The Great Simplification with Nate Hagens - And Then What?: Using Wide-Boundary Lenses | Frankly 65

Episode Date: July 12, 2024

(Recorded July 8 2024) There are many so-called 'solutions' out there that, upon first glance, seem like great ideas - yet when we look beyond the narrow scope of the immediate benefits, we discover a slew of unintended (and often counterproductive) consequences.  Today's Frankly offers a series of examples of modern issues using a "wide-boundary" lens - and in the process demonstrates the importance of asking "...and then what?" when thinking about our responses to future events and constraints. How would incorporating wider boundary lenses into our lives change our plans and expectations for the future? What are we missing when we go all-in on plans to expand renewables, electric vehicles, and AI? Could a growing number of ecologically literate people guide us towards more pro-social policies, institutions, and infrastructure?    Show Notes Watch on YouTube  

Greetings. Just back from an outdoor trip up north, as they say here, with many members of my family. I'm going to talk about that in next weeks, frankly, an update on my family, which will, of course, have wide boundary implications for the biosphere and the great simplification. Of course, it will. Otherwise, I wouldn't talk about it. Today I am going to talk about wide boundary implications. We have an ostensible goal, but we often don't look at the second order effect, the third order effect, and the, as Daniel Schmachtenberger would say, the nth order effect behind the surface goal. In the 1970s, there was a famous ecologist named Garrett Hardin, who was most famously known for an essay called The Tragedy of the Conflicts.

He's less well known for his framing of numerate, which is knowing numbers, literate, which is knowing words and grammar. And more important than those was being equal it or ecologically literate. And he said the question that you should ask when looking at a situation is, and then what? And then what is the lead-in to the ecological, broader consequences of an action, a policy, a decision? So today I'm going to list a few modern, relevant examples of narrow versus wide boundary thinking that we don't often enough ask, and then what? So first of all, a easy, simple, probably unless you live in the state of Iowa, non-controversial example, corn ethanol. So 15 years ago, when oil was almost $150 a barrel, gasoline was expensive and in short supply.

So we started to mandate more corn ethanol, which is a liquid fuel made from corn that reduced the amount of gas. Gasoline we needed, lowered the prices on gasoline, etc. Was good for consumers and voters who like things cheap. That was the narrow boundary goal. Of course, if you expand beyond that, corn ethanol really wasn't an energy source, very, very marginally. It was more of an energy conversion. It converted corn and natural gas and energy and fertilizer and energy in heating and soil, etc.,

into a different form of energy that was used in our cars. Even wider boundary input was we took the input for many people's food supply, especially in Latin America, away from the food bucket and into the transportation bucket. And an even wider boundary impact was the unintended consequences of the nitrogen runoff down the Mississippi River into the Gulf of Mexico, which was estimated to be 10 to 20% higher. and we have increasing dead zones. So there's a narrow boundary, ethanol good for low gas prices and then the wider boundary impacts. Another example very relevant today is debt.

If we're struggling with paying the bills as a nation, as a world, we can go into debt. And that pays the piper at the moment, but makes us pay. the Piper back in the future. But there are many proponents saying that debt doesn't matter. Debt is an abstraction. MMT says a country can never go insolvent as long as it can print its own currency, et cetera. So we are in the United States increasing our debt $1 trillion every 100 days. France just in a surprise election yesterday elected a far left. assemblage and the Bloomberg estimates are for a lot more debt coming to pay higher minimum wages and abolish the pension limits, et cetera. So in the near term, debt helps us consume things we

wouldn't be able to consume and produce things we wouldn't be able to produce. But a wider boundary look is that MMT correctly says that there's a double entry accounting that we enter an asset and a liability every time money is created. So the financial system is in balance, both at the bank level and at the government level. The problem is we need a triple or quadruple level entry book accounting because when we create debt or money, we don't create energy. We just extracted faster. And we don't create more dolphins, ecosystems, cold blue oxygenated oceans and productive, healthy biosphere. So when we create debt, is it a direct call on the biophysical aspects that our world

depends on now and increasingly in the future? And even wider boundary look at debt, particularly in the case of the United States, following an MMT protocols, it's inherently unfair. It's unfair to the countries that around the world don't have their own currency and they peg their situation to the U.S. dollar. And therefore, when we print more money to buy stuff in the United States, it raises interest rates for them. And they can't just print money to pay off the debts. Not only that, but it follows what the heck is that law. I forget.

