stuff stuff and long car trips! application of the 4see socio-economic-energy model to the uk and...

Stuff stuff and long car trips!

Application of the 4see socio-economic-energy model to the UK and designing future scenarios

Simon Roberts

Foresight Group

Arup (London)

Seminar to: The Design Group

The Open University (Milton Keynes)

13th January 2010

13Jan10, Simon Roberts© Arup 2010

2

Problems!

• We’ve all heard about climate change…• But COP15 at Copenhagen only reached an accord.• Climate change has slipped from the “finite pool of worry” (fatigue)

– In 2008 and 2009, climate change fell to the bottom of people’s list of concerns as anxiety about the economy rose.

• Then there’s “peak oil”…• And what about just plain sustainable development (recall Report of

the Brundtland Commission 1987)?• What are we actually going to do?

www.cred.columbia.edu/guide/


3

Stuff stuff and long car trips!

Policy 1 – stuff stuff• reduce consumer consumption of goods

Policy 2 – stuff long car trips• get a grip on the growth of personal transport by car


4

Policy 1 - Stuff stuff

1. “Goods Tax” of 15% (say)• Note: services have no extra tax

2. Non-consumers get rebate so only consumers are hit• Note: very similar to VAT except targeted specifically on goods

and hypothecated (as follows)

3. This Goods Tax (less non-consumer rebate) goes into “REEF”, the Renewables and Energy Efficiency Fund

4. REEF used by national and local government for major investment programme into:• large- and small-scale renewables• energy efficiency improvement for all properties (homes,

industry, offices, etc)


5

Policy 2 - stuff long car trips

1. Transport has carrot-and-stick to reducing long car journeys

Details given later…


6

Typical household expenditure on goods is £218/hh/wk

ONS ONS “Family Spending 2008”


7

Typical household expenditure on services is £162/hh/wk

ONS “Family Spending 2008”


8

15% Goods Tax on household expenditure of £380/hh/wk


9

total national consumption

£0b/y

£200b/y

£400b/y

£600b/y

£800b/y

£1,000b/y

£1,200b/y

£1,400b/y

£1,600b/y

£1,800b/y

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

year

good

s &

serv

ices

con

sum

pti

on

by

econ

om

y

0%/y

1%/y

2%/y

3%/y

4%/y

GD

P

Expand to national view

just households consumption

£0b/y

£200b/y

£400b/y

£600b/y

£800b/y

£1,000b/y

£1,200b/y

£1,400b/y

£1,600b/y

£1,800b/y

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

year

goo

ds

& s

ervi

ces

con

sum

pti

on b

y h

ou

seh

old

s

services

goods

services

goods


10

INDUSTRYTransport equipmentElectrical & optical equipmentChemicals, chemical products & man-made fibresRubber & plastic productsWood & wood productsFood, beverages & tobaccoConstructionPulp, paper & paper productsPublishing & printingBasic metalsFabricated metal productsMineral productsCoke, petroleum products & nuclear fuelLeather & leather productsTextile & textile products

SERVICESReal estateHealth & social workTransport, storage and communicationEducationPublic admin. & defenceFinancial intermediationSocial & personal servicesWholesale & retail tradeHotels & restaurants

Providers of goods and services in national economy


11

just households consumption

£0b/y

£200b/y

£400b/y

£600b/y

£800b/y

£1,000b/y

£1,200b/y

£1,400b/y

£1,600b/y

£1,800b/y

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

year

goo

ds

& s

ervi

ces

con

sum

pti

on b

y h

ou

seh

old

s

total national consumption

£0b/y

£200b/y

£400b/y

£600b/y

£800b/y

£1,000b/y

£1,200b/y

£1,400b/y

£1,600b/y

£1,800b/y

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

year

good

s &

serv

ices

con

sum

pti

on

by

econ

om

y

0%/y

1%/y

2%/y

3%/y

4%/y

GD

P

Economic growth

GDP

services

goods

services

goods


12

Effect of Goods Tax is a shift to investment in economy

15% of household goods 50% of investment in economy


13

jobs energy security balance of payments welfare CO2

Policy effectiveness of Stuff stuff and long car trips!


14

4see, holistic model of an economy covering energy, goods, services, capital stocks (assets),

working population and balance of payments

industry

servicesector

UK

energy

domestic

transport


15

4see, energy

industry

servicesector

UK

energy

domestic

transport


16

consump-tion

4see, goods and asset growth

industry

servicesector

UK

energy

domestic

transport


17

Metric for capital of “embodied energy” from raw energy via industry

"Energy Analysis: its utility and limits" Slesser (1978)


18

consump-tion

4see, services

industry

servicesector

UK

energy

domestic

transport


19

What does 4see ignore?

