sesion 2.1 heun stanford net energy workshopfinal2

Energy in Macroeconomic Growth Modeling

Dr. Matthew Kuperus Heun Engineering Department

Calvin College

10:15 AM, 31 March 2015 Huang Engineering Bldg Mackenzie Room (300)

Stanford University

Net Energy Analysis Workshop

Mainstream Macroeconomic Growth

Modeling

GDP = Akl

GDP = AklCapital stock

GDP = AklCapital stock

Labor

GDP = AklTechnology

Capital stockLabor

GDP = AkleEnergy

1980 20101980 2010

GDP = Akl GDP = Akle

GDP = Akl GDP = Akle1980 20101980 2010

GDP = Akl GDP = Akle

Five Propositions

CONPROCONPRO

NOYESNOYES

Quick-Reference Guide | 7

Quick-Reference Guide

For Additional InformationFor Additional Information

ArgumentsArguments

What Your Vote MeansWhat Your Vote Means

Summary Put on the Ballot by Petition SignaturesSummary Put on the Ballot by Petition Signatures

AgainstNo on 46Patients and

Providers to Protect Access and Contain Health Costs

1510 J Street, Suite 120Sacramento, CA 95814(916) [email protected]

ForYour Neighbors For Patient Safety969 Colorado Boulevard, Suite 103Los Angeles, CA 90041(310) [email protected]

AgainstNo on 45Californians

Against Higher Health Care Costs

455 Capitol Mall, Suite 600Sacramento, CA 95814(866) [email protected]

ForConsumer Watchdog Campaign2701 Ocean Park Blvd., Suite 112Santa Monica, CA 90405(310) [email protected]

Californians are being overcharged for health

insurance. Prop. 45 will stop the price gouging by requiring health insurance companies to be transparent and publicly justify rates before premiums can increase. The same regulation of auto insurance has saved drivers billions. Sponsors: Consumer Watchdog, California Nurses Association. Opponents: health insurance companies.

Prop. 45 is a power grab by special interests

to take control over health care benefits and rates from Californias successful new independent commissionand give it to one Sacramento politician instead. Higher costs, more bureaucracy. Political interference with treatment options. Exempts big corporations. Nurses, doctors, consumers say vote No!

46 saves lives. It prevents substance abuse by

doctors and patients and holds negligent doctors accountable. Estimates show 18% of health professionals have an abuse problem in their lifetimes. Medical negligence is this countrys third largest cause of death. Prescription drug overdoses are epidemic. A cure is overdue. Vote Yes.

Trial lawyers wrote Prop. 46 to make

millions from medical malpractice lawsuits. We will pay, and could lose our trusted doctorsas many doctors and specialists are forced to leave California, moving to states with more affordable medical-liability insurance. Protect your wallet and access to healthcare. No on 46.

A NO vote on this measure means: The

cap on medical malpractice damages for such things as pain and suffering would remain at $250,000 and not be subject to annual inflation adjustments. Health care providers would not be required to check a statewide prescription database before prescribing or dispensing drugs. Hospitals would not be required to test physicians for alcohol and drugs.

A YES vote on this measure means: Rates

for individual and small group health insurance would need to be approved by the Insurance Commissioner before taking effect.

A NO vote on this measure means: State

regulators would continue to have the authority to review, but not approve, rates for individual and small group health insurance.

A YES vote on this measure means: The

cap on medical malpractice damages for such things as pain and suffering would be increased from $250,000 to $1.1 million and adjusted annually for future inflation. Health care providers would be required to check a statewide prescription drug database before prescribing or dispensing certain drugs to a patient for the first time. Hospitals would be required to test certain physicians for alcohol and drugs.

Requires drug testing of doctors. Requires review of statewide prescription database before prescribing controlled substances. Increases $250,000 pain/suffering cap in medical negligence lawsuits for inflation. Fiscal Impact: State and local government costs from raising the cap on medical malpractice damages ranging from tens of millions to several hundred million dollars annually, offset to some extent by savings from requirements on health care providers.

Requires Insurance Commissioners approval before health insurer can change its rates or anything else affecting the charges associated with health insurance. Provides for public notice, disclosure, and hearing, and subsequent judicial review. Exempts employer large group health plans. Fiscal Impact: Increased state administrative costs to regulate health insurance, likely not exceeding the low millions of dollars annually in most years, funded from fees paid by health insurance companies.

