Energy accounting

[Dimentio]

Energy accounting, for those who are not familiar with the term, is a distribution system where we look at the total emergy capacity of an entire society (society in this term is understood as the energy generation, the machine park and the infrastructure).

We divide the total capacity equally between all humans living within the area which is using the EA system. That means that they get a small plastic card (not necessarily a card) with an unique account tied to their ID. That is rather a quota for their possible consumption opportunities than energy in itself.

When they are ordering goods and services, the energy needed to produce said goods or services are subtracted from their quota.

The quota is supposed to cover for two years. After that, the level is reset to the highest available quota for the new period.

You could not exchange energy credits, as the KW units of the quota are called. You could not save them over the two-year period. You could not steal a card unless you try stealing someone else's identity.

Of course, this is only a very basic blueprint of how the system will look like, and it might be more complicated when applied in the real world.

There are some moral hazards as well, associated with Energy Accounting.

For example, should healthcare and schooling be associated with EA if it is implemented, or a whole own area which is "free"?

Should everyone have the same income, or should those who work harder get a bit more "income" (a bigger energy quota)?

Demogorgon claimed, in one thread, that Energy Accounting goes against economics. I think, in my divine innocence, that he might mean that it somehows contradicts the notion that human wants are equivalent with human needs, the basic of neoclassical economics.

I could assure, that since the capacity always is equal to the total aggregated amount of quotas in a technate, situations of hoarding will only affect the individual hoarder badly, without affecting anyone else, so there will not be an extent of queues, at least not according to the design.

I will claim, that Energy Accounting sounds a lot more sane than for example gift economics.

What is your take on it?

[Dean]

What about those who require certain expensive treatments for their health? If my diabetes medicene cost 105% of my quota for energy, do I get denied that or other goods?

What about, say, copper availability or uranium? If a valued consumer good used uranium, and it was inexpensive re:energy to produce, how could EA account for that deficiency?

The energy required to produce X commodity may be 10% of the available energy, but if the material required is 50% of available, you don't have more than two you could make at maximum material efficiency. Even the average of 30% material/energy doesn't take into account the fact that there are only enough material for 2 assemblies. The fact is that there is not one ultimate or universal variable for economics - we have a number of efficiencies, costs, energy requirements &c. to consider for every production.

I don't see how EA gives us anything more than what we could ascertain from Marxism or general economics.

[Dimentio]

What about those who require certain expensive treatments for their health? If my diabetes medicene cost 105% of my quota for energy, do I get denied that or other goods?

It is theoretically possible that the healthcare system on a continental level could get an own EC "card" which is outside of the EC distributed to the people. Given the fact that your share of EC;s are accounted for during an extensive time, I think you will not have any risk of depletion.


What about, say, copper availability or uranium? If a valued consumer good used uranium, and it was inexpensive re:energy to produce, how could EA account for that deficiency?

The energy required to produce X commodity may be 10% of the available energy, but if the material required is 50% of available, you don't have more than two you could make at maximum material efficiency. Even the average of 30% material/energy doesn't take into account the fact that there are only enough material for 2 assemblies. The fact is that there is not one ultimate or universal variable for economics - we have a number of efficiencies, costs, energy requirements &c. to consider for every production.

As I forgot to state. We do not only account for energy costs in terms of electricity, but we are re-calculating emergy costs and translating resource depletion costs into emergy costs.

What the EA gives us is not a theory with which to understand reality, but a potential way of eliminating monetary policies.

[Cult of Reason]

I posted the following in the other thread:


For example, should healthcare and schooling be associated with EA if it is implemented, or a whole own area which is "free"?No, they should be free, IMO. Schooling benefits the whole of society, not just the individual. Also, treatments with a high energy cost could restrict the purchasing power of the sick.


Should everyone have the same income, or should those who work harder get a bit more "income" (a bigger energy quota)?Same income. There should be a social duty to do useful work. In the event where more people want to do a particular job than there is need for that job, then only those best qualified should be allowed to do that job. Further, if there is a particularly unpopular job that cannot feasibly be done away with or made less bad, then those least educated, and so less fit for anything else, should probably be assigned to it or, alternatively, more people as a whole should do the job so that the working hours for the job can be decreased.

Besides, when there is an abundance of goods and service, the effect of a differentiation of income is moot.