I'll put it in the show notes that those who are nearest the spigot of money, have outsized benefits and a lot of Americans have little to no savings. So if interest rates go up, it's helpful for those people who have investments, but not helpful for those people with little or no money. Even wider boundary than that, it raises the risk premium for foreign investors. It increases systemic risk. If France is part of the euro, but the European Central Bank has various debt protocols, calls and rules, which is why last decade prostitution and cocaine sales were allowed to be included

in GDP so that the debt to GDP ratio wouldn't get outside of their rules. And it creates risks in the treasury market and longer systemic risk. So there's a big and then what with debt. Moving on to another topic popular in today's discourse is electric vehicles, EVs. We ostensibly want to replace internal combustion engine vehicles with electric vehicles because we care about the climate change and the parts per million CO2 in the atmosphere and ocean acidification and all those things. So ostensibly, that's a good thing, more EVs. A wider boundary view says that, first of all, you have to drive EVs a long time and where you live, where you charge your EV has to be a large percentage, low carbon energy.

Otherwise, the savings are marginal at best. And even wider boundary look is that gasoline is only one product from a barrel of oil. of the 6,000 products that come from a barrel of oil, tires on electric vehicles, asphalt, which electric and internal combustion engines ride on, and plastic. The largest input in a car, a Tesla or a electric car, is all the plastic components.

All that comes from a barrel of oil. Even wider boundary look is we have around 80 billion net human babies born every year, but we have over 100 million cars and light trucks being born every year. And is that, whether they're low carbon or high carbon or medium carbon in their driving emissions, is that the sustainable future we want to head towards? Another example in that vein would be renewable energy. Now, of course, we want a larger percentage of our energy mix to be renewable. In fact, for most of our history until about 150 years ago, most of it was.

We want to do that for two reasons. One, because we're aware of climate change. So we want to reduce the carbon amount in our fuels. And two, this fossil pixie dust that has been supporting our economies for the last 150 years is finite. It's drawing down relatively rapidly that we don't see it on a day-to-day week-to-week, month-to-month basis. but on a decadal basis, we are at or near the top of the carbon pulse. So expanding renewable energy on the surface is a good thing. You might guess that there are, and then what questions associated with this?

First of all, as Olivia Lazzard, Simon Mischo, and more recently Ed Conway have said on the podcast here, a decarbonization of our energy supply will lead to a. re-materialization of copper, lithium, aluminum, cobalt, all the rare earth metals, etc. Much of this is in countries that are increasingly aligned, not in the unipolar Western world order. And depending on the estimates, we need orders of magnitude more of these materials. An even wider boundary advantage is that replacing or building, adding, renewable energy to our system is still trying to set us up for a 19 terawatt global metabolism or even more in the future. We're still trying to grow the size of the superorganism. We're not

just stopping fossil fuels. We're growing fossil fuels and adding renewables at the same time. And lastly, well, not lastly, this diagram could have like 10 different wide boundaries on it. Lastly, is they're really not renewable. Like in 25 years, we're going to have to rebuild the inverters, the wind blades, the solar photovoltaics. Right now, only 8.5% of our global material supply chain is recycled. Again, I am really in favor of more renewables, but with a different objective, a different cultural goal.

So a wide boundary yellow team view of renewables is not quite. as sanguine as we hear in the news. Artificial intelligence, very much in the news. And Bill Gates is especially vocal that AI is going to help rather than hinder climate goals. So the benefit from AI is it's going to make lots of things more efficient, so we're going to use less energy. That's kind of the story that we hear in the news. But there is a wider boundary aspect of this. According to Goldman Sachs, a search on AI chatbot chat GPT will use nearly 10 times as much electricity as a regular Google search,

which means that carbon emissions from data centers would more than double by 2030. Bill Gates said that in the extreme case, this is only a 6% addition, but probably only half of that. And will AI save us energy more than a 6% reduction? Bill Gates says absolutely yes. But is that really the issue? Data Centers is really only a small portion of the wide boundary impact of artificial intelligence. One step out, we're going to have more processes that make things more efficient in extraction using sensors and data and all kinds of new methodologies to extract oil and different resources faster and better. So if AI works the way people are saying, it's going to have a big straw effect on energy, material. environmental impact. Wider than that even is the new innovations and new scientific discoveries that big data is going to give us that we didn't know before, which acts as an even wider straw.

But using the widest boundary of all, the backfire effect is going to be ginormous from artificial intelligence. We talk about Jevin's paradox, which is the rebound effect, which is if we invent a new lighting technology and it saