Rethinking Renewable Mandates

Powering the world’s economy with wind, water and solar, and perhaps a little wood sounds like a good idea until a person looks at the details. The economy can use small amounts of wind, water and solar, but adding these types of energy in large quantities is not necessarily beneficial to the system.

While a change to renewables may, in theory, help save world ecosystems, it will also tend to make the electric grid increasingly unstable. To prevent grid failure, electrical systems will need to pay substantial subsidies to fossil fuel and nuclear electricity providers that can offer backup generation when intermittent generation is not available. Modelers have tended to overlook these difficulties. As a result, the models they provide offer an unrealistically favorable view of the benefit (energy payback) of wind and solar.

If the approach of mandating wind, water, and solar were carried far enough, it might have the unfortunate effect of saving the world’s ecosystem by wiping out most of the people living within the ecosystem. It is almost certain that this was not the intended impact when legislators initially passed the mandates.

[1] History suggests that in the past, wind and water never provided a very large percentage of total energy supply.

Figure 1. Annual energy consumption per person (megajoules) in England and Wales 1561-70 to 1850-9 and in Italy 1861-70. Figure by Tony Wrigley, Cambridge University.

Figure 1 shows that before and during the Industrial Revolution, wind and water energy provided 1% to 3% of total energy consumption.

For an energy source to work well, it needs to be able to produce an adequate “return” for the effort that is put into gathering it and putting it to use. Wind and water seemed to produce an adequate return for a few specialized tasks that could be done intermittently and that didn’t require heat energy.

When I visited Holland a few years ago, I saw windmills from the 17th and 18th centuries. These windmills pumped water out of low areas in Holland, when needed. A family would live inside each windmill. The family would regulate the level of pumping desired by adding or removing cloths over the blades of the windmill. To earn much of their income, they would also till a nearby plot of land.

This overall arrangement seems to have provided adequate income for the family. We might conclude, from the inability of wind and water energy to spread farther than 1% -3% of total energy consumption, that the energy return from the windmills was not very high. It was adequate for the arrangement I described, but it didn’t provide enough extra energy to encourage greatly expanded use of the devices.

[2] At the time of the Industrial Revolution, coal worked vastly better for most tasks of the economy than did wind or water.

Economic historian Tony Wrigley, in his book Energy and the English Industrial Revolution, discusses the differences between an organic economy (one whose energy sources are human labor, energy from draft animals such as oxen and horses, and wind and water energy) and an energy-rich economy (one that also has the benefit of coal and perhaps other energy sources). Wrigley notes the following benefits of a coal-based energy-rich economy during the period shown in Figure 1:

  • Deforestation could be reduced. Before coal was added, there was huge demand for wood for heating homes and businesses, cooking food, and for making charcoal, with which metals could be smelted. When coal became available, it was inexpensive enough that it reduced the use of wood, benefiting the environment.
  • The quantity of metals and tools was greatly increased using coal. As long as the source of heat for making metals was charcoal from trees, the total quantity of metals that could be produced was capped at a very low level.
  • Roads to mines were greatly improved, to accommodate coal movement. These better roads benefitted the rest of the economy as well.
  • Farming became a much more productive endeavor. The crop yield from cereal crops, net of the amount fed to draft animals, nearly tripled between 1600 and 1800.
  • The Malthusian limit on population could be avoided. England’s population grew from 4.2 million to 16.7 million between 1600 and 1850. Without the addition of coal to make the economy energy-rich, the population would have been capped by the low food output from the organic economy.

[3] Today’s wind, water, and solar are not part of what Wrigley called the organic economy. Instead, they are utterly dependent on the fossil fuel system.

The name renewables reflects the fact that wind turbines, solar panels, and hydroelectric dams do not burn fossil fuels in their capture of energy from the environment.

Modern hydroelectric dams are constructed with concrete and steel. They are built and repaired using fossil fuels. Wind turbines and solar panels use somewhat different materials, but these too are available only thanks to the use of fossil fuels. If we have difficulty with the fossil fuel system, we will not be able to maintain and repair any of these devices or the electricity transmission system used for distributing the energy that they capture.

[4] With the 7.7 billion people in the world today, adequate energy supplies are an absolute requirement if we do not want population to fall to a very low level. 

There is a myth that the world can get along without fossil fuels. Wrigley writes that in a purely organic economy, the vast majority of roads were deeply rutted dirt roads that could not be traversed by wheeled vehicles. This made overland transport very difficult. Canals were used to provide water transport at that time, but we have virtually no canals available today that would serve the same purpose.

It is true that buildings for homes and businesses can be built with wood, but such buildings tend to burn down frequently. Buildings of stone or brick can also be used. But with only the use of human and animal labor, and having few roads that would accommodate wheeled carts, brick or stone homes tend to be very labor-intensive. So, except for the very wealthy, most homes will be made of wood or of other locally available materials such as sod.

Wrigley’s analysis shows that before coal was added to the economy, human labor productivity was very low. If, today, we were to try to operate the world economy using only human labor, draft animals, and wind and water energy, we likely could not grow food for very many people. World population in 1650 was only about 550 million, or about 7% of today’s population. It would not be possible to provide for the basic needs of today’s population with an organic economy as described by Wrigley.

(Note that organic here has a different meaning than in “organic agriculture.” Today’s organic agriculture is also powered by fossil fuel energy. Organic agriculture brings soil amendments by truck, irrigates land and makes “organic sprays” for fruit, all using fossil fuels.)

[5] Wind, water and solar only provided about 11% of the world’s total energy consumption for the year 2018. Trying to ramp up the 11% production to come anywhere close to 100% of total energy consumption seems like an impossible task.

Figure 2. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

Let’s look at what it would take to ramp up the current renewables percentage from 11% to 100%. The average growth rate over the past five years of the combined group that might be considered renewable (Hydro + Biomass etc + Wind&Solar) has been 5.8%. Maintaining such a high growth rate in the future is likely to be difficult because new locations for hydroelectric dams are hard to find and because biomass supply is limited. Let’s suppose that despite these difficulties, this 5.8% growth rate can be maintained going forward.

To increase the quantity from 2018’s low level of renewable supply to the 2018 total energy supply at a 5.8% growth rate would take 39 years. If population grows between 2018 and 2057, even more energy supply would likely be required. Based on this analysis, increasing the use of renewables from a 11% base to close to a 100% level does not look like an approach that has any reasonable chance of fixing our energy problems in a timeframe shorter than “generations.”

