Monday, October 05, 2009

The Most Energy Efficient Economy in History



Bottom Line: The U.S. economy has never been more energy efficient than it is today and it just keeps getting more efficient every year as we find ways to produce more output with less energy (see top chart). Home appliances keep getting both cheaper to purchase and cheaper to operate over time (see charts above), which translates into a rising standard of living for the average American. Amid all of the gloom and doom we hear about the state of the economy, the increase in energy efficiency is something to celebrate.

See full post here at The Enterprise Blog.

38 Comments:

At 10/05/2009 4:31 PM, Anonymous Benny The Real Man said...

This is a terrific post by Dr. Perry. It is yet another reason with the Peak Oil Doom crowd is wrong, wrong, wrong.

 
At 10/05/2009 4:33 PM, Blogger Chuck said...

PIXIE DUST = DATA MINING + CONFIRMATION BIAS

Speaking (writing) anecdotally Austin, TX had 72 days of 100% + this season. The electric bills equaled many mortgage payments. People did not celebrate the fact that their 75 watt incandescent bulb was replaced by a 19 watt cfl bulb. That's real efficiency. They were in shock that the ac unit needed to run continuously since evening temps did not reach 80 F until past 2:00 am the next morning.

 
At 10/05/2009 4:43 PM, Anonymous Benny Tell It Like It Is Man said...

Hey--we hate subsidies right? Did you know we in the USA subsidize some phone lines to the extent of $16k per line.
That's so rural hicks can enjoy their lifestyle--at your expense.

Dr. Perry-this would make a good post.

US subsidy fund for rural service reaches all-time high
By Fawn Johnson, Dow Jones Newswires
Tuesday 16 June 2009
New numbers from FCC mean consumers' phone bills will increase slightly on 1 July.
A subsidy fund designed to help phone carriers offer service in rural areas has mushroomed to an all-time high - 12.9% of interstate telecommunications revenue, up from 9.5% in the beginning of the year, the Federal Communications Commission announced Monday.

That means that consumers' phone bills will increase slightly on July 1, the start of the third quarter. The FCC's announcement forecasts a change that carriers will need to make to customers' phone bills effective on that date.

The subsidy fund is supported by a tax on the long-distance and regular phone-service bills paid by wireless, Internet and traditional phone customers. The amount is a separate line item dubbed "universal service," and it usually adds up to few dollars per month.

AT&T Inc. estimates that the increased customer payments from the first quarter to the third quarter of 2009 amount to roughly half a billion dollars.

Industry insiders say the universal-service-tax percentage is increasing because the number of traditional landline subscribers is falling dramatically as people switch to all wireless or Internet-based phone services, where contribution rates are lower.

Fewer phone bills overall means a higher-percentage subsidy tax for each one.

The universal-service fund pays out about $8 billion annually to phone companies that offer service in hard-to-reach areas.

AT&T and Verizon Communications Inc. receive the most subsidies from the fund, according to data the FCC sent to Capitol Hill last month. But that statistic is largely attributed to the two phone giants having the No. 1 and No. 2 positions in the industry. Verizon and AT&T customers also are the biggest payers into the fund.

Some smaller phone companies receive massive subsidies to recoup their costs, according to the FCC. For example, Beaver Creek Telephone Company, a tiny phone provider in Washington, received more than $16,000 per phone line in 2008.

Hey QT, are you reading?
$16k per line in Beaver Creek.

 
At 10/05/2009 5:50 PM, Blogger Chuck said...

Benny:
It's 35 families with no telephone service.
The rest of he story:
http://www.timberlinetel.net/south5.html

If you really want to investigate something report on how many Congressmen/Senators receive farm subsidies (family members) for not planting ...

 
At 10/05/2009 6:18 PM, Anonymous Bennt The Free Marketeer said...

Chuck-
I am trying to develop a list of all rural subsidies, and annual dollar amounts--airports, roads, water systems (often built by Army Corps of Engineers), power, postal delivery, phones, farm subsidies--data from zip codes suggest that more than $100 billion a year is sucked out of urban areas, and funneled into rural areas.
My guess is that rural areas would dry up without heavy and continuing subsidies.
Odd, how never, ever does the right-wing mentionm these subsidies (oh, I forgot, military outlays fall heavily into Southern and rural areas).
Left wing subsidies=bad.
Right-wing subsidies=good.

