As the Guardian notes this morning:
One in five nearly-new cars are now selling at more than their brand-new equivalents, as disruption to supply chains continues to push used cars to record values.
This is absurd, and there can be no one who thinks that this situation will last. The chip supply chain issue will resolve. Second hand car prices, which have helped fuel the inflation indices, will fall. So too will inflation in that case. Changing interest rates will not solve this. Better supply chains will. Price volatility due to supply chain disruptions reverse.
This chart of oil prices is also indication of that. Note it is inflation adjusted:
Oil prices can skyrocket at a hint of supply disruption. They plummet too. At some point they will, not least when we really sort out the supply of the renewables that will supplant them.
The pretence that all prices are destined to rise forever without Bank of England intervention is pure nonsense.
The myth that inflation is here to stay is similarly fanciful.
It really is time that we had sine mature economic debate in the UK, not least from those paid to lead it.
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Surely in order to have a mature economic debate we will need some grown ups in both government and the Bank of England?
Yes
I know…..
The Energy Return on Investment (EROI) of renewables is too low for them to “replace” fossil fuels.
Renewables are supplementing fossil fuels, not replacing them.
Vinnie
This dedication to a measure is boring
What is your realistic solution?
Richard
Hi Richard.
I’ve copied this from another blog. The writer sums up the situation perfectly, so I’ve just cut and pasted.
“The answer to declining net energy cannot be “let’s build a civilization scaled ……….” (fill in the gap with nuclear, solar, wind, wave energy, geothermal, fusion or zero point energy).
The amount of energy needed to build anything of scale, while maintaining existing world infrastructure, and improving infrastructure in developing countries, just doesn’t add up.
As an example of lack of system thinking, a future based on solar energy. Current thinking on the EROEI is around 15 – 20 to 1, based on energy used in construction from publications like the following …
https://renew.org.au/renew-magazine/solar-batteries/energy-flows-how-green-is-my-solar/
The sort of numbers used are probably way too low as the promoters of anything tend to be, but lets use the ~3700kwh number in construction of 1 Kw of solar polycrystalline panels (note not the extra infrastructure!). Over 25 years at 4 hrs/d this would produce 36,500 Kwh of electricity, which is less than 10/1 return on energy invested, but promoters always stretch life to 30+ years, add more hours etc to get to the 15- 20/1 ratio.
What everyone fails to mention is that the above initial energy is based on fossil fuels providing the mining, heat processes and transport of all aspects of production of the solar panels.
If we use electricity as the source of energy in their construction, we will have to make the hydrogen and synthetic fuels first. At best using 20% efficiency for conversion of solar power to hydrogen and synthetic fuels, the energy cost of manufacturing solar panels goes up to 3700 Kwh X 5 = 18,500 Kwh to produce 1 Kw of polycrystalline panels, so the EROEI falls to 2.
There is nowhere near enough energy to run a modern civilization on EROEI of 2!! It’s only as high as 2 by leaving out all the energy needed to make the electrolizers, hydrogen tanks, huge facilities to capture carbon out of atmosphere for the synthetic fuel production etc, etc.
So even if we go all out to produce a “renewable” powered civilization from solar ( and the same would apply to all other wishful thinking alternatives to FFs), it is a one time deal by using remaining fossil fuels to extend current civilization a few decades, while trashing the environment in the process..
People believe in religions with a passion en masse, so nothing to stop the belief in a ‘renewable future’ at current civilization levels despite the evidence of numbers and reality.”
I really want to believe in renewables being our future, but at long last, I no longer do.
The reality of that is SCARY, but we have to face reality and then look at the options.
De-growth looks inevitable. That has huge/profound effects on all our futures.
We are not going to do degrowth
That assumes growth is related to material consumption
I have never disputed that we will need to consume fewer material items
See my book The Courageous State
Not yet………
A quick look suggests there are many different ‘EROI’. We have to stop burning fossil fuels – ‘supplementing’ them wont do.
Some EROI seem to put hydroelectricity, wind and coal as the best performers, and natural gas, solar and nuclear much lower while others put nuclear way ahead.
Fossil fuels must be phased out and replaced by renewables. There is no alternative if we want to keep on living on a habitable planet.
But that does not mean we will be able to carry on living in the same way. For example, in housing, there will have to be much greater emphasis on insulation and passive heating and cooling. In transport, there will have to be much greater emphasis on walking and cycling and public transport over personal vehicles. In farming, we have to manage with much fewer inputs. And so on.
The resources of any closed system are finite, and we have to live in a way that is sustainable. The whole planet cannot live like people do (on average) in the USA, for example. There are simply not enough resources, and it would not be sustainable for any length of time. We have to work out how we can live in ways that deliver comfort and happiness for as many people as possible. It won’t be easy, but it is possible.
Are we intelligent enough to work out how, before the environment takes the decisions for us?
I wish I could answer that question
Your suggestion that we will have to change how we live is absolutely right
It seems very few get that
A point worth noting but will we be hoodwinked? Will there be an effort to sustain it by vested self interests?
Who would have thought we could have negative equity in cars?
“The chip supply chain issue will resolve”.
If I can offer slightly dissenting voice. A key global supplier of ICs is Taiwan. China has ambitions wrt Taiwan and is now cuddled up with Russia.
Doubtless it is waiting and watching with respect to Ukraine developments. EU/US reactions to Ukraine developments may well be used by China as an indicator of EU/US responses should it make a move to take over Taiwan. I don’t think we are out of the woods by a long way.
EU is now trying to re-establish a substantive chip mfu base (having swallowed the “let markets decide” nonesense for 3 decades). Perhaps things will get back to normal – I hope so.
As for the more mature economic debate re the UK – the tories are functionally incapable and I’d suggest Liebore intellectually incapable.
All my warnings are subject to war….
Pestilence, Famine, War (not necessarily in that order) and Death.
Dont forget the 5th Horseman (Horseperson) of The Apocalypse, Kaos according to Terry Pratchett.
Seems particularly appropriate right now