A rise in petty crime has always been an indicator of hard times. Statistically, the poorer people get, the more property-related crime increases. Car thefts are just one of many property crimes that are on the increase just now. As Will Dron at the Sunday Times Driving reported earlier this year:

“The number of car thefts rocketed by nearly 9% in 2018, according to the latest figures from the Office for National Statistics (ONS).

“The annual ONS Crime Statistics show that ‘theft or unauthorised taking of a motor vehicle’ increased from 103,493 in 2017 to 113,037 (8.8%) last year…

“Last year’s surge in stolen vehicles was a major contributor in the 2% increase in total offences, which also include figures for aggravated vehicle taking, theft from a vehicle and ‘vehicle interference’(452,743 to 463,497).”

Until recently, “theft from a vehicle” involved someone smashing a window or jemmying a door in order to gain access to property left within the vehicle. Far more worrying, though, is a growing trend for criminals to remove parts from the vehicle itself. More specifically, in February this year the BBC began reporting a big spike in the number of thefts of catalytic converters from parked vehicles. Yesterday, Mary-Ann Russon at the BBC was able to put some numbers to a crime that is not generally recorded separately:

“For the first six months of 2019, the number of thefts of catalytic converters [in London] jumped to 2,894, compared to 1,674 thefts for all of 2018.”

Why, though, would criminals want to steal catalytic converters; and what has this to do with the Green New Deal? Mary-Ann Russon goes on:

“The prices of certain precious metals have skyrocketed in the last 18 months – palladium is now worth £1,300/oz, while rhodium goes for £4,000/oz, according to FJ Church and Sons, a specialist metals merchant that is also the UK’s largest specialist in recycling catalytic converters…

“Precious metals must be used because the converters have to work efficiently enough to meet emissions standards.”

The problem for the various proposed green new deals – in which massive state investment in the deployment of non-renewable renewable energy-harvesting technologies halts global carbon emissions while simultaneously ushering in a forth industrial revolution – is that those same precious metals (and many more rare resources) are an integral part of the technologies that are supposedly going to save us. Indeed, platinum and palladium are not even particularly rare (although they are expensive to extract). At today’s rate of consumption there is more than a century of reserves of these metals. However, deployed at the rate required to electrify transport and decarbonise electricity generation and we will run out of reserves in just twenty years. Not that this will ever happen – although not for the reason mainstream economists believe. Other mineral resources essential to the green new deal would be gone long before the platinum and palladium are gone. For example, reserves of zinc, chromium and gold will be gone in just two months at GND levels of use; with silver, nickel, copper and cobalt reserves being consumed within a year at GND levels of consumption. As a group of scientists at the UK National History Museum warned earlier this year:

“To replace all UK-based vehicles today with electric vehicles (not including the LGV and HGV fleets), assuming they use the most resource-frugal next-generation NMC 811 batteries, would take 207,900 tonnes cobalt, 264,600 tonnes of lithium carbonate (LCE), at least 7,200 tonnes of neodymium and dysprosium, in addition to 2,362,500 tonnes copper. This represents, just under two times the total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world’s lithium production and at least half of the world’s copper production during 2018. Even ensuring the annual supply of electric vehicles only, from 2035 as pledged, will require the UK to annually import the equivalent of the entire annual cobalt needs of European industry.

“The worldwide impact: If this analysis is extrapolated to the currently projected estimate of two billion cars worldwide, based on 2018 figures, annual production would have to increase for neodymium and dysprosium by 70%, copper output would need to more than double and cobalt output would need to increase at least three and a half times for the entire period from now until 2050 to satisfy the demand.”

Ironically, the rise in thefts of catalytic converters is partly an unintended consequence of our prior efforts to decarbonise the economy. The development of (relatively) energy-dense lithium ion batteries has resulted in an explosion of electrical devices that would previously have needed to plug directly into the electricity grid to operate. One such is the battery-powered angle grinder; which allows a thief to roll beneath a vehicle and cut the catalytic converter from the exhaust system in a matter of seconds. It is, however, another aspect of the rise in these thefts that economists will point to for false comfort. The increased price of precious metals such as platinum and palladium fuel the economics fallacy that increased prices result in either or both the production of new resources and the substitution of alternative materials.

From this view point, we have nothing to fear from the massive additional demand envisaged by the proponents of green new deals, because shortages will raise prices which, in turn will unlock new (previously uneconomic) reserves and fuel innovation to discover substitute materials. This sounds great so long as we ignore completely – as almost every economist on the planet does – the role of energy in the economy.

According to mainstream economics, energy is just another input to the productive process; no different, for example, to a pile of sand or a pallet of timber. However, as Steve Keen – one of the few economists to understand the importance of energy – puts it:

“Capital without energy is a statue; labour without energy is a corpse.”