I am against all subsidies.

 
At 10/05/2009 7:18 PM, Anonymous Anonymous said...

How do we compare in energy efficiency to Japan, France and Germany?

Of course, if you are inefficient, you can always do better. So what.

Others are far more efficient.

Bill

 
At 10/05/2009 7:31 PM, Anonymous Anonymous said...

Per capita energy consumption, actually, has been going up since 1986. See Energy Information Agency data:

http://www.sdi.gov/lc_ener.htm

Bill

 
At 10/05/2009 8:34 PM, Anonymous Pfurr said...

Every time energy efficiency comes up some BOZO brings up consumption per capita which is a BOGUS measure preferred by China to dilute their massive pollution from inefficient production. Most of their population doesn't participate in either GDP production or consumption. It's also used by America-haters to portray us as villains because disproportionately make good use of energy.

What BTU/GDP measures is efficiency of production, the relevant measure. It means that if you are truly concermed about the environment, MORE should be produced by the US. We produce more than most for a given amount of energy.

Remember that energy usage is just a PROXY for pollution. Not all countries emit the same amount of pollutants per unit of energy.

If I emit 1 ton of pollutants to produce a car, does it matter whether I have one kid or three kids?

But if I produce two cars for that same ton of pollutants, that's better!

 
At 10/05/2009 9:08 PM, Anonymous Anonymous said...

Pfurr,

Sorry, but per GDP is not a measure of efficiency, regardless of whether you call someone a Bozo.

Think of it this way: we have a service economy, we have finance companies, our composition of GDP is different than countries which have more manufacturing--real estate, financial services, banking,law, etc. do not consume energy.

Per capita does measure usage.

I would say there are better ways to measure efficiency than per GDP or per capita. Look at automobile mileage, energy consumption per killowat, etc.

Rather than spouting off, perhaps you should do some research. Here are some comparative efficiencies:

"Energy consumption is loosely correlated with gross national product, but there is a large difference even between the most highly developed countries, such as Japan and Germany with 6 kW per person and United States with 11.4 kW per person. In developing countries such as India the per person energy use is closer to 0.7 kW. Bangladesh has the lowest consumption with 0.2 kW per person.

The US consumes 25% of the world's energy with a share of global GDP at 22% and a share of the world population at 5%. The most significant growth of energy consumption is currently taking place in China, which has been growing at 5.5% per year over the last 25 years. Its population of 1.3 billion people (20% of the world population) is consuming energy at a rate of 1.6 kW per person.

Over the past four years, electricity consumption per capita in the U.S. has decreased about 1% per year between 2004 and 2008. Power consumption is projected to hit 4,333,631 million kilowatt hours by 2013, an annual growth rate of 1.93% for the next five years. Consumption increased from 3,715,949 in 2004 to an expected 3,937,879 million kilowatt hours per year in 2008, an increase of about 1.5% per year. The rate of increase has been steadily decreasing - it was 2.5% in the 1990s.[30] U.S. population has been increasing about 1.3% per year, a total increase of about 6.7% over five years.[31] The decrease has been mostly due to efficiency increases. Compact fluorescent bulbs, for example use about one third as much electricity as incandescents. LED bulbs, however, use about one tenth as much, and over their 50,000 to 100,000 hour lifetime are cheaper than compact fluorescents.

One metric of efficiency is energy intensity. This is a measure of the amount of energy it takes a country to produce a dollar of gross domestic product."

Bill

 
At 10/05/2009 9:53 PM, Blogger QT said...

Benny,

Interesting to know what #'s we're talking here however, I would love to know the actual bottomline dollar amount compared with say...publicly subsidized transit?

Isn't this the usual exercise in socialism? Government trying to engineer social outcomes through redistribution?

