Energy Consumption as a Metric of Prosperity

For decades, the growth of human civilization has been measured primarily by a single factor – GDP growth.  This metric is incredibly important, as our leaders seek to maximize this quantity. Politicians, investors, and businessmen can point to a single figure and use it to make predictions and evaluations.

However, as our population growth slows,  GDP growth has devolved into a fundamentally flawed measuring stick for civilization. 


As the rate of population growth slows, less labor will be available to grow economies. Per Piketty’s 2014 book, economic growth is roughly half dependent on population growth, and half dependent on growth in the rate of return on capital – IE, technological and infrastructural advances. With an aging global population, economic growth will likely slow. However, this effect will be counterbalanced by a rise in the rate of return on capital – as technology increases, more productivity will be done using machines, not man. This could result in skyrocketing inequality, as workers see low rises in compensation, while those who own capital see massive returns on investment. Yet, our GDP will still rise, despite the fact that the well-being of the worker has not improved.

In contrast, energy consumption is a superior methodology to measure prosperity and standard of living. Energy is the fundamental currency of the universe – in order to produce an iPhone, smelt aluminium, or grow food, energy is required. GDP rises if a wealthy miner strikes a vast diamond deposit in a poor African nation – but standard of living does not increase, as evidenced by the poverty of the Democratic Republic of the Congo, a nation with 24 trillion dollars worth of mineral resources. GDP also is not a true measure of productivity – if someone hires a tax lawyer, GDP goes up, despite the fact that nothing of value has been added to the economy. In contrast, energy consumption increases as standard of living increases (IE: buying a car or an air conditioner), and as national productivity increases (building a factory). And while gains in efficiency overtime skew data in the short-term, over the long-term, a growing civilization will consume more energy.

Currently, mankind consumes about 18TW of power, or roughly 2350 watts per person. But, if billions are to be lifted out of poverty, this number will grow. If every person on Earth consumed as much energy as the average American, mankind would need to use 73TW. And, if every person consumed as much energy as the average Icelander or Qatari, man would consume a whopping 200TW of energy. Given current trends in population growth, this number may be slightly higher – humanity is expected add two billion people in 30 years. And, with mankind expected to grow his presence in space, this number may still be higher – it takes around 50 megajoules to put just one kilogram into orbit.

Energy consumption is not responsible for global warming – at least, not directly. The 18TW (1.8*10^13) of energy that man uses pales in comparison to the 174PW (1.74*10^17) that we receive from the sun on a daily basis. However, the CO2 emissions from this energy trap sunlight in a “greenhouse effect”, heating up the planet. To avoid catastrophe, man will likely need to remove CO2 from the atmosphere – an effort which will require Terawatts of clean, carbon-free energy, such as nuclear power. Indeed, producing power on the petawatt scale (10^15 watts) may allow man to do the truly amazing – altering weather, making Siberia and Antarctica livable, and cooling down the Sahara desert. As energy production increases, and energy becomes cheaper, the future will become our imagination.

Energy, on a fundamental level, measures prosperity, and is overall a better metric to measure growth as GDP becomes increasingly flawed. Perhaps it is time to switch our mode of thinking from a financially-based mode of thinking, to an energy-based form of thinking.  


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