Papers by Robert U. Ayres
Ecology and Society, 2006
Concerns about global environmental change challenge long term ecological research (LTER) to go b... more Concerns about global environmental change challenge long term ecological research (LTER) to go beyond traditional disciplinary scientific research to produce knowledge that can guide society toward more sustainable development. Reporting the outcomes of a 2 d interdisciplinary workshop, this article proposes novel concepts to substantially expand LTER by including the human dimension. We feel that such an integration warrants the insertion of a new letter in the acronym, changing it from LTER to LTSER, "Long-Term Socioecological Research," with a focus on coupled socioecological systems. We discuss scientific challenges such as the necessity to link biophysical processes to governance and communication, the need to consider patterns and processes across several spatial and temporal scales, and the difficulties of combining data from in-situ measurements with statistical data, cadastral surveys, and soft knowledge from the humanities. We stress the importance of including prefossil fuel system baseline data as well as maintaining the often delicate balance between monitoring and predictive or explanatory modeling. Moreover, it is challenging to organize a continuous process of cross-fertilization between rich descriptive and causal-analytic local case studies and theory/modeling-oriented generalizations. Conceptual insights are used to derive conclusions for the design of infrastructures needed for long-term socioecological research.
This paper investigates the energy transition and the relation of energy and economic growth on t... more This paper investigates the energy transition and the relation of energy and economic growth on the basis of a comparable long term historical dataset for four national case studies. It analyses data on the development of energy use and the consumption of energy services during 100 years of industrialization in Austria, Japan, the United Kingdom and the USA. All four countries appear as fully industrialized countries today, but were at different stages of industrialization and the energy transition at the beginning of the 20th century: In contrast to the advanced economies of the UK and the USA, Austria and Japan were late comers to industrialization but were rapidly catching up. The paper uses the exergy approach to assess changes in the energy system. Exergy is a quality measure of energy which quantifies the ability of energy to perform work. Not all thermodynamic work is useful, but useful work is the prerequisite for all energy services demanded by final consumers. The paper pr...
International Journal of Sustainable Engineering, 2010
The first-named author of this book is one of those rare inter-disciplinarians: a first-rate econ... more The first-named author of this book is one of those rare inter-disciplinarians: a first-rate economist whose understanding of how the economy works is informed at the deepest level by an appreciation of the economic importance of energy and materials, that is, by the physical and energetic basis of all economic activity. This book is an exploration based on that perspective of the importance of energy – or exergy as it is more correctly called – to the economic growth experienced by different economies over the last few centuries. The book brings together a number of different literatures, the most important of which is that on theories of economic growth and the related subject of technical change. The book is critical of growth theories which fail to recognise the importance of resources to economic activity. It is an empirically observed fact that economic growth has led to increased use of natural resources, including energy. But, the book argues, is it not just as likely that the increased use of energy has actually driven economic growth? Several rather technical chapters in the book are devoted to explaining the construction of a new data-set for the USA and Japan which can test this hypothesis. The authors then utilise this data-set to run some regressions of a production function which includes exergy as a factor of production, from which they conclude that there has been mutual causality between exergy use and GDP growth. So far so good. However, the authors then go on to argue that, because economic growth has been to some extent driven by energy use in the past, this must go on being so in the future. Moreover, because of the global depletion of fossil fuels, there will not be enough exergy to go on driving economic growth through increased use of it. Rather, ‘future economic growth depends . . . on an accelerated increase in the output of useful work from a decreasing exergy input, that is, increasing exergy-to-work conversion efficiency’ (p. 218). This conclusion does not seem to me to follow from the identification of growing exergy use having been a historical driver of economic growth. The reason for this lies in the book’s own earlier analysis of technical change, which is also identified as a key driver of economic growth (p. 51). Now technical change, as the book also acknowledges, derives from the increase in human knowledge. Indeed, it is the increase in human knowledge about how to use fossil fuels that has powered industrial society, rather than their mere existence – fossil fuels existed unused long before the industrial revolution. If fossil fuels become scarce and expensive, then future economic growth will depend not just on conversion efficiency, but also on the ability of humans to learn how to harness other energy sources (for example, renewables or nuclear power) more effectively or, indeed, to make technological advances in other fields. Indeed, the book seems to contradict its own later identification of conversion efficiency as being essential to future economic growth with the statement: ‘In our theory it is mainly innovations that increase the quantity and reduce the costs of “useful work” that have caused the economy to grow in the past. Future economic growth may depend on innovations in another area, of course: probably information technology and/or biotechnology’ (pp. 165–166). Perhaps because I perceive an excessive emphasis in the book on the importance of exergy use to economic growth, the long chapter that seeks to explain economic ‘catch up’ (a narrowing of the difference in GDP per head between the USA and other countries) in terms of growing exergy use is also not particularly convincing. However, this difference in opinion in respect of the book’s conclusions should not detract from the many valuable thoughts and insights that are to be derived from the process of getting to them. The book remains a masterful exposition of the importance of energy to economic activity and growth, and of the folly of theories of economic growth (and of economic activity generally) that leave it out of account, as is unfortunately still all too common.
