Howard T. Odum was one of the earliest people to tie economics together with energy and ecology, so it is worthwhile giving a brief outline of some of his thought. As Odum develops his thought, the ideas seem to get a little overcomplicated, so this is only a basic account which seems enough to be useful for understanding our current situation and highlighting its problems. More detail may follow later.

Ramage & Shipp (Systems Thinkers) describe his underlying theme as follows:

The central method for Odum in understanding the behaviour of an ecosystem at any scale was to follow its energy flows: the way in which energy was transferred and transformed from one part of the system to another.

Odum also wanted to develop principles which applied to any ‘ecosystem’ from the ‘individual’ to the world.

I’m not sure what Odum’s definition of energy is, as I cannot find one at this moment, but let us assume energy is the ability to do work, move particles (produce heat) or to build organisation, structure or what is sometimes called ‘negative entropy’. We can use the Jancovici definition of energy as produced by, or allowing changes in, the world/system, or as being the engine of transformation. A constant stream of fresh available energy is needed to maintain any system’s functioning.

Paying attention to the ‘laws’ of thermodynamics, Odum notes that there is always a loss (or more accurately ‘dispersal’, or ‘degrading’) of energy; this is known as ‘entropy.’ There is always a difference between usable, or available, energy and the total energy expended to produce, transport and concentrate that available energy. The usable energy is generally less than the total energy expended, through the system.

For example, the energy used by motor transport is not just the energy used by the automobiles to move around, but the energy used in manufacturing the cars; building the roads and bridges and petrol infrastructure; transporting petrol; maintaining roads and cars etc. Energy is constantly dispersed, or lost as heat, in these processes, and the energy required to maintain the whole traffic system is much greater than just the sum of petrol burnt to power cars.

The amount of available, or net, energy to a society, organism or ecological system, determines the limits of what may be done. For Humans, real wealth, or prosperity, is ultimately limited by geophysical, ecological and energetic processes.

Odum argued as far back as 1974 that humans were using more and more of our available fossil fuel energy to generate new fossil fuels or other energy sources, thus lowering socially available energy as a percentage of energy use. This was presumably overcome through using up energy sources more rapidly.

Most business predictions about future available energy are based on the gross (total) energy of the source and not the available energy. This relationship between energy consumed to make energy available (what other people call Energy Return on Energy Input) can be excessive and Odum argued that shale oil, for instance, would never yield more energy than was used to extract it. This does not mean that people cannot structure the market to make profit from shale oil in the short term, but it is ultimately a non-constructive use of energy and will cause collapse somewhere in the system.

Odum suggests that social systems will succeed and dominate, the more they can “maximize their useful total power from all sources and flexibly distribute this power toward needs affecting survival”. When it is possible to expand inflow of available energy into a society, then survival can be helped by rapid growth or expansion allowing that society or organism to take over a domain, even if there is a large amount of energy (and other) wastage.

This spread or domination often involves using energy before others can use it; or ‘stealing’ energy from others and the future. The expanding system is heavily competitive (perhaps internally as well as externally). The more energy a system steals from others, the more likely its expansive phase will be short, as it is probably destroying its ecological base.

In general, if a society, or organism, consumes all of the resources it requires for survival, then it must change, diminish or die out.

Furthermore, if the energy expended by a society (especially one with decreasing available energy) does not help support energy collection and concentration, or social replication and general equilibrium processes, then the system is also likely to become vulnerable to collapse.

When energy inflows are limited or declining then successful systems (or parts of systems) are more likely to use the available energy to build relatively co-operative, stable, long-lasting, high diversity, equilibrium states. These societies are more oriented towards maintaining energy inputs without increasing energy expenditure to do so. In this case, previously marginal lifeforms or societies, using energy sources that are neglected by the dominant form, may continue after the dominant form has burnt itself out.

Odum seems primarily interested in the dominant systems using maximum power and then changing, rather than in evolution on the margins. He also seems to assume steady states (equilibriums) are what ‘nature’ seeks, rather than that all systems change and risk disequilibrium. His thesis was largely developed before Chaos and complexity theory, and assumes that all systems develop maximal use of energy: “systems organize and structure themselves naturally to maximize power [energy use]”. However he notes that “energies which are converted too rapidly into heat are not made available to the systems own use because they are not fed back through storages into useful pumping, but instead do random stirring of the environment.” This could be destabilising.

He suggests that modern economics developed during an extremely high expansion era, and economists are generally not even aware of the possibility of relatively steady, low growth, societies. Most of our other institutions and understandings are also based upon, and demand, expansion. These institutions and ideas will be challenged and stressed by lower energy availability and may actively sabotage attempts at change.

However, most of human existence has occurred in relatively low expansion societies, so such societies are not impossible.

Furthermore, as most economists take expansion as natural (living in societies of high energy availability), they assume expansion of energy is also natural or easy. They tend to oppose ideas which suggest contraction or conservation are healthy phases, and tend not to notice how new post-fossil-fuel, energy sources (e.g. nuclear and solar) often depend on a kind of subsidy through fossil fuel use. These new energy sources become less useful, less easy to build and less profitable when that energy subsidy is removed.