You can point to elected representatives from western states who support ag & ethanol subsidies for their constituents however just about every elected official is seeking goodies & earmarks for his/her state. I don't like it any better than you but that's the game of politics.

 
At 10/05/2009 10:27 PM, Anonymous Pfurr said...

The only thing as predictable as a bozo using enercy per capita as a measure of efficiency is the retort by another bozo that we have a "service" economy.

I did not say GDP was a measure of efficiency. Energy use per GDP is a measure of efficiency and a more appropriate one than energy per capita.

Energy is an input and production is an output. So the proper measure of efficiency is the amount of inputs used to achieve a particular level of output, I.e. BTU/GDP.

Living bodies aren't necessarily inputs of production which is why it's an improper measure. China's huge, largely unproductive population provides little input to its GDP.

It does not matter whether we produce cars, toys, computer software or accounting services. GDP is GDP. It is the best measure of PRODUCTION there is. The definition takes into account the VALUE of that production, at market prices. It measures the value we add to the world's total welfare. The majority of that welfare just happens to be enjoyed by us which is indicated by our high standard of living.

So all these bogus arguments about emissions is subterfuge for an attack on our standard of living. We use more energy because we produce more. Our production has higher value than other countries. Therefore we enjoy a higher standard of living. It explains why only 5% of the population uses 25% of the energy - we EARN it. If we didn't earn it, the energy would be diverted to nations which have a higher value use for it. We would be outbid in the market for energy. By taxing us, you transfer the energy to countries which produce less with the same energy. You transfer part of our standard of living to them.

All this BS about energy usage is a veiled attempt at global income redistribution.

 
At 10/05/2009 10:34 PM, Anonymous Anonymous said...

Pfurr,

You seem to see conspiracies everywhere. Some measure is used because it will lead to some conclusion you do not like. Sad.

This is an efficiency argument, not one of theology or politics.

The composition of GDP relates to efficiency. The most efficient economy by your measure would be the poorest: some backward country that uses animal labor.

As I mentioned earlier, the best way is to look at this as a per capita measure...humans consume energy, and some, with the the same mix and living standard, like Germany and Japan, consume it more efficiently. Face it.

Bill

 
At 10/05/2009 10:36 PM, Anonymous Pfurr said...

One metric of efficiency is energy intensity. This is a measure of the amount of energy it takes a country to produce a dollar of GDP.

DUH!!!!

BTU: a unit of energy

GDP: a measure of production

Energy Intensity = BTU / GDP

Exactly what I was saying, bozo!

 
At 10/05/2009 10:53 PM, Anonymous Pfurr said...

WRONG!

A backward country would not be the most efficient country. Despite its use of unmeasured energy (farm animals), its output as measured by GDP would be dismally low and so would its standard of living.

A camp fire isn't as efficient as a stove for cooking. A stove isn't as efficient as an oven.

A blast furnace is FAR more efficient in melting iron than an open fire.

Why is it so difficult for you to understand that profit maximization is synonymous to cost minimization which is equivalent to efficient use of resources?

I've already explained that having more people under your roof says absolutely NOTHING about efficiency of production.

Again, by your dumb definition, if an additional baby is born given a fixed amount of production (GDP), the nation would become MORE efficient.

By my correct definition, if we squeeze one more dollar of GDP (at fixed prices) out of the same energy usage, we become more efficient (regardless of how many people share that GDP)

Face it. You're stuck on stupid.

 
At 10/05/2009 11:02 PM, Anonymous Anonymous said...

Perhaps generalizing the argument a bit may make it more clear, talk about all factors of production, and its clear that minimizing them per unit of GDP is a measure of efficiency.
The argument here is human impact or
economic efficiency, energy per capita is a measure of human impact, the latter is a matter of the ability of an economy to fill needs at the minimum total resources required.

 
At 10/05/2009 11:39 PM, Anonymous Pfurr said...

No, you are not THINKING. Let me expose the folly of you clever numbers game and why you focus so much on energy per capita.