The situation is not quite as bad if we look at the task of producing an amount of electricity equal to the world’s current total electricity generation with renewables (Hydro + Biomass etc + Wind&Solar); renewables in this case provided 26% of the world’s electricity supply in 2018.

Figure 3. World electricity production by type, based on data from 2019 BP Statistical Review of World Energy.

The catch with replacing electricity (Figure 3) but not energy supplies is the fact that electricity is only a portion of the world’s energy supply. Different calculations give different percentages, with electricity varying between 19% and 43% of total energy consumption.1 Either way, substituting wind, water and solar in electricity production alone does not seem to be sufficient to make the desired reduction in carbon emissions.

[6] A major drawback of wind and solar energy is its variability from hour-to-hour, day-to-day, and season-to-season. Water energy has season-to-season variability as well, with spring or wet seasons providing the most electricity.

Back when modelers first looked at the variability of electricity produced by wind, solar and water, they hoped that as an increasing quantity of these electricity sources were added, the variability would tend to offset. This happens a little, but not nearly as much as one would like. Instead, the variability becomes an increasing problem as more is added to the electric grid.

When an area first adds a small percentage of wind and/or solar electricity to the electric grid (perhaps 10%), the electrical system’s usual operating reserves are able to handle the variability. These were put in place to handle small fluctuations in supply or demand, such as a major coal plant needing to be taken off line for repairs, or a major industrial client reducing its demand.

But once the quantity of wind and/or solar increases materially, different strategies are needed. At times, production of wind and/or solar may need to be curtailed, to prevent overburdening the electric grid. Batteries are likely to be needed to help ease the abrupt transition that occurs when the sun goes down at the end of the day while electricity demand is still high. These same batteries can also help ease abrupt transitions in wind supply during wind storms.

Apart from brief intermittencies, there is an even more serious problem with seasonal fluctuations in supply that do not match up with seasonal fluctuations in demand. For example, in winter, electricity from solar panels is likely to be low. This may not be a problem in a warm country, but if a country is cold and using electricity for heat, it could be a major issue.

The only real way of handling seasonal intermittencies is by having fossil fuel or nuclear plants available for backup. (Battery backup does not seem to be feasible for such huge quantities for such long periods.) These back-up plants cannot sit idle all year to provide these services. They need trained staff who are willing and able to work all year. Unfortunately, the pricing system does not provide enough funds to adequately compensate these backup systems for those times when their services are not specifically required by the grid. Somehow, they need to be paid for the service of standing by, to offset the inevitable seasonal variability of wind, solar and water.

[7] The pricing system for electricity tends to produce rates that are too low for those electricity providers offering backup services to the electric grid.

As a little background, the economy is a self-organizing system that operates through the laws of physics. Under normal conditions (without mandates or subsidies) it sends signals through prices and profitability regarding which types of energy supply will “work” in the economy and which kinds will simply produce too much distortion or create problems for the system.

If legislators mandate that intermittent wind and solar will be allowed to “go first,” this mandate is by itself a substantial subsidy. Allowing wind and solar to go first tends to send prices too low for other producers because it tends to reduce prices below what those producers with high fixed costs require.2

If energy officials decide to add wind and solar to the electric grid when the grid does not really need these supplies, this action will also tend to push other suppliers off the grid through low rates. Nuclear power plants, which have already been built and are adding zero CO2 to the atmosphere, are particularly at risk because of the low rates. The Ohio legislature recently passed a $1.1 billion bailout for two nuclear power plants because of this issue.

If a mandate produces a market distortion, it is quite possible (in fact, likely) that the distortion will get worse and worse, as more wind and solar is added to the grid. With more mandated (inefficient) electricity, customers will find themselves needing to subsidize essentially all electricity providers if they want to continue to have electricity.

The physics-based economic system without mandates and subsidies provides incentives to efficient electricity providers and disincentives to inefficient electricity suppliers. But once legislators start tinkering with the system, they are likely to find a system dominated by very inefficient production. As the costs of handling intermittency explode and the pricing system gets increasingly distorted, customers are likely to become more and more unhappy.

[8] Modelers of how the system might work did not understand how a system with significant wind and solar would work. Instead, they modeled the most benign initial situation, in which the operating reserves would handle variability, and curtailment of supply would not be an issue. 

Various modelers attempted to figure out whether the return from wind and solar would be adequate, to justify all of the costs of supporting it. Their models were very simple: Energy Out compared to Energy In, over the lifetime of a device. Or, they would calculate Energy Payback Periods. But the situation they modeled did not correspond well to the real world. They tended to model a situation that was close to the best possible situation, one in which variability, batteries and backup electricity providers were not considerations. Thus, these models tended to give a far too optimistic estimates of the expected benefit of intermittent wind and solar devices.

Furthermore, another type of model, the Levelized Cost of Electricity model, also provides distorted results because it does not consider the subsidies needed for backup providers if the system is to work. The modelers likely also leave out the need for backup batteries.

In the engineering world, I am told that computer models of expected costs and income are not considered to be nearly enough. Real-world tests of proposed new designs are first tested on a small scale and then at progressively larger scales, to see whether they will work in practice. The idea of pushing “renewables” sounded so good that no one thought about the idea of testing the plan before it was put into practice.

Unfortunately, the real-world tests that Germany and other countries have tried have shown that intermittent renewables are a very expensive way to produce electricity when all costs are considered. Neighboring countries become unhappy when excess electricity is simply dumped on the grid. Total CO2 emissions don’t necessarily go down either.

[9] Long distance transmission lines are part of the problem, not part of the solution. 

Early models suggested that long-distance transmission lines might be used to smooth out variability, but this has not worked well in practice. This happens partly because wind conditions tend to be similar over wide areas, and partly because a broad East-West mixture is needed to even-out the rapid ramp-down problem in the evening, when families are still cooking dinner and the sun goes down.

Also, long distance transmission lines tend to take many years to permit and install, partly because many landowners do not want them crossing their property. In some cases, the lines need to be buried underground. Reports indicate that an underground 230 kV line costs 10 to 15 times what a comparable overhead line costs. The life expectancy of underground cables seems to be shorter, as well.

Once long-distance transmission lines are in place, maintenance is very fossil fuel dependent. If storms are in the area, repairs are often needed. If roads are not available in the area, helicopters may need to be used to help make the repairs.

