Maturity and efficiency: Progress in a post-growth world

May 4, 2022

Confusion surrounds the ‘energy transition’. The emphasis on carbon is also bit of a red herring.

Carbon is emitted as a consequence of hydrocarbon combustion.

Technology grows economies and energy consumption

Hydrocarbons (coal, oil, gas) are the workhorse fuels of the industrial revolution. This means that there is a good correlation between carbon emissions and economic growth!

Economies as interconnected systems of nodes (people, companies, other organisations) and flows (of energy and materials and information). Such systems grow larger as they incorporate more energy, which becomes embodied in goods and assets and what is contained within the flows. Technologies are tools for accessing and storing more energy in the system. New technologies unlock new sources of energy and the means for storing them within the economic system. As economies grow, they consume more energy—because the consumption of energy is what allows the economy to grow. At any given time, an economy has a certain energy footprint. If new technologies expand this footprint, the economy can grow (resulting in a larger footprint). If technologies are forgotten or regulated away, the energy footprint declines, and the economy will shrink (a phenomenon that we call ‘recession’ or ‘depression’).

The rate of growth (or lack thereof) affects the sentiments and belief of people within an economy. When an economy is growing, many feel optimistic about the future and are happy to invest in new opportunities. Those responsible for innovation and investment are rewarded (a necessary evil), creating inequalities. When economies grow more slowly, if at all, it is harder for many to feel optimistic about the future.

Systems-level management becomes important during periods of declining or negative growth. People need to understand what is happening and where they fit in. It is much harder to manage a mature organisation than a growing one. The emphasis on a ‘metaphysic’, ‘mission’, or general organising force needs to strengthen, to keep people focussed on the task at hand. In a mature economy, the emphasis needs to be on efficiency (deciding what nodes and flows to prioritise and focussing on getting as much as possible out of the available energies), not growth.

Renewable economies are smaller and less sophisticated

Before the Industrial Revolution, human economies were powered by wholly renewable sources (sun, wind, and biomass). The Industrial Revolution unlocked new stores of fossil energies.

Apart from tidal, geothermal, and radioactive energies, all processes on Earth are powered by the sun. The sun is a giant, gravity-powered fusion reactor that releases large amounts of heat (infrared radiation) into space. The Earth is bathed in these energies. While most sunlight is radiated back into space, some sunlight is captured and drives the global weather cycle, which erodes geological formations. Other sunlight is captured by plants and other photosynthetic organisms that contain specialised arrays for capturing solar energies and the capacity for storing these as biomass.

Sunlight is a very diffuse energy source, but one that can be concentrated as it is transformed into other forms. Wind is more concentrated than sunlight and is considered to be of a higher quality and ‘transformity’. Rain also has a higher transformity than sunlight (being formed as oceans absorb solar energies and some water molecules evaporate, carrying the solar energy to where the wind blows and where the rain falls). When rain falls over an area, the evaporated water becomes successively more concentrated and can be used to power hydropower plants. Hydropower is therefore of a higher transformity still. This makes waterpower a higher-quality source of energy than either wind or solar, but it is often geographically localised and has other environmental impacts (damming).

Biomass has a high transformity (representing sunlight captured and concentrated and maintained over long periods). Organisms are the most efficient captors of solar energies, and biomass is the most efficient store. Solar panels (even with batteries or other storage) don’t get even close!

Fossil fuels are derived from concentrated biomass and have very high transformities. Burning even small amounts of fossil fuels releases the energy equivalent of thousands of years of biomass accumulation in a short span of time. That’s what makes fossil fuels so valuable: We can have thousands of years’ worth of pre-Industrial energies released in an instant! (No wonder that industrialised economies are capable of reaching sizes orders-of-magnitude larger than pre-industrial ones.)

Following the Industrial Revolution, human economies have been growing at very high rates—and faster the more technologies (begot from previous technologies) that have been developed to capture and store more energies. This—and plentiful fossil resources—have allowed human economies to grow exponentially. The past 200 years have therefore been quite an exceptional time in human history. Without fossil fuels, economies would not have been able to grow this fast (or this large).

A forced ‘maturity’ in the transition away from fossil fuels

Carbon emissions go hand in hand with the burning of fossil fuels. This is carbon that was captured from the atmosphere by organisms that were alive at one point, converted into biomass, and then stored and concentrated deep underground for millions of years. Releasing large amounts of this stored carbon at once (or over a geologically brief period of 200 years) has impacted the concentration of carbon dioxide in the atmosphere.