Energy intensity = Energy / GDP

Standard of Living = GDP / Population

The measure YOU want to decrease is:

Energy / Population

But:

Energy/GDP x GDP/Pop = Energy/Pop

To lower Energy/Pop you either have to lower energy intensity or lower standard of living. Profit maximization already assumes production at minimum resource cost. If a producer could lower its energy usage cost-free, it would do so. We don't need to mandate, tax, subsidize, regulate or cajole a profit maximizing producer to save money!

If lowering energy usage required an investment or R&D, the company would weigh the cost of that investment vs the net present value of the energy savings. So even if there exists a more efficient technology, it might not be cost effective to adopt it or research it.

People like YOU connive plans to lower energy intensity irrespective of cost-benefit analysis. Subsidies are the last resort in your calculus. Your prefer regulation, taxes, or cap and trade provisions (a la Kyoto) which effectively achieve lower energy/pop by lowering the standard of living and FORCING energy intensity to go down. You think that the long run result of lower energy/cap is self-justifying. You don't take into account the incremental lowering of standard of living and associated consequences on PEOPLE. You wave away those costs with your hands.

Your calculus is yet another example of the broken window fallacy. You measure the benefits without regard for all the economic costs. To sway opinion, you create a mythical bogeyman called Global Warming to contrive an external cost which must be redressed. If people "perceive" that cost, it changes their C-B analysis. But there's still the nasty free-rider problem, so the heavy hand of government must come in to make all right with the world!

SO YES, IT IS A CONSPIRACY.

You and people like you want to lower our standard of living. In particular, you want to TRANSFER it to less efficient producers (with hordes of unproductive poor people) through allotment of pollution rights. The poor Peruvians will own pollution rights which they will SELL to the US, making them better off and us worse off and reducing total world social welfare because WE are better, more efficient producers than they are. So you not only transfer wealth, you make the world POORER.

Even if by some miracle you approved of subsidies, they would distort production decisions and over allocate resources to production.

We'd have all the clean power we need from nuclear energy if you morons would step out of our way. We would have found a safe way to deal with waste by now if you had funded that instead of staunchly opposing nuclear energy - another symptom of your America hating ideology.

 
At 10/06/2009 12:16 AM, Anonymous Liter said...

Bill,

Some countries do have lower energy costs than we do, but you take no account of what it cost them to get it.

If I had solar panels on my roof that save energy, is that a good thing? Not necessarily. If the cost of those panels is greater than the NPV of my energy savings, they're not cost effective. And if pollution is what matters, how much pollution went into producing those panels. That has to be deducted from pollution savings. Also, the maintenance cost and disposal costs have to be considered.

Germany pays a high price for that efficiency. If they want to pay it at a net loss, that's ok. We don't want to pay it, especially with unemployment at 10%.

 
At 10/06/2009 12:31 AM, Anonymous Vizini said...

I got a suggestion for you Bill.

Appoint me, the Great Vizini, the Grand Inquisitor of Environmental Hypocrisy.

I shall go to all the homes of liberals and other environmentalists, starting with YOU, and conduct a thorough audit of your environmental footprint including the wasteful disposal of perfectly good appliances and vehicles whose embedded energy was a sunk cost when you replaced them. Then I shall dictate which lifestyle adjustments you shall make for the benefit of mankind. I shall fine and tax you for all violations, using the revenue for R&D or remediation subsidies for conservatives and libertarians.

I have no doubt the Inquisition will purge you of much hypocrisy and raise adequate capital for innovation in energy saving technologies! Don't think of it as a sacrifice or infringement of your civil liberties. Think of it as your patriotic duty.

 
At 10/06/2009 3:54 AM, Blogger Chuck said...

PONCHOVILLA says you are all wrong. Here is the real story:

Poncovilla SEZ:

I was riding my horse “PRONTO” through Baltimore (Balmer, Merlin) when things became clear to me. I made the journey to my original home to convince the NRA lobbyists in Washington, DC of my Constitutional right to personal nuclear arms. A group of “illegals” warned me to leave my personal assault rifles in a locker at Penn Station in Baltimore due to heightened CIA, FBI and Secret Service anxiety while traveling to the DC area.

