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Ending the age of scarcity

The current escalation of multiple overlapping crises – climate-related disasters, pandemic, war in Europe and stagflation – is intensifying anxiety and uncertainty around the world. Traditional solutions no longer work. Politicians have few convincing answers. Existing institutions are overwhelmed. World civilization is undergoing a great transformation of unprecedented magnitude.

Looking ahead to the post-pandemic era and the current inflation surge, most economies face strong headwinds that threaten to drag them back to the secular stagnation of the 2010s. But with policies aimed at boosting trade in services and increase green investment, the outlook would improve considerably.

Each of the five fundamental sectors that together define a civilization – energy, transport, food, information and materials – is undergoing rapid technological disruption. These upheavals signal the twilight of today’s dominant extractive industries, which are entering a deadly economic spiral, auguring higher unemployment, deeper inequality and civil unrest.

But this “global phase shift” also lays the foundation for a new civilizational life cycle. The most significant technological disruptions aimed at mitigating climate change affect three fundamental sectors – energy, transport and food – which together account for 90% of global greenhouse gas emissions.

Fossil energy is disrupted by the “superpower” potential of solar, wind and battery (SWB) power. Private vehicles powered by gas-guzzling internal combustion engines will be overtaken by electric vehicles (EVs) and eventually autonomous EVs (A-EVs). Commercial farming and fishing are being turned upside down by precision fermentation and cell farming, which allow all kinds of proteins to be brewed and programmed without killing animals.

All disruptive technologies follow the same learning-by-doing feedback loop. As costs drop exponentially, adoption accelerates to dominate the market. When these technologies become ten times cheaper than the technology in place, they quickly replace it. The disruption of horses by cars, landlines by smartphones, and photographic film by digital cameras has happened in 10 to 15 years.

Perturbations are not one-for-one substitutions, but rather lead to completely new systems with distinctive properties. For the first time in our history, emerging technologies are showing a clear path to ending the age of scarcity.

Oil, gas and coal are becoming increasingly inefficient and expensive. The value of the energy they produce relative to the energy they use has more than halved over the past two decades. But the opposite is true for the SWB, for which the return on energy investment (EROI) increases exponentially.

As I explain in a recent Earth4All article, the cheapest SWB combination is to over-provision solar and wind generation capacity at 3 and 5 times the level of existing demand. This “superpower” capability – producing more power than incumbent fossil fuel systems at zero marginal cost for most of the year – would significantly reduce overall system costs by removing the need for weeks of storage. seasonal battery.

Swiss government scientists have shown that building such a system on a global scale could generate up to ten times the amount of energy we use today. This will enable the electrification of a wide range of industries, from wastewater treatment and recycling to mining and manufacturing. And this system will not need constant inputs of materials like the current fossil fuel system; once built, it will last 50 to 80 years.

Similar counter-intuitive cascading effects will benefit the transport sector. Electric vehicle and A-EV cost curves show that ridesharing via Transport-as-a-Service (TaaS) will become up to ten times cheaper than owning and managing your own car by the 2030s. As a result, only a fraction of the number of vehicles we currently use will be in service. And, because SWB and TaaS involve a tiny fraction of the demand for battery storage anticipated by most conventional analysts, the consumption of critical minerals needed to produce the batteries will be much lower than feared.

These disruptions will also render obsolete all the infrastructure of energy, transport and food systems based on fossil fuels. This includes oil rigs, gas terminals, pipelines and coal-fired power plants, as well as global logistics and shipping networks for fossil fuels, livestock and livestock products.

Dismantling this infrastructure will create unprecedented potential for metal recycling. Iron, aluminum, steel, copper, nickel, and cobalt are widely used in the petroleum industry, but will also aid in energy, transportation, and food processing.

Meanwhile, the disruption of dairy industries will free up 2.7 billion hectares of land previously dedicated to raising animals for rewilding, regenerative agriculture and active reforestation. This will enable large-scale natural strategies to remove and capture atmospheric carbon.

Over the next two decades, the transformation of the global production system will create unique possibilities – what my RethinkX colleagues James Arbib and Tony Seba call an “era of freedom”. Moreover, we don’t have to wait for exotic and expensive breakthrough technologies to solve our greatest global challenges. We have all the tools we need to usher in a new era of glut that provides advanced power, mobility, food, education and infrastructure to all at one-tenth the cost of existing systems and without crossing planetary boundaries. .

But reaching this “age of freedom” will not be easy. Disruptions today are fast, but not fast enough to lift the world out of the climate danger zone. If we delay them by clinging to dying incumbent industries, the social, economic and geopolitical fallout could stall or even impede transformation.

As disruptive technologies evolve for economic reasons, governments can accelerate this transformation by leveraging markets. This requires ending multi-billion dollar subsidies and new investments in conventional energy; creating free and fair electricity markets that uphold the right of individuals to own and trade electricity; and the establishment of open source intellectual property systems for global design and local implementation. In the case of residential heating, governments should provide incentives and subsidies for electrification.

Above all, we must change our mindsets and embrace the need for a step change from centralized to decentralized provision of energy, transport and food. This means moving from top-down to bottom-up, and from hierarchies to networks and nodes.

The old system is dying while a new one is being born, placing us in the eye of the storm. But with the right choices, we can quickly build a fairer, more advanced civilization that delivers unparalleled levels of universal and enduring prosperity. There’s no time to lose – and everything to gain.

By Nafeez Ahmed
Director of Global Research Communications at RethinkX and member of the Transformational Economics Commission of the Club of Rome.

#age #scarcity

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