David Seaton's picture

    Humanity: up a tree, with no fireman in sight

    By David Seaton on Wed, 06/15/2011 - 2:57pm |

    Raghuram Rajan

    “The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit.” [Marx - Capital, Volume III, Chapter 30]

    “It is the end of cheap goods,” says Bruce Rockowitz. He is the chief executive of Li & Fung, a company that sources more clothes and common household products from Asia than perhaps any other.(...) China helped to keep global inflation in check. But that era is now over, (...) Nothing can replace the Chinese miracle. “There is no next,” says Mr Rockowitz. Prices will now start to rise by 5% or more each year, with no end in sight. And that may be optimistic. So far this year, Mr Rockowitz says, Li & Fung’s sourcing operation has seen price increases of 15% on average. Other sourcers of Asian toys, clothes and basic household products tell similarly ominous tales. Economist

    “In the quest for growth, many countries have neglected to build a reliable system of social security that will help citizens buffer the market's volatility.(...) Democratic capitalism’s greatest problem is not that it will destroy itself economically, as Marx would have it — but that it may lose its political support.” Raghuram Rajan

    Marx's predictions of the system collapsing under the "enmiseration" of workers seem to have been foiled over and over again by the system's growing ability to produce and market ever cheaper and more abundant consumer goods and then, when incomes began to stagnate, to make available ever cheaper and more abundant credit with which to buy those goods: a form of consumption which used to be aptly known in England as "buying on the never-never". The role of the worker was replaced by the role of the consumer and the connection between the two roles became ever more tenuous.

    Thus did the system square the circle: people could "own" their own home and consume just as if they were prosperous, despite stagnant or falling wages and to tide people over the rough spots, in most developed countries, there was a generous welfare state in place.  This formula for dynamic economies combined with social peace appears to be have run out of road. And in this financial crisis the "never" of never-never seems to have arrived.

    In the video above, Chicago University professor and former (clairvoyant) chief economist of the IMF, Raguram Rajan lays great emphasis in improving education in order to prepare workers for a labor market demanding ever more sophisticated skills, as those without said skills, seem irredeemably doomed to Marx's "enmiseration". 

    As much as I admire professor Rajan, and I admire him very much, I am skeptical about the possibility of training the mass of humanity, the grandchildren of homo habilis, in the skillful, rather obsessive, management of the abstract symbols and concepts which make up so much of the new technologies... This is a sort of skepticism I have been incubating for a long time. I remember even writing a poem when I was in my teens, with the lines:

    On a rectangular plot of manicured grass,

    Sits the man of tomorrow,

    On yesterday's ass

    My intuition tells me that we are quite a young species -- only about 200,000 years old -- and only living in permanent village-town-cities, that is to say, "civilized", for some 10,000 years. We belong to a species, which by a quirk of evolution, is intelligent enough to have gotten itself into a situation which we are not intelligent enough to get out of... something like a kitten climbing a tree... Unfortunately, there doesn't seem to be a "fire department" to get us down from our "tree".

    Let me give a simple, graphic, example of what I am trying to say. Look at today's epidemic of obesity, which I think is a perfect indicator of our dilemma. For almost all of our 200,000 years of existence as a species, right up till the very recent development of our advanced agricultural and distribution techniques, being able to gain weight quickly, when food was abundant, and lose it slowly, when food was scarce, was a vital plus for surviving frequent crop failures, droughts and other natural disasters. Suddenly, within a few generations, thanks to our logistics and food processing systems, a large percentage of the population finds itself waddling toward an early grave.  I think this will serve as metaphor for many observable phenomena today, you are welcome to make your own list.

    Certainly most of humanity through most of its history and prehistory, survived and did useful work without having to manage abstract symbols and concepts and it seems to me as cruel as laughing at fat people  to make those abilities essential for living with any security and dignity today.

    The challenge today is to allow the most average of people to have a decent life, with good health, as much education as they are able to absorb and a chance to work gainfully in occupations within their capacities and enjoy a dignified retirement. The person able to "re-invent" work, and make this possible would be the "Einstein" of today's world.

    Crossposted from: http://seaton-newslinks.blogspot.com/

    Comments

    Since I am writing a reinvention of sorts elsewhere and for other purposes, I won't go into detail here (lucky you!!) But at the center of the required changes, we are likely to find not simply "work-related" shifts, but perhaps even more importantly, changes to what we've all come to know and love as... "consumption."  

    Change that, and humanity regains its wiggle room. Which is about all human beings ever require. 

    1. Housing is 30-35% of personal expenditure. Since WW2, the square footage of new houses has more than doubled, while the number of residents has fallen drastically. Each square foot has to be purchased (in most countries, in after-tax income), interest paid, heat and cooling paid, decoration and furnishing paid, maintenance paid, property taxes paid, insurance paid, etc.

    A change in culture and consumption patterns around housing is already underway (I would argue) (and not just in size, but in family and age usage patterns), largely under the cosh of economic events, but also as a result of generational and technological changes (including ones we too often mock.) The net result, however, is that we are able to free up more income (and reduce our need for work), achieving more financial maneuvering room than any tax break or educational shift could achieve.