Unfortunately my horse shit in an intersection as I passed through a traffic light on a short yellow. This indiscretion was captured digitally by a traffic camera. I whacked Pronto in the ass to avoid a red light violation to no avail. The event occurred on Baltimore St, which was referred to as the “block” in earlier times. The block was Baltimore’s red light entertainment district. Back in the 60’s we didn’t need Viagra, as the girls were very persuasive. Also the girls could WICKYOURPEDIA pretty cheap. Today there is an inflation/deflation problem. To offset my trip expenses I had a stash of unlabeled Mexican blue pills that I would sell as needed. Nasty side effects from this inflation deflation problem. Also, I got a good deal on these plastic cards that can be used at a bazillion ATM machines for daily cash expenses so I don’t think there is a money supply problem. This is just personal experience (anecdotal evidence) to the picky bastards out there in blogging land.

I need to get out of town quickly as I have seen my likeness in the post office. Apparently, the FDA, INS, Animal rights group, NSA, Baltimore City Police, IRS, EPA, OSHA, CDC and several other groups would like to have a friendly conversation with me.

If this ever comes to trial I am pleading insanity as I have an engineering degree with a minor in mathematics plus a minor in philosophy. However, I pose as a mathematical economist on weekends. I make a skitzophrentic look normal. Sometimes I referee rugby matches between macro and micro economists. Sometimes those boys get bloody violent. I used to think the Kondratiev Wave meant the surf was up in Ocean City, MD and the Elliott Wave meant good surfing in Long Beach. The wave theorists should be cognizant that the big waves are on the North Shore. They can be killers.

Viva la Revolución



Random Thoughts on my journey during brief moments of consciousness:

Principles of the Austrian School of Economics:

http://en.wikipedia.org/wiki/Austrian_School

Confirmation Bias:

http://en.wikipedia.org/wiki/Confirmation_bias

Inflation:

http://en.wikipedia.org/wiki/Inflation

Deflation:

http://en.wikipedia.org/wiki/Deflation

Why are people so fucked up?

http://unknowngenius.com/blog/archives/category/blah-blah-blah/our-fucked-up-world/

Economists model fucked up people

http://openeconomicsnd.wordpress.com/2009/08/31/staying-behind-and-rationality/

Fucked up people declare economists as an effete corps of intellectual snobs

http://chatna.com/author/agnew.htm

I tried connecting the dots on all this “stuff”. It’s about as easy as threading the Eye of a needle in the non proverbial haystack complicated by externalities such as “headwinds” driving rain and mudslides. The dot connecting sometimes results in a vicious circle. Other times I picture a U, V, L or W. I think my horse ate some of the dots.

Then I remembered a fundamental truth.


“I know you believe you understand that what I said is true, but I’m not sure you know that what I said is not what I meant.”

Where is Secretary Paulson to explain all of this?

By the way I heard a rumor that alien beings landed on the dark side of the moon. They tuned into a signal from earth and observed the Jerry Springer show. Then they watched Larry Kudlow talking about mustard seeds. It was decided that no intelligent life existed on earth so they used hyper drive to visit a distant galaxy.

PONCHOVILLA

 
At 10/06/2009 5:21 AM, Anonymous Anonymous said...

Hang on a minute, of course the US economy doesn't use much energy. You don't actually produce anything!

I like the articles on this blog, but the data is often misunderstood and misinterpreted.

 
At 10/06/2009 9:22 AM, Anonymous Anonymous said...

Liter,

I would agree with you if you had some data re the statement: "Some countries do have lower energy costs than we do, but you take no account of what it cost them to get it." I really doubt German and Japanese solar panels account for their efficiency, and rather expect it is their auto choices, insulation, and other policies. One way to look at this is mpg standards, insulation standards, tax policies (higher gas prices to fund roads rather than taking road costs out of general revenue). Some are costs, but that does not reduce their efficiency savings, particularly with escalating energy prices. We are not the most energy efficient economy in history relative to other countries. We are relative to our past.

Am open for data showing that energy efficiency in Germany and Japan was at a cost that exceeded the benefit in total.

 
At 10/06/2009 9:27 AM, Blogger QT said...

