Just out of curiosity, what is your science and math background?
Living in a state of exponential delusion
Simon Ratcliffe
WHY IS it that our planners and politicians understand so little of basic mathematics and its implications? Let me explain how serious the consequences of not understanding some basic mathematical concepts can be. Let us take economic growth, the basic premise of conventional economics, and the assumption that without it our economic model falls apart. It is important that we understand the implications and consequences of this assumption. To understand the implications, we need to understand the underlying exponential mathematics.
Exponential growth refers to a situation where there is constant growth. It doesn’t matter what the rate of growth is, only that it is constant. For example, our current economic strategy is aimed at achieving 6% growth over a sustained period of time. What 6% growth means is that we will be doubling the size of our economy in roughly the next 11 years.
Yes, at this rate of growth we will double our gross domestic product, which means we will double what we produce. In order to double what we produce, we will need to double what goes into what we produce.
This includes raw materials and crucially, energy. So, roughly speaking, in the next 11 years we are going to need to double the amount of energy we are currently consuming.
How did I work this out? As I said, it is a matter of simple mathematics. Every junior financial adviser knows the Rule of 70. To calculate the doubling time of anything that is growing at a constant rate, divide 70 by that rate of growth. This basic calculation is used constantly with respect to calculating financial returns, but rarely to calculating the rate at which we are depleting resources.
In fact, it can be applied to anything that involves constant growth: population, the rate at which a disease is spreading, and so on.
Let’s understand this in a little more depth. Each doubling cycle — 11 years, in our case, at 6% growth — is greater than the sum of all previous doubling cycles combined. This means that in the next 11 years, we will consume more than we have in our entire history. Every time we double, that is, when we go from one to two, from two to four, from four to eight, from eight to 16, and so forth, the last doubling cycle is greater than the sum of all the previous cycles — 16 is greater than 8+4+2+1, which is equal to 15. This is a mathematical law that is rarely understood, particularly by economists, who often assume resources are infinite.
This might now explain why it is that Eskom has been unable to keep up with electricity demand and why we keep experiencing power cuts. If Eskom is going to meet demand, it is going to have to generate more electricity than it has in our entire history during the course of the next 11 years. Does anyone seriously think this is possible? Where will the resources come from? Where is the coal, the uranium, the skilled and unskilled labour going to come from? Who is going to be training the engineers and the artisans required? I know we have large reserves of these resources, but is there a plan to double output?
More seriously, to do this Eskom is obviously going to have to burn more coal than we have burned in our entire history. This is a frightening thought, given that, per capita, we are among the world’s worst polluters.
And in terms of the responsibility that we have to our children and our grandchildren, we need to be cutting our carbon emissions, not expanding them, so that we can leave them a planet that sustains life.
Let’s look at little further afield. China and India are both growing at a rate of about 10% per year. So, their economies are doubling every seven years. Some might argue that this is growth off a low base, but each of these countries has a population of more than 1-billion people, so absolutely their consumption is enormous, even if per capita it is less than ours right now. Both of them will in the next seven years consume more than they have during their entire histories. Is it any wonder that most of the world’s steel, coal, cement and other critical resource are on ships heading east?
Which brings me to the obvious rhetorical question: for how long can this be sustained? I haven’t done any research into world steel resources, and production, nor have I done any research into the same for cement, but I have done a lot of research into world oil reserves and oil production. One thing is crystal clear: we are going to have to face up to oil production reaching its peak within a few years, and also the dramatic way in which this is going to affect all of our lives. Oil is deeply embedded in just about everything we take for granted. That flight across the ocean to visit a family member living abroad, that new SUV that has just been released, the mange tout on your plate just flown in from Kenya, can no longer be taken for granted.
Very soon we are going to have to face up to the very short life of globalisation. The inevitable decline in oil production will bring with it restricted mobility, and a far more localised way of living. Work, schools, social services, medical care will all need to be close to where we live. Sustainable neighbourhoods are going to need to be connected with good, reliable public transport. We need to begin planning at every level of government, in every sector of the economy, in every town and in every village for this. It is not a matter of if, it is a matter of when.
This is not a fantasy. What is a fantasy is the idea that finite resources can defy physical laws and last indefinitely. Yes, we are rapidly approaching the time when economic laws will be confronted head on by physical and mathematical laws. I know where I will be putting my money.
?Ratcliffe is an energy and sustainability consultant and is chairman of the Association for the Study of Peak Oil SA.
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