Guest post from Tur Borren
A summary of learnings about the economic challenges facing future generations
Today I’d like to share a guest post from Tur Borren, who was the initial inspiration for the Good Energy Project. I interviewed Tur recently about his life in New Zealand since he emigrated here at the age of 13 as part of a large Dutch family. Tur spent his career helping companies in trouble - “problem accounts” as he called them. Since his retirement, he has turned his attention to trying to understand the problems humanity is experiencing on a global scale.
Click here to listen to my interview with Tur.
In today’s guest post he has made an attempt to summarise his learnings so far - a difficult task. He hopes this will make a contribution to the debate about the economic conditions future generations will have to deal with.
Kia ora Loo
You have motivated me to summarise my learnings to date in writing. Here goes!
1. The combination of abundantly available cheap sources of energy coupled with rapidly developing new technology has created phenomenal economic growth over the past 250 years.
When James Watt turned coal into heat and heat into work with the invention of the steam engine in Britain c.1750 this was the beginning of unprecedented economic growth, initially amongst the wealthy western societies and subsequently globally. Since then the global population has increased tenfold to 8 billion, living standards have improved widely and humanity has become increasingly dependent on cheap sources of energy. Was it the availability of fossils which fuelled this growth or was it human ingenuity? Surely, it was a combination of the two!
The first significant sign that this bonanza was unsustainable came with the publication of an early computer model known as ‘The Limits to Growth’ first released in 1972 and much debated ever since. As predicted, economic growth began to stagnate 25 years ago and has arguably gone into reverse since. In spite of continuous technological innovation, human ingenuity appears to be losing the battle against the loss of cheap sources of energy. As a consequence prosperity is in decline, the planet earth is suffering and future generations are in trouble.
What are future generations going to do about it? That is the question.
2. Renewable energy will help but not as much as people think.
Global warming and the costs associated with climate related damage represent a big challenge. Also, the costs associated with discovering and distributing new sources of fossil fuels are rising steeply. Obviously, we need to find new sources of energy to replace fossil fuels. However, I fear that the claimed benefits of current sources of renewables are significantly overstated. Analysis must include the energy used in the construction, storage and distribution of renewable energy to produce an accurate picture of true costs. More work needs to be done to assess this issue. Other often-ignored issues are the expected life expectancy of the required newly created assets and the availability of common and rare metals needed in their construction.
Energy expert and engineer Professor Susan Krumdieck, presents this argument clearly in this interview.
3. The race for renewable energy will burn fossil fuels and lock in existing global inequality
I am worried that we are currently seeing a race to replace fossil fuels with renewable energy. This seems to me to be comparable to the race for access to Middle East oil fields in the Second World War or the race for nuclear arms dominance in the Cold War which followed. Renewable energy currently supplies a relatively small quantity of global energy consumption. Large quantities of fossil fuels will be used to support the development of renewable energy at a meaningful level. If the wealthy economies sacrifice their emission reduction targets in order to gain an advantage in the scaling up of renewables, I question whether this will be in the world’s best interest. It may simply increase the advantage dominant western economies already have in the creation of wealth, whilst locking in the plague of inequality we are trying to resolve.
4. The most obvious solution is to reduce energy consumption and waste
The most obvious and readily available solution to the problems set out above is to reduce humanity’s dependence on energy. There are a myriad of ways to use less energy in our daily lives. But there is no single overriding solution which can be relied upon to motivate the necessary changes which are required to do so. Social peer pressure to combat deteriorating economic conditions may be our best hope for meaningful progress. This peer pressure has failed to convince present and past generations, partly because increased prosperity was still believed to be in evidence.
Reducing high energy waste is also a critical objective. Much work is being carried out to reduce waste and this can only be encouraged.
5. The wealthy must be persuaded to take full responsibility
The primary responsibility for reducing global dependency on energy lies with those societies which have a high per capita energy consumption profile. We do not need to look far to determine who is guilty. Wealth and excessive energy consumption walk hand in hand. Even if prosperity has been improving in poorer cultures and their carbon emissions have risen as a result, it is ludicrous to blame global warming on the poor.
I think the best argument to persuade the wealthy to take full responsibility for reducing global dependency on energy is that wealth will suffer if they don’t. In his blog, Tim Morgan provides compelling evidence that the cost of supplying energy will continue to rise which he argues will cause economic degrowth. Furthermore, our financial systems, including capitalism, are so intricately interwoven with economic growth a reversal could trigger a global collapse. The poor would almost certainly be worst affected, but the wealthy will not be immune.
6. We need to assemble good teams and take risks to succeed.
Whilst there are many promising solutions, the implementation of major new projects is always challenging. Change of any kind requires a degree of over-promising to gain support and funding. Unfortunately the risk of underperformance plays a vital role in delaying the approval and implementation of many good projects. Delays in implementation can become a self fulfilling promise. As a generalisation, committees of any kind tend to be risk-averse. So are the fearful and the elderly. That leaves those who have the expertise, the optimistic and the young. This combination is not as rare as some imagine. A project which is well conceived, successfully implemented and supportive of the public good is a work of art. These projects need to be well funded. The business community needs to be encouraged to take responsibility.
7. We need to work hard to protect human rights, social justice and equal opportunity in a less prosperous future
The economic realities set out above essentially state that the days of growing global prosperity have come to an end. Future generations will bear the costs of our current and past excesses. Unless we do something to proactively redistribute wealth, the poor will get poorer. I fear that human rights and social justice will also suffer in a less prosperous future. If this happens much anger is likely to be unleashed. Many argue that we are already experiencing the effects of this. Managed retreat will be all about minimising the ill effects of economic downturn. The continued and foolish promotion of economic growth is not the way to achieve this.
By valuing our people, reducing our energy use and waste and lowering overheads I think we can still create a flourishing future.
8. Strong leadership and a major change in social values is needed.
To combat the likely economic conditions set out above will require a major change in social values. It is my belief that such a change can only be implemented against a clear understanding of the likely consequences to future generations if we don’t give this our best shot.
What I found when working with problem accounts was that I had to explain to people what would happen if they didn’t take action. People needed to believe and take pride in the fact that we were going to fix the problem.
For as long as leaders avoid or soften the implications of our economic problems, they only make the future societal and financial dislocations worse. No one country can solve this alone. Global leadership of all countries and communities will be needed to achieve universal acceptance of the challenge before us.
9. Aotearoa is ideally placed to accept this challenge
The smaller and more tolerant a society is, the better it can demonstrate to the world at large that change is possible. Pride within our various and diverse communities needs to be rediscovered. I think that we can be optimistic that Kiwis will be willing to accept this challenge. Whether this will be successful is a matter for younger generations to determine. We should give them all the support we can.
Ngā mihi,
Tur Borren
August 2023