Energy, Ecology and Economics

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* Article: Energy, Ecology and Economics. Howard Odum. Ambio (No. 6, 1973)



In 1974, the article was reprinted by Mother Earth News with the following introduction:

“In early November of 1973—during a visit to MOTHER's new home in the mountains of western North Carolina—New Alchemist John Todd gave the magazine's editors about the 14th-generation Xerox copy of what can conservatively be described as a dynamite paper.

We had only to glance at this extraordinary document to realize that the paper (originally written at the request of the Royal Swedish Academy of Sciences) is one of the most concise—yet most sweeping—examinations yet made of the real problems of the world.

The man who produced this work is Howard T. Odum, Ph. D. . . . Director of the Center for Wetlands and a Graduate Research Professor at the University of Florida in Gainesville. In the past, he has been Professor of Ecology at the University of North Carolina, Chief Scientist for the Puerto Rico Nuclear Center and Director of the Institute of Marine Science of the University of Texas at Port Aransas. Professor Odum has many other environmental credits to his name including the book, Environment, Power and Society (John Wiley, 1972).”

Excerpt of the Royal Swedish Academy Introduction:

“Many are beginning to see that energy, ecology, and economics form a single, unified system, states the author, who gives twenty points to explain the energy control of our economy and the relationship to the environment…He offers a general answer to the present world situation, where ‘boom and bust’ economies may soon be forced toward a steady state: reject economic expansionism, stop growth, use available energies for cultural conversion to steady state, and seek out the condition now that will come anyway.”

Odum’s Introduction:

As long-predicted energy shortages appear, as questions about the interaction of energy and environment are raised…, many are beginning to see that there is a unity of the single system of energy, ecology, and economics. The world's leadership, however, is mainly advised by specialists who study only a part of the system at a time.

Instead of a single system's understanding, we have adversary arguments… Many economic models ignore the changing force of energy, regarding effects of energy sources as an external constant; ecoactivists cause governments to waste energy in unnecessary technology; and the false gods of growth and medical ethics make famine, disease, and catalytic collapse more and more likely for much of the world. Some energy specialists consider the environment as an antagonist instead of a major energy ally in supporting the biosphere.

Instead of the confusion that comes from the western civilization's characteristic educational approach of isolating variables in tunnel-vision thinking, let us here seek common sense overview which comes from overall energetics…

With major changes confronting us, let us consider here some of the main points that we must comprehend so we may be prepared for the future.” (


Odum's 20 Points

Modified / Interpreted / Plagerized by David MacLeod:

1. The true value of energy to society is the net energy. ..

Net energy is the Energy Returned on the Energy Invested (EROEI). It takes some amount of energy to get more energy, and you have to carefully account for all of the energy expended to make sure you actually “Obtain A Yield” (Permaculture Principle #3).

For example, conventional crude oil is a very dense energy source. In the past all you had to do was put a hole in the ground in the right place, and up came “the bubblin’ crude.” The International Energy Agency now tells us that conventional crude peaked in 2006, so now we have to go after more “unconventional” sources, such as drilling in deep ocean water, and converting tar sands into oil. We have to expend much more energy upfront to capture these unconventional resources, therefore the net yield of these resources is less than it was for conventional oil. As Odum says, “Much energy has to be used directly and indirectly to support the machinery, people, supply sytems, etc. to deliver the energy. “ For alternative technologies such as solar photovoltaics and wind turbines, we need to account for the fossil fuels used to mine the materials, to construct and maintain the manufacturing process, and to deliver and install the systems. We often tend to just measure the yield and value of the amount of energy obtained from these sources, but Odum is telling us that we really need to pay attention here to the fact that it is the net yield after accounting for all of the energy expended that is the true value to society.

2. Worldwide inflation is driven in part by the increasing fraction of our fossil fuels that have to be used in getting more fossil and other fuels.

As we expend more and more energy to get energy, the net yield declines (point #1). Expending more energy also means spending more money. Spending more money, even as the net yield is declining results in a decrease in value of that money, which is basically the definition of inflation. It is easy to be misled here, and miss the forest for the trees – the economy and the total energy use may be expanding, even as net yield is declining, and more money might therefore be allowed to circulate, which results in us digging a deeper hole. The number one rule when you’re stuck in a hole is to stop digging (as Matt Simmons used to say), but that is a problem if we don’t realize we’re in a hole.

As we attempt to Catch and Store Energy (Permaculture Principle #2), we again need to make sure we are Obtaining A Yield (Principle #3).

3. Many calculations of energy reserves which are supposed to offer years of supply are as gross energy rather than net energy and thus may be of much shorter duration than often stated.

Fossil fuel reserves tend to be overstated for a variety of reasons. Many of the publicly stated reserves will never be economical to actually extract. If these reserves were calculated as units of net energy, the numbers would be much lower and closer to the reality of what could actually be useful." (

4. Societies compete for economic survival by Lotka’s “Maximum Power” principle: the system that gets the most energy and uses it most effectively survives in competition with other systems.

We learn from points 4, 5, and 6 that “survival of the fittest” competition is very natural, and useful in the development of any ecosystem. There is no need to engage in moralistic judgments on human systems that do this. There is a time to maximize power and to utilize available energy effectively (“Obtain a Yield”) and to be less wasteful as compared to competitors or alternatives (“Produce No Waste”).

5. During times when there are opportunities to expand one’s power inflows, the survival premium by Lotka’s principle is on rapid growth even though there may be waste.

“Dog-eat-dog growth competition” occurs in pioneering species, whether that be new vegetation colonizing bare ground, or the last 200 years of humankind colonizing growth. Perfectly natural, but only when energy resources are plentiful.

6. During times when energy flows diminish and there are no new sources, the systems that win are those that do not engage in a fruitless attempt to continue to grow.

Instead, they use all available energies to develop diverse and resilient steady state systems. When an ecosystem matures, the rapid growth specialists are replaced by a new team of higher diversity, higher quality, longer living, better controlled, and stable components. This is the “climax team,” which is able to maximize the limited amount of energy available, becoming much more efficient than those that specialized in fast growth.

“Our system of man and nature will soon be shifting from rapid growth as the criterion of maximizing one’s work for economic survival to steady state non-growth as the criterion of maximizing one’s work for economic survival.”

It is here that the Permaculture Principles such as “Apply Self Regulation and Accept Feedback,” “Produce No Waste,” “Use and Value Diversity,” and “Creatively Use and Respond to Change,” become very important (as well as all of the other principles).

Most of humankind’s million year history was close to a steady state, but economists have all been trained during a rapid growth state and most don’t even know there is such a thing as a steady state. Although 200 years is a long time from our perspective, we are experiencing the tail end of a short pulse or blip in the history of the world – “a temporary use of special energy supplies that accumulated over long periods of geologic time.”

7. High quality of life for humans and equitable economic distribution tends to be a positive characteristic of steady state periods.

During competitive growth periods instability, inequality, and poverty more commonly occur, but during steady state periods competition is controlled, and replaced with regulatory systems (“Apply Self-Regulation and Accept Feedback“), diversity of labor (“Use and Value Diversity”), and uniform energy distributions (“Catch and Store Energy”). “Love of stable system quality replaces love of net gain.”

8. The successfully competing economy must use its net output of richer quality energy flows to subsidize the poorer quality energy flow so that the total power is maximized.

In ecosystems, a diversity of species allows for a greater variety of energy sources to be utilized, and to varying degrees. Some species are “subsidized” by getting some of their energy indirectly from multiple sources. For example, leaves on top of trees get more energy than they need, and leaves lower on the tree need more energy than they are getting from the sun. The leaves on top transport fuel to leaves lower on the tree that are more shaded, providing the “subsidy.” The ecosystem as a whole benefits, because resources are maximized and more total work gets done.

In similar ways, fossil fuels are used in many places of our economy to subsidize activities that would otherwise not yield net energy. Many examples could be named, from subsidizing our educational systems to subsidizing the manufacture of wind turbines and solar photovoltaics, which leads to the next point.

9. Energy sources which are now marginal, being supported by hidden subsidies based on fossil fuel, become less economic when the hidden subsidy is removed.

Related to the previous point of using rich energies to subsidize marginal ones: marginal energies will yield less in the future when the subsidy is no longer available. Economists often don’t recognize this change in energy quality, because the subsidy remains hidden to their view. They will often say that a marginal energy source will be economic in the future when the rich sources become unavailable. However, the yield from a marginal energy source will decline as the subsidy from the richer energy source declines. An energy source is not a source unless it can contribute a net yield.

10. Increasing energy efficiency with new technology is not an energy solution, since most technological innovations are dependent on a supply of cheap energy (a hidden subsidy) to support complex energy-expensive structures.

Much of our progress of achieving increased efficiencies over the last 100 years has been based on a subsidy from a second energy source. “We build better engines by putting more energy into the complex factories for manufacturing the equipment. The percentage of energy yield in terms of all the energies incoming may be less not greater.”

11. Even in urban areas more than half of the useful work on which our society is based comes from the natural flows of sun, wind, waters, waves, etc. without money payment. An economy must maximize its use of these energies rather than destroying their enormous free subsidies. The necessities of the natural imputs from our environment are often not valued until they are degraded or destroyed.