An issue that most people are not aware of is the fact that above ground long-distance transmission lines often cause fires, especially when they pass through hot, dry areas. The Northern California utility PG&E filed for bankruptcy because of fires caused by its transmission lines. Furthermore, at least one of Venezuela’s major outages seems to have been related to sparks from transmission lines from its largest hydroelectric plant causing fires. These fire costs should also be part of any analysis of whether a transition to renewables makes sense, in terms of either cost or energy returns.

[10] If wind turbines and solar panels are truly providing a major net benefit to the economy, they should not need subsidies, even the subsidy of going first.

To make wind and solar electricity producers able to compete with other electricity providers without the subsidy of going first, these providers need a substantial amount of battery backup. For example, wind turbines and solar panels might be required to provide enough backup batteries (perhaps 8 to 12 hours’ worth) so that they can compete with other grid members, without the subsidy of going first. If it really makes sense to use such intermittent energy, these providers should be able to still make a profit even with battery usage. They should also be able to pay taxes on the income they receive, to pay for the government services that they are receiving and hopefully pay some extra taxes to help out the rest of the system.

In Item [2] above, I mentioned that when coal mines were added in England, roads to the mines were substantially improved, befitting the economy as a whole. A true source of energy (one whose investment cost is not too high relative to its output) is supposed to be generating “surplus energy” that assists the economy as a whole. We can observe an impact of this type in the improved roads that benefited England’s economy as a whole. Any so-called energy provider that cannot even pay its own fair share of taxes acts more like a leech, sucking energy and resources from others, than a provider of surplus energy to the rest of the economy.

Recommendations

In my opinion, it is time to eliminate renewable energy mandates. There will be some instances where renewable energy will make sense, but this will be obvious to everyone involved. For example, an island with its electricity generation from oil may want to use some wind or solar generation to try to reduce its total costs. This cost saving occurs because of the high price of oil as fuel to make electricity.

Regulators, in locations where substantial wind and/or solar has already been installed, need to be aware of the likely need to provide subsidies to backup providers, in order to keep the electrical system operating. Otherwise, the grid will likely fail from lack of adequate backup electricity supply.

Intermittent electricity, because of its tendency to drive other providers to bankruptcy, will tend to make the grid fail more quickly than it would otherwise. The big danger ahead seems to be bankruptcy of electricity providers and of fossil fuel producers, rather than running out of a fuel such as oil or natural gas. For this reason, I see little reason for the belief by many that electricity will “last longer” than oil. It is a question of which group is most affected by bankruptcies first.

I do not see any real reason to use subsidies to encourage the use of electric cars. The problem we have today with oil prices is that they are too low for oil producers. If we want to keep oil production from collapsing, we need to keep oil demand up. We do this by encouraging the production of cars that are as inexpensive as possible. Generally, this will mean producing cars that operate using petroleum products.

(I recognize that my view is the opposite one from what many Peak Oilers have. But I see the limit ahead as being one of too low prices for producers, rather than too high prices for consumers. The CO2 issue tends to disappear as parts of the system collapse.)

Notes:

[1] BP bases its count on the equivalent fossil fuel energy needed to create the electricity; IEA counts the heat energy of the resulting electrical output. Using BP’s way of counting electricity, electricity worldwide amounts to 43% of total energy consumption. Using the International Energy Agency’s approach to counting electricity, electricity worldwide amounts to only about 19% of world energy consumption.

[2] In some locations, “utility pricing” is used. In these cases, pricing is set in a way needed to provide a fair return to all providers. With utility pricing, intermittent renewables would not be expected to cause low prices for backup producers.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
This entry was posted in Energy policy and tagged , , , , . Bookmark the permalink.

1,461 Responses to Rethinking Renewable Mandates

  1. Shawn says:

    Of possible interest. “Crude-quality issues are hitting all segments of the oil market and heading to one conclusion: Slower shale-production growth and shortages of heavier crudes. In this case, it is possible that we might end up in energy oil shortages while we are awash in oil! ”
    https://www.anasalhajji.com/uncategorized/the-world-is-still-asleep-on-the-crude-quality-crisis-a-follow-up-note

    My translation: diesel shortages coming even as total oil production (in barrels) grows or plateaus.

    • Davidin100millionbilliontrillionzillionyears says:

      cool…

      this quote:

      “By some sell-side estimations, the realized pricing on a boe basis for some Permian producers are in the low $40s and that’s not including any potential crude quality discounts in the future.”

      just another aspect to the idea that the better quality crudes are becoming tapped out and the world must turn to lesser quality crudes…

      perhaps the heavy oil producers will increase production and bring some balance…

      Canada perhaps…

      Venezuela perhaps… maybe in a few years…

      so there is great hope! 😉

        • It's different this time around....NO says:

          Way too late for that, Greta, I m afraid. Best you and everyone else enjoy the little time we all have left of BAU and let the show unfold. As Gail has pointed out, and I may confirm, we THINK we are in charge, but the system is self regulating, and based on natural laws.
          We may not like it, but that’s just the way it is.
          But we are just human and the human condition reverts back to endless drama we see now.

          Empty spaces, what are we living for?
          Abandoned places, I guess we know the score
          On and on, does anybody know what we are looking for?
          Another hero, another mindless crime
          Behind the curtain, in the pantomime
          Hold the line, does anybody want to take it anymore?
          …My soul is painted like the wings of butterflies
          Fairy tales of yesterday will grow but never die
          I can fly my friends
          The show must go on, yeah
          The show must go on
          I

          • SteveS says:

            We need our smartest people to try harder. Find ways to extend the trend. They would be real heroes.

            People who are already resigned about the situation and just keep reiterating they are destined to die when it dies are not helpful. Literally that is not a message worth delivering.

            • Davidin100millionbilliontrillionzillionyears says:

              “We need our smartest people to try harder. Find ways to extend the trend. They would be real heroes.”

              there are many people around the world who are working to extend economic growth and aid people with food and health care to give them longer and better lives…

              are they really heroes?

              the result is that the world population, which already is in overshoot, continues to increase…

              personally, I welcome any attempt to keep BAU wobbling along in my corner (northeast USA) of the world for as long as possible…

              but any extension of BAU brings about a higher world population and therefore the potential for greater human suffering than if population decrease started now…

              so what should we do?

            • hkeithhenson says:

              “so what should we do?”

              The Clinic Seed story unfolds in a world where a side effect of providing really good health care has the side effect of biologically wiping out the human race.