Regarding the transition to the energy accounting system from a situation of scarcity (artificial) to abundance, I think the following scheme could be considered:

Energy accounting is introduced immediately. When it comes to environmental and material costs (I will explain this bit later), it is already sufficient. The only problem might be in equitably dealing with demand in a situation of scarcity. Therefore, for as long as scarcity exists, there should be energy accounting where everyone gets an equal share of the (scarce) energy available to the system. That is, there would be restriction on people's consumption in the short term, where they need to budget their consumption in terms of energy. In addition to this rationing of energy, there should also be rationing of any other scarce objects that are vital to each consumer, such as food, water, clothing etc. (incidentally, this period might well help remove the lingering elements of today's consumerist society -- a good thing).

As things continually improve, the rations of energy, food, water, clothing should increase until the point where they become irrelevant to typical consumption. At that point, all the restrictions aside from energy should be dropped. After all, if you are never finding any particular use for all your clothing coupons, then they might as well be done away with so that people do not have to work to administer them anymore.

In a revolutionary situation, the idea of gradual introductions does not seem very relevant. In that situation, changes must be fast if collapse is not to occur. In the short term, the change in the system can be justified by "it's for the revolution, comrade". After all, after you have abolished private property and taken over the means of production, do you really expect your income to come in in the same way? In the longer term, the performance of the system will be enough.

With regards to materials etc., the beauty of an energy accounting system is that, properly executed, it already takes account of this. Open-cast mining, for example, devastates country-side. If it is assumed that people will demand for the country-side to be adequately restored, then then energy cost of such restoration should be added to the energy cost of the mining and then compared to the energy cost of deep-shaft mining the same resource. Whichever is less, wins.

If the question is of mining versus recycling then the answer is easy. Recycling usually will win because the materials do not usually have to be processed as much as mined materials. For mined materials, the total energy cost is given by:

Energy needed to find new equivalent resources + energy needed to develop the mine (infrastructure and equipment costs, etc.) + material extraction energy costs + smelting/refining costs + fashioning costs + all the transportation and distribution costs, all in energy terms

For recycled materials:

waste collection costs (and the waste must be collected anyway) + processing costs + fashioning costs + distribution costs

Since the latter has fewer things to add up, it will usually have lower energy cost. With an energy accounting system, environmentally friendly choices become obvious. mining will usually only be done when recyclable materials are for any reason unavailable.

[Cult of Reason]

What about those who require certain expensive treatments for their health? If my diabetes medicene cost 105% of my quota for energy, do I get denied that or other goods?

I agree that healthcare should not be subtracted from anyones "energy account". Energy accounting should only account for routine consumption. A serious illness is anything but routine for the sufferer, except for things like diabetes, for which people should not punished for having.


What about, say, copper availability or uranium? If a valued consumer good used uranium, and it was inexpensive re:energy to produce, how could EA account for that deficiency?

The energy required to produce X commodity may be 10% of the available energy, but if the material required is 50% of available, you don't have more than two you could make at maximum material efficiency. Even the average of 30% material/energy doesn't take into account the fact that there are only enough material for 2 assemblies. The fact is that there is not one ultimate or universal variable for economics - we have a number of efficiencies, costs, energy requirements &c. to consider for every production.

I don't see how EA gives us anything more than what we could ascertain from Marxism or general economics.

You scenario fails to include the energy costs of finding new resources. The more scarce resources become, the more difficult it is to find new resources, and so searching for new resources takes more energy. Included in the energy embedded in the product should be the energy needed to find new resources to replace those already used. If the product is made entirely out of recycled material, then that particular cost is zero.

This way, energy use is truly the fundamental property that is present in all economic transactions.

[Die Neue Zeit]

"Energy accounting" MAY be feasible after many, many, many, many generations of labour credits. What is completely ignored here in this sci-fi model is wasted, thermal energy:

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

Also consider zero-point energy at the other extreme (if popularizations of this concept like Star Trek: Deep Space Nine's "quantum torpedo" are accurate in this "technical" regard):

http://en.wikipedia.org/wiki/Zero-point_energy#.22Free_energy.22_devices

[BobKKKindle$]

You could not save them over the two-year period.Why not? There will always be some goods which are so expensive that they cannot be purchased within a two-year period once the cost of necessities has been taken into account, and so the only way anyone would ever be able to purchase these goods is by putting aside a certain amount of money each time they receive payment until they have enough to purchase the good in question - in other words, saving. There is no rational justification for preventing people from saving money - saving does not even have to involve the accumulation of interest and so would not necessarily be exploitative. If there was no saving, can we also assume that people would not be able to borrow money? If so, how would communities be able to pay for investment projects which exceed the energy they have been allocated for the two-year period? What if an individual consumer wants to purchase a good immediately even though he does not have enough money to hand but thinks he will be able to accumulate enough money at some point in the future? Saving and borrowing are essential for any modern economy - and so the fact that EA does not even allow for these activities means that it would never be able to function as a viable alternative to capitalism and would result in a lower standard of living.


Therefore, for as long as scarcity exists, there should be energy accounting where everyone gets an equal share of the (scarce) energy available to the system.You are essentially proposing a rigidly egalitarian distribution of purchasing power hidden under flowery language. This is wrong for two reasons. Firstly, as Marx acknowledged in 'Critique of the Gotha Program', immediately after a revolution has taken place the attitudes of capitalism will still be dominant amongst the working population and so to maintain a high level of output and allow for the expansion of the productive forces it will be necessary accept some degree of material inequality by rewarding people according to how much they are able to produce - such that if someone works for a longer period of time or does a more strenuous form of labour they should be entitled to a larger share of output. A rigidly egalitarian distribution is incompatible with incentives and so will lead to people refusing to work as much as they should because they know they will receive the same amount of purchasing power regardless, eventually resulting in a decline in the level of output and consequently a lower standard of living for every member of society. Secondly, even if we assume that capitalist attitudes have been eliminated and people are willing to work hard for the benefit of the community, a rigidly egalitarian distribution fails to account for the fact that people have different needs - there will be some people who will not spend the full amount of purchasing power they have been allocated but at the same time there will also be some people who find that they do not have enough to meet all of their needs.

[Dimentio]

Because you cannot save a given capacity over its period. When you have a capacity to produce 100 cars during period 1, and 150 under period 2, you could decide to move that period 1 capacity to period 2 and somewhat get 250 cars.

Industrial Capacity does'nt work like capital.

Given the rigidly egalitarian model, I am open for some sort of semi-flat distribution system.

As for the quantum torpedo, I think its quite preposterous to put that up. We technocrats ain't proposing any specific "save-the-day-technologies" which ain't existing today. The Venus Project, which is a technocratic organisation, is doing that. While NET has worked together with TVP, we are still critical of some parts of their approach.

[Cult of Reason]

"Energy accounting" MAY be feasible after many, many, many, many generations of labour credits. What is completely ignored here in this sci-fi model is wasted, thermal energy:I do not understand how you have reached that conclusion. Energy losses are accounted for. What is measured is total energy input, NOT total useful work done. For a start, the latter would be more difficult to do. If it takes 90 kWh to smelt a certain amount of alumina to aluminium, but 10% of the electricity was lost in the power lines and transformers etc. since the generation, then the energy cost will be recorded as 100 kWh, NOT 90. Assuming that all energy use is as electricity, the total value of all the probable electricity generation would be divided equally among all citizens and then all transactions would account for all energy used or lost since electricity generation.

I see no reason, apart from getting people to adjust to the system, why energy accounting could not be set up within a year. Measuring energy consumption and production is not difficult; power companies do it frequently, whether in kWh, barrels of oil or cubic metres of natural gas. If they did not, things like the National Grid simply would not function.


Why not? There will always be some goods which are so expensive that they cannot be purchased within a two-year period once the cost of necessities has been taken into account, and so the only way anyone would ever be able to purchase these goods is by putting aside a certain amount of money each time they receive payment until they have enough to purchase the good in question - in other words, saving. There is no rational justification for preventing people from saving money - saving does not even have to involve the accumulation of interest and so would not necessarily be exploitative. If there was no saving, can we also assume that people would not be able to borrow money? If so, how would communities be able to pay for investment projects which exceed the energy they have been allocated for the two-year period? What if an individual consumer wants to purchase a good immediately even though he does not have enough money to hand but thinks he will be able to accumulate enough money at some point in the future? Saving and borrowing are essential for any modern economy - and so the fact that EA does not even allow for these activities means that it would never be able to function as a viable alternative to capitalism and would result in a lower standard of living.
What sort of goods do you have in mind, exactly? Many things will not be available to own in the way that is done currently. Houses and buildings, for example, would not be owned or purchased, but allocated.