Much of the released carbon dioxide has been buffered by the world’s oceans, but at the expense of acidification. The concern about climate change comes from the recognition that once the ocean buffers are full, the atmospheric concentrations of carbon dioxide can rise quickly enough to push the global climate into a completely new state. We don’t know what that state might look like, but there is analogy here to how the processes that contribute to the biology of ageing over-fill cellular calcium stores. (It’s probably best not to find out what an ‘ageing’ climate would look like.)

So, we’re transitioning away from fossil fuels. This transition has philosophically been happening since the first carbon-dioxide recordings were made and people realised that they have been rising concurrent with the unfolding of the Industrial Revolution. But social and cultural change takes time to go from seed to execution. Thermodynamically, it also makes sense for energy to be used: The ‘invisible hand’ of the universe obeys the second law of thermodynamics (that the not-available energy content of the universal system should always increase). Any local increase in the organisation of matter (organisms and things) needs to be paid for with an increase in the not-available energy content of the universe.

The best way to make energy ‘not available’ is to consume the available energies—to build or do something and, in so doing, convert the available energy into not-available energy. It only makes sense (unless you have great self-control!) to phase out a rich source of energy once it is no longer energy-effective to procure it. Only at this point, where you have to put more energy into procuring energy than the amount of energy you get out, does it make sense to change your energy-seeking behaviour to do something more efficient and worthwhile. There are obvious analogies to this in investing (but using an ‘energy currency’ instead of money).

‘Zero-carbon’ fuels are distractions, not enablers

So far, the ‘energy transition’ has not been as much a transition away from fossil fuels and onto renewables as it has been a way to continue growing our economies—but faster. Instead of taking over from the fossil fuels, renewables have formed additions to our total energy consumption. So, the transition hasn’t been as much of a transition as it has been an addition to our total energy-generating capacity. For a true energy transition to take place, we need to shift our energy usage away from fossil fuels and onto renewables. But that means an end to growth: We will have a (lot) fewer energies to power everything that we’d like to do.

The current allure of ‘zero-carbon fuels’ like hydrogen and compressed air storage and batteries is that they will help us manage the supply-demand mismatch between renewable solar energies and human energy use. Excepting nuclear power (which yields a net-energy return on investment at the expense of a nuclear-waste problem) and the not-quite-here-yet fusion power (which so far has not yielded a net-energy return on investment), other renewable sources of energy are intermittent—and unpredictable.

The intermittency of renewables forms the basis for much of the debate around renewables and inspires much innovation in the sector. To manage the intermittency, the temptation is to ‘smooth’ the energy supply by managing it in time and space. Batteries and compressed air and hydrogen and other storage technologies are offered up as solutions to this problem. Such ‘zero-carbon fuels’ can be generated when renewables are plentiful and then stored and transported to be used where and when the energy is needed.

However, these stores—and therefore the transition itself—cannot be used to generate much economic growth: As we phase out fossil fuels, we need to convert some of these fuels into the generation and distribution infrastructure needed for the energy transition to occur: We need to spend our energy on energy-generation, not downstream production. For the first time, we might find ourselves running at full speed as an economy—just to stay where we are. This could mark the end of the Industrial Revolution as we know it. As the previous era begins cresting, a new era might begin.

The real energy transition marks the end of growth

While it is alluring to think that we can continue on with business as normal while transitioning our economies away from fossil energies and onto renewables, this feels unlikely. Just as large social and cultural and economic and infrastructural changes were required to make full use of the promise and potential of the Industrial Revolution, we will need to make as-large changes to make full use of the potential of a return to renewables. Many things are going to change. Many things are going to need to change.

Among the things to change is likely to be our on-demand economy. Likely, our economies are going to need to shift to become more supply-driven; going from being ‘on demand’ to being to be ‘on supply’. Many trends that we take for granted might actually start to run in reverse! Instead of growth being the sine qua non of modern human activity, efficiency is likely to start becoming more important: Instead of maximising toplines, we might want to maximise turnover. An emphasis on quality over quantity is likely to result. Experience and expertise is likely to be valued higher than ambition and energy. Instead of money and power being symbols of success, we might start to value wisdom and insight. It’s almost as if our economies and societies through these changes are starting to become more … mature.

A mature economy will look very different from the young economy that we’re used to! We should certainly not expect it to look like an extrapolation of the status quo. In fact, we might be heading more towards the Star Trek universe (where high-tech meets low-density sustenance farming) rather than the overpopulated, financialised, hi-tech solar system depicted in, for example, S.A. Corey’s The Expanse (available on Amazon Prime). Rather than looking forward (by extrapolating current trends), we might instead want to look into the past for inspiration.

Sustainability is dead, long live sustainability

Likely, the last years of the pre-Industrial age likely represented ‘peak sustainability’.

Before fossil fuels started to be used at scale, human economies were completely solar-powered (excepting tidal and geothermal energies). People back then were just as smart and innovative as we are today, they just had fewer fossil fuels and less information about how to use these fuels available. But that didn’t stop them from building massive windmills out of sustainable materials like stone and wood, or from figuring out how to maximise the productivity of solar-powered and carbon-storing farm and woodlands. They were practising true sustainability (as in, building something that lasts), living within their means—and within a truly circular economy.

In such economies, low-tech options are better (and more efficient) than high-tech options. For example, instead of treating urban wastewater in chemical and energy-intensive water-treatment plants, wastewater can be funnelled into wetlands to grow algae to feed fish to feed the people who produced the original waste. This way, material and nutrients are kept cycling and the only energy that is needed is that supplied by the sun. No fossil fuels or technology is needed! Similarly, instead of having our goods made in far-away countries and then imported, we can make goods more locally. In those cases where goods need to be imported, we can use wind-powered ships, like the great clippers of the late 19th century before they were phased out by steam-powered ships.

Instead of our economies and societies growing larger and more interconnected and increasingly frenetic, a true energy transition might allow the world to shrink and to slow down. Communities will become smaller and more tightly-knit: We’ll get to spend more time with our children and to get to know our neighbours again. There will also be less need for computing and software in a world where everything is moving slowly enough to be done by hand (or reached by foot). With some modern technology and more moderate expectations of what makes a good life, we might finally end up with the long-promised 4-day workweek—if ‘work’ in its modern sense even exists at all.

Demands in this slower, smaller economy will be driven by efficiency (not growth). The path there will be one of transition (just as the way to now from the start of the Industrial Revolution was, in turn). During this centuries-long process, populations will shrink and more people will move into the countryside where the energy (sunlight and biomass) is more highly concentrated. As these changes are happening, we will be tasked with sifting through our current library of technologies and energy uses and figuring out what will be worth keeping and what should be forgotten. It will be the ‘destructive’ part of Schumpeter’s ‘creative destruction’. But ‘destruction’ is a misnomer. It’s a constructive and evaluative process. The economic equivalent of natural selection. What is good for the economy and the community and individuals will survive and to be selected for. The ‘invisible hand’ of this process will be happiness and well-being, not the accumulation of wealth.

Fossil fuels were an investment, but was is a good one?

On the way to our current (or near) economic peak we have used abundant fuels and our collective imagination to create knowledge and technologies and things. Some of this investment has been worthwhile and has made the world a better place. (Some investment, maybe less so!)

On the way down (the descent), we will need to figure out what is a good investment for the long term, and what we should write off as a collective, youthful mistake. The most energy-intensive tools and applications will likely be the first to go… At the same time, new technologies will be invented, but with an emphasis on efficiency and sustainability—rather than growth and desirability.

While these trends are already in motion (observe, for example, the current interest in building out the urban bike infrastructure and the growing demand for locally-made goods), the bulk of these changes will happen over a long period of time. The world did not industrialise overnight—and it will likely take a similar time to de-industrialise. Continents like Africa, which are less-far along their industrialisation trajectory might (finally) be allowed to develop in their own way, without industrialised-world oversight.

Companies will also come and go in this span of time. Hopefully—the occasional conflict and energy crisis aside—the transition will also be well-managed and peaceful. Like with most social trends, we will (ideally) only notice these things happening only when we look backwards and notice how much society has changed while we were busy worrying about something else. : )

The conceit of synthetic biology

May 3, 2022May 3, 2022

I was a younger and less-experienced analyst a few years ago, and with a biology backgroound it was inevitable that I would be excited about synthetic biology. This culminated with a visit to a synthetic biology conference in 2019. In the years since, several companies and ideas that I came across at the conference have failed to make much of an impact. Obviously, this is to be expected of any young industry, and there are companies and concepts that presented at the conference and that seem to be doing well. Others keep popping up, but I’m not sure how they’re faring operationally. However, seeing these stories unfold, and having followed (and been disappointed with some) additional ones along the way, I got started thinking:

What if synthetic biology has a dirty little secret and it’s not all it was made out to be?

