8.4 Markets, Technology and Substitutes to the rescue?
8.4 Markets, Technology and Substitutes to the
rescue?
Mainstream economists do
not see things in this way. They assume that markets will be able to anticipate
scarcities and problems arising from the limits to growth, that these problems
will be reflected in rising prices in forward markets – and then the rising
prices will create and incentivise profitable opportunities for technological
solutions. If necessary it is recognised that the state may have to step in to
adjust prices to ensure that incentivisation is strong enough to bring about
the necessary new technologies and substitute arrangements. Thus markets and
ingenuity will always provide alternative arrangements on a rising curve of
human well-being. The message is therefore that we do not need to be
particularly worried about climate change or peak oil or the depletion of
fossil energy or other resources. Greater efficiency of resource and energy use
and other ways of doing things will enable us to find a way out of our
problems.
But there are problems
with this view which can be illustrated with a case study – energy usage and
carbon by the internet. At the current time the internet uses about 1 to 2% of
the global energy supply. Roughly 50% of this is energy used in the internet
day to day and the other 50% is the energy used to create the computers,
infrastructure and so on. Technological change is so rapid that the energy
efficiency of the internet is improving 10 times every 5 years. That seems
highly reassuring – however despite this, overall energy usage by the net is
doubling every 5 years. Continue that trend for half a lifetime and the net
would be using an amount of energy equivalent to the current entire global
energy usage. (Starting at 2% and doubling every 5 years this would be 4% in 5
years, 8% in ten, 16% in 15, 32% in 20 and so on....)
The fact that energy usage
increases even though energy efficiency is rising was first noticed by the
English economist Stanley Jevons in the 19th century. Indeed increased energy
efficiency tends to generate increased usage – people with cheaper low energy
light bulbs leave them on all night. Corporations that use internet video
conferencing between their executives rather than flying them to meet each
other save a lot of money and energy – but the money saved is then used for
business expansion which means the purchase of goods and services...which
consume energy...so the value to the environment of the gains are undone with
no absolute reduction occurring.
To lock in the gains of
energy and materials efficiency requires an absolute cap on energy usage that
is reduced to the sustainable maximum that the planet can bear.