Prop Drug and Alcohol Testing of Doctors. Medical Negligence Lawsuits. Initiative Statute.46

Prop Healthcare Insurance. Rate Changes. Initiative Statute.45

http://latimesblogs.latimes.com/lanow/2012/10/deadline-california-voters-mail-ballots.html

Proposition 1 Proposition 2 Proposition 3 Proposition 4 Proposition 5

Proposition 1

Energy and the Economy are Linked

0

20

40

60

80

100

120

1940 1950 1960 1970 1980 1990 2000 2010 2020

Ener

gy C

onsu

mpt

ion [1

015 B

TU/y

ear]

0

20

40

60

80

100

120

1940 1950 1960 1970 1980 1990 2000 2010 2020

Ener

gy C

onsu

mpt

ion [1

015 B

TU/y

ear]

1973 Stagflation

Early 1980s

.com Collapse

Great Recession

-6

-4

-2

0

2

4

6

8

10

1940 1950 1960 1970 1980 1990 2000 2010 2020

% C

hang

e US GDP

-6

-4

-2

0

2

4

6

8

10

1940 1950 1960 1970 1980 1990 2000 2010 2020

% C

hang

e

US Energy

US GDP

Proposition 2

Fundamentals of Energy Supply, Demand, and Prices

Are Different Now

Quantity

Price

Quantity

Price

Demand

Quantity

Price

Demand Supp

ly

Quantity

Price

Supp

ly

Quantity

Price

Demand

Supp

lyDemand

~2000

25

Quantity

Price

[$/b

arre

l]

Supp

lyDemand

25

Quantity

Price

[$/b

arre

l]

Supp

lyDemand

June 2008132

Quantity

Price

[$/b

arre

l]

Supp

lyDemand

132

Quantity

Price

[$/b

arre

l]

Supp

lyDemand

Dec 2008

40

Quantity

Price

[$/b

arre

l]

Supp

lyDemand

40Pric

e [$

/bar

rel]

Quantity

Supp

lyDemand

Mar 2011

120

Price

[$/b

arre

l]

Quantity

Supp

lyDemand120

Quantity

Price

[$/b

arre

l]

Supp

lyDemand

May 2014

110

Quantity

Price

[$/b

arre

l]

Supp

lyDemand

110

Quantity

Price

[$/b

arre

l]

Supp

lyDemand

Jan 2015

45

Quantity

Price

[$/b

arre

l]

Proposition 3

Heretofore Under-appreciated Metrics

are Fundamentally Important for Understanding

Macroeconomic Growth

I. Bashmakov. Three Laws of Energy Transitions. Energy Policy, 35(7):35833594, July 2007.

D. J. Murphy and C. A. S. Hall. Energy return on investment, peak oil, and the end of economic growth. Annals of the New York Academy of Sciences, 1219(1):5272, Feb. 2011.

D. J. Murphy and C. A. S. Hall. Energy return on investment, peak oil, and the end of economic growth. Annals of the New York Academy of Sciences, 1219(1):5272, Feb. 2011. M. Aucott and C. Hall. Does a change in price of fuel affect GDP growth? An examination of the U.S. data from 19502013. Energies, 7:65586570, 2014.

D. J. Murphy and C. A. S. Hall. Energy return on investment, peak oil, and the end of economic growth. Annals of the New York Academy of Sciences, 1219(1):5272, Feb. 2011.

C. W. King, J. P. Maxwell, and A. Donovan. World economy-wide energy expenditures and net energy metrics. Energies, page **** In Review ****, 2015.

M. Aucott and C. Hall. Does a change in price of fuel affect GDP growth? An examination of the U.S. data from 19502013. Energies, 7:65586570, 2014.

EROI = Energy DeliveredEnergy Input

Lucas gusher at Spindletop West Texas, 1901

https://en.wikipedia.org/wiki/Texas_Oil_Boom#mediaviewer/ File:Lucas_gusher.jpg

Oil platform P-51 Brazil

https://en.wikipedia.org/wiki/Oil_platform#mediaviewer/File:Oil_platform_P-51_(Brazil).jpg

Gilbert, D. Exxon, Shell Emit More CO2 Despite Pumping Less. Wall Street Journal, page B1, 15 October 2014.

