Thursday, January 21, 2010

copenhagen and economic growth?

EnergyBulletin | As noted here routinely in my writings and in the Crash Course, we have an exponential monetary system. One mandatory feature of our current exponential monetary system is the need for perpetual growth. Not just any kind of growth; exponential growth. That's the price for paying interest on money loaned into existence. Without that growth, our monetary system shudders to a halt and shifts into reverse, operating especially poorly and threatening to melt down the entire economic edifice.

This is so well understood, explicitly or implicitly, throughout all the layers of society and in our various institutions, that you will only ever hear politicians and bankers talking about the "need" for growth.

In fact, they are correct; our system does need growth. All debt-based money systems require growth. That is the resulting feature of loaning one's money into existence. That's the long and the short of the entire story. The growth may seem modest, perhaps a few percent per year ('That's all, honest!'), but therein lies the rub. Any continuous percentage growth is still exponential growth.

Exponential growth means not just a little bit more each year, but a constantly growing amount each year. It is a story of more. Every year needs slightly more than the prior year - that's the requirement.

The Gap
Nobody has yet reconciled the vast intellectual and practical gap that exists between our addiction to exponential growth and the carbon reduction rhetoric coming out of Copenhagen. I've yet to see any credible plan that illustrates how we can grow our economy without using more energy.

Is it somehow possible to grow an economy without using more energy? Let's explore that concept for a bit.

What does it mean to "grow an economy?" Essentially, it means more jobs for more people producing and consuming more things. That's it. An economy, as we measure it, consists of delivering the needs and wants of people in ever-larger quantities. It's those last three words - ever-larger quantities - that defines the whole problem.