Energy efficiency: A (big) dirty secret

One of the main selling points for synthetic biology is the ability to replace synthetic chemicals with fermented ones; to harness the power of biology and to create new materials from biological feedstocks and engineered microbial strains. However, this doesn’t actually make all that much sense, because once you start making chemicals like plastics and biofuels in bioreactors (rather than fossil hydrocarbons), you’re really just increasing your total energy usage because the reactor is energetically expensive to run and to operate (not to speak of the engineering and R&D that went into making it possible). So, even if the end-products are biological, the overall energy budget of the fermentation might actually have increased. The sustainability gains might therefore not be as great as initially thought. The only thing we got rid of was the fossil feedstock, but we burned that while transforming biological feedstock to product, so the net gain will still be negative.

There might be no better example of these dynamics than the cultivated meat industry. Less so with companies using vegetable feedstocks without too much bioprocessing, because here the biggest challenges would be operational, not scientific. Instead I’m thinking more of the companies that hope to grow cells in bioreactors and to turn these into bio-nuggets.

Bio-nuggets are a nice idea, but once you start thinking about it in more detail, you realise that it’s going to be extremely energetically expensive: Mammal, bird, and fish cells are much slower-growing than yeast or bacteria, and they tolerate bioreactor conditions much less well than their free-living counterparts. You’d need to put very large amounts of energy (both direct and embodied) into the reactors to yield even a small scoop of bio-sludge at the bottom. The pharmaceutical industry has been trying to improve bioreactor yields for years, without making much progress. To try to make food out of these inefficient processes once fossil fuels are starting to become limiting because of net-zero commitments feels a bit out of place.

Additionally, there is an incomprehensive machine-loving logic to the entire endeavour, where part of the marketing message from cultivated-meat companies is that animals are ‘so inefficient at turning feed into meat’, partially because of energy losses in the form of metabolic heat and partially because of their tendency to turn feed into more organs than just meat. ‘Why grow a cow, including bones and horns, when all you want is the steak?’ Or so the logic goes. But this betrays a fundamental misunderstanding of how animals work, and we’re really paying dearly for this insight with every company that tries to grow steak in a vat.

The dirty secret of the cultivated meat industry is that animals are actually quite efficient at turning feed into meat! Much more so than any bioreactor can ever hope to be.

Misapplied logic conceals the real problem

The bioreactor is applying linear machine logic to a complex biological problem of how to convert energy into biomass. This is a problem at least half a billion years old. Animals and plants found the solution to this problem by creating complex bodies with specialisations that exceed the capabilities of single-celled organisms. Instead of growing one cell by another, they grew one body after another. The cellular collective (in the form of a body or other multicellular structure) turned out to be more efficient than each cell fending for itself. We see this logic at work in economies all the time: The reason why people come together to form companies, and companies, economies, is because the collective is much more efficient than the parts working individually. To think that meat grown in a vat is more energetically efficient than growing the meat as an animal is to apply machine-level thinking to biological organisms. It doesn’t work.

I’m left wondering if a similar problem to this is what’s plaguing the synthetic biology industry: That the entire industry is really just a large science project without any real justification for its existence. Because of the energetic inefficiency of fermentation, maybe it doesn’t make sense to apply it to anything other than high-value end products like biological drugs (like antibodies) or the odd commodity protein (assuming that the yield can be gotten high enough)? Sure, genetic and strain engineering can help to optimise the yield somewhat, but there is often a tradeoff between yield and volume, where cells that convert biomass into product at a high efficiency might not be so good at growing, reducing the final volume of product achieved. Synthetic biology is really a grand experiment to explore biothermodynamic limits, and I don’t think we’re anywhere ready to do this at anything other than the very small (and expensive and inefficient) scale, no matter how much money investors keep pouring into it.

Bioreactors are, even in the best conditions, always going to be very energetically expensive and inefficient. They’re machines, and machines are not optimised or organised the way complex systems like organisms are, so they’re always going to be operationally inferiror. If we want to grow meat, we have good alternatives to do so in the form of animals—the problems with animal agriculture aside. Same if we want to grow biological products like rose oil or enzymes. Roses are the most energy-efficient means we have for making rose oil, so why throw a bioreactor into the mix? Some enzymes can be expressed at high yield by yeast and bacteria, and this is really what the synthetic biology industry is limited to anyway.

Instead, the problems that synthetic biology purport to solve have much more energy-efficient (but harder) solutions. If animal agriculture is limiting because of its environmental impact, we simply have to eat less meat. (All the cynics on Twitter who say there are too many people on the planet are right.) If this infringes on someone’s ‘personal freedoms’, well, that sucks, but there’s not much that we can do about it right now. It’s better to start working on people’s expectations on responsibilities and freedoms than finding a technological solution to everything.