            • Davidin100millionbilliontrillionzillionyears says:

              and the abundant energy from power satellites?

              what would that do to the human race?

              double or triple the population which is already in overshoot?

              hasten the depletion of all other resources?

              arable land, fresh water, minerals, metals etc…

              oh, whatever…

              BAU FULL THROTTLE tonight, baby!

            • hkeithhenson says:

              “what would that do to the human race?”

              Bezos wants a trillion people living in space habitats throughout the solar system. The earth would be mostly depopulated.

            • wish I was a genius like Bezos

              Space travel on that scale requires technology not yet invented

              New technology always requires old technology to build on. At current rates of consumption, our current technology can’t last more than 20 years or so, so any ‘new technology’ must be created within that timespan

              We know of no habitable planets

              If habitable planets exist, they will be ‘inhabited’ already, they will not be sitting there waiting for us to arrive. (Of course they could be inhabited by dead Mormons or Scientologists or whatever)

              If by chance we found another planet, our purpose and intention would be to fill it with ‘us’
              (refer to the Americas after 1492)

              Hiring clever people to spend your money on your daft projects does not make you clever
              it just makes you poorer

            • hkeithhenson says:

              “Space travel on that scale requires technology not yet invented”

              I don’t think so. Rockets of the kind SpaceX and Blue Origin make look like they will get down into the cost range required. The alternative is Reaction Engines pre-cooled engines. They are far advanced in testing.

              ” must be created within that timespan”

              Looks like it could be done that fast.

              “We know of no habitable planets”

              You miss the point O’Neill made in the early 70s. What he and his students figured out is that planetary surfaces are not a good place to grow an industrial civilization relative to free space. There is enough material out there in the asteroids to build a few thousand times the land area of the earth.

            • in the interests of maintaining polite and civilised dialogue on OFW I will restrain my reply, particularly to the last paragraph, to eye rolling and banging head on keyboard

            • Davidin100millionbilliontrillionzillionyears says:

              Bezos should become a science fiction writer…

            • Tim Groves says:

              We could start by colonizing the Moon and Mars, and then build a Ringworld, and then go on to turn it into a Dyson sphere using the asteroid belt as the raw materials and utilizing a large fraction of the Sun’s energy to power the endeavor. Amazon drones would of course deliver goodies to people throughout the zone of habitation providing, of course, that they had an Amazon Prime account.

              Build it, and they will come!

          • SteveS says:

            Gail is being heroic by bringing attention to issues we must keep in mind. If we are ever to come up with real solutions that extend the trend, we first need to have an accurate picture of the energy problem. But if the message is lazy, a kind of “let’s do nothing,” it really isn’t worth delivering. While it’s likely much is pre-destined in the financial-energy boom of the past couple hundred years, there is probably some room to make the outfall of its popping less catastrophic. It may even be possible to extend the trend. For instance, we didn’t know we could harness nuclear energy until we exploded a bomb in 1945. A lot of smart people working very hard on a problem in a short time can achieve very surprising things.

            If you believe entirely in predestination, there isn’t much point in saying or doing anything at this point, even saying we can’t do anything.

            • Gusher of not warranted optimism.. ?

              Predestination is one thing.
              (Over)mature system (perhaps) nearing thermodynamic collapse another one..
              And too live in such times is simply an occurrence, though luck, so what..
              You can still mitigate but not on macro societal level for everybody and everything.

            • hkeithhenson says:

              “still mitigate but not on macro societal level”

              There is a good chance the future will go very badly. But it’s not a sure thing and there *are* approaches such as power satellites that could be grown large enough to pick up the entire human energy demand.

            • Well, anything can happen with some probability.

              I was surprised that these muskadian reusable rockets worked at all.. but given the large money burn rate, why not. Not sure he will ever get the top notch reliability factor out of it for such desired regular cargo service though.

              Now if you compare-contrast the whole industrial chain needed for say such power sat on one hand and all the myriad of industries and installations for “recycled-extended” nuclear power fuel alternative, who comes on top? The first is seemingly easier but doesn’t yet fully exist, the second one exist today but is confined to one beyond peculiar country at the times the industry is globally unloved (well hated) to say the least.

              So, perhaps the day for powersat to flourish could be around the corner.

            • Tim Groves says:

              If we did manage to do something to avoid collapse, save the day, and all live happily ever after, it would be because we were predestined to do so.

            • SteveS says:

              You actually don’t have evidence to support that strong of a judgment. It could be; it could not be. The bubble can blow bigger, but it can also fall apart prematurely. There are data to support the assessments that key points in financial history would seem to be predestined. This is an interpretation of the data. There are other possible interpretations. It does seem the laws of physics play a defining role in our energy economy. But it’s a very poor judgment to assess they definitely predestine everything, because there’s not sufficient evidence to support the claim. We cannot even really be sure of what sufficient evidence would look like. It might require omniscience. You can never fully confirm it; only be led strongly to assess it.

              A lot of folks around here are so sure of their judgments. It’s really very poor analysis. Strong analysis makes judgments from data, and some measure of certainty/uncertainty is put on those judgments. If you were to take completely certain judgments to anyone truly serious, you wouldn’t be taken seriously. Intelligence analysts are trained in this; financial analysts are trained in this. Many of the best analysts actually have the ability to change their minds very quickly based on new data. They also have a healthy respect for the unknown.

              On the kinds of issues we find on this website, you can pretty much tell if someone is worth listening to or not just based on their approach. Unfortunately, the doomer types are full of very weak analysis. Some of it will end up being right, in about the same way a dead clock is right twice a day.

            • Not because some of us were “better” or “worse” people according to some standards.

            • hkeithhenson says:

              The only standard that has been consistent for the whole time life has been on the planet is natural selection. It is what Clark thinks shaped the psychological traits that led to the industrial revolution. But it is really harsh. Depends on an excess number of children and early death or failure to reproduce for a lot of them.

            • species either adapt to changing conditions or they die out

              dinosaurs adapted to become chickens, and we eat them

              had they stayed 30ft tall, and we’d stayed the size of rodents they would have eaten us—all a matter of food/energy resources, and physical situations on the resource tree.

              a big asteroid dice threw down in our favour in the gaming table of evolution.

              i think we are about to lose our winnings

            • Natural selection is the way the system works for every other species. We have a huge medical establishment, for the purpose of working around natural selection. Also, relocation works against natural selection. A person needs to grow up with, and intermarry with, others in the same climate zone.

