Towards a Sustainable Yield for Regional Ecosystems: Difference between revisions
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"This article proposes that the replenishment of net energy gain to meet human needs through the maximum sustainable yield of resources is the fundamental story of economics. The following section surveys how the framework of core and periphery has led societies to create an intricate system of resource and financial dependency through which raw materials and energy are transformed into useful products and services. Later we explain how net energy became a key component in the monetary hegemony of sovereign nations; how this is impacting geopolitics at present; how the sciences of physics, chemistry, and biology have indirectly shaped modern political economy; and why policymakers, the free market, the scientific community, and the public must learn to restore value to nature through self-organizing and self-sustaining regional systems." | "This article proposes that the replenishment of net energy gain to meet human needs through the maximum sustainable yield of resources is the fundamental story of economics. The following section surveys how the framework of core and periphery has led societies to create an intricate system of resource and financial dependency through which raw materials and energy are transformed into useful products and services. Later we explain how net energy became a key component in the monetary hegemony of sovereign nations; how this is impacting geopolitics at present; how the sciences of physics, chemistry, and biology have indirectly shaped modern political economy; and why policymakers, the free market, the scientific community, and the public must learn to restore value to nature through self-organizing and self-sustaining regional systems." | ||
(https://online.ucpress.edu/gp/article/5/1/122343/203074/Who-Will-Pay-Back-the-Earth-Revaluing-Net-Energy) | |||
=Discussion= | |||
==The [[Impact of the Center-Periphery Model for Net Energy in the Rise and Fall of Civilizations]]== | |||
James Quilligan: | |||
"Tainter (2004) and others emphasize the decisive impact of the center-periphery model for net energy in the rise and fall of civilizations.2 This pattern began twelve thousand years ago with the Holocene Age, when Earth’s glaciers receded and food, wood, and animals became the vital sources of energy and value. Throughout this long span to the present, as populations grew, they developed settlements, towns, city-states, and nations in gradual stages, using energy to create social and economic infrastructure in those core areas. Slow and steady increases in energy extraction and human need resulted in unequal exchanges of material resources and labor energy from the rural periphery to the more urbanized core. The control of energy stocks and flows by the rulers of the core led to a division of labor, social hierarchy, and institutional and technical complexity in the more advanced societies, while draining energy from the periphery through its minerals, biomass, and animal and human labor (Tainter 2004, 91--126). | |||
Yet the economic success of the core’s growth phases, which had initially led to higher energy depletion in the countryside, boomeranged back upon the core through diminishing economic returns and the dispersal of waste and pollution. Through agricultural exchange, for example, nutrients like nitrogen and phosphorus that had been removed from the soil in a rural periphery accumulated now as waste in the urban core. With slowing benefits from the energy flows of its ecological periphery, the economic and governance systems of the core began to decline. More and more energy was captured just to maintain this complex infrastructure—including administration of the periphery, security and transportation costs, and constant importation of food —until there was little net energy available for economic growth (Tainter 2004, 118--23). The destruction of ecosystems through overconsumption by the core, persistent underdevelopment of the periphery, and an overall decline and collapse of energy supplies sorely weakened the management of the core area (Diamond 2011, 509--24; Graeber 2011, 211--21). This was the pattern of development in all energy-driven societies of the past twelve millennia, as evidenced in the Mesopotamian, Egyptian, Hittite, Roman, Chou, Indus Valley, and Mayan civilizations and numerous others (Tainter 2004, 43--90); Diamond 2011, p. 77–308). | |||
Things changed dramatically during the Age of Exploration and Globalization (1500–2000). We pick up the story where European nations were becoming an imperial core and the rest of the world its colonial periphery. With the availability of new resources and slave labor in the sixteenth and seventeenth centuries, resulting from territorial conquest, mercantile trading, and the growing use of new forms of energy, economic growth began to increase exponentially and support the value of money (A. Hall 2011, 59--110). In the seventeenth century, high-priced coal and whale oil led to easier commercial production with less energy and physical labor, as well as greater consumption than previously, which led to lower costs for producers, sellers, and buyers. In England from 1500 to 2000, for example, the amount of money spent on producing energy to empower the rest of the economy decreased from 40 percent to 5 percent (C. A. S. Hall and Klitgaard 2018, 86). The trend of higher energy efficiency leading to greater economic growth became more pronounced through the accumulation of net energy and the development of monetary hegemony in core areas (Goldstein 1988, 296--313). Higher currency values in Europe became the norm following a wide-ranging conflict over unequal transfers of net energy, involving issues of religion, trade, and warfare, which ended with the Treaty of Westphalia in 1648. This agreement by over one hundred European states established peace through border protection and domestic noninterference for the first time (Bobbitt 2003, 502--19; Anghie 2005). It also paved the way for national banking in the eighteenth and nineteenth centuries, which incentivized borrowing for investments in production, finance, and military activity, all of which secured the monetary value of energy. The enormous boost from resource energy production in the colonial periphery also stabilized currency values in the core nations of imperial Europe. | |||