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

0 10 20 30 40

Oil,Price,($20

10/BBL

)

EROI

High

Low

Historical*range*for*conven0onal*US*oil*and*gas*

Oil*Sands*(SAGD)*

Oil*Shale*(surface*w/ATP,*Shell*inAsitu)*

*2013*Carey*King*

See: C. W. King and C. A. S. Hall. Relating Financial and Energy Return on Investment. Sustainability, 3(10):18101832, Oct. 2011.

M. K. Heun and M. de Wit. Energy Return on (Energy) Invested (EROI), Oil Prices, and Energy Transitions. Energy Policy, 40(C):147158, 2012.

Proposition 4

The Dynamics of the Energy-Economy Nexus are an

Interdisciplinary Grand Challenge

http://www.engineeringchallenges.org

C. L. Schultze and D. H. Newlon. Ten years and beyond: Economists answer NSFs call for long-term research agendas. Compendium, American Economic Association, 15 July 2011.

After M. K. Heun and M. de Wit. Energy Return on (Energy) Invested (EROI), Oil Prices, and Energy Transitions. Energy Policy, 40(C):147158, 2012.

Energy Scarcity Rel. to Demand



Increasing Energy Prices





Stimulation of High-Cost

Energy Supply





Energy Supply

Energy Surplus Rel. to Demand



Decreasing Energy Prices



Energy Supply







Energy Supply

Destruction of High-Cost

Energy Supply







Energy Supply


Energy Supply


Energy Market

Dynamics






Energy Supply


Energy Supply







Energy Supply


Energy Supply


High Energy Cost Share



Economic Slowdown (Recession)




Energy Supply


Energy Supply






Reduced Energy

Demand




Energy Supply


Energy Supply






Reduced Energy

Demand




Energy Supply


Energy Supply


Low Energy Cost Share





Reduced Energy

Demand


Economic Growth

(Recovery)



Energy Supply


Energy Supply




Increased Energy

Demand




Reduced Energy

Demand


Economic Growth

(Recovery)



Energy Supply


Energy Supply




Increased Energy

Demand




Reduced Energy

Demand


Economic Growth

(Recovery)



Energy Supply


Energy Supply




Economic Interactions

Increased Energy

Demand




Reduced Energy

Demand


Economic Growth

(Recovery)



Energy Supply


Energy Supply




Increased Energy

Demand




Reduced Energy

Demand


Economic Growth

(Recovery)

Government Stimulus



Energy Supply


Energy Supply




Increased Energy

Demand




Reduced Energy

Demand


Economic Growth

(Recovery)

Government Stimulus



Energy Supply

Economic Development


Energy Supply




Increased Energy

Demand




Reduced Energy

Demand


Economic Growth

(Recovery)

Biophysical Constraints on Energy Supply

Government Stimulus



Energy Supply



Energy Supply




Increased Energy

Demand




Reduced Energy

Demand


Economic Growth

(Recovery)


Government Stimulus



Energy Supply



Energy Supply


Declining Net Energy

(EROI)



Increased Energy

Demand




Reduced Energy

Demand


Economic Growth

(Recovery)


Government Stimulus



Energy Supply



Energy Supply


Declining Net Energy

(EROI)



Energy Efficiency

GDP = Akl

Proposition 5

Transition to a Stable Clean Energy Regime is

Incompatible with an Unstable

Energy-Economy System

http://www.mlive.com/lansing-news/index.ssf/2015/03/michigan_gov_rick_snyder_wants.html

http://www.mlive.com/lansing-news/index.ssf/2015/03/michigan_gov_rick_snyder_wants.html http://www.novoco.com/energy/resource_files/reports/cap_renewable-energy-investment_011012.pdf

Establish Interdisciplinary Structures

Secure Funding

8 AFRICA

Human Development Index

Exceeds biospheres average capacityper person, low development

Exceeds biospheres averagecapacity per person,

high development

Within biospheres average capacityper person, low development

World average biocapacity available per person

Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent

EcologicalFootprint(2003globalhectares

perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00

Meets minimum criteriafor sustainability

Fig. 8: HUMAN DEVELOPMENT INDEX AND ECOLOGICAL FOOTPRINTS, 2003

More than1 billion

100 million 1 billion

30 million 100 million



less than5 million

Country population (coloured by region):

North AmericaEurope EUEurope Non-EULatin America and the Caribbean

Middle East and Central AsiaAsia-PacificAfrica

TOWARDS LASTING HUMAN DEVELOPMENT

Sustainable development is acommitment to improving thequality of human life while livingwithin the carrying capacity of supportingecosystems (IUCN et al., 1991).