    2. Transportation is 10-15% of personal expenditure. The trend-line on horsepower is an exact mirror of the trendline on square footage. We now regularly purchase SUV's and even high-efficiency cars with better acceleration than the muscle cars of decades past. In addition, the US now possesses more vehicles than it has licensed drivers, with the rest of the West not far behind.

    A shift to electricity as an energy source for our vehicles will enable most nations (and regions within those nations) to shift to domestic energy sources for transportation. It will dramatically reduce air pollution, and - critically in many cities - noise. A single wind turbine will be able to generate enough electricity to drive 5-10,000 cars all year. Roofs will be placed over parking bays in sunny areas, and cars recharge as they wait at work. Tens of millions of families already have commutes of under 40 miles round-trip, as well as garages with electrical outlets, which means they are eligible for a shift to EVs today - not in some distant future.

    Further developments in batteries and recharging, in mass transit systems and payment methods, in online work and shopping, also give us the tools - if we have the will - to dramatically reduce transportation-related consumption, and thus change the economic game.

    3. Food and drink and tobacco is another 10-15%. An obvious and necessary change is to shift away from consuming so much red meat. This not only produces cash savings and better health, but enables a dramatic freeing up of growing land in the US, Canada, Australia and so on. Other changes, away from pop and highly sweetened items, will also produce health and cash savings.

    * 

    When this is pointed out, many on the Left will go on about how "so much more" is required. All I would say is that there is no policy proposal on the table today, whether tax or spend, from left or right, which would produce even a 5% shift in how we allocate our GDP. Whereas if people should regrasp their consumption, then 10%, 20% and even 30% shifts are within practical, daily, reach. [And it's worth noting that each 1% shift frees up or shifts roughly $120 billion, so not such small change.]


    by quinn esq on Wed, 06/15/2011 - 4:29pm

    Interesting.... good points, got to take some time over it.

    I would point out on the fly, that if salaries continue to stagnate, you and your sigificant other will have to both work more hours each to pay together for a pissant electric car, a tiny rented apartment, and vegen fare, than grandad did for his enormous gas guzzler, house in the suburbs and his T-bone steak... With grandma a stay at home, "homemaker".


    by David Seaton on Thu, 06/16/2011 - 1:14am

    Hate to rain on your parade when its such a shitty day in the world (no war=war). But I think that you are way too optimistic on the transportation sector.  It will be very hard--if not impossible--to scale up battery production without several major technological innovations/borderline miracles. A billion-plus batteries is a lot of lithium, more than we have. I don't see anyway this will be done in a cost effective manner. Plus you are taking a huge amount of new electrical infrastructure that will need to be built.  All eminently doable but again not cheap. Transportation costs will raise not decline (Unless we go really long on coal, and take a truely scorched earth approach to mining, which we do in W. Virgina)

    As "easy to get" oil quickly disappears our most energy dense fuel will become more costly as we shift to tar-sands and shale oil production (yeah fracking). I suspect you will also see biofuels usage increase in several parts of the world (i.e. suger cane ethanal, palm oil, etc).  This is much cheaper than electric but will put tremendous pressure on arable land, primarily in Africa/S.America/S Asia.

    http://www.planbeconomics.com/2011/05/27/dr-fatih-birol-iea-peak-oil-was...

    Cellusic Ethanal and the various Algae options are also quite interesting, but I don't see any of them scaling up anytime soon.  Transportation is going to be expensive, and plane travel in particular is at risk of becoming a richies only sorta thing (batteries are pretty damn heavy). 

    I am hopeful that culture changes will work wonders on 1&3. I think the current price of housing is forcing as much of a cultural shift as any changing morays are.  At least here in the states we are stuck with a fifty year overhang of suburbia shit that is poorly built, expensive to maintain, forces long commutes, and kills us too boot. That isn't going away anytime soon.  

    But still, I am hopeful.  It's better then the fresh water situation at least. :)


    by Saladin on Thu, 06/16/2011 - 1:30am

    I was gonna do this ArchDruid blog as a news item, but it might as well go here: Profligacies of Scale

    Technology, for a great people nowadays, is their source of meaning and their hope of salvation. Most liberals, conservatives, atheists, and plenty of people who think they belong to some other religion all put their trust in the great god Progress and wait prayerfully for him to bring a future that, they insist, must be better than the present. However poorly founded that faith may be, it plays an immensely important role in today’s industrial cultures, and the death of Progress in our time thus bids fair to deal the same shattering blow to our present certainties that the death of God announced by Nietzche measured out to the equally comfortably certainties of the nineteenth century.

    And speaking of water: Learning from the Aquacalypse


    by Donal on Thu, 06/16/2011 - 8:07am

    Great quote Donal.


    by David Seaton on Thu, 06/16/2011 - 10:44am

    Donal,

    I agree with much of the sentiment. I think that much of the anger that motivates the teapartiers is same despair hitting leftists--a realization of that lifestyles are not going to get better. The death of progress so to speak.  However, I would disagree about the actual death of progress--at least technological progress--if anything the rate at which it is happening is accelerating.  Iphone anyone? or crazy stories like this:

    http://news.discovery.com/tech/the-first-laser-made-of-living-cells-has-...