Sustainability, 2021
This paper traces US national wealth from 1914 through 2015 and constructs a multivariate econome... more This paper traces US national wealth from 1914 through 2015 and constructs a multivariate econometric model that combines elements of short-term and long-term dynamics. We find that US wealth depends on a range of macroeconomic variables, including the wealth itself observed in the previous period, change in market capitalization, change in US house price index and inflation. Less impactful, statistically significant factors included unemployment, changes in oil price, and change in debt-to-GDP ratio. Another significant result is that the Glass–Steagall Act, which prohibited commercial banks from speculative activity in the stock market after 1933, had a statistically significant positive impact on wealth in the US. We test the model by asking whether it could have anticipated the actual collapse in 2008, given prior data up to 2000, 2005 and 2010. All three tests forecasted a sharp wealth decline starting in 2008, followed by a recovery. These results suggest the possibility of fo...
According to neoclassical economic theory, growth can–and will–continue at past rates regardless ... more According to neoclassical economic theory, growth can–and will–continue at past rates regardless of the availability or cost of energy. This bizarre conclusion follows from the widespread assumption in economic models that capital and labor are the only important factors of production. That assumption can be traced to a textbook “theorem” which says that the output elasticity of energy in the economy must be proportional to the cost share of energy in the GDP. Since primary energy accounts for a very small fraction of the GDP– ...
This paper describes the development of a forecasting model called REXS (Resource EXergy Services... more This paper describes the development of a forecasting model called REXS (Resource EXergy Services) capable of accurately simulating the observed economic growth of the US for the 20 th century. The REXS model differs from previous energy-economy models such as DICE and NICE (Nordhaus 1991) by replacing the requirement for exogenous assumptions of continuous exponential growth for a simple model representing the dynamics of endogenous technological change, the result of learning from production experience. In this introductory paper we present new formulations of the most important components of most economyenergy models the capital accumulation, resource use (energy) and technology-innovation mechanisms. Robust empirical trends of capital and resource intensity and the technical efficiency of exergy conversion were used to parameterise a very parsimonious model of economic output, resource consumption and capital accumulation. Exogenous technological progress assumptions were replaced by two learning processes: a) cumulative output and b) cumulative energy service production experience. The initial results of simulation for the period 1900-2000 shed light on the historical causes of economic growth and downturn. They also have considerable implications when simulating future output for scenario analysis. Over the past century, the dominant long-term productivity improvements can be associated with efficiency improvements of primary exergy use. Economic downturns were the result of strong and sudden depreciation during the 1930s due to overcapacity and a similar rapid drop in the level of investment end energy consumption in the early 1970s. The REX modules are the focus of ongoing research. We discuss briefly the many possibilities for elaboration of each module that will enrich the feedback dynamics, policy levers and post-scenario analyses.
This paper briefly reviews the economic literature on resource scarcity, resource availability an... more This paper briefly reviews the economic literature on resource scarcity, resource availability and economic growth. The Club of Rome study "Limits to Growth" was given short shrift by economists because it contradicted historical evidence that resource prices have been declining, not increasing, since the industrial revolution thanks to technological progress in exploration, mining and refining of metals and fossil fuels. Recent events, however, suggest that resource prices are no longer declining, either because of increasing demand by developing countries (e.g. China) or because of limits to technological progress -or for other reasons. In any case, this situation suggests that resource productivity is far too low, today, and needs to be boosted sharply. This can be done by cutting subsidies and shifting taxes away from labor and capital onto resource extraction and consumption, thus promoting technological innovation in resource efficiency.
Uploads
Papers by Robert U. Ayres