The necessary life support that nature offers for free begins to diminish when an area becomes about 50 percent developed by humans. At that point, further economic growth of the area may result in an actual net loss because of higher energy drains. For example, an area that naturally accepted and reprocessed waste waters gets paved over, and then requires the construction of an expensive and energy hungry waste treatment plant. What was formerly done for free by nature is gone and we now have to pay for the service.

12. Environmental technology which duplicates the work available from the ecological sector is an economic handicap.

As urban areas grow, we tend to put a lot of energy into the development of technologies to protect the environment from our wastes. However, most wastes are actually rich energy resources, and ecological resources are capable of reprocessing these wastes into useful energy. If growth is so dense that complex technology is required to deal with its wastes, then it is too dense to be economically vital for the combined system of man and nature. Man as a partner of nature must use nature well, not crowding it out, paving it over, or developing industries that compete with nature for the waters and wastes that would be a contributor to the survival of both.

13. Solar energy is very dilute and the inherent energy cost of concentrating solar energy into form for human use has already been maximized by forests and food producing plants. Without energy subsidy there is no yield from the sun possible beyond the familiar yields from forestry and agriculture.

Advocates of major energies available from the sun don’t understand that the energy from the sun, while very large in volume, is very dilute in quality. Therefore, a large amount of subsidized energy (usually from fossil fuels) is required to concentrate the sun’s energy to upgrade it to electricity.

Plants are actually the most efficient processors of solar energy using photosynthesis. They build tiny microscopic semiconductor photon receptors that are the same in principle as solar cells made by humans. The difference is that the plants are able to build these processors out of the energy budget that the sun allows. The reason major solar technology has not and will not be a major contributor of substitute for fossil fuels is that it will not compete without energy subsidy from the fossil fuel economy. Some energy savings are possible in house heating on a minor scale.

[The above is a controversial point, but there are many who agree with Odum’s position here, such as David Holmgren and John Michael Greer. Rich Dryer, an energy industry engineer, put it well: “Those studies which purport to show positive net energy have simply excluded large chunks from the necessary life-cycle analysis. Just enumerate the energy cost of the factory to make the truck to mine the silicon ore, the energy to make the truck to transport that ore to another factory and its construction and operating energy cost, the energy to design, fabricate, transport, construct, operate, maintain, repair and recycle the cells. All of that is currently powered by hydrocarbon. Now plug that entire supply chain back into its own energy output and try and maintain “business as usual” in a world that until now didn’t have to do *any* of that and is struggling with hydrocarbon depletion.”

edit, 6/25/11:

However, I found a good piece from 2006 (Energy Payback of Roof Mounted Photovoltaic Cells) that helped me get clear on my own position that Odum, Holmgren, and Greer are wrong in saying solar pv will never yield net energy. Colin Bankier and Steve Gale analyzed numerous other studies, fond what they think is the best one, and further refined its findings. When they included Odum's methodologies, they found that the average rooftop system will tend to have a positive energy payback in about 4 years.

Odum had done a study in 1996 of a centralized solar power plant that showed solar pv used twice as much energy as it provided in its lifetime. So centralized solar power plants may be a bad idea; however decentralized, distributed solar pv installed on rooftops of already existing buildings is net yielding.]

14. Energy is measured by calories, btu’s, kilowatt hours, and other intraconvertible units, but energy has a scale of quality which is not indicated by these measures. The ability to do work for man depends on the energy quality and quantity, and this is measurable by the amount of energy of a lower quality grade required to develop the higher grade. The scale of energy goes from dilute sunlight up to plant matter to coal, from coal to oil to electricity and up to the high quality efforts of computer and human information processing.

Odum is here telling us that not all energy is equal. We can’t just measure quantity, we also have to consider quality. Energy can be upgraded to a higher quality (available to do more work), but there is always a net loss of total energy in the upgrading process – this is the basic law of entropy in physics.

From his book, “Energy Basis for Man and Nature,” Odum writes: “Some forms of energy, like sunlight, are very dilute; others, like gasoline, dynamite, and high-voltage electricity, are very concentrated. A Calorie of dilute energy cannot be used in the same way as a Calorie of concentrated energy. Furthermore, it takes energy to concentrate energy. We must degrade some energy in order to concentrate what is left…Four Calories of coal are required to make 1 calorie of electricity; 1,000 Calories of sunlight may be required to make one Calorie of wood.”