Includes all fundamentals• stocks of:

– energy– industry– service sector– transport– domestic

• flows of:– energy– goods– services– labour

• flows of:– income– rent– pensions

• “stocks” of:– property values– equities– debt– loans– savings

LubricantDivvy-up-the-spoilsPromises

industry

servicesector

UK

energy

domestic

transport

“The Economic Growth Engine” Ayres & Warr (2009)


20

4see, across UK boundary

trade in energy, goods & services balance of payments

energy service sector industry domestic liabilities foreign assets


21

consump-tion

4see, full system dynamics

industry

servicesector

UK

energy

domestic

transport


22

Applying 4see

1. Use as a window onto historical data (since 1990)

2. Derive indices from historical period to give insight

3. For future scenarios (to 2025)• extrapolate insight indices• implement policies


23

Historical period: sector sizes (capital stocks)


24

Historical period: direct energy use


25

Historical period: total output of goods

consump-tion


26

Historical period: investment in the economy


27

Historical period: service demand

consump-tion


28

Historical period: employment


29

Choice of embodied energy as metric for capital stocks

1. Metric is stable (unlike house prices, for instance)

2. As denominator in indices to give insight

3. When capital stocks are increased, energy implications are immediately evident


30

Historical period: indices

energy

jobs

service demand

÷


31

energy use ÷ sector size = energy efficacy


32

jobs ÷ sector size = employability


33

consump-tion

service demand ÷ sector size = service demand indices


34

4see framework is…

• is an extensive (complete?) picture of economy• is a socio + economic + energy model• has a full physical basis• sets maximum physical envelope for physical growth• handles opportunity costs of investment options• handles “how quickly can we…?”• sets its own rate of growth

industry

servicesector

UK

energy

domestic

transport


35

About economic growth

• Growth is spurred by need to provide employment..• ..against a background of declining need for labour

(labour is a declining factor of production)• 2 views:

“…This prospect of investment falling and creating widespread unemployment terrifies governments so much that they work very closely with their business sectors to ensure that their economies continue to grow almost regardless of any social or environmental damage the growth process may be causing.”

“The Economic Challenge of Sustainability” Douthwaite & Siochrú (2006)

“a country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.”

“The Age of Diminished Expectations” Paul Krugman (1994)


36

Proactive scenario of Stuff stuff and long car trips!

To do a scenario:

1. extrapolate employability

2. extrapolate service demand indices

3. set sector investments

4. implement Policy 1:• shift of goods from consumption to investment in economy

(the “Goods Tax”)

5. implement Policy 2:• restraint of personal car transport


37

Proactive scenario, setting: employability


38

Proactive scenario, setting: sector investments


39

Proactive scenario, observation: GDP


40

Proactive scenario, observation: employment


41

Proactive scenario, observation: energy efficacy


42

Proactive scenario, observation: energy types


43

Proactive scenario, observation: primary fuel


44

Proactive scenario, observation: balance of payments


45

Proactive scenario, observation: CO2 emissions


46

Policy 2 - stuff long car trips

• Commuter and business travel account for ~40% of distance driven.• Transport presents a problem for legislators!

1. Package of measures to deliver behavioural change and secure modal shift.

2. Redress the balance of the relative cost/convenience of different transport modes.

3. Allocation of road space based on most fuel and carbon efficient modes.

4. More integration of sustainable transport policies with land use planning.

5. Encourage car clubs and home working and similar.• (Electric cars will take long to penetrate and only offset short trips)


47

Vision of 2025 under Stuff stuff and long car trips

• You’ve got a job!• Shop prices are up (a little)• Long car trips are expensive• More home and local working• Its easier and less costly to use trains and coaches, and travel is in

comfortable stock• Increase in recreation and leisure services• Care services for the aged have increased


48

What if we don’t Stuff stuff and long car trips!

The reactive scenario


49

Reactive scenario, setting: sector investments


50

Reactive scenario, observation: GDP


51

Reactive scenario, setting: primary fuel


52

Reactive scenario, setting: balance of payments


53

Reactive scenario, setting: CO2 emissions


54

jobs energy security balance of payments welfare CO2

Policy effectiveness of reactive scenario


55

Wrap up

1. Some consumer consumption of goods could be diverted to ambitious investment programmes for RE and EE.

2. Economic growth and low unemployment would be maintained.

3. Constraints on personal mobility by car are essential to reduce oil imports.

4. Decline of North Sea suggests UK should be taking these steps unilaterally; if nothing else to benefit balance-of-payments…

5. …and the UK can shout about its climate change leadership!

6. The 4see framework enables diverse components of the economy to be examined and their interaction modelled.


56

Video (June 2009)

www.driversofchange.com/projects


57

Epilogue

• But CO2 is down only 40% by 2025...• …and there is still growth of stuff.• Need a fundamental review of employment.• Hint from Denmark on enlightened employment policies in 1990s.• More research needed.• Anyone got any ideas on this?

stuff stuff and long car trips! application of the 4see socio-economic-energy model to the uk and...

Documents

stuff stuff goods tax

stuff long car tripsget

stuff long car tripstransport

current pricesrpqlusesgross

long car journeys details

followsthis goods tax

nonconsumer rebate

energy efficiency fundreef