Sustainable economy

Chapter 2 - Society

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Welcome to the Sustainable economy page

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Economics is how humanity manages to convert its energy surplus into dopamine

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Before the agricultural revolution about 10,000 years ago, every calorie was necessary for the survival of the human species. Paradoxically, the initial yield of farming was smaller in calorie terms than hunting, but the difference was that grains could be stored for 'later in the season'. This simple fact created 'resources' that could be traced back to one family or individual.

As you may be aware, dopamine is not the reward for obtaining 'something' but for desiring 'something'. When that 'something' becomes physically present in society, it becomes the seed for exchange (trade) and economy. This biological basis of human behaviour has played a crucial role in the evolution of our economic systems.

So many years later, we are still living in the same process. Time and, recently, the Industrial Revolution has industrialised and monopolised resources. From this perspective, we still make millions of products with oil energy that respond to the consumer's demand for 'happiness'.

Content source
Nate Hagens

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Core ideas

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Labour, capital and natural resources are complementary rather than substitutable.If you give a baker enough money to double his number of ovens and chefs but tell him he can‘t have more flour and dough, he will struggle to make more bread.

Content source
Energising Money An introduction to energy currencies and accounting - The40foundation

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Deep dive

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Short time scale of human energy economic evolution

(You can find more on the Life page)

• 40.000 years ago, modern man came to Europe as Cro-Magnon man (about 1.200 to 1.600 generations back)
  • Energy search and energy consumption are in balance
• 10.000 years ago, agriculture was invented (about 300 to 400 generations back)
  • Energy surplus (grains) can be stored
• 5.000 years ago, the use of writing appeared (about 150 to 200 generations back)
  • Because of access to stored energy, the social system develops: religion, cities, empires, wars
    • Example of how this affects society: Five thousand years ago, the Mesopotamian goddess Nisaba was worshiped as the patroness of agriculture and literacy. The more the writing gained in importance, the more Nisaba's right to exist was also questioned. Until after about a thousand years she turned out to be married to the god Nabu, who became the new god of writing. From an autonomous goddess she was reduced to a faithful and devoted wife, or sometimes even to Nabu's secretary. (Elif Sharak)
• 1.500 years ago, the demand for energy starts growing (about 60 to 75 generations back)
  • The social system develops, enhancing the economy (and vise-versa): feudal system, nation-states, guilds, trade, world travel, colonisation
• 300 years ago, the search for energy resources started on an industrial scale (about 12 to 15 generations back)
  • Coal, oil, gas are the divers of the current economy

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New Economic Thinking

A large economy is one of the best examples we have of complex dynamics. There are multiple components arranged in complicated overlapping hierarchies, out-of-equilibrium dynamics, nonlinear coupling and feedback between different levels, and ubiquitous unpredictable and chaotic behaviour.

OXFORD MARTIN SCHOOL

Institute for New Economic Thinking
The Institute for New Economic Thinking at the Oxford Martin School (INET Oxford) is a multidisciplinary research centre dedicated to applying leading-edge thinking from the social and physical sciences to global economic challenges.
https://www.inet.ox.ac.uk/

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SAGE framework

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• S - Solidarity (measuring social cohesion and embeddedness):
  • This covers the needs of humans as social creatures, living in communities with a sense of belonging.
• A - Agency (measuring empowerment):
  • It covers an individual’s need to shape their life through their own efforts, both personally and collectively. It includes mastery of the environment, personal growth, and attainment of personal and collective goals.
• G - Gain:
  • It covers GDP and profit. This variable is central in the economists’ toolkit.
• E - Environmental sustainability (measuring the impact of human actions on the natural world):
  • It includes not only the consumption of what economists call “environmental services,” but also the need to support the flourishing of the natural world.

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Content source
https://www.global-solutions-initiative.org/

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Do you want to know more?

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Impact of doing nothing about the climate change on economic growth

• The estimated damage in 2049 amounts to $38 trillion (in 2005 dollars), which corresponds to annual damage the size of the current German economy
• The costs of doing nothing are already much higher than the costs of taking action. The damages exceed the estimated costs of mitigation to limit global warming to 2 degrees Celsius by a factor of six
• The damages are mainly caused by changes in average temperature, but also by changes in daily temperature variations, precipitation patterns and extreme weather events
  • The damage caused by daily temperature variations represents the largest increase in total damage compared to models that only consider changes in the average annual temperature. This means that including daily variability, rather than just average temperature, significantly increases damage
• The impacts of climate change are unevenly distributed. The greatest damage will occur in regions with low latitudes, low historical emissions and low-income levels

Content source
The economic commitment of climate change - M. Kotz - Nature - 17 April 2024
https://www.nature.com/articles/s41586-024-07219-0

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Energy

EU

ENERGY RESILIENT EU SCENARIO
Study “Energy System 2050 – towards a decarbonised Europe”, we shed light on this question. We highlight five key components which support the 2050 vision: renewable energy, grid infrastructure, sector coupling, hydrogen technology, and joint action at the European level.
https://www.energysystem2050.net/

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