Faltering or falling energy consumption, particularly electricity, is not an indication of a healthy economy. Article for the Financial Post by John Constable & Debra Lieberman.
Since 2007, something historically unprecedented has been happening in most Western economies — energy consumption is in a nosedive.
U.K. energy use has fallen by 30 per cent to quantities not seen since the 1950s, while the rest of Europe has regressed 30 years to 1990s levels. The U.S. is following suit. Whereas total energy consumption had been flatlining, it then fell 13 per cent by 2020, approaching levels not seen since the mid-1990s. A subsequent post-covid increase gives one hope but may not reverse the trend. This downward spiral also holds for electricity usage, the very index of a modern society, with the U.K. dropping over the past decade to levels last seen in the 1970s. The Canadian case is less dramatic but still concerning: both total energy and electricity consumption have flatlined over this period, and since 2018 have begun to decline.
Faltering or falling energy consumption, particularly electricity, is not an indication of a healthy economy. You might think otherwise — it’s evidence of increased efficiency, right? For some individual consumers, in the short run, potentially, yes. For society as a whole, in the longer run, emphatically not. As a rule, gains in efficiency will increase demand for the now cheaper goods or services, or save energy for another purpose, so total consumption rises.
Savings from LEDs, for example, will first be translated into more lighting. (Who knew a lit driveway looked so pretty?) And when that demand becomes satisfied it will be spent on vacations, better health care, and education, and further out in the economic system on roads or defence. Like cash, energy is never left on the table, and given its availability, there is no limit to possible improvements in human well-being. Put simply, efficiency fuels welfare-enhancing consumption.
Energy demand is falling because of environmental policies, including subsidies to modern renewables such as wind and solar. As distasteful as this might sound, it is nonetheless true. So far, both the U.S. and Canada are relatively minor players, the U.S. having spent a mere US$125 billion between 2008-2018, and while Canadian national totals are lower, the province of Ontario alone is reported to have spent about US$30 billion in the period 2006 to 2014. But the EU, where the biggest energy collapse is observed, has spent a staggering US$800 billion since 2008, a total that has been increasing at $US70 billion a year. And the U.K., a country of 65 million people, is shelling out well over US$10 billion every year.
The intention of these subsidies was to reduce costs, but the gamble has not paid off — nor will it so long as Mother Nature and her laws of physics are at the table. Wind and solar remain stubbornly expensive for consumers in spite of a blizzard of misinformation and propaganda claiming otherwise.
How did we get here? The answer lies in our intuitive understanding of “energy” itself. The human mind contains programs enabling us to reason about survival-dependent concepts — mating, food, co-operation. The “physics of energy” is not such a concept. Without science we lack the lens to focus effectively on energy, leaving us more or less “energy-blind.” Energy is a strange concept — in the strict scientific sense it isn’t a substance, such as coal or oil, but instead an abstract property of all substances, namely the capacity to cause change in the world, to do work.
Moreover, energy varies in quality, not just quantity. To support complex society a fuel must be of high quality, that is, structured so that it has the potential to do a lot of work. In thermodynamics, this is referred to as a fuel’s degree of “disorder” or “entropy.” Greater disorder equals greater entropy equals less work. But our “energy-blindness,” the inability to easily grasp thermodynamic principles, means that we must rely on physics to see — and what it reveals is that fossil fuels and uranium are highly ordered and rich in their potential to do work, making them cheap, while wind and solar are the reverse.
In fact, to render wind and solar functional requires much additional work and resources, both often supplied by fossils. Transforming renewables into useable grid electricity relies on turbines and photovoltaic panels, themselves complex and expensive states of matter, to say nothing of the management costs of buffering the electricity system against their variability.
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John Constable is energy director of the Global Warming Policy Foundation in London and author of its forthcoming study Europe’s Green Experiment: A costly failure in unilateral climate policy. Debra Lieberman is a professor of psychology at the University of Miami and author of Objection: Disgust, Morality, and the Law (OUP, 2018).
Electricity pylons near Bristol, England. Photo by Matt Cardy/Getty Images files