Countries progress towards sustainabledevelopment can be assessed using theUnited Nations Development Programmes(UNDP) Human Development Index (HDI)as an indicator of well-being, and theFootprint as a measure of demand on thebiosphere. The HDI is calculated from lifeexpectancy, literacy and education, and perperson Gross Domestic Product. UNDPconsiders an HDI value of more than 0.8to be high human development. AnEcological Footprint lower than 1.8 globalhectares per person, the average biocapacityavailable per person on the planet, would bereplicable at the global level.

Successful sustainable developmentrequires that the world, on average, meets,at a minimum these two criteria, withcountries moving into the blue quadrantshown in Figure 8. As world populationgrows, less bioproductive area is availableper person and the quadrants height shrinks.

In 2003, Asia-Pacific and Africa wereusing less than world average per personbiocapacity, while the EU and North Americahad crossed the threshold for high humandevelopment. No region, nor the world as awhole, met both criteria for sustainabledevelopment. Cuba alone did, based on thedata it reports to the United Nations.

Changes in footprint and HDI between 1975and 2003 for some nations are illustrated onpages 11-13. During this period, wealthynations such as the United States of America

significantly increased their resource usewhile increasing their quality of life. Thisdid not hold for poorer nations, notablyChina or India, where significant increasesin HDI were achieved while their per personEcological Footprints remained below globalper person biocapacity.

Comparing a countrys average EcologicalFootprint per person with global averagebiocapacity does not presuppose equalsharing of resources. Rather it indicateswhich nations consumption patterns, ifextended worldwide, would continueglobal overshoot, and which would not.The Ecological Footprint and the HDIneed supplementing by other ecologicaland socio-economic measures freshwaterscarcity and civic engagement, forexample to more fully definesustainable development.

Goldfinger, S. et. al. 2008. Africa: Ecological Footprint and Human Well-being. WWF International and Global Footprint Network. p. 8.

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million












Goldfinger, S. et. al. 2008. Africa: Ecological Footprint and Human Well-being. WWF International and Global Footprint Network. p. 8. Human Development Index

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million












Goldfinger, S. et. al. 2008. Africa: Ecological Footprint and Human Well-being. WWF International and Global Footprint Network. p. 8. Human Development Index

High Human Developm

ent

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













Ecological Footprint [hectares/person]

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













Ecological Footprint [hectares/person]

Average Available Biocapacity

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













USA

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













USA

China

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













USA

IndiaChina

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













USA

IndiaChina

South Africa

8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













8 AFRICA




high development



Thre

shol

dfo

rhig

hhu

man

deve

lopm

ent


perperson)

11

10

12

9

8

7

6

5

4

3

2

1

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.00



More than1 billion





less than5 million













Cuba

Well$or$Mine$Egross,t(

Edelivered,t(

Einvest,t(

EROIt(>>$1.0$

Einput,t(

(a)$

Heun, M.K. and de Wit, M. Energy Return on (Energy) Invested (EROI), Oil Prices, and Energy Transitions. Energy Policy, 40(C):147158, Jan. 2012.


Edelivered,t(

Einvest,t(

EROIt(>>$1.0$

Einput,t(

(a)$

Heun, M.K. and de Wit, M. Energy Return on (Energy) Invested (EROI), Oil Prices, and Energy Transitions. Energy Policy, 40(C):147158, Jan. 2012.


Edelivered,t(

Einvest,t(EROIt(!$1.0$(b)$

Einput,t(

M. K. Heun and M. de Wit. Energy Return on (Energy) Invested (EROI), Oil Prices, and Energy Transitions. Energy Policy, 40(C):147158, 2012.

C. W. King and C. A. S. Hall. Relating Financial and Energy Return on Investment. Sustainability, 3(10):18101832, Oct. 2011.

sesion 2.1 heun stanford net energy workshopfinal2

Documents

health insurance companies

health professionals

health care providers

health care benefits

small group health insurance

akl gdp

vote meanswhat

vote meanssummary