Yet heavily strained by the escalating energy-related costs, each sovereign core eventually struggled to maintain monetary control over the contenders in the neighboring states that challenged its authority. In five different periods, a new nation established itself as monetary hegemon by overpowering the existing core nation: 1494–1517, Portugal versus Spain; 1579–1609, Netherlands versus France; 1688–1713, England versus France; 1792–1815, England versus Germany; and 1914–1945, the United States versus Germany (Goldstein 1988, 281--347). Once the challenger prevailed over the incumbent ruler, it consolidated its own power and legitimacy over the trade and financial practices of the defeated hegemon, beginning a new cycle of monetary politics that applied the victor’s own version of the core-periphery model to the new social order. | |||
During the eighteenth through the twentieth centuries, these power struggles were also evidenced in the recurring colonist revolutions and demands for reparations and climate justice, involving devalued labor, resources, and terms of trade (Chakrabarty 2021, 95--106; B. J. Cohen 2000, 47--67; A. Hall 2011, 527--654). After World War II, when higher market prices for food calories and nutrients, water, wood, biomass, minerals, human and animal labor, and fossil fuels began to dominate the international system of trade and finance, imbalances in the net energy-value between geographic locations created widespread disparities across the developing world (Stavrianos 1981, 623--755). As traditional agriculture was displaced by industrial agriculture based on cheap and seemingly endless sources of petroleum, the former colonial territories developed a nascent understanding of the ecological footprint involved in energy balances and deficits. In the 1970s the issues of agriculture, natural resource supplies, social poverty, aid, labor, trade, finance, monetary policy, and ecological degradation were contested globally. With the publication of North-South: A Program for Survival in 1980, a detailed solution was proposed (Brandt 1980). | |||
But this new pact, in which the wealthier Northern Hemisphere would supply more aid, technology, and financing, while the less developed nations of the South would sell their labor, raw materials, and mass-produced goods, was only the latest expression of the core-periphery dichotomy where energy flows are misaligned and misappropriated (Allen, Tainter, and Hoekstra 2003, 33--43). Altogether, the effects of exchange-value during the modern fossil fuel period—including the degradation of the environment through waste and pollution, declines in the purchasing capacity of the middle classes and poor, severe and successive debt crises, destabilization of governments, and the spread of conflict among the wealthier states—were strikingly similar to those of earlier civilizations (Turchin 2023, 161--89). | |||
The Global North and Global South were still following the same biogeographical practices of exchange: | |||
* Energy transfers of ecological reserves of biomass and energy from peripheral regions to the hegemonic core, rapidly boosting resource consumption | |||
* Consolidation of wealth and rebuilding within the core, enabling purchases of energy from the peripheral areas without measuring the net value of this energy | |||
* Higher resource demand and overconsumption in the core exceeding the available energy, resulting in the disintegration of economic and social infrastructure in both areas | |||
A major factor in today’s planetary dysfunction has its source in the myths of an infinite biosphere, value-added accounting, and chronic misvaluations of net energy between the world’s core and periphery regions (B. J. Cohen 2008, 36--55; Daly and Townsend 1993, 70--73; Graeber 2011, 166--206). These myths continually interpret nature’s thermodynamic laws as a competition for the unlimited accumulation of energy wealth, requiring societies to rely on the feedback mechanisms of profit, compound interest, debt, and GDP rather than the signals of energy yield from natural systems and the physiological needs of populations. In all instances, the wealth transfer to the social core expresses the increase in financial value accrued through the exchange of energy, while the wealth deficit in the social periphery is the mounting debt generated by higher energy-value in the core exchanged for less energy-value (Eichengreen 2008, 210--32). Similar monetary dynamics are now playing out in geopolitics, with a significant twist. China’s emergence since the 1990s as an industrial and technological powerhouse in the Global East periphery / Global South semiperiphery has elevated it to contend for the role of monetary hegemon on a planet whose population, for the first time in history, is surviving on diminishing energy resources." | |||
(https://online.ucpress.edu/gp/article/5/1/122343/203074/Who-Will-Pay-Back-the-Earth-Revaluing-Net-Energy) | (https://online.ucpress.edu/gp/article/5/1/122343/203074/Who-Will-Pay-Back-the-Earth-Revaluing-Net-Energy) | ||
Latest revision as of 14:32, 19 September 2024
* Article: Who Will Pay Back the Earth? Revaluing Net Energy through the Sustainable Yield of Regional Ecosystems. By James Quilligan. Global Perspectives (2024) 5 (1): 122343. doi
Abstract
"The West’s dominance of the world order is being tested by China, Russia, and other nations. This standoff over energy and monetary hegemony has critical implications because neither bloc has a regenerative plan for resource management of the planet. Since the population demand for global resources began to exceed its supply in 1971, world economic growth has surpassed the availability of natural resources. Society’s increasing need for energy calls into question the legitimacy of sovereign governments in accounting for their ecological deficits. A new measure for the energy-value of resources through their sustainable yield is necessary to adjust the financial imbalances in energy, production, and trade while meeting basic human needs within the limits of Earth’s natural systems. The calculation of maximum sustainable yield could transform the neoclassical economic system of value-added into a process of value-renewed exchange by using the metabolic measure of carrying capacity. Biophysical economics may then become the basis for energy, monetary, and security agreements among sovereign nations to devolve the stewardship for restoring net energy-value to people within their bioregional areas. A planetary compact, focusing on the ratio between sustainable yield and human need, would encourage new partnerships between businesses, governments, and the public, granting to citizens the rights and responsibilities to organize the self-sufficiency and sustainability of their own regional habitats."