            • hkeithhenson says:

              ” working around natural selection”

              The medical profession so far has had little effect on the average genetics. That may change when we have widespread designer babies.

            • But it has managed to keep at least a few people with cancer and other diseases alive long enough to get back in the gene pool for another round.

              I think sanitation advances plus a few antibiotics have done more to increase lifespan than the vast majority of medicine.

            • hkeithhenson says:

              ” a few people”

              Certainly, but the effect is like a drop of ink in a lake in terms of the whole gene pool. On cancer, there are only a few genes such as BCRA that contribute. Those genes are not selected out so much because the effect is usually after childbearing.

              ” sanitation advances”

              Perhaps. Transporting food reduced the famines too.

            • Tim Groves says:

              A person needs to grow up with, and intermarry with, others in the same climate zone.

              Gail, the above comment could (and to a contemporary SJW certainly would) be considered racist or miscegenistic, and might even get its author kicked out of academia, deplatformed, and lumped in with the deplorables.

              If we were to get real picky, it could also be considered supportive of forced non-monogamous marriage arrangements. Your detractors may start accusing you of being a closet traditional Mormon.

            • Sorry, I don’t try to write politically correct ideas. I am trying to describe what happens in practice.

              When I grew up, quite a few of my classmates in a small town in Wisconsin married other classmates from elementary and secondary school. Or they married neighbors. They tended to get jobs in the area, often in farming or in support for farming. So they stayed put.

              A few of us relatively rich kids (high energy consumption) with high grades went off to other states to college and later graduate school. We met our spouses later, in the mix of people we rubbed shoulders with later. My grandparents all came from Norway, or their parents came from Norway. My husbands’ background is more mixed European, from farther south in Europe. Sort are sort of close, but not the same. We now live in Georgia, USA, which is farther south than either Norway or Europe, so we are not in the right climate zone, for either of us.

              The people who stayed around where I grew up married others from the same community. Quite a few of Norwegian heritage married others with similar Norwegian heritage. There were quite a few people of Polish descent in that part of Wisconsin, too, but parents of that time discouraged dating people that different. (I know even when my mother lived in a nursing home near the end of her life, she wanted to talk to women of Norwegian background, not Polish. Different religions were a big part of the issue.)

              So traditional customs tended to keep people together with their own group. Once people got wealthier (more energy consumption per capita), and could travel more, a great deal more mixing and movement away from the “correct” geographical area that we were biologically adapted to started taking place. If “selection of the best adapted” is to work based on climate in a particular area, people need to stay put. Other things would probably help too, such as wearing a lot less clothing, so we are truly exposed to the climate of the area.

            • there is a tendency—just a tendency—for people to marry/pair up on the same intellectual level.

              You do, after all, need to converse between times.

              physical attractiveness also has a degree of commonality.

              Thus kids tend to get those attributes from both parents if they are lucky. I seem to have a gift for art, 4 of my 7 grandkids have that to a far higher degree than I ever did. Which I am immensely proud of. They got other traits from other grandparents as well

              So things flow down the generations, get diluted or accentuated according to chance.

              Nothing racist about it it, you select a partner, or the partner selects you based on the unconscious intention of providing offspring with the best start in life.
              That’s the way nature works, “racism” or whatever is the label we stick on it.

            • hkeithhenson says:

              “Gail, the above comment could (and to a contemporary SJW certainly would) be considered racist or miscegenistic,”

              Gregory Clark and I get into the same mess by making the case that certain groups of humans have been heavily selected for traits conducive to starting the industrial revolution. Clark also makes a case for the Chinese being similarly selected.

      • Except you need all of the infrastructure in place to handle a growing supply of heavy crude. I don’t think that this has been happening. The infrastructure is too costly; the returns on the selling the heavy crude have been too low. I know that Saudi Arabia has some potential heavy oil as well. None of this has really been worth developing at the world’s low oil prices.

        IEA was counting on oil prices rising indefinitely ($300 barrel) and the heavy oil coming out. This is one of the IEA’s charts from a few years ago:

        EHOB on the above chart is “Extra heavy oil and bitumen.” Tight oil is oil from shale formations.

        IEA was expecting that there were continue to be a huge amount of conventional oil left, plus lots of shale oil and lots of EHOB, thanks to high prices. This is not happening. The same issue occurs with coal and natural gas. There is a lot in the ground, but we cannot get it out.

        • Davidin100millionbilliontrillionzillionyears says:

          “The infrastructure is too costly; the returns on the selling the heavy crude have been too low.”

          then that is the other side of the coin…

          “… the realized pricing on a boe basis for some Permian producers are in the low $40s…”

          if light oil production is unprofitable and heavy is also unprofitable…

          then that is an endgame for the oil industry…

          prices will always be too low for producers…

          countries will have to step in and keep the industry working even without profits…

          the USA seems to be doing that now with LTO…

          perhaps Canada too with its tar sands…

          several countries (USA Russia China) seem to want to “help” Venezuela with its heavy oil…

          the endgame…

          this could go on for as long as the countries are able to keep unprofitable oil industries working…

          5 or 10 months… or 5 or 10 years…

          it must end someday, so it will…

          • SteveS says:

            How those kinds of government interventions work and for how long, is really interesting. All modern militaries are incredibly dependent on fossil fuels. If a government of a great power is still standing, it’s probably a good bet it will try anything and everything to secure those resources for military, if nothing else. Having any shortage of those resources would drive military and intelligence circles crazy. It’d probably make Wall St. temper tantrums look very mild.

    • Heavy oil, which is what produces the highest percentage of diesel, is expensive to extract. Oil producers stopped building new infrastructure for it, earlier than for tight oil from shale. So we should not be surprised if its production falls first.

      The EU made what, in retrospect, looks like a very poor decision to encourage the use of private passenger automobiles that operated using diesel. This made the EU especially vulnerable to problems as shortages arise. They EU has no choice but to try to find something else. Hence all of the new rules regarding moving away from diesel.

      • Robert Firth says:

        The decision to move to diesel was not made by the EU: it was created by lobbying and bribery by he car makers, especially German, and by German government pressure. They also capitalised on the Kyoto protocol by claiming that diesel cars produced a lot less CO2, a claim that any chemist will tell you was a flat lie.

        The EU industrial policy is run fro the benefit of Germany, just as its agricultural policy is run for the benefit of France. And the whole house of cards is collapsing, as the other countries begin to wake up to that truth, and stirring performances of “An die Freude” will not send them back to sleep.

        • Duncan Idaho says:

          Hint:
          Diesel is more energy dense than gasoline–
          The world runs on diesel.

        • hkeithhenson says:

          “that diesel cars produced a lot less CO2, a claim that any chemist will tell you was a flat lie.”

          Diesel engines are around 10% more efficient than gasoline ones. So for a given power output, they do make somewhat less CO2.

        • True, but it was less sinister (in the origins at least) – diesel spec/optioned cars were more expensive (profitable) and they were really just sipping fuels when on high speed autobahn in contrast to equal power gasoline – wasteful options. So it made sense for a while (few decades) when availability of diesel products was not questioned, and especially before inner cities clogged up by traffic.

          Now, compare contrast with US situation of low highway speeds, long stretches of stop and go traffic (batt regen), gasoline, and lot of smog-sunshine (Cali market).. Voila in such peculiar settings the mild hybrids like Prius made a lot of sense. Similarly, there are niche markets where natgas cars shine..

  2. Harry McGibbs says:

    “Investors are pricing in a 100% chance the Fed cuts rates at its next meeting in September after Monday’s market carnage, joining central banks around the globe that are providing more stimulus to their respective economies…

    “Initially seen as a cautionary pause, the world’s central banks have clearly returned to a path of lower interest rates that has not been seen since the global financial crisis.

    “More than half of the world’s central banks are expected to cut interest rates in the third quarter, while 0% of central banks are expected to raise rates in the third or fourth quarters, data compiled by Goldman Sachs shows.”

    https://www.axios.com/central-banks-interest-rate-cuts-financial-crisis-2d373344-91ca-4c69-a525-017afe96e17d.html

    • Harry McGibbs says:

      “Rates are crashing around the world, and this does not bode well for the global economy. Signals being sent by the global bond markets [are glaringly negative].

      “Given the precipitous plunge in rates over the last 48 hours, it is likely that over $15 trillion in sovereign debt carries negative interest rates … quite possibly even more.”

      https://www.cnbc.com/2019/08/06/crashing-interest-rates-bring-world-closer-to-an-economic-abyss.html

      • Harry McGibbs says:

        “After the Dow shed almost 1,000 points on Monday, stock market futures point to a slight recovery on Wall Street this morning. Tuesday’s bounce, however, is tainted by the Treasury’s recession indicator which plunged to a level not seen since before the 2008 financial crisis. As the trade war between China and the US escalates, the recession alarm is screaming.”

        https://www.ccn.com/market-news/dow-recovers-recession-alarm-hits-crisis-levels/2019/08/06/

        • Harry McGibbs says:

          “Investors shouldn’t take much solace from Tuesday morning’s rebound, says Nomura. The firm is warning the next sell-off could resemble a crisis-level plunge like the one that followed Lehman Brothers’ collapse.”

          https://www.cnbc.com/2019/08/06/nomura-a-second-market-sell-off-could-be-lehman-like.html

          • Harry McGibbs says:

            “To most people, Aug. 9, 2007, was an ordinary enough summer day. The stock market fell about 3 percent, sufficiently notable to lead the major newspapers, but hardly anything that would generate panic in the streets. Yet to many people who work in economic policy or financial markets, that day was the beginning of what would eventually be called the global financial crisis… Monday felt eerily similar…”

            • Harry McGibbs says:

              “The escalating trade war between the U.S. and China is potentially creating “the most dangerous financial moment” since the global crash at the end of the last decade, former Treasury Secretary Larry Summers said.”

              https://www.cnbc.com/2019/08/06/larry-summer-tweets-on-china-us-trade-currency-war.html

            • This is not the way to reassure the public. Instead, a Plunge Protection Team is needed.

            • Harry McGibbs says:

              On a personal note, I have been taking a current affairs snapshot of the global economy’s areas of risk and weakness almost daily since the start of 2015, which has given me at least some intuition into its overall health, and this is certainly the most concerned I have been since I began. Jan 2016 and Dec 2018 were also very concerning but not to this degree.

            • The big problem, when the trade war moves over into currency movement, is that a whole lot of derivatives are tied to currency moves. It is these derivatives that cause banks to start making many big moves that negatively affect the stock market.

          • I see the article says:

            Nomura is basing its view on data showing hedge funds fleeing the market and said more are set to exit when their algorithms are triggered by rising volatility.

            I wouldn’t be surprised if banks use similar algorithms, making the problem worse.

        • Today the market is expected to be down again.

      • Negative interest rates really don’t work. Also, banks have problems with these low rates. The low rates really reflect a low rate of return on investment. It is this low rate of return on investment that is the true problem.

        • Davidin100millionbilliontrillionzillionyears says:

          Japan was lowest but now:

          Japan 10 year minus 0.197%
          France 10 year minus 0.308%

          and the winner is:

          Germany!

          10 year Bund is now minus 0.573%

          how low can they go?

          “I have a bad feeling about this”…

          2019 should limp to 12/31…

          2020 looks nearly certain to have major disruptions…

        • Harry McGibbs says:

          “For Europe’s lenders, the hits keep on coming.

          “Banks in Germany, Italy and the Netherlands warned Wednesday that making money and improving their operations are becoming more challenging as already-low interest rates look set to tick lower. Shares of Commerzbank AG, UniCredit SpA and ABN Amro Bank NV fell sharply as they struck a gloomy tone.”

          https://www.wsj.com/articles/europes-banks-warn-about-prospects-11565195627

    • Right now, WTI is at $51.53. No bounce so far.

      • Yoshua says:

        WTI USD 50.77

        Well…this trend line broke.

        Technical charts are a bit weird…”everything” is breaking down right now…yuan…European Banks…S&P 500…WTI…Iron Ore…

        I don’t know how they line up everything simultaneously.

        • Davidin100millionbilliontrillionzillionyears says:

          it almost seems like declining net (surplus) energy is directing the entire world economy…

          no, that would be preposterous!

  3. Harry McGibbs says:

    “Investor anxiety is visible just about everywhere in Hong Kong’s markets as recession warnings and escalating protests strain sentiment to breaking point. While most of the world recovered Tuesday from a yuan-induced meltdown, Hong Kong saw the biggest spike in interbank rates in more than a decade, the longest stretch of equity declines since 1984 and the wildest stock swings in four years.”

    https://www.bloomberg.com/news/articles/2019-08-06/hong-kong-assets-turn-toxic-as-trade-war-protests-cloud-outlook

  4. Tim Groves says:

    Sounds like an ominous warning, particularly when you remember the way the PLA broke up that picnic in the Square of Heavenly Peace.