Energy credits are not currency. They are not exchangeable. They are closer to Jacob's labour vouchers in that regard than to money.

The average citizen of the USA uses approximately 250 kWh per day averaged over the year (i.e. this takes account of non-routine purchases, such as cars, TVs, laptops etc.; in Europe the amount is 125 kWh per day). If a person was given the equivalent of 250 kWh per day over, say, two years, that is about 182 500 kWh. Making a desktop computer costs about 1800 kWh. If the person bought nothing else, they could consume 101 of them in two years. Of course, they would not. They would probably only have one each two year period or, indeed, have one that is constantly upgraded with modular components (ever heard of "my grandfather's hammer", the one where the head has been replaced three times and the handle three?).

A car is about 76 000 kWh (though, personally, I think cars are too large to be considered possessions and, if they ARE to be used as an important means of transport (which, incidentally, I think would be a BAD BAD BAD idea) they would probably be shared among the community, otherwise the vehicle is a waste when not in use, which is most of the time). The person could perhaps have a new car each year, if they had little else!

So what purchases, again, were you thinking of? Or should each individual have three cars?

Incidentally, 182500 kWh is enough for over 300 000 drinks cans, enough even more a severely caffeine addicted person who hates coffee.

In case you are wondering where all this energy is to come from, if a 2000 km by 2000 km area in the Sahara was covered by parabolic troughs with a power per unit area of 15 W/m^2 it would be able to provide the entire world with enough electricity to provide for American profligacy. Of course there are other deserts in the world, such as the Mojave, or indeed most of Australia.


You are essentially proposing a rigidly egalitarian distribution of purchasing power hidden under flowery language. This is wrong for two reasons. Firstly, as Marx acknowledged in 'Critique of the Gotha Program', immediately after a revolution has taken place the attitudes of capitalism will still be dominant amongst the working population and so to maintain a high level of output and allow for the expansion of the productive forces it will be necessary accept some degree of material inequality by rewarding people according to how much they are able to produce - such that if someone works for a longer period of time or does a more strenuous form of labour they should be entitled to a larger share of output. A rigidly egalitarian distribution is incompatible with incentives and so will lead to people refusing to work as much as they should because they know they will receive the same amount of purchasing power regardless, eventually resulting in a decline in the level of output and consequently a lower standard of living for every member of society. Secondly, even if we assume that capitalist attitudes have been eliminated and people are willing to work hard for the benefit of the community, a rigidly egalitarian distribution fails to account for the fact that people have different needs - there will be some people who will not spend the full amount of purchasing power they have been allocated but at the same time there will also be some people who find that they do not have enough to meet all of their needs.

This transition period, during which a lot of construction would take place to replace the hopelessly inefficient infrastructure we would be inheriting, would probably last about 10 years. For comparison, rationing in the UK lasted for 14 years from 1940 to 1954. The restrictions on consumption, both of energy in general and essential goods such as food, would be gradually raised until they become moot. These increases would go along with the improving situation.

People do not produce things, machines do. People would have, depending on their job, a duty to make sure the machines are working satisfactorily.

Regarding people refusing to work: the answer to that scenario is simple. Those who wish to drag everyone else down by shirking should not be given any energy credits, only the necessities for life. In a situation where it is essential that everything gets finished as soon as possible, anything that is deliberately done to impede that is a crime.

With regards to different levels of work, those who work harder should be given the opportunity to do jobs that are less unpleasant or where they would be best placed to have large effect. Those who are lazy should get the shitty jobs. In addition, in sucha situation those who are seen to be lazy or slow on the job are unlikely to particularly popular.

Incidentally, while the standard model of energy accounting says that there will be equal distribution of goods, that would not necessarily be the case in the transition period. After all, the standard model of energy accounting assumes abundance (a situation where differentiated income is moot) as well. If it was absolutely necessary, it would be quite feasible to vary the amount of energy credits people get by how diligent they are, though that would necessitate another parallel system to measure workload. Personally I do not think it would be necessary, and I think the existance of any income differentiation brings its own problems, which you, as a Communist, should be able to recognise, but it could be done. It could easily be done.