    However much of this progress isn't likely to matter to most of us fighting the 9 to5 live etc. So I think the quote, like David's sentiments above, gives us much to think about. 


    by Saladin on Thu, 06/16/2011 - 1:21pm

    Hey Sal. Pleasure as always.

    I'll start with the housing comment first, because housing is less sexy than transport, but more important. In my mind, it's not fossil fuels that are the #1 thing to change, it's how we house our people. The bubble and its collapse has taken center stage, and now there's no obvious way for people to accumulate wealth or win the lotto, so the focus is on that.

    But way more important is the simple fact that we North Americans are burying ourselves under more and more square footage, a bit like the antlers on the Irish Elk. I mean, you can walk through 60% of the homes in NAm and find whole rooms which are barely, if ever, used. The rest of the world would find this unbelievable. And the fact that we then have to work extra YEARS of our life to pay for them, or squeeze things like education, vacations, health care beyond limits makes clear how insane this is. 

    That's the big enchilada. There's more money wasted in the US annually on HOUSING than there is at the PENTAGON, and that by a long yard. We need to downsize, to put more people under the same roof, to stop building new and stupid, and much more beside. I wish some of the brain power presently going into doomer talk around oil would look at the incredibly stupid set of house horns we've grown and figure out some ways to whittle.

    As for cars, agreed on cellulosic and algae. They're not here yet. And that oilsands and fracking madness will rule for some time.

    But the lithium and electrical network issues raised aren't that worrying. Those stories were driven a bit much by people who don't want there to be a new option, and by organizations which stand to benefit. For example, lithium is much more abundant than imagined. There was one guy (at Meridian?) who started shouting about this, he got huge coverage, and now the story seems to have run away on us.

    Fact is, nobody had bothered too much to even look for lithium - which is actually reasonably common (as much lithium as chlorine, for instance.) Manitoba had North America's major lithium mine, but nobody even paid any attention to it. So when they say "global reserves" it's about as misleading as it could get. Even then, I believe just the resources they've listed as "reserves" would give us 3 billion Chevy Volts. So.... no immediate issues.

    As for the grid's limits, well.... having spent way too much time in this field, all I can say is it is in the interest of every utility in the world to whine about how hard it is to expand to supply cars. (Same as they did for wind.) All they're doing is trying to get taxpayers to pay for the expansions, or regulators to approve profits off of vast new wire outlays. How much is needed? Well, ask yourself a few questions.

    The standard draw for a Chevy Volt doing  a night-time recharge is about 1 kw at a time, and say, 10 kwh's overnight. Your house has about a dozen items that can draw 1 kw. Hair driers. Coffee makers. A/C units draw much more. So capacity-wise, it's doable. If people get talked into fast-charge stuff, then it gets harder, but we're still really just talking replacing neighbourhood equipment like utilities do all the time, on regular daily rounds, and as they've been doing for YEARS already, as we added A/C and big screen TV's and such.

    In terms of energy used, take the annual electricity bill for refilling your Volt, and you can see that the scale actually isn't that huge. Say 8 kwh's a day average X 365 days = say, 3,000 kwh's a year. If you rates are 10 cents/kwh, then... $300 a year. Now, that's a reasonably small fraction of your household electrical bill I'd bet, maybe 10%-20%? Well, for a utility, even if it has to build new plant for this, and even if it has no access to renewables, can buy an off-the-shelf natural gas combined cycle turbine of 400 MW's and have it running pronto, at high efficiencies, very rapidly. And one of those, operating at 80% of capacity, would supply almost 1 MILLION Volts. As for wind turbines, depending on the turbine size and local winds, you're going to get 2,000-10,000 cars per turbine. Or 20-100,000 for a single wind-farm of 100 turbines. So..... we can do this. 

    Americans often go on about EVs, and (sorry) but there's this brain-cloud that seems to come in, whereby they think that if THEY find them too expensive or whatever, then.... they won't happen elsewhere. But think about this. You guys may have gas today at $3.70. Fine. But we're at $4.80. Much of Europe is at $6-$10/gallon. And so on. So tell me the economics of going to EV's in Europe, where commutes and annual travel distances are much less.... gas is much more... dislike of noise is higher... and domestic sources of oil and gas are much fewer? How about Asia? Sure, there grids are weak. But if you're China or India, with the air pollution of cities, and the screaming pressure around gasoline, which direction are you going to push?

    Nope. Seems to me a done deal, that electrification of transportation is coming. The question for Americans is HOW, as a country, does it move early enough to get out of the oil-price vice, to get some of the manufacturing, to avoid early pressures on battery materials and prices, to make the transition and apparently keep its manhood intact.

    Irish Elk. More relevant than we may have suspected. ;-)


    by quinn esq on Thu, 06/16/2011 - 10:43am

    Interesting read, Q.

    On the residential front, is there any sign of progress on smaller housing by, say, changing zoning laws and such to promote more concentrated urban residential neighborhoods?


    by Cho on Thu, 06/16/2011 - 12:45pm

    Boulder got slightly close, though pared down from the original plans.  I would have gone for Xing large north-facing windows, too; McMansions are famous for that in CO.


    by we are stardust on Thu, 06/16/2011 - 1:33pm

    Well it's the right direction, at least. As long as there is movement there is hope.


    by Cho on Thu, 06/16/2011 - 5:56pm

    Seems to be pretty much city-to-city, neighbourhood-to-neighbourhood trench warfare on this front. Some cities are seeing signs of life in renting, condos and other density-boosting housing types. 