    China warned it will be “only a matter of time” before it punishes those behind two months of pro-democracy protests in Hong Kong that have increasingly devolved into violent clashes with law enforcement.

    The comments by Yang Guang, spokesman for the Chinese Cabinet’s Hong Kong and Macao Affairs Office, are a further indication that Beijing will take a hard line against the demonstrators and has no plans to negotiate over their demands for political reforms.

    “We would like to make it clear to the very small group of unscrupulous and violent criminals and the dirty forces behind them: Those who play with fire will perish by it,” Yang said. “Don’t ever misjudge the situation and mistake our restraint for weakness.”

    Singling out “brazen, violent and criminal actors” and the “meddling hands behind the scenes” as the focus law enforcement efforts, Yang said, “As for their punishment, it’s only a matter of time.”

    https://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=12256329

    • Harry McGibbs says:

      China’s government seems to be in a bit of a no-win situation here. On the one hand, they cannot let these protests continue for fear of looking weak and because of the economic damage they are causing but, on the other, a Tiananmen Square-style crackdown would also be hugely damaging economically and reputationally.

      They must be hoping their scary sabre-rattling will cause the protesters to climb down but that doesn’t seem to be happening.

      • Isn’t it bit in the line of the old joke about scorpions (or snakes?), when the bitten victim is complaining the predator only answered all smiles style: you knew all about me so you should not have had believed me in the first place..

        So, in the same vein, the mainland Chinese assumption that the UK/US are somehow in gentlemanly fashion going to more or less stick to the peaceful (and no meddling) transition time from the old colonial hub to Chinese hands was very naive..
        Nope, the whole issue was again re-weaponized ala other ongoing color revolutions handbook or at least as perennial poking stick on the bad Panda..

        One additional illustrative example, the young guys from yt channel Asian Capitalist (having also US/CAN passports), who occasionally discuss some good doom related topics toyed with the same silly idea and now are in panic mode quickly packing their bags and getting out of there..

        ps I’m not adoring the Chinese regime and I’m not Asian..

      • Robert Firth says:

        Harry, I tend to agree. If China moves the troops into Hong Kong there will certainly be bloodshed, and if she closes her only trusted and reliable window on the world, she is risking the fall of the dynasty.

        As the Empress Dowager discovered in 1900.

      • Yoshua says:

        Hong Kong is China’s financial center.

        The PLA can’t just go in there and crack down on the protesters. China would be cut off from global financing?

        You Brits left a nice little ticking time bomb in HK.

        • Yep, what an expertly bunch of treacherous pirates, and that’s ~100+ yrs after their domestic coal peak and ~20yrs after their shelf oil / natgas peak..

          Long cycles, short memory spans, yet third/fourth turnings aficionados have it always right, +/- a decade or so, lolz..

          • Yoshua says:

            Britain started the industrial civilization. You rule the world. The city Is the financial center of the world.

            • Yes, that’s highly probable as it “curiously” enjoys the highest possible int law autonomy out of all of the tax and fin heavens be it on the continent or offshore. That being said, it’s highly probable there must be some sort of fall back decentralized infrastructure in place should they fall for what ever man made or enviro reason, it’s a tiny place.. The rumor has it at least these three hubs are likely on such list: NY, Luxembourg, Switzerland.

        • “Hong Kong is China’s financial center.” This is sort of a problem. Oops!

  5. Harry McGibbs says:

    “German industrial output fell more than expected in June, driven by weaker production of intermediate and capital goods, data showed on Wednesday, adding to signs that Europe’s biggest economy contracted in the second quarter.

    “Industrial output dropped by 1.5% on the month – a far steeper decline than the 0.4% fall that had been forecast, figures released by the Statistics Office showed… “The continued plunge in production is scary,” Bankhaus Lampe economist Alexander Krueger said.”

    https://www.euronews.com/2019/08/07/scary-german-output-figures-propel-recession-fears

  6. Tim Groves says:

    “India expects coal-fired power capacity to grow by 22% in three years.

    That’s according to the Chief Engineer at the country’s Federal Power Ministry, Ghanshyam Prasad, who Reuters reported as stating coal capacity is likely to reach 238GW by 2022.

    India’s Coal Minister, Pralhad Joshi previously said annual coal demand rose by 9.1% during the year ending March 2019, noting the figure hit 991.35 million tonnes, driven primarily by utilities, which accounted for three-quarters of total demand.

    The anticipated growth is likely to affect efforts to cut emissions and could risk worsening already poor air quality.

    India’s electricity demand rose by 36% in the seven years up to April 2019, while coal-fired generation capacity during the period rose by three-quarters to 194.44GW.

    Pralhad Joshi said despite the growth rate in thermal capacity outpacing electricity consumption in the last few years, more coal-fired plants will still be needed in the future to meet growth.”

    https://www.energylivenews.com/2019/08/05/india-expects-coal-capacity-to-swell-by-a-fifth-in-three-years/

    • The IEA writes about a future in which people in India and Africa can afford air conditioning. Sounds, in theory, like a good way of keeping world electricity demand rising. I can’t imagine it happening.

  7. Shawn says:

    Another item of possible interest.

    “Wells, Wires, and Wheels” — on the economics of renewables in tandem with EVs versus oil for gasoline and diesel vehicles. Our EROCI analysis shows that for the same capital outlay today renewables with EVs will yield 6-7x as much useful energy as gasoline with oil at $60/bbl, and 3-4x as much useful energy as diesel. https://lnkd.in/dksgdW7

    New Research led by Mark Lewis (https://docfinder.bnpparibas-am.com/api/files/1094E5B9-2FAA-47A3-805D-EF65EAD09A7F) , our Global Head of our Sustainability Research, shows that oil needs a long-term breakeven price of USD 10 – 20/barrel to remain competitive in mobility.”

    Well….I only scanned the research summary paper, but for all the reasons Gail has pointed out in her essays, I am skeptical of the implied conclusion that we can move to renewable energy as replacement for fossil fuels in general or for mobility in particular. Millions of years of accumulated sunlight then processed in the earth for millions of years, and then removed from the ground at relatively little cost, is going to be hard to replace. Fossil fuel burning provides a vast and relatively free energy subsidy to all aspects of our global society that generally remains unaccounted for in economic studies.