Harder problems than energy-efficiency are before us

In the long term, global populations are likely near peak. By 2100, it’s likely that we reach ‘peak human’ and that the global population will go down from there, to perhaps stabilise around 2 billion people. Less so if we have to depend completely on biomass for our energy needs, in which case we’ll probably bottom out at 0.5 – 1 billion—the global population before the Industrial Revolution. Any level of population above this will have to be fuelled by non-solar sources like fossil or nuclear fuels. Countries like China and Japan are leading the way in the population decline as people don’t have the time, money, or inclination to have children. Europe and the US are not far behind. Emerging markets will take a bit longer to stabilise. Once we’re at 2 billion people again, we can eat all the meat that we want—with the exception that industrial agriculture won’t be feasible without fossil fuels. We’ll have to go back to living off the land like our ancestors did for millennia. This will require quite significant changes to our way of life.

The challenge will be how to manage these lifestyle changes and to make sure that we keep all that is good. We have so much information and knowledge today that we didn’t have 200 years ago, and we need to find ways of making use of this information in the best way. Increasingly, the emphasis will have to be on better data, rather than more data. (So Big Data will be no more. Good riddance, it won’t be missed.) Instead of killing time and civilisation on TikTok, we might want to spend our last fossil fuels on improving education. Instead of propping up megapolises (where nobody is happy anyway), we might want to prepare for a mass return to the land and solar-powered agriculture. There are likely to be innovations yet to happen in this area, but we’re better off investing in educating people about the benefits of coppicing than we are in spending money and fuel on space travel. That’s for the next Industrial Revolution, even if that’s going to be centuries (if not millennia) from now.

Fossil fuels were a natural gift that we have (increasingly) spent. What we have around us right now is what we chose to do with them. Everything—from the computer that I’m typing this on to the food in my fridge—was made from fossil fuels. They’re impossible to escape. But some things were better investments than others.

The mentality of the coming decades should really be one of asking ‘does this trend or innovation represent fuel well-spent?’.

Fighting to retain an acceptable level of return on investment

Increasingly, the return on investment of our current technological paradigms (most recently financialisation and IT) is going down. We need to learn to see the declining ROI on innovation as a signal that it’s time to stop investing. If a company can’t generate positive FCF and a positive ROIC, we shouldn’t be putting money into it because it’s money that’s going to be destroyed. The same logic applies to technological innovation. If we lament that ‘the return on pharmaceutical R&D is going down’, well, that sucks, but investing in innovation to set even more money on fire isn’t going to help solve the problem of money being on fire in the first place. The only thing that helps is to invest in a truly new technological paradigm. (And you know those by looking at whatever people are not investing in or caring about right now.)

There is lots of exciting technological innovation yet to happen, but nobody really cares. Most of the ‘forecasting’ that we do involves extrapolating on current trends and running them into infinity. That’s how we ended up thinking that cultivated meat was a good idea, or that spending money on pharmaceutical R&D within the current paradigm would somehow help with the ROI problem.

Instead, we should look to what people more intelligent than us are saying. And they’re saying things such as that the real computer revolution never happened, because computers (when first imagined and built) were meant to augment our silly little human intellects with real computing power, not lead to us to being hypnotised by some bouncy decolletage on TikTok or shouting at each other on Twitter.

The energy we lose on TikTok and waste on Twitter is energy that we could be spending to help make our current civilisation more mature. But that’s going to require hard choices and restrictions of personal freedoms because it’s going to require the lot of us to grow up and to do hard things; the sort of things that we don’t want to do. Like cutting off investment into areas that are yielding below some threshold level of ROI. And that will also require us to stop paying for Netflix and buying junk from IKEA and of pretending that finance is a way of changing the world (because it isn’t). Instead, we should see inflation as paying debts that are long overdue and incurred on us collectively, and to think small and to empower more local connections. We need to learn how to slow down and to settle and to make do with less stuff. (Yes, I know that this is hard.)

To mature as a society we are going to need to do lots of hard things. Better starting now, even if we are starting small.

The best things are usually pretty boring and small

I don’t think synthetic biology is going to be the future except in very limited cases. I also don’t think the Internet is a force of good, or that markets are very good at allocating capital. I think a lot of the lessons that we need to learn have been learned over and over over the aeons. That the most meaningful things are pretty simple, like home and family, and jobs that allow us to manipulate real things and to build homes that will last for generations. I don’t think anyone will make much money from investing in that. But maybe money and capital gains is just imaginary anyway. Obviously, there will always be some bright spark or another who needs capital for building what could be a great business, but let’s leave the business-building to them. The rest of us should probably just sit quietly and get on with our own lives. The system will be much more efficient that way.

Prolumine

Tag: innovation