making the wrong decisions. That illusive goal is now much closer to being solved, with this major improvement in the measure of the impacts of businesses. The traditional way to measure impacts was to count up what you could trace, and this study showed that what we can trace is most often only a small part, basically because what was being left out was the impacts on the environment caused by the resource demands resulting from the revenue businesses generate as their main purpose, having to date only been counting the impacts of intended operations. This discusses a comprehensive approach to quantifying them. JLH
Statement to OWG 6:
Prepared statement For 9:00 AM Major Group Meeting of 12/12/13 on Means of implementation (science and technology, knowledge-sharing and capacity building) — “The mismatch between measured impacts and responsibilities”. Also delivered from the floor at OWG-6.1 the Informal Meeting on Measuring Progress” on Tuesday 12/17/13
Statement: Because sustainability metrics for businesses are just for the impacts of business operating technology, the environmental impacts of the people who operate the business, their employees and those of all the kinds of service providers businesses use to operate, don’t get counted. Businesses and economists, thinking of money systems not environmental ones, may not see a reason to treat businesses as physical systems and count all their impacts, but you know for sure nature does. So it’s very common for businesses and consumers to actually be directly responsible for much larger scale environmental impacts than they are told. Of course the reason we’re measuring impact is for steering a redesign of our economy for the future of the earth, and it would actually be better to get it right. Using metrics very often in error by 80% or more is really unacceptable as it voids the purpose of measurement in general, but you talk to people and they don’t want to change, sometimes mentioning the inconvenience. Don’t you think we’d do better to think of the “inconvenience” to the investors who have been trusting us, who we are presently giving false guidance to for what to invest in?Continue reading Getting the incentives right requires redefining the units of measure→