    And the overall square footage per new home appears to have fallen across a number of countries, so that's a start as well.

    But still....


    by quinn esq on Thu, 06/16/2011 - 2:00pm

    Portland, Or, or Vancouver BC are leading the fight on this.  Portland's zoning code is all about promoting density (if intrested its on the web). Coupled with that is a development commission that hands money out to devlopers to build dense multifamily buildings. Not a good deal for the community but good for promoting density...

    The biggest constraint, aside from cultural housing preferences, is construction cost. A single family house can be built for 80-100 a squarefoot. Multifamily residences start at 150, and skyrockets on up from there (plus there is all the headaches of management, shared commons spaces, etc.) Its just easier and cheaper to build Single family, and that is also what people want.

    Although right now, nobody is buying, and nobody really will be until the job situation changes. So this is sorta a moot issue. 


    by Saladin on Thu, 06/16/2011 - 2:12pm

    Its just easier and cheaper to build Single family.

    More stuff I wouldn't have guessed. Thanks.

     


    by Cho on Thu, 06/16/2011 - 5:54pm

    I'm with you on the housing. Believe me, I am with you. However, I believe it is going to take a major cultural change to get the whole country on board.  We still are under this romantic notion of the countryside living (the tyranny of lawns) and the "own your own castle" single family house mentality.  I think that you can see some signs of it happening today, for example the one housing type that is holding its own consistently across markets is that that is in 'walkable' neighborhoods, which is also the preferred neighborhoods of the gen y sect. 

    Yes it is a huge amount of money.  But there are serious long term structural policy reasons for that.  It's not just bigger cost more to build, which you seem to imply. Housing is costly, because ever since FDR established the Federal National Mortgage Association we have made it a central policy to get folks to own homes (Fannie and Freddie, home mortgage tax deduction, etc.). And for the last decade so much money was pumped into chasing it this guaranteed safe return that prices skyrocketed, irrespective of fundamentals like price of drywall or a 2x4. Trillions were funneled to it, and super low interest rates meant one could buy twice as much. but I would argue that that did not translate into a house twice as big (probably more like 20%), the rest was just wasted money on land, inflated bottom lines, crazy securities, But then you know all this so .. 

    Look I am certain the grid can handle electric cars, most are charged at night when usage is at its lowest. There will be a lot of necessary upgrading that needs to happen, particularly if we are going to go sustainable sources of energy, like you implied (one wind turbine). Coal is cheap, and it produces nearly half the electricity in this country, replacing that will be costly. At the micro level I used to build things, so I've got a rough idea of how much it costs. For EV vehicles I would suspect that about a third the residential electrical panels in this country would need to be upgraded to handle the additional load (hair dryers blow circuits all the time, doing that for 8 hours a night), that's 1.5-2k a pop. Sure cheap in the big scheme of things but it adds up. 

    I am happy to hear that lithium isn't running low, my understandings were that we have a long way to go to scale up mining, and that there were concerns about availability and it's potential cost. If you have looked into this and can assure me that we don't have resource constraints there, then good. I always trust you, but if any good sources please send em my way. But we still have to build the batteries, and that will also take capital, and a fair amount of energy, which adds costs. 

    However, neither of those concerns were my central point.  My point is that cost of vehicles, and transportation in general is going to rise.  That's it. Not that it's not possible, or unlikely, just that it is going to get more expensive.  Maybe not too much more for Europeans as you point out, perhaps only 50% more, maybe less,  but the cost of transportation is likely to double for us, (at least with automobiles, trains can probably do better, but planes more $$$).  I am 100% with you that we need to do this, and that we can likely do it, but it is not going to be some magical panacea for saving money.  

    1 barrel of oil = 9 straight years of man's labor, it's just hard to compete with that sort of energy density. 

    P.S. I don't know if I want china to adopt widespread EVs. That country is already on track to double their coal production in the next 20 years, sure they are building PVs and turbines like mad, but also opening a coal plant a week (which albeit cleaner on N02,SO2, are just as dirty on co2). We will hit 500ppm. 


    by Saladin on Thu, 06/16/2011 - 2:05pm

    Housing first.

    Agreed that there were many reasons the cost of new housing soared. Basically, I'm not interested in building any more new housing, at least for a few decades. People in the new construction industry can scream all they want. Frankly, screw them. That industry refused to get costs under control, they buried tens of millions of families under impossible bills, and made deals with every goddamn hoodlum developer going. So as far as I'm concerned - kill the new build industry, focus skilled people on doing useful things with existing buildings, and maybe go back to new build once this lot is retired. 