Contents
James Quilligan:
"This article proposes that the replenishment of net energy gain to meet human needs through the maximum sustainable yield of resources is the fundamental story of economics. The following section surveys how the framework of core and periphery has led societies to create an intricate system of resource and financial dependency through which raw materials and energy are transformed into useful products and services. Later we explain how net energy became a key component in the monetary hegemony of sovereign nations; how this is impacting geopolitics at present; how the sciences of physics, chemistry, and biology have indirectly shaped modern political economy; and why policymakers, the free market, the scientific community, and the public must learn to restore value to nature through self-organizing and self-sustaining regional systems."
Discussion
The Impact of the Center-Periphery Model for Net Energy in the Rise and Fall of Civilizations
James Quilligan:
"Tainter (2004) and others emphasize the decisive impact of the center-periphery model for net energy in the rise and fall of civilizations.2 This pattern began twelve thousand years ago with the Holocene Age, when Earth’s glaciers receded and food, wood, and animals became the vital sources of energy and value. Throughout this long span to the present, as populations grew, they developed settlements, towns, city-states, and nations in gradual stages, using energy to create social and economic infrastructure in those core areas. Slow and steady increases in energy extraction and human need resulted in unequal exchanges of material resources and labor energy from the rural periphery to the more urbanized core. The control of energy stocks and flows by the rulers of the core led to a division of labor, social hierarchy, and institutional and technical complexity in the more advanced societies, while draining energy from the periphery through its minerals, biomass, and animal and human labor (Tainter 2004, 91--126).
Yet the economic success of the core’s growth phases, which had initially led to higher energy depletion in the countryside, boomeranged back upon the core through diminishing economic returns and the dispersal of waste and pollution. Through agricultural exchange, for example, nutrients like nitrogen and phosphorus that had been removed from the soil in a rural periphery accumulated now as waste in the urban core. With slowing benefits from the energy flows of its ecological periphery, the economic and governance systems of the core began to decline. More and more energy was captured just to maintain this complex infrastructure—including administration of the periphery, security and transportation costs, and constant importation of food —until there was little net energy available for economic growth (Tainter 2004, 118--23). The destruction of ecosystems through overconsumption by the core, persistent underdevelopment of the periphery, and an overall decline and collapse of energy supplies sorely weakened the management of the core area (Diamond 2011, 509--24; Graeber 2011, 211--21). This was the pattern of development in all energy-driven societies of the past twelve millennia, as evidenced in the Mesopotamian, Egyptian, Hittite, Roman, Chou, Indus Valley, and Mayan civilizations and numerous others (Tainter 2004, 43--90); Diamond 2011, p. 77–308).
