Energy

Energy-wasting biases. Identifying and eliminating tax biases to both extracting and consuming energy, and other primary products. Whether on balance these biases raise or lower prices to consumers is not known, but neither is it relevant here: the point is that the combination raises the total volume of extracting the primary products, and of course of consequent combustion and pollution.

The writer has identified many of these biases elsewhere (Gaffney, 1978). Suffice it here to observe the following. It is not just that a commodity like gasoline is subsidized; it is worse than that. Within the stream of production, subsidies go to those activities involved in extraction, while taxes fall on activities downstream that conserve and economize on the primary product (Gaffney, 1982). Read the whole article

If land and land rent are the strongest determinants to Georgists, energy is its closest counterpart to ecological economists. Just as land rent can be measured fully in terms the relative surplus it produces in any given socio-economic context, energy can be traced and calculated in calories, BTU’s or joules. Land rent is completely a human product — there is no rent where there are no people, as land has no market value. On the other hand, energy exists regardless whether people are present or not, as it is a component of nature itself. But not all energy is now recognized as relevant in economics; only that energy which is employed in the human economy, and we assume that the human economy is necessarily bounded. Wind, sunlight and lightening are as yet unpriced and are peripheral today even in ecological economics. Attention is given more to those natural resources potentially procurable or otherwise relevant to human dependency, and energy certainly is primary. So rather than regard energy as a free good and largely outside the economy as neoclassical economics assumes, energy will likely continue to be central — even the driving force — in ecological economics.

Indeed just about all other factors of production are essentially convertible from energy. Besides that used in households, industry, and transportation sectors, agriculture — at least linked to developed economies — is essentially energy driven. As Martinez-Alier has shown,86 modern agriculture is essentially unfeasible without reliance upon applied energy forms, and the diets of modern societies are heavily reliant upon energy in the forms of intensive fertilizer use, intensive application of machinery, and animal protein-fed farmers. By way of contrast, in pre-modern agricultural societies one could argue that human and animal energy account for all the foodstuffs produced, and were used in turn to assure the continuance of the agricultural cycle. Unlike modern societies they are in energy equilibrium. Hall87 argues that energy is the determining factor in the development success of all economies, posing momentous challenges for the future as projected shortages of fossil fuel sources loom on the horizon.

The regard for steady-state socio-economic dependence upon the natural environment raises profound questions about the extent to which human activity is possible without continuing depletion of the earth’s energy resources, mainly fossil fuels. On the one hand are those that believe that contemporary society’s reliance upon intensive energy has become so embedded that continued sustainable life is impossible. Among these are noted ecologist writers such as Paul and Ann Ehrlich who envision the continued boom and ultimate collapse of all civilized nations. The other view includes the majority of ecological economists who hold out hope that it might be possible to shift in time to renewable energy sources before damage to the ecosystem is irreversible. This view is exemplified by those who could be called the “steady-staters,” and who believe that there is still time to bring economic practices into an equilibrium state and avoid the doomsday scenario. Among the latter are Herman Daly, one of whose books is entitled Steady State Economics. An interesting discourse is unfolding among this community, perhaps as reflective of personal temperament as much as it is due to research interest and disciplinary background. At the moment it is a focus of intensive and increasing research and interest. ... read the whole article

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