    There are signs of life, in terms of intensification not just of neighbourhoods, but of EXISTING BUILDINGS. NYT says, "Multigenerational families, which accounted for 25 percent of the population in 1940 but only 12 percent by 1980, inched up to 16 percent in 2008, according to the analysis... At the same time, the share of older people living in multigenerational families, which plummeted to 17 percent in 1980 from 57 percent in 1900, rose to 20 percent. The latest overall shift coincides with a number of demographic changes, including delayed marriage, greater longevity, more grown children (the baby boomers) with whom the elderly can share a household, Medicare cuts enacted in 1997 and the growing number of immigrants.... The shift appears to have been accelerated by the recession. In 2008, at the beginning of the recession and the latest year for which figures are available, 2.6 million more Americans lived in a multigenerational household than did the year before. Perhaps as a result of job losses and foreclosures that have affected young adults, in particular, a majority of multigenerational households that include a family member 65 or older are headed by that older adult. The growth of extended families has also been facilitated by another phenomenon: the average single-family home is about twice as big as it was several decades ago."

    It's almost impossible or us to see this as desirable, so hardwired has it become to build our own place, but the economy is forcing this shift on us. My view is we should seize it as a positive, and take advantage of the enormous (largely wasted) asset we have in our larger living spaces.

    As for new homes being built, the average size is falling, as are the numbers of bedrooms, bathrooms and the luxuries. Fine with me.

     


    by quinn esq on Thu, 06/16/2011 - 3:02pm

    "Basically, I'm not interested in building any more new housing, at least for a few decades."

    I've been giving this thought and I just can't agree. Basically we built a lot of the wrong kind of housing, and we did it on the cheap to boot. It won't last.  We need to be building more of the right kind, mid to high density mixed use on top of transit nodes.  And I think we need to tear down a shitload of subdivisions, unless we are cool with them become slums that hid dense poverty.  I don't know if I am, but maybe that's an aesthetic thing. I like attractive places, and I think we need good viable communities for a healthy society.  Slumland in outer rung suberbs just doesn't seem healthy to me. 

    Sadly there were a lot of good people in the construction industry, it was one of the last fields a man could make money without sucking up to some asshole corporate, or living the vacuous existence and bullshit psychological games that are "the office".  Now we gotta all go fake smile and pretend that our career is the most important thing and that we are "go-getters" sucks. 


    by Saladin on Thu, 06/16/2011 - 3:28pm

    Fine - just no new land, no new burbs, no new sprawl.

    And it's a damned good intellectual and design constraint for North Americans to try to have to use and incorporate existing stuff into their new efforts. 


    by quinn esq on Thu, 06/16/2011 - 3:34pm

    Paolo Soleri...Arcosanti.


    by Peter Schwartz on Thu, 06/16/2011 - 5:00pm

    Agreed.  Also If we only do electric vehicles and don't reform our neighborhoods then there is always this possiblity:

    http://www.commondreams.org/view/2011/06/10-3

    (although I can't find his source)


    by Saladin on Thu, 06/16/2011 - 5:55pm

    Also, employment for folks without higher degrees...


    by Peter Schwartz on Thu, 06/16/2011 - 5:01pm

    Construction is also about the only trade that an unskilled worker can make a decent living at.


    by David Seaton on Fri, 06/17/2011 - 1:43am

    Lithium. If anything, we're now headed toward huge oversupply. Interesting the games being played by various companies and such here, as this sort of media story produces results which work in favour of certain interests.

    Here's a Bloomberg one from a couple of years ago, headlined "Lithium for 4.8 billion electric cars lets Bolivia upset market."

    There are numerous sites already discussing the possibility of a lithium surplus.


    by quinn esq on Thu, 06/16/2011 - 3:07pm

    Now, tour main point is that "the cost of vehicles, and transportation in general is going to rise.... maybe even double for us."

    Bottomline, I don't think so. And the reasoning isn't very complex.

    1. On a straight up energy basis, electricity has long kicked gasoline's ass. If an average car is getting 20-25 mpg, I need 5-6 kwh's of electricity to drive the same car the same distance as that gallon of gas. In a state with 10 cents per kwh power, that costs me... 50-60 cents. Per gallon equivalent. [Partly this is because gasoline is burned so inefficiently, and electricity isn't. Partly it's just that electricity is cheap and oil isn't.]

    2. As a car, the path to lower cost cars is simple. An electric car (sans battery for one moment), partly because it has thousands fewer moving parts.

    Our society is also being offered the chance to reduce the excess weight we added to cars by our insane dash to buying SUVs and trucks. We can say that "people will never do it" but the fact is, the car companies are opening the floodgates and pouring out smaller, and cheaper, vehicles. Now... it's our choice whether or not to choose them. But it's not a question of physics. 

    3. The battery. This is all that's left to double the price of transport. But prices of batteries have collapsed from earlier predictions, and I've pasted that Deutsche Bank chart up here a number of times. Batteries in the FIRST major PHEVs to hit market are already down to $600/kwh. Which means an overbuilt battery like the Chevy Volt's 16 kwh log costs $10,000. You will drive the same distance on a 12 kwh battery soon, and at a cost of $300/kwh. Thus, the added battery cost will be $3,600.

    With electrical energy at 50 cents a gallon, you'd save $3.00 or so a gallon today, so.... you'd need to drive 1,200 gallons worth to pay for that battery, which is 24-30,000 miles. Looks doable.