[M]ost technological innovations are really diversions of cheap energy into hidden subsidies in the form of fancy, energy-expensive structures.

It is even possible that the successes in expanding agriculture in the last 100 years does not primarily come from improvements in agricultural knowledge and practice, but from burning lots of fossil fuels, so that we invest far more energy into food than we get out of it. People now eat “potatoes partly made of oil.” The expansion of fish catch has come from massively increased tonnage of ships, massive increase in the energy expended in the building of them and powering them. With the decline of fish populations, even more energy may be required to carry on getting a profitable fish catch, until the fish are gone, and the fishing system collapses.

Changing social energy sources to renewables takes massive energy expenditure (and probable ecological destruction) to make the factories, gather resources, build the equipment, fuel the transport etc. That does not mean it is completely impossible to slowly organise the manufacture of renewables entirely through renewable energy, but that it won’t occur without considerable planning and enforcement, and it may not happen in time to prevent disastrous climate change.

It may be the case that there there are no new sources of low energy input, and low polluting, energy becoming available. For example, fusion is still a fantasy.

The energy available to contemporary society, and hence the amount of work/organisation and effective activity that can be done, may well be running down. Consequently economic expansion is slowing. Quite a number of people argue that the period of real growth in the West ended in the 1970s or even earlier.

It could be that current appearances of expansion are largely being funded by the attempt to use easy currency availability as energy, through low interest debt and through syphoning wealth up the hierarchy. But this ‘simulation’ of available energy cannot continue forever, without new sources of energy availability. Some of the global expansion may be happening because developing countries are using energy to generate growth, from a low basis, as happened earlier in the west.

The question arises that if we are now beginning an era of declining global energy availability, how should we best spend the energy remaining? Sixty years ago we possibly could have used the energy to build a renewable system, that may now be more difficult, because of the decline in availability.

Societies also receive an energy subsidy which comes from the natural workings of ecologies such as the flows of sun, wind, waters, waves, etc. Another method of achieving apparent growth could arise through accelerated destruction of the world ecology (consuming it without replacement) which will have fierce consequences as life supports are destroyed, and need to be repaired (requiring large amounts of energy if possible).

An economy, to compete and survive, must maximize its use of these [ecological] energies, [while] not destroying their enormous free subsidies. The necessity of environmental inputs is often not realized until they are displaced.

Our current societies are tending to destroy these subsidies, or remove vital parts of the system (such as water) and replace the ecosystem workings (if replaced at all) by high energy expenditure technologies, which become vulnerable to energy decline. A society which is aiming for relative equilibrium may need to make sure it helps its natural ecology to increase its own replication and equilibrium capacity.

After this discussion it should seem obvious that the energy used to give us energy availability includes the works of the sun, ecologies, humans and technologies. A lot of this energy availability comes without human work, and the more human activity destroys this ‘free energy’ the more expensive energy production becomes.

High availability of energy allows the building of complicated structures, greater resilience against natural fluctuations and threats, and allows greater concentrations of people and built organisation. Cities, for example, depend on cheap energy for building concentrated structures and for bringing in food. With fossil fuels, cities have increased in size as food can be brought in from far away and local lands do not have to support the population. Loss of energy availability, may mean cities collapse.

High energy availability also gives greater capacity for expansion. High energy availability human societies are usually military threats to lower energy availability societies – hence the pressure for everyone to increase energy availability for defense. Attempts to maintain growth seem to be a matter of maintaining, or obtaining, dominance at the expense of a functioning eco-system. In times of energy scarcity, militarily active societies may burn themselves out, putting energy into expansion rather than conservation, or they may put increasing amounts of energy into maintaining the power and lifestyles of the already wealthy and powerful. This may postpone apparent system breakdown, but it will only increase the problems and collapse will more likely be hard to control.

In the contemporary world, those countries which have only recently embarked upon the growth/expansion process, may be starting it at a time when it would be better to support or improve their former economic and energy flow patterns, if they wish to survive.

Countries which save energy now are more likely to survive, and they will have functioning energy resources in the future. Countries which attempt to solve their energy problems through warfare at a distance will probably expend more energy than they can recover.

With the decline in available energy human labour will become more important. Without some degree of social change in attitudes to labour, this seems likely to involve the creation of an under class or even slavery (although Odum does not argue this). Information storage, processing and availability may well decline, as that consumes a lot of energy. Information (because of the second law) tends to disperse, depreciate, and develop error, and it requires ongoing energy usage to preserve unchanged or develop, although it may require less energy to replicate than to generate anew.

The contemporary world is caught in the paradox of needing energy to continue with its patterns of development and expansions, but the only energy and economic processes which can power this, are destructive of the ecosystem at large and of the capacity of these societies to continue. The only way non-catastrophic way forward is to find some way in which general economic expansion can be curtailed, ecologies supported, and energy usage reduced.