    That said, the study does point out the enormous waste of energy that results from burning fossil fuels in combustion engines. Maybe in the short term, it would make sense to use the remaining fossil fuel resources to manufacture non-renewable renewable energy harvesters. However, our income/purchasing power to make such harvesters will diminish as conventional fossil resources deplete and the energy costs of fossil fuels continue to rise

    • I wonder where the roads to operate these vehicles on will come from, among other things.

    • SteveS says:

      If nuclear could become part of the all-hands-on-deck renewable effort (I know it takes long to scale up), it might be more hopeful. Uranium is finite, and there is also a waste problem (though we once had what seemed like a pretty viable plan once for storing that waste under mountains), but conceivably it could stave off the worst effects of our pollution and climate problems. It’d be a large source of relatively free energy. It’s high-risk, but now’s about the time to consider those kinds of options. Maybe we should just build nuclear power plants like crazy.

      • Uranium has the same “too low price for producers” problem as other types of energy supply. I suppose, if more of the demand were focused on uranium, maybe the price would rise. But we couldn’t be certain of it.

        There also seems to be a problem with spent fuel pools, when we can no longer keep them cool. In fact, there is a problem with storing or reprocessing spent uranium. With all of the spent fuel pools we have today, this issue may not matter. We already may have enough of a problem to kill off most of the population. If that is the case, adding some more nuclear power plants won’t really make the situation worse, except for the possibility of future generations.

        • SteveS says:

          Good info. There may be no truly good energy options. Perhaps the mindset should be to find and act on the “least bad”, realistic option. If under some options we would certainly experience unprecedented death and human suffering, the options under which we just might experience unprecedented death and human suffering begin to make some sense.

      • Because of the principle of nuclear decay, spent nuclear fuels still contain a lot of untapped potential energy, so if there is any sort of nuclear future the old fuel can’t be just stored away, but rather reprocessed. For that specific facilities are needed as well as an additional smaller fleet of breeder reactors (burning different revamped fuel mix)..

        This has been all known since at least 1950-60s, US abandoned this field first, only RU managed the full cycle and to some extent FR (EU) have any capability in this area left. Plus India and China can attempt something in idealized future outlooks. Koreans are to my limited knowledge doing only the ordinary NPP stuff..

        The expenses on educated staff and facilities (+upgraded safety standards/expenses) are enormous, it would take decades to revamp this industry (not even incl. the more complex spent fuel recycling angle of it) globally or specifically in the West.

        Most likely, the history just forked away at some past junction already, it could not be turned around realistically speaking. The resources (incl. time) were blown instead on frivolous merchandise and services, wars, and other fluff.. most recently the klimate kult objects of worship-renewables..

        • I expect it is too late now to start down the recycling route. My impression is that recycling is more expensive than mining additional uranium. If it were a whole lot cheaper, it would have caught on quickly. Also, I believe that there were some issues with the US objecting because recycling might be used to make bombs.

          • For them it makes sense because (economies of scale) they are global supplier of pellets for conventional NPPs both of their own as well foreign designs, the extra spent material brought home could be reprocessed and burned further. Also it is income in hard currency leveraged for domestic projects.

            This won’t make sense for smaller economy with fewer no. of reactors as you rightly suspect – and I’m not advocating for it. Perhaps in idealized case only ~3-4x countries in the world would have similar complex industries serving clients home and around the region.. The US failed long time ago, France is stuck in some unfinished phase and others considering it..

            Mining of the new raw stuff is problematic, logistics-geopolitics, it’s not only trading parlor price-tag question. If you have a fleet of baseload NPPs you have to feed it reliably as any other hungry beast, that’s large part of the reasoning behind such large investment – industrial complex.

    • The fellow in charge of the project is Mark Lewis. He is a fellow I remember from ASPO meetings as previously working at Deutsche Bank. Speaking at ASPO, he has been involved with peak oil.

      Mark Lewis does try to expand boundaries somewhat in his analysis. But he still misses the seasonal intermittency problem, and the need to somehow support fossil fuel/nuclear providers that provide electricity when solar is not available. I don’t look at the write up closely. He has some battery use, but the more solar an area uses, the more battery use is needed. Even then, there is a huge “over the top” problem, so that much of the energy isn’t really usable. So I expect his analysis, like all of the others, is very optimistic.

  8. If PLA attacks HK, it will be a trap

    On 1804, the Duc d’Enghien, a minor Bourbon nobleman, was arrested in a castle facing the French border and was killed on Napoleon’s orders. It was a dirty thing, but the kings of Europe used it as an excuse to fight Napoleon for the next 10 years.

    The playbook looks the same.

    • adonis says:

      endless wars to reduce the population and aid growth that should get the energy per capita rising ultimately it all comes down to population reduction and it does seem to be heading that way the only thing we can hope for is this is all part of the plan and their is a captain steering the ship through these treacherous waters unless there is not.

      • Davidin100millionbilliontrillionzillionyears says:

        many centuries of endless wars have not stopped the human population from going into overshoot…

        should we hope for WW3?

        ps: there is no Captain… the earth is a sailing ship to nowhere (at least Jon Anderson says so)…

        the human race is sailing for a while, until inevitable human extinction…

        but hey, have a nice day!

        pps: Dove dark chocolate bar 3.30 oz… or Cadbury Royal Dark…

        again! https://www.youtube.com/watch?v=aO0erLpktSE

        • Tim Groves says:

          This one’s especially for you David.

          Ceasar’s Palace, morning glory, silly human race……

          • Davidin100millionbilliontrillionzillionyears says:

            thanks!

            the astounding Steve Howe when he was young… and still made those quirky facial expressions…

            it almost seems like we’re all aging very fast…

            that’s not a good trend…

  9. Harry McGibbs says:

    “The global economy is probably in recession, with most cyclical indicators showing business activity is flat or falling.

    “Recessions become obvious only once they are well established given the lagging nature of most economic data…

    “Policymakers are reluctant to announce a recession for fear of harming consumer and business confidence and worsening the downturn (“Business cycles: theory, history, indicators and forecasting”, Zarnowitz, 1992).

    “But almost all the main economic and industrial indicators that provide a reliable guide to the business cycle confirm the economy has already slowed severely… By most measures, the global economy is in the midst of the deepest slowdown since 2015, and in many cases since 2009.”

    https://www.reuters.com/article/global-economy-kemp/column-global-economy-is-probably-in-recession-kemp-idUSL8N2535R7

Comments are closed.