    4. I'm most interested in the very small battery cars, like the new Plug-In Prius coming. It'll have a smaller 5 kwh battery or so. Just $2-$3,000 worth of extra battery on top of an existing Prius, right? But that battery will take you an extra 15-20 miles each day. In short, it will take 50% of our daily trips right off gasoline, and produce a car that basically gives you 100 mpg. 

     And Toyota's VP has said their goal is not to sell it at a $2-$4,000 premium over the Prius, but to ABSORB the extra cost. (As opposed to bringing down the price and expanding performance every couple of years, which they've been doing for the existing Prius.) 

    So. Bottomline. A 100 mpg car, that costs you $20-$30,000 sticker price, and about 1/4 the cost to drive. 

    Airplane tickets may rise.... but there's absolutely no need for cars to cost hugely more.

    And I say this - I need to add - as someone who DOESN'T own a car, ISN'T a car lover, and has no stake at all in selling the grand green soap of a GM or anyone else.

    I walk. That's what I do. But facts is facts, and math is math, and these are the figures as I see them.


    by quinn esq on Thu, 06/16/2011 - 3:29pm

    The Volt has a range of 25-50 miles on 16kw. The average cost of electricity in US is 12cents a kw. So worst case 1.90, best case 95c.  Not too bad, I hope you are right. 

     However I coal is our cheapest electricty source roughly 6 cents per kw (aside from hydro), and it supplies half our energy, so that is pulling down our average cost. If we switched to wider adpotion of renewables, I suspect the cost will rise to 16 or so.  Which still isn't too bad, but of course the volt can only go 50miles so this isn't a real option for most drivers (yeah I know most folks drive daily short ranges, but nearly everybody wants the option of a road trip, even if they don't take it).  We will need big technological improvements. I am hopeful.  As to battery cost, you seem very optimistic, I hope you are correct but right now the higher cost is the reality. 

    Overall you make a good case, though I don't see the costs droping below our current 10-15% of income, unless we all move into higher density nodes and walk verywhere.  Like the smart ones among us already do.

     


    by Saladin on Thu, 06/16/2011 - 3:55pm

    Just because I spend time daily on this sort of nonsense, a couple of corrections. Apologies to those not into nit-picking.

    1. The Volt has a 16 kwh battery, but the original design only allowed 8 kwh of that to be used at one time. Basically, they wanted huge back-up and redundancy in the battery, because they weren't sure how well it would work. By launch, their confidence had risen a bit, and they now use 10 kwh's. (You likely always want some unused, just so you're not working the battery in ways it doesn't like.) Thus, you can technically use 10 kwh's, but most people don't max that out, so.... I used 8.

    Which means, if you're at 12 cents/kwh, you'd use 8-10 X 12 = 80 cents to $1.20.

    But that takes you say, 30-40 miles, which is 1.5-2 gallons consumption in most conventional vehicles in the fleet. So.... 40-80 cents/gallon-equivalent as a minimax range.

    2. Coal used to pull down our average cost of electricity, as you could probably produce for 3-5cents/kwh. That seems to have risen with pollution control and as global coal prices got pushed up by China for a time. Today, natural gas is damned cheap, certainly under 8 cents, likely in some plants running at 6 cents and below.

    But as for wind, on the whole enormous center of the continent, it's at 5-6 cents/kwh unsubsidized. Solar is coming down still, and within a decade will likely be at 12 cents and below in significant portions of the country. 

    No reason we can't have power at 12 cents, I'd say.

    3. The Volt only goes 30-50 miles per charge, but what people are still missing - partly because the all-electric Leaf came out at the same time - is that the Volt has NO range restrictions. It's just like a Prius, and has a gas engine in it. It will do its 30-50 miles on electricity, and then, if you so choose, take you another 300 plus miles on gasoline. You can stop and refill with gas, same as any other car, and go cross-country no problem. 

    What it means is that for all those shorter daily trips, you take them on electricity.... and still have the option of going on gas for cross-country Thelma and Louise fests when and as you like. 

    4. Can we hack the 10%-15% transport spending down much? Well... that's giving away another part of the game, but sure we can. Car-sharing is gonna just keep coming amongst younger urban populations, hell, they have their parking spots all over my neighbourhood already. Which is gonna mean a LOT of people won't buy 2 vehicles, but maybe 1, plus a ZipCar or AutoShare membership. Or maybe even two. Getting rid of auto insurance, and daily parking, and maintenance and repair is gonna be seen by a lot of people as a gift from God. 

    Put the greening and the sharing together and we're in a world of much cheaper and much cleaner fuels.... AND of much lower capital costs and insurance/parking etc. 

    I can live with that.


    by quinn esq on Thu, 06/16/2011 - 4:16pm

    As well you know, "dotting the t's and crossing the i's" has never been my forte. Its too much damn work just to try and keep the big picture straight ;)  So I appreciate your clarifications.   

    Car sharing is a great development. But the Lower capital costs of density are likely matched by higher costs of the electrical infrastructure, but I will defer to you on that. You make a compelling case. 

    While I've got you, I've a few more questions.  My understanding of wind is that you need alternatives on standby incase the wind fails. Does your 5-6kwh include those additional capital costs (well probably not, but what might they work out to?). 