Pfurr,

Energy/GDP x GDP/Pop = Energy/Pop

Well argued invectives aside.

 
At 10/06/2009 10:23 AM, Anonymous Liter said...

Well there you go again anonymous, expecting me to do all your thinking and work for you.

I didn't say German "efficiency" had anything to do with solar panels in particular. Solar panels are one example I used to demonstrate that technologies which reduce pollutants migh not be cost-effective and might pose other environmental harms. CFLs contain mercury. Windmills kill birds. The fact of the matter is ALL alternatives to oil, coal, and natural gas cost more per unit of energy or would require prohibitively expensive infrastructure transitions.

I don't need to prove to you that Germany's efficiency came at a high cost. It's self-evident. If the technology to save both money and pollution existed, we would not have to force private companies to adopt it.

YOU need to prove to us that your desired transition is cost-effective. YOU need to prove the existence of external costs. It's a burden you shun. You dazzle people with terms like "sustainable" without ever really defining what you mean. All the costs of sustainability are hidden from view.

Relative efficiency between countries isn't a useful measure either because each country has different preferences, tax structures, unemployment, etc. You view the world solely through your zero-emissions goggles, people and economics be damned.

 
At 10/06/2009 11:21 AM, Anonymous Anonymous said...

Well, Liter, you made the assertion but didn't have any data to support it.

 
At 10/06/2009 11:23 AM, Anonymous Benny said...

QT-
My point is that the rural areas are big, big winners in the game of winning subsidies. Money is sucked out of urban areas into rural areas.
Without federal subsidies, my estimate in the United States running well in excess of $100 billion and probably up to $200 billion annually, our rural areas would depopulate.
Programs in urban areas are subsidized, but by urban residents, when then also subsidize rural areas.My big point is this: While the right-wiong froths about Michael Moore (and Dr. Perry has yet another post), we are being taxed to subsidize rural lifestyles to the tune of $200 billion a year. But that topic is off limits, as the R-Party reps rural areas.
In other words, the right-wing hates subsidies, except when they don't.
Botom line: The right-wing has no credibility. It is just another interest group. Same as the left wing.

 
At 10/06/2009 11:42 AM, Anonymous Anonymous said...

To those who want to get some data and other analysis on this question--and there are some like Pfurr who just want to rant--I suggest you look at the compositional analysis of GDP and efficiency measures, and not simply GDG to energy consumption. (A non-manufacturing high IP economy will look efficient when it is not). See, DW Ang, Monitoring Changes in Energy Efficiency--GDP Rates to Composite Energy Index, Dept of Industrial Systems. Now, if you want to see how the US ranks on energy efficiency, there is a WIKI chart at http://en.wikipedia.org/wiki/File:Gdp-energy-efficiency.jpg

You will see how the US ranks vis a vis for example, Poland, Germany, Switzerland, Japan, Austria, Italy and France. Curious. Go to the link and find out.

Bill

 
At 10/06/2009 12:24 PM, Blogger QT said...

Benny,

I haven't noticed that this was the official website of the Republican party although I have to agree with you that the U.S.A. seems to have a surfeit of special interests & subsidies...business in Washington as usual without so much as a break in the lockstep with Barack "I'm the change you've been waiting for" Obama. Then, there's the little matter of eminent domain where you take one taxpayers property and give it to a developer who can pay higher taxes. It is certainly sickening.

On the other hand, farmers represent around 2% of the U.S. population. It is difficult to imagine how much more depopulated you want? It is my impression that suburban taxpayers substantially subsidize cities at least, they do here in Canada.

In Canada, the other side of the coin is marketing boards and supply management.

The government often sets the price of crops below the cost of production and maintains monopoly control like the Canadian Wheat Board in Western Canada. Should selling your own wheat be a crime? Do you have this kind of nonsense in the U.S.?

If the government tries to keep crop prices low for consumers, don't such policies necessarily lead to subsidization?

 
At 10/06/2009 12:36 PM, Blogger QT said...

Anon,

Excellent graph. Thanks for some data on this.

