Energy Transition & the Luxury Economy

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

REM, it’s the end of the world as we know it

I spent a fair amount of my day yesterday listening to and reading Simon Michaux, who I now consider 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 vaguest acquaintance with the man and his ideas. But now it’s like I’ve crossed a bridge and see the world in a whole 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. This is the light in which I now view the popular energy transition narrative. That narrative is simple untrue. It’s not just a little fake, but it is dramatic untrue. That is, not only will capitalist industrial civilization – as we know it – not continue in a similar form as it has now, only with the help of renewable energy sources, but it cannot possibly continue at all. It’s basically over. It runs on fumes. Those days are numbered, and those days are few. Much less than most people think. Much less than we are prepared for, or prepared for anyway.

I’ve been very much on the point of this almost complete certainty, and have been on that point for a year, but then Richard Heinberg recently came right out and said that the energy cost of energy transition is such that there is necessarily a “wrist” of fossil energy consumption, and associated greenhouse gas emissions, associated with a massive build-up of “renewable energy” infrastructure and appliances. If I understand correctly what Heinberg is saying here, he is saying that for a significant number of years, as the world builds this ‘renewable’ energy infrastructure, the result will almost certainly be a Increase, rather than a decrease, in greenhouse gas emissions—which makes ‘energy transition’ completely inconsistent with the main objective. 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 failed to mention in that article is that it is theoretical plausible that all that renewable energy infrastructure can be mined, smelted, manufactured, transported and installed without increasing greenhouse gas emissions as humanity would dramatically reduce energy consumption quite quickly in most every other sector of the economy. But are we really the kind of people who would give up cars, global mass tourism and a luxury-based, luxury-dependent economy for the sole purpose of replacing fossil fuel infrastructure with renewable energy infrastructure? That is, are we really going to put this mass build-out of renewable infrastructure if we do Top priority as a culture and civilization—to the point of making giant sacrifices in other energy sectors?

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But there is another, deeply related question. And this is the one Simon Michaux answered. The question is… Is it even possible to replace enough of the world’s fossil energy with renewable energy to sustain a capitalist-industrial technological economy like the one that encircles most of the world? In a nutshell, Michaux says no. It’s not possible – certainly not in a time frame that matters. He says we just don’t have a sufficient supply of the necessary metals and minerals to do that. And he makes a very strong case for this, with ample documentation.

Can we 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 amount which would allow technological civilization as we know it to continue. Period. Point.

So what does that mean?

Speaking for myself, this means that this is the beginning of the end of the world as we know it – in almost every way. There can be no easy, smooth transition of our energy systems. Which means it’s the beginning of the end of the economy as we know it.

The popular version of “the energy transition” has been a story of the maintenance of an economic, technological and socio-political regime with only a few relatively minor adjustments, rather than a dramatic transformation. That story just doesn’t hold up under scrutiny. Neither is the idea of ​​”climate action” and climate politics that permeates activist circles today. All of this requires not a minor adjustment, but a rather dramatic overhaul (and transformation) at its core.

Two key and deeply intertwined facts emerge in light of both the Heinberg wrist and the Michaux Monkeywrench1. These are:

  1. Energy decline (and thus economic downsizing, measured in GDP/GWP) is inevitable in the near term.
  2. We live 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 topic. Energy descent is defined there as “a process by which a society either voluntarily or involuntarily reduces its total energy consumption.” My contention is that we alreadyinevitably, enter energy descent based on both voluntary and involuntary processes— although global net energy consumption continues to temporarily increase. That is, the increase in global net energy consumption has peaked, and we are only now discovering that it has. Continued global net energy consumption will begin to decline measurably in the very near future, whether we like it or not. (But we are partial choose to begin this process voluntarily… even as involuntary processes will force it regardless of our choice. So there’s a bit of a paradox here, since neither of us seems to have voluntarily embarked on energy descent or involuntary. Consider that it discovered a large cavity in the hull of the ship we are in. The ship has not yet begun to sink. But the notch is there, nonetheless. Heinberg’s ‘wrist’ and Michaux’s monkey wrench serve as light on the situation we are in. The ship called Normal will not stay afloat. It happens. And soon “the (popular) narrative” will also shift, and we will no longer pretend otherwise. But we are currently at the point of this insight as a civilization. The narrative needs to shift, because it is untrue.

What is “the luxury economy”?

I define a luxury economy as an economic mode of access to existence who depend on luxury goods and services 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 chart.

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

Modern luxury economies are machine-centric and overwhelmingly dependent on exomatic energy. Need-based economies are leaner and use proportionally more endosomatic energy. Endosomatic energy is the energy you use to swing a hammer or pedal a bicycle. Exomatic energy is the energy used by your car’s 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 pressed to provide an epitome of energy- and material-intensive luxuries, I would have to include cars rather high on my list, even though some people’s lives would be dramatically disrupted if they were forced to go without a car to live Another excellent example of luxury goods and services would be air travel. And these two items are among the biggest factors in fossil fuel consumption and greenhouse gas emissions. Car-free living can be challenging, but in most cases it won’t lead to starvation or dire misery. And, more importantly, we could rearrange things so that it would be much, much easier to live without a car.

The future of our economies, everywhere in “the developed world” (ie, global north, 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 they use fossil fuels directly or not.

The transition to a smaller, slower and less energy-intensive economy will be made much smoother and more pleasant if we carry out this transformation deliberately, intelligently and voluntarily. If we wait to be forced to do so by unavoidable – but unavoidable – circumstances, it will be an unimaginable catastrophe.

Unfortunately, governments are unlikely to lead the way by adopting policies that introduce and enable voluntary energy (and economic) descent. Indeed, they seem unlikely to adopt such policies—for now. We will probably have to start acting as communities, outside of governments, to present and implement this transformation in front of governments. This will require a paradigm shift in politics – a shift from the politics of the state 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 rely on that, 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 Pols is the energy cost of ‘energy transition’ — which recognizes that greenhouse gases must Increase in the near term to build out renewable energy infrastructure in the near term—, if the popular image of ‘energy transition’ is accepted.

The Michaux Monkeywrench is the monkey wrench thrown into the theoretical gears of “energy transition” when we admit that the world is impossibly rare and rare-ish metals and minerals to enable the popular vision of “energy transition” to proceed.

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


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