Energy Accounting

Background

If you have read our article about the problems with the current monetary system, you know that it is addicted to exponential economic growth – something which is impossible within the near absolute constraints of a finite world. This can only mean one thing, and that is that we need to transition towards a different way of resource management – and one that can fulfill the three criteria outlined in this website.

Energy – the currency of the Cosmos

One of the set of governing laws that defines our Universe is Thermodynamics. There are four laws of Thermodynamics which together determine how matter and energy works.

• Zeroth law of thermodynamics: If two systems are in thermal equilibrium respectively with a third system, they must be in thermal equilibrium with each other. This law helps define the notion of temperature.
• First law of thermodynamics: When energy passes, as work, as heat, or with matter, into or out from a system, its internal energy changes in accord with the law of conservation of energy. Equivalently, perpetual motion machines of the first kind are impossible.
• Second law of thermodynamics: In a natural thermodynamic process, the sum of the entropies of the interacting thermodynamic systems increases. Equivalently, perpetual motion machines of the second kind are impossible.
• Third law of thermodynamics: The entropy of a system approaches a constant value as the temperature approaches absolute zero.[2] With the exception of non­crystalline solids (glasses) the entropy of a system at absolute zero is typically close to zero, and is equal to the log of the multiplicity of the quantum ground states.

The laws of thermodynamics in short means that every action in the Universe comes with a cost in terms of energy. Each system contains an energy reserve, which is called exergy. The term applied for the energy consumed in direct utilization of production is called emergy.

Since every action costs energy, that means that industrial operations, but also actions intended to remedy environmental effects, can be measured in their energy costs. This means that it is possible to calculate an economic system from a physical basis, namely how much energy an entire industrial process is taking into account. 

The Energy Survey

The Energy Survey as envisioned by the EOS is a process where the Earth’s carrying capacity is continuously measured. Such measurements do exist today as well, and studies show that we are using far more than what the planet can renew every year. The plan with the Energy Survey is to provide data about the ecological and economic situation of the Earth.

Out from this survey, we will move out slightly less than 100% of the Earth’s renewal capacity. That amount would be the resources available for human economic utilization. That means, per definition, that under the system of Energy Accounting, it would not be possible to use more resources than the Earth can provide for.

The Energy Units

The available energy in terms of the renewal capacity of the Earth will be distributed to each human being. The distribution means that each human being will be given an “ownership”, or rather “usership” of an exclusive amount of the Planet’s renewal capacity. The distribution can happen in several ways. All human beings can be given a specific amount just because they need to live and survive for example. People can be compensated for how many hours they work as well, or for their participation in innovative projects and the popularity of said innovations. All three ways to give people access to the resources can be employed simultaneously as well, and the system does not need to be homogeneous throughout the world. Energy units are distributed for a specific period, dependent on the Energy Survey. When the Energy Survey has updated, the amount of Energy Units are reset and distributed out again. Some critique within the EOS has pointed out that this can incentive hoarding during the end of the measurement period. 

How to use Energy Units

Energy Units will be allocated by the citizens individually to the companies, cooperatives or sequences (collectively understood as “holons”) which build up the production system. People choose themselves what holons they want to order goods and services from. The cost of the product or service will be equivalent to the energy cost in terms of the energy that it will cost to extract the resources, produce the item, transport it to the consumer and then restore the extraction site and deal with other environmental costs.

This means that the more environmentally hazardous a particular operation is, the more it will cost in terms of Energy Units. This will incentive actors to produce goods and services which are more efficient and durable in terms of environmental effects.

There is a discussion within the EOS on how the time factor should be measured.  

Economic growth under Energy Accounting

We are not opposed to economic growth in itself. Our problem with the current system, the Debt­based Monetary System, is that it is addicted to exponential growth at all costs.

Under Energy Accounting, the situation will be different since we are basing the measurements of the Energy Survey of what the Earth can cope with on long terms. That means that in terms of the volume of resources we use, we will grow slower. However, the de­facto size of the economy will grow due to efficiency gains when items gradually require less resources, are made more modular and more durable, and when the infrastructure is transitioning towards a more sustainable system.

That means that we will experience deflationary growth, as the user will be able to obtain more and more through an individual Energy Unit, while the total amount of Energy Units will remain in a state of equilibrium in relation to what our planet is able to manage. 

Empirical testing

Energy Accounting works on paper, but before any system like that is going to be implemented, it has to be tested – within computer simulations, factories and local and regional socioeconomic environments. The goal of the Earth Organisation for Sustainability is actually to field test Energy Accounting and attempt to break it.

The reason why we want to do that is so that we can find the flaws with our proposed system and then adapt Energy Accounting after the results of our tests, in order to form it organically after the needs of reality. We are a scientific movement and strives to achieve certain objectives, not to dogmatically cling to certain systems. If Energy Accounting is proven to not work, we would still try to learn as much from the experiments and use the parts that work to improve either on the current system or on some other potential system.

If our system is proven to work, we will not try to install it globally tomorrow, but rather opt for a gradual transition, where the immediately pressing goal is to see to it that the world of tomorrow is fulfilling the three criteria.