Things changed dramatically during the Age of Exploration and Globalization (1500–2000). We pick up the story where European nations were becoming an imperial core and the rest of the world its colonial periphery. With the availability of new resources and slave labor in the sixteenth and seventeenth centuries, resulting from territorial conquest, mercantile trading, and the growing use of new forms of energy, economic growth began to increase exponentially and support the value of money (A. Hall 2011, 59--110). In the seventeenth century, high-priced coal and whale oil led to easier commercial production with less energy and physical labor, as well as greater consumption than previously, which led to lower costs for producers, sellers, and buyers. In England from 1500 to 2000, for example, the amount of money spent on producing energy to empower the rest of the economy decreased from 40 percent to 5 percent (C. A. S. Hall and Klitgaard 2018, 86). The trend of higher energy efficiency leading to greater economic growth became more pronounced through the accumulation of net energy and the development of monetary hegemony in core areas (Goldstein 1988, 296--313). Higher currency values in Europe became the norm following a wide-ranging conflict over unequal transfers of net energy, involving issues of religion, trade, and warfare, which ended with the Treaty of Westphalia in 1648. This agreement by over one hundred European states established peace through border protection and domestic noninterference for the first time (Bobbitt 2003, 502--19; Anghie 2005). It also paved the way for national banking in the eighteenth and nineteenth centuries, which incentivized borrowing for investments in production, finance, and military activity, all of which secured the monetary value of energy. The enormous boost from resource energy production in the colonial periphery also stabilized currency values in the core nations of imperial Europe.
Yet heavily strained by the escalating energy-related costs, each sovereign core eventually struggled to maintain monetary control over the contenders in the neighboring states that challenged its authority. In five different periods, a new nation established itself as monetary hegemon by overpowering the existing core nation: 1494–1517, Portugal versus Spain; 1579–1609, Netherlands versus France; 1688–1713, England versus France; 1792–1815, England versus Germany; and 1914–1945, the United States versus Germany (Goldstein 1988, 281--347). Once the challenger prevailed over the incumbent ruler, it consolidated its own power and legitimacy over the trade and financial practices of the defeated hegemon, beginning a new cycle of monetary politics that applied the victor’s own version of the core-periphery model to the new social order.
During the eighteenth through the twentieth centuries, these power struggles were also evidenced in the recurring colonist revolutions and demands for reparations and climate justice, involving devalued labor, resources, and terms of trade (Chakrabarty 2021, 95--106; B. J. Cohen 2000, 47--67; A. Hall 2011, 527--654). After World War II, when higher market prices for food calories and nutrients, water, wood, biomass, minerals, human and animal labor, and fossil fuels began to dominate the international system of trade and finance, imbalances in the net energy-value between geographic locations created widespread disparities across the developing world (Stavrianos 1981, 623--755). As traditional agriculture was displaced by industrial agriculture based on cheap and seemingly endless sources of petroleum, the former colonial territories developed a nascent understanding of the ecological footprint involved in energy balances and deficits. In the 1970s the issues of agriculture, natural resource supplies, social poverty, aid, labor, trade, finance, monetary policy, and ecological degradation were contested globally. With the publication of North-South: A Program for Survival in 1980, a detailed solution was proposed (Brandt 1980).
But this new pact, in which the wealthier Northern Hemisphere would supply more aid, technology, and financing, while the less developed nations of the South would sell their labor, raw materials, and mass-produced goods, was only the latest expression of the core-periphery dichotomy where energy flows are misaligned and misappropriated (Allen, Tainter, and Hoekstra 2003, 33--43). Altogether, the effects of exchange-value during the modern fossil fuel period—including the degradation of the environment through waste and pollution, declines in the purchasing capacity of the middle classes and poor, severe and successive debt crises, destabilization of governments, and the spread of conflict among the wealthier states—were strikingly similar to those of earlier civilizations (Turchin 2023, 161--89).
The Global North and Global South were still following the same biogeographical practices of exchange:
- Energy transfers of ecological reserves of biomass and energy from peripheral regions to the hegemonic core, rapidly boosting resource consumption
- Consolidation of wealth and rebuilding within the core, enabling purchases of energy from the peripheral areas without measuring the net value of this energy
- Higher resource demand and overconsumption in the core exceeding the available energy, resulting in the disintegration of economic and social infrastructure in both areas
A major factor in today’s planetary dysfunction has its source in the myths of an infinite biosphere, value-added accounting, and chronic misvaluations of net energy between the world’s core and periphery regions (B. J. Cohen 2008, 36--55; Daly and Townsend 1993, 70--73; Graeber 2011, 166--206). These myths continually interpret nature’s thermodynamic laws as a competition for the unlimited accumulation of energy wealth, requiring societies to rely on the feedback mechanisms of profit, compound interest, debt, and GDP rather than the signals of energy yield from natural systems and the physiological needs of populations. In all instances, the wealth transfer to the social core expresses the increase in financial value accrued through the exchange of energy, while the wealth deficit in the social periphery is the mounting debt generated by higher energy-value in the core exchanged for less energy-value (Eichengreen 2008, 210--32). Similar monetary dynamics are now playing out in geopolitics, with a significant twist. China’s emergence since the 1990s as an industrial and technological powerhouse in the Global East periphery / Global South semiperiphery has elevated it to contend for the role of monetary hegemon on a planet whose population, for the first time in history, is surviving on diminishing energy resources."