Odum ends point number 14 above with saying computer and human information processing represents a very high energy quality. How so? Again, from “Energy Basis for Man and Nature”: “People sometimes make mistakes in deciding what activities ultimately cost or do not cost much energy…We are so used to thinking of energy as physical processes that we do not realize that thinking uses energy too. The energy is in all the work that goes into educating the mind and maintaining the body to support the mind…Because much energy is used in developing one’s abilities, intellectual activity is a very high-quality use of energy; intelligence and learning are concentrated potential energy.”

15. Nuclear energy is now mainly subsidized with fossil fuels and barely yields net energy.

It is good to note here that Odum was at one time the Chief Scientist at the Puerto Rico Nuclear Center. I won’t try to summarize Odum’s point here, because after much time had passed since writing this article, Odum observed a gradual increase in the efficiencies of nuclear power. In 2001, he wrote, “We conclude that nuclear fission reactors are highly competitive for the part of the U.S. energy budget that needs to be in the form of electricity.” (A Prosperous Way Down, p. 159)

I will take this opportunity, however, to mention that Whatcom’s own John Rawlins, a retired nuclear physicist and peak oil activist, wrote a column for the Whatcom Watch entitled “Nuclear Power No Solution to Peak Oil.” He wrote, “I would no more invest in a new nuclear plant than I would leap from an airplane. No country in the world has yet succeeded in actually disposing of any spent fuel or high-level nuclear waste. The U.S. spent-fuel-disposal program chose disposal criteria that I believe are inherently impossible to meet.”

16. Substantial energy storages are required for stability of an economy against fluctuations of economies, or of natural causes, and of military threats.

“The frantic rush to use the last of the rich oils and gas that are easy to harvest for a little more growth and tourism is not the way to maintain power stability or political and military security for the world community of nations as a whole. World stability requires a de-energizing of capabilities of vast war, and an evenly distributed power base for regular defense establishments, which need to be evenly balanced…a two year storage is required for stability of a component.”

Alas, these many years later, we are still in that frantic rush to use existing resources and continuing vast wars. Witness the recent decision to release storages from the strategic petroleum reserve.

17. The total economic health of a country relative to others depends on the relative net energy of that country including its natural and fuel-based energies minus its wastes and nonproductive energies.

Some countries are rich in natural resources, but do not have the infrastructure to produce much value added goods from those resources. Other countries have become resource poor but have abilities to produce value added technical goods and services. The country with the strongest position is one that is rich in energy resources and also has internal sources of developed structure and information based on the energy.

18. During periods of expanding energy availabilities, activities that spur more growth and competition are successful in increasing the flow of energy beyond their cost. Institutions, customs, and economic policies sometimes become self-sustaining by accelerating energy consumption.

Fast growing economies contain many pump priming properties that become embedded in procedures of government and culture. Urban concentrations, high use of cars, economic stimulus measures to subsidize growth, advertising, high rise buildings, etc. are all costly in energy, but they can stimulate economic vitality as long as they can be successful in increasing the flow of energy beyond their cost. They accelerate the system’s growth during a period when new energy resources are available to exploit.

19. During periods when expansion of energy sources is not possible, then the high density and growth promoting policies and structures become an energy liability because their high energy cost is no longer accelerating an energy yield.

“The pattern of urban concentration and the policies of economic growth simulation that were necessary and successful in energy growth competition periods are soon to shift. There will be a premium against the use of pump priming characteristics since there will be no more unpumped energy to prime. What did work before will no longer work and the opposite becomes the pattern that is economically successful. All this makes sense and is commonplace to those who study various kinds of ecosystems, but the economic advisors will be sorely pressed and lose some confidence until they learn about the steady state and its criteria for economic success.”

20. Systems in nature are known that shift from fast growth to steady state gradually with programmatic substitution, but other instances are known in which the shift is marked by total crash and destruction of the growth system before the emergence of the succeeding steady state regime.

The terrible possibility that is before us is that there will be the continued insistence on growth with our last energies by the economic advisors that don’t understand, so that there are no reserves with which to make a change, to hold order, and to cushion a period when populations must drop…

Man will survive as he reprograms readily to that which the ecosystem needs of him so long as he does not forget who is serving who. What is done well for the ecosystem is good for man. However, the cultures that say only what is good for man is good for nature may pass and be forgotten like the rest.

…Perhaps this is the main question of ecology, economics, and energy: Has the human system frozen its direction into a…path toward cultural crash, or is the great creative activity of the current energy rich world already sensing the need for change? Are alternatives already being tested by our youth so they will be ready for the gradual transition to a fine steady state that carries the best of our recent cultural evolution into new, smaller, more dilute, and more delicate ways of human-nature?

What is the general answer? Eject economic expansionism, stop growth, use available energies for cultural conversion to steady state, seek out the condition now that will come anyway, but by our service be our biosphere’s handmaiden anew." (