With regards to needs, after the transition period there would be little question of people not being able to fulfil their desires apart from the obviously ridiculous, such as the three-cars-per-person scenario mentioned earlier.

[BobKKKindle$]

Thanks both of you - I don't have time to respond to everything now but concerning the types of goods which might require people to save (which they would apparently not be allowed to do under the system you are proposing) there are many goods that come to mind - what if someone wanted to go on a long holiday to an exotic location? What if someone wanted to own a luxury yacht? Personally I don't think that people should be prohibited from owning any kind of personal property under communism - and if your system is unable to allow the ownership of cars, that's a major reason not to accept EA.

[Cult of Reason]

long holiday to an exotic location?

There are two possible scenarios here.

Firstly, the "exotic location" is within the area where Energy Accounting is in effect. In that case, then whatever they purchase in that location goes against their account, as normal. What people buy on holidays in not typically hugely energy consuming in my experience, so I do not see how that would have any significant effect on their subsequent consumption.

Secondly, there is the scenario where the "exotic location" is foreign and energy accounting does not apply there. IIRC, the scheme here is that the area which uses energy accounting trades, to an extent, with the outside world in order to acquire reserve currency. Whenever citizens want to travel abroad they are then given their share of this reserve to be used at their destination. In this case how much they would be able to spend would depend on how well trade was going with the outside world, so, typically, they would not be able to purchase as much as they would have been able to domestically.

Incidentally, all areas that would be able to support an energy accounting system would probably have tropical areas by necessity (the cocoa, coffee and tea have to come from somewhere!).


What if someone wanted to own a luxury yacht?

What about a mansion? Or a city? Why can't a person own everything? Obviously there are things that are too ridiculous to be a mere possession. I think it is infeasible to provide luxury yachts to everyone, whatever economic system you have. The costs in energy, materials and human labour are too great. Besides, when you say luxury yacht, what do you mean? One of those huge things with onboard chef etc.? Not a chance!

Besides, most people are on their yachts for only short periods. It would be a waste not to simply have communal yachts that people possess on a temporary basis. Hire cars, hire yachts, hire jetskis (despite their appalling mpg) for all I care, but owning them is stupid.


Personally I don't think that people should be prohibited from owning any kind of personal property under communism - and if your system is unable to allow the ownership of cars, that's a major reason not to accept EA.

I do not think yachts, or even cars, should count as personal property. Bicycles, probably, but cars? Certainly not!

Cars as a mass transport system is one of the worst ideas to come out of the 20th century. As a track distraction. Fine. I would probably enjoy it. But as a primary means of transport? It is inferior to almost every other reasonable option. But, in the event that my view does not become dominant, EA almost certainly could support car use, if SUVs etc. were excluded, and if the cars were mostly electric. Well, theoretically EA could support anything: it depends on how much energy is available and, if we assume getting it from other planets etc. is not possible, it is most definitely limited, especially if you want your system to be able to sustain itself. There is only so much land you can, or want to, cover with renewable energy generation. As David MacKAy says in his recently released book (Sustainable Energy -- Without the Hot Air), for renewable energy sufficient to provide for millions of people, you need an area comparable to that of countries. In order to be sustainable, an abundant system of any description would have to use renewable energy.

[Vanguard1917]

Cars as a mass transport system is one of the worst ideas to come out of the 20th century. As a track distraction. Fine. I would probably enjoy it. But as a primary means of transport? It is inferior to almost every other reasonable option.


But that's not the case, is it? If access to a car can permit individuals to get from A to B faster (not to mention more comfortably) than alternative modes of transport (e.g. bus or train), it is a superior mode of transport, at least as far as personal transport is concerned. Logically, therefore, instead of calling for cutbacks, what we need are cars which run more efficiently, and roads which are maintained and built more regularly and planned more innovatively, so that each individual can experience the freedom of travel which car ownership affords.

Also, Bobkindles is right that equitable distribution of goods does not necessarily imply a more advanced system. Socialism is a more advanced social system insofar as it can develop the productive forces of society, which is its historical justification. With the aim of producing an abundance of goods to satisfy human needs and desires, socialism seeks to abolish scarcity. The concept of energy accounting, on the other hand, takes scarcity as its starting point and sees it as an eternal condition of human society, as something which is here to stay.

[Dimentio]

I think you've misunderstood energy accounting a bit.

http://www.technocracy.ca - technocracy for beginners.