    So what are your thoughts on Carbon Capture and Storage? If we go electrical Coal will become an even larger component than it already is. My research has not been very uplifting for example this paper on China, the world's largest user:

    http://pesd.stanford.edu/publications/the_real_drivers_of_carbon_capture...


    by Saladin on Thu, 06/16/2011 - 5:37pm

    Wind and its back-up needs is one of those issues which the media can't grasp, so they just say "wind is intermittent" and let wind's opponents have the floor. Drives me nuts. So.

    1. EVERY energy source has outage problems and downtime, and nobody operates guaranteed, on-time, more than 80% over the long haul. Nuclear has obvious problems... coal requires real downtime for maintenance... hydro has drought and seasonal flows... etc.

    2. Wind is actually reasonably predictable on a year-to-year basis (less variance than hydro, for instance), and not bad season-to-season, even day-to-day. It's tougher hour-to-hour. So what you need to do is spread your wind resource out geographically, so peaks and valleys are flattened... use good forecasting, so you see lulls coming.... and then add some capacity which can ramp up fairly quickly, especially natural gas. 

    3. A lot of people go nuts on this and argue you need complete 100% back-up, but they haven't a clue what they're talking about. See, neither coal nor nuclear is fast-ramping either, and so when demand shifts, even if you have coal or nukes underlying your system, you tend to need hydro or gas to handle the quick fluctuations.

    4. In fact, the point of putting together a grid is so you can add different pieces that you need - cheap steady baseload, peaking capacity for key times in the day, plus really fast-acting capacity. You want this from a diversity of sources, to balance the costs and risks. Plus, it's good to have interconnections to your neighbours to help balance the system. Recently, people are even adding more demand response systems, where you can turn down demand. 

    5. Same story when you add wind. You look at the net changes which could result, from both demand shifts as well as lulls in wind and other sources, and then... add needed capacity (or interconnections to neighbouring systems.) What this doesn't mean is that you somehow add new plant that you have to run all the time, you don't. Instead, you might add some gas, but then only run it when the net new changes in load and supply require it. Fact is though, wind replaces much of the gas you would run through it... plus, you get other value from adding this gas capacity to the system (i.e. often the wind is blowing and you can then use the gas to help balance other issues in the system.)

    6. There was an enormous amount of natural gas capacity laying around in various systems as we hit the downturn, because actual gas fuel had been expensive. So you could add wind, use it for energy and you often already HAD the gas capacity you needed to respond.

    7. GE and others are building new turbines precisely to enable even more wind and renewables to be added. 

    So a jurisdiction might add wind at around 5 cents/kwh, already have some excess gas capacity, add a bit of new plant, and come out with a significantly net new addition to their grid, for 6-7 cents/kwh. NOT the "you have to back all wind up with 100% from other plants storyline.


    by quinn esq on Thu, 06/16/2011 - 6:20pm

    Thank you sir, my hat is tipped. 


    by Saladin on Thu, 06/16/2011 - 6:34pm

    For China, the world is changing fast. Renewables are now being built faster than coal..., they're vastly outpacing the US in wind and solar... and are now moving to take the lead in electric vehicles as well. 

    http://www.businessgreen.com/bg/news/1803183/china-low-carbon-sources-su...

    http://www.fastcompany.com/1698811/chinas-aggressive-push-toward-clean-e...


    by quinn esq on Thu, 06/16/2011 - 6:41pm

    Yes. I am familar with the hype--and there are real achievements--but 68% of energy production is still coal. And they have no plans to reduce their consumption, and even with renewables the latest 5 year plan calls for a doubling of coal consumption by 2030, which will mean a 50%-60% increase in CO2 (less becuase they will be newer "supercritical" facilities).  Just saying without CCS its bad news.   
    Also the massive ongoing water droughts are really fucking with their hyrdopower, e.g. the three gorges production is way down this year.  But they have new dams being built down south that should help, but hurt laos and cambodia. 


    by Saladin on Thu, 06/16/2011 - 6:53pm

    I stress less about this stuff than many. It's not that it isn't awful, or that it won't cause incredible problems - it will. what I'm more interested in is how China can help drive these new technologies along the learning curve, driving their costs down for all humanity. Because as that happens, our sense of what is possible changes, year on year. e.g. Right now, we have lots of wind, but little direct solar PV. As that becomes economic, the amount of BOTH that can be added to the system changes. e.g. Add more EV's, and we not only need more electricity but.... it adds storage to the system, and thus, ALLOWS more renewables. But first, we need to drive these technologies and their costs down, get their systems established, get lots of people employed in them. So, ummmm, yes. China and its coal mania and hydro building is.... bad, absolutely. 


    by quinn esq on Thu, 06/16/2011 - 8:18pm

    You can keep a Volt charged with about $6000 worth of home solar, after federal tax credits and before local incentives. If you drive in the day, you have to "bank" the kwh's in the grid or in other home use, but still.

    People will say it's not worth it, but free gas for life?


    by Rootman on Fri, 06/17/2011 - 7:51am

    I would be interested in ideas on how to provide decently paid employment for people who are simply not able to study beyond highschool.


    by David Seaton on Thu, 06/16/2011 - 3:26pm

    Probably the best occupation I've heard of for the lesser educated is... blogging.

    In particular, it's smart to blog from a low-cost overseas location, back into the American market.

