The good: pointing out that Amory Lovins is not really in agreement with economics:
Many people are aware of this issue which was first articulated by William Stanley Jevons in the middle of the 19th century and which is referred to as The Jevons Paradox. Jevons noticed that James Watt's redesigned steam engine had made it much easier to produce more coal. This led to a reduction in its price and a subsequent increase in demand as more and more businesses and individuals could afford to use coal as an energy source. Greater efficiency had resulted in a boom in coal consumption.The bad: the suggested solution of energy quotas. Not carbon caps, just energy. Period.
Yet, efficiency advocates today persist in their one-sided equation. If the energy that will be available to humans is essentially unlimited, then there is little point in efficiency. If energy resources are, in fact, limited, then efficiency is paramount. But efficiency alone will not solve our problems so long as we are using finite energy sources such as fossil fuels. Efficiency alone will paradoxically cause us to consume such fuel even faster bringing on its ultimate depletion that much sooner.
A possible approach to this problem is caps on energy use. This would, of course, be potentially very painful to the world economy. But a system of gradually falling caps on energy use would achieve what efficiency alone cannot: an extremely energy efficient economy that uses less overall energy with each passing year. One system designed to accomplish this is called Tradable Energy Quotas (TEQs). According the originator's website TEQs would work this way: "Every adult is given an equal free Entitlement of TEQs units. Industry and Government bid for their units at a weekly Tender." The overall amount of energy use allowed would be gradually ratcheted down by perhaps 2 percent per year. Those who don't use up their quota are free to sell their extra units on the open market.We have the technology to build a low-carbon economy. But a modern economy is based on substituting energy for labor, and trying to restrict energy use significantly without regard to net utility would be a terrible idea. Sensible climate change solutions will (and already are) spurring a transition to a fission economy; energy quotas will simply create poverty.
So, we ought to be truthful about what energy caps imply. Ultimately, they imply a steady state economy. It is an economy where the quality of goods and services can improve, but resource inputs cannot grow. And, it is clear from the devastation already wrought on the biosphere by our current economy that the steady state economy, in order to be sustainable in the long run, will have to operate at a level of inputs far below what we are experiencing today.Why? In the very, very long run, why can't we build a steady-state economy using space-based resources that could have a vastly larger total inputs than now? And until then, don't we have a lot of thorium? Personally, I think it's obvious that the economy will ultimately evolve into a steady-state system, but this will only happen once the entire world develops to a post-industrial state- and that's nowhere near happening yet. And while we need to see to it that this ultimate evolution happens in a sensible manner, straitjacketing our future on the basis of what we can currently imagine is the height of irresponsibility.
And with that, I'm off to present my research on Cold War civil defense at a conference. I'll be back on Sunday.