A factor not considered is differences in landmass. Hong Kong, Austria, Switzerland, Germany, Japan do not have the same need for transportation. Hong Kong is practically a postage stamp comes out as the most efficient.

It is interesting that Austrailia scores closer to the U.S.

 
At 10/06/2009 5:37 PM, Anonymous Anonymous said...

To say that the investments to change are so large as to be impossible, is to say that the past never happened. The candle to gas lamp or the gas to electric lamp required investments that for their time were as large or likley larger than ones today, and in addition technology had to be invented to make some changes possible. Recall that Edison wanted a DC system which meant you had to be within a couple of miles of the power plant due to the amount of copper involved. Tesla did the technology to fix this. Today the barrier is mostly investment not technology and a Samuel Insull will come along and make the investments. When statements about the amount of investment are made it helps to go back in history and look at similar transitions and ask how did they do it?

 
At 10/06/2009 7:18 PM, Anonymous Liter said...

Germany's annualized GDP growth has been less than 2% since at least 2000. Is that enough evidence for ya?

Do I need to chew your food for you too?

You are the one suggesting we make major changes to our economy. It's up to YOU to prove the benefits will outweigh the costs. Don't try to shift YOUR burden onto me, oh, but that's what you guys are good at.

 
At 10/06/2009 7:46 PM, Anonymous Pfurr said...

No Bill, I've already debunked with pure mathematics the folly of your argument. You and your leftist allies can contrive whatever measures of "efficiency" you want to make us look bad.

Energy intensity is FIXED in the short run, so any reduction in energy per capita necessarily reduces short run GDP per capita. You concoct this measure with that objective in mind, not energy efficiency.

Bottom line is that energy use per capita is an absolutely BONEHEAD way to look at energy usage and you defend it precisley for the reasons I've stated. You want to transfer standard of living from us to other countries.

Other countries had to sacrifice to get more efficient production and you are pretending these costs don't exist or that they pay for themselves. If they did, then profit maximizing firms wouldn't need your push. They'd figure it out on their own.

US average GDP growth since 1990 is 3%. That compares to 2.9% for the world, 1.6% for Japan, 1.7% for Germany and 2% for the EU. Do you want to tell us again that Germany and Japan haven't paid a price for that "efficiency"?

I'm with Vizini. You need to shut up and turn off your computer. You're wasting energy and emitting CO2 with your leftist drivel.

 
At 10/06/2009 7:50 PM, Anonymous Benny the Anonymous said...

> Energy is an input and production is an output. So the proper measure of efficiency is the amount of inputs used to achieve a particular level of output, I.e. BTU/GDP.

Oh, come on, pfurr. Don't confuse them with blatantly obvious facts. Next you'll actually want reason from someone too stupid to actually invent a name.

 
At 10/06/2009 8:31 PM, Anonymous Anonymous said...

Pfurr,

I didn't respond to your earlier comments because others did as well by pointing out that the composition of GDP affects the efficiency argument you made. Oh well, so much for amatuers.

Perhaps you looked at this graph:
http://en.wikipedia.org/wiki/File:Gdp-energy-efficiency.jpg

You will note that experts normalize GDP to BTU as a measure of efficiency. I don't think I need to explain this to you again, but I will: a country with a high GDP with less manufacturing will score higher on your approach, even though its use of BTUs per GDP is less efficient. That is why people who make comparisons use this as one of the approaches. You would have also seen this in the article that was referred to earlier.

Now, perhaps you like to have discourse by using names, or asserting that something you believe is liberal or conservative. These are just facts. They also support the use of nuclear energy, which countries which have higher efficiencies have. And, because they are complex, I don't expect you to understand that it is difficult to make comparisons as you have simply by using a GDP model.

If the world were perfect, one would use Leontief models with NAICS and SIC code input/output date to measure effiency by subsectors. But, since this is a matter of professional discussion, I wouldn't imagine you would wish to participate in this but would rather call persons bozo. Too bad for you.

 
At 10/06/2009 8:36 PM, Blogger OBloodyHell said...

*Some* of you will enjoy this toon:


http://wondermark.com/404/

Most appropriate, given the argument over efficiency

 
At 10/06/2009 10:51 PM, Blogger QT said...

OBH,

uh...yeah

Benny,

To digress to rural subsidies, do you also factor in the lack of services in rural communities, ie.

snow removal
garbage pickup
sewage treatment
water provision
fire protection (usually its volunteer only)
schools
arenas
theatres or access to any cultural institutions
hospitals
sports facilities of any kind
police services
daycare
public transit

just a thought, cityboy.

 
At 10/06/2009 11:29 PM, Anonymous Pfurr said...

Why are you smart enough to measure efficiency but not smart enough to put your name in the Name/URL box?

My approach is the SAME as that chart, you dolt!

BTU/GDP is the SAME measure as GDP/BTU. They're merely inverses. For one, higher is better. For the other, lower is better.

What you don't understand about that chart is that energy efficiency is not the ONLY objective of a society. We also want economic growth, convenience, large cars, and pretty wrapping paper on our Christmas presents.

You can't state as a "fact" that Germany's lower energy intensity is "better". That's a normative statement involving a value judgment. Our society gets to decide what level of efficiency we want - freely and democratically. You, on the other hand, want to FORCE it.

I present my case against all this cost-ineffective global warming with fact and analysis. You magically wave away costs and dazzle the ignorant with fallacious charts and snazzy terms which have no economic or social significance.

There are TRADE-OFFS for that efficiency. There are COSTS to achieve that level of efficiency. You are either ignorant or dishonest about those costs.

This chart of yours is a snapshot in time. It says NOTHING about the costs it took for Japan or Germany or Europe to achieve greater efficiency. In your fantasy world, capital replacement is costless and instantaneous. In the real world, greater energy efficiency requires costly investment.

I've done the math for you already, but I'll do it again for the slow of understanding:

Energy Intensity: Energy/GDP

Standard of Living: GDP/Pop

Energy/GDP x GDP/Pop = Energy/GDP

This is an IDENTITY. It's always true.

Our energy intensity is FIXED in the short run. All the costless and cost-effective energy savings have already been made. In order to lower energy intensity (in the long run), you must INVEST. The opportunity costs is what that money could otherwise be spent on.

Since energy intensity is fixed in the short run, lowering Energy per capita necessitates a falling standard of living. You don't share that part. In fact, you blatantly deny it.

These costs are part of the reason why Germany, Japan, and Europe have much slower rates of economic growth than the US over the past 20 years. Until recently, they've had double our unemployment rate.

You think I'm just calling you names. I'm wiping the floor with you and your arguments. You're too stupid to realize it. I'm providing you the benefit of an advanced understanding of economics and energy and you are regurgitating nonsense fed to you by the anthropogenic global warming propaganda machine.

I've explained to you twice the nonsense of using energy per capita as measure of efficiency. I'll explain it a third time: it is PRODUCTION that creates emissions of pollution and uses energy.

GDP is composed of Consumption, Investment, Government Expenditures and Net Exports. So consumption by people is already in there.

By using GDP, we measure the output that was created by the input of energy.

GDP also expresses production at MARKET VALUES. By using GDP, we measure efficiency based on the VALUE of the output. If production of two goods emit the SAME amount of pollutants, the more efficiently produced good is the one which creates the greater value for society. It involves the smallest trade-off between benefits and costs.

I've explained that adding people to a population doesn't make a country more efficient, so Energy per capita is nonsense. Energy/land mass is equally nonsense. Your ability to select a denominator - any denominator - for your measure of efficiency doesn't mean it's right. GDP is the ONLY correct denominator.

I've explained that adding output for a given level of energy does make a country more efficient.

It doesn't get any easier than that. If you can't understand basic multiplication and division, basic comparative statics, and basic concepts of economics, you are beyond any hope of learning.

As I said, you are STUCK ON STUPID.

 
At 10/06/2009 11:31 PM, Anonymous Pfurr said...

O Bloody Hell,

That cartoon was da bomb!

 
At 10/08/2009 9:10 PM, Anonymous Roxanne said...

That's great! I wish it could be done in our country.

 

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