    Big bucks, almost no costs.


    by quinn esq on Thu, 06/16/2011 - 6:02pm

    Is that how it works from Canada, eh?


    by David Seaton on Fri, 06/17/2011 - 2:24am

    Plus free MAPLE SYRUP!

    by quinn esq on Fri, 06/17/2011 - 9:22am

    The challenge today is to allow the most average of people to have a decent life, with good health, as much education as they are able to absorb and a chance to work gainfully in occupations within their capacities and enjoy a dignified retirement. The person able to "re-invent" work, and make this possible would be the "Einstein" of today's world.

    You are envisioning the world as Marx described it more than a sesquicentennial ago sharply divided between capital and labor.  You write of reinventing work but what you mean is reinventing employment, of finding some way to use us poor schmoes so we can have a means to live while at the same time providing some benefit to our employers.  After all, can't have idle hands living off the wealth of others making mischief.  But wait, isn't that exactly what Capital does?  Trust fund babies living off the accumulations of generations past?  

    Sorry, I digressed.  

    Stop thinking of people as just labor and start thinking of them as capital as well because contemporary capitalists do.  In our monetary economy, we have all been financialized and monetized by them in ways beyond Marx's ability to imagine.  Because there are so many of us and so much money sloshing around, even a few pennies or less per transaction can generate millions or even billions of dollars.  Our clicks, eyeballs, a second of attention.   Sold by content providers hoping to score enough to buy an island somewhere or worse to crawl up a Forbes list.  

    This is definitely not Marx's Kapital but he was a smart guy.  Doubt he would have applied industrial economy solutions to monetary system problems. Too bad he isn't around.  


    by EmmaZahn on Thu, 06/16/2011 - 7:44pm

    Still, if we don't find ways to make all these people productive, the system will implode... or at least democracy will. That is the point that Rajan is making and I find his logic compelling.


    by David Seaton on Fri, 06/17/2011 - 1:41am

    If it isn't working for 'these people" maybe the system should implode.  After an Orlovian style collapse you enthusiatically promoted here, who would you rather find yourself among?  neurotic type A overachievers and other assorted MBAs or 'these people' who can actually do physical stuff?

    Here's a thought.  Why not pay people to learn things and develop skills that are useful at the foundation levels of society -- survival, security, maybe even socialization .  And everyone has to acquire a basic level of competency at them, including MBAs, PhDs, etc.  Think about it. How useful would you be to me or me to you in the event of a collapse?  

    And we should not stop with the basics.  Recognize people as the basic infrastruture of society they are.  Develop them to their fullest potential.  Let them share necessary work so everyone gets a chance to "actuate their potential":).  

    It is possible.  The monetarists have shown us a way to finance it if we can some way rid ourselves of old economic and social paradigms.

     

    ``````````````````````````````

    Hope is the thing with feathers
    That perches in the soul,
    And sings the tune without the words,
    And never stops at all,

    And sweetest in the gale is heard;
    And sore must be the storm
    That could abash the little bird
    That kept so many warm.

    I've heard it in the chilliest land
    And on the strangest sea;
    Yet, never, in extremity,
    It asked a crumb of me.

                     ---Emily Dickinson


    by EmmaZahn on Fri, 06/17/2011 - 2:04pm

    Emma, 

    It is sad to think that the world would probably be better off if the USA went broke and the "system" imploded.... Easy for me to say, I don't live there.


    by David Seaton on Sat, 06/18/2011 - 1:30pm

    I didn't say anything about going broke.  With our climate, natural resources and human capital?  Pfffft.  But an implosion or pop of the giant money bubble at the top might not be such a bad thing since it isn't doing what it is supposed to anyway.  


    by EmmaZahn on Sat, 06/18/2011 - 3:58pm

    Emma,  

    A country that is rich in climate and resources, with highly educated people and first class scientists, can go broke and surrounded by natural abundance people can go hungry.... study the case of Argentina, once one of the richest countries in the world.


    by David Seaton on Sun, 06/19/2011 - 8:59am

    Not broke, just land poor. A fellow from Dalton, Georgia must have heard the term before. If not, in accounting geek speak it is known as all stock and no flow. :D

    From "Lessons of History" by Will and Ariel Durant, excerpt here:

    "We conclude that the concentration of wealth is natural and inevitable, and is periodically alleviated by violent or peaceable partial re-distribution. In this view all economic history is the slow heartbeat of the social organism, a vast systole and diastole of concentrating wealth and compulsive recirculation.”

     


    by EmmaZahn on Sun, 06/19/2011 - 9:41am

    "... a vast systole and diastole of concentrating wealth and compulsive recirculation.”

    Well, at least they mentioned what got stole.


    by quinn esq on Sun, 06/19/2011 - 10:51am

    Not really the most apt medical analogy for the accumulation of a wealth symbol like money, is it?   Hemochromatosis and chelation would be a better one.  Too much money poisons the body politic like too much iron poisons a human one.  It can be bled out under controlled conditions or uncontrolled ones.

     

     

     


    by EmmaZahn on Sun, 06/19/2011 - 2:37pm

                        

    Firetruck got delayed; sorry.


    by we are stardust on Fri, 06/17/2011 - 10:01am

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