Energy is not something that comes after capital and labour in the productive process; it has to come before. Energy is essential to the manufacture of the capital with which future output will be produced. Energy – in the shape of food calories – is also what keeps the workforce alive and productive. Unfortunately, again, economists treat energy as infinite – yet another “externality” that can be assumed to be available wherever and whenever it is required.

There is, of course (for all practical human purposes) an infinite supply of energy in the shape of the sunlight landing on the Earth’s surface. The trick, however, is to convert that solar energy into useful exergy in order to power the industrial global economy. Not only that, however, we must do this in such a concentrated way that we have far more energy available to the non-energy economy than is required by the energy-economy to keep delivering. There is only one source of solar energy (which comes in three forms) that we know of that is capable of delivering in this way – the fossil fuels with which we built the global economy and that still provide 86 percent of its energy. Neither solar panels nor wind turbines can provide anything like the energy return required to maintain – still less grow – the economy we currently rely upon. The best they can offer is a small addition to our global energy supply (and possibly a temporary lifeboat for when our recoverable reserves of coal, oil and gas have been consumed).

Because of its energy density, nuclear power could theoretically provide us with several centuries of low (energy) cost energy. But nobody knows how to do nuclear. Fusion (outside the laboratory) has been a physicist’s wet dream that was 25 years away on the day I was born, is 25 years away today, and will no doubt be 25 years away long after I’m dead and gone. Current fission is far too inefficient to take the place of fossil fuels; while so called “forth generation nuclear” faces too many technical challenges to ride to the rescue in anything like the time we have left.

So here’s the problem with high prices: they are the consequence of the high energy cost of production. To understand this, consider that there are hobbyists who strip gold out of electronic scrap. Some even pan reasonable quantities of gold from the ocean. There is a reason, though, that hobbyists are the only people who do this despite growing demand for gold by industry – the energy input (captured in part by the monetary costs, including labour time) outweigh the value of the gold recovered. The fact that there is more than enough gold (and just about every other mineral) in the oceans to satisfy the collective global requirement for a green new deal is irrelevant; without an abundant energy-cheap supply of energy it will remain too costly to ever recover.

The same problem is already limiting conventional global mineral reserves. As the Natural History Museum scientists explain:

“Energy costs for cobalt production are estimated at 7000-8000 kWh for every tonne of metal produced and for copper 9000 kWh/t. The rare-earth energy costs are at least 3350 kWh/t, so for the target of all 31.5 million cars that requires 22.5 TWh of power to produce the new metals for the UK fleet, amounting to 6% of the UK’s current annual electrical usage. Extrapolated to 2 billion cars worldwide, the energy demand for extracting and processing the metals is almost 4 times the total annual UK electrical output.”

Worse still, as with all of our extractive industries, we began – back in the nineteenth century – with the high quality deposits and have been forced to turn to ever lower ore grades to maintain output. This means that an increasing volume of ore must be processed just to get the same quantity of metal that we used to recover from higher quality deposits. This, in turn, means that more energy must be expended just to stand still. And, of course, the green new deal envisages a massive growth in our production of mineral resources and so a massive growth in energy consumption.

This is the real kicker, because fossil fuels have been consumed in the same way. There is a massive difference between Jed Clampett’s Oklahoma deposits just feet below the ground, and the deep water deposits in the Gulf of Mexico, the Arctic or the Northeast Atlantic. And even these deposits provide a much greater energy return than the light crude that is released by the expensive hydraulic fracturing of shale deposits or the heavy bitumen recovered by strip mining and boiling tar sands.

The global economy has eaten its way through all of the best fossil fuel deposits in the same way as it has eaten its way through everything else it considered to be a resource on Planet Earth. Now we are left with the dregs; and they do not provide a sufficient energy return on the energy invested to continue to operate the global economy that feeds and clothes us; still less provide the massive expansion of resource consumption envisaged in a green new deal.

This is where the economics fantasy of higher prices driving new resources falls down. As the energy needed to obtain energy increases, so the energy available to the wider economy – which includes extraction and manufacturing industries – shrinks. This is a particular problem in the developed economies of North America, Europe and Japan; which offshored much of their production to regions with cheaper labour and less environmental regulation decades ago. As the purchasing power of wages has fallen across the developed economies, so demand for manufactured goods (which, in turn, provide the demand for the energy and extractive industries) is slumping. Higher prices merely exacerbate the problem by lowering consumer demand even further. This is already leading to bankruptcies in energy and extractive industries which cannot remain profitable at the prices the economy is able to bear.

What the rise in the theft of catalytic converters is showing us is that even a small increase in demand – a tiny fraction of that envisaged in the various green new deals – pushes prices up to economy-busting levels. If we had energy-cheap fuels or energy-harvesting technologies, and if we had abundant untouched reserves of high-quality mineral ores, some kind of green new deal would be possible. But we are long past that. Our depleted and exhausted planet provides us with just one viable course of action – one that nobody in a position of power is willing to contemplate – to shrink the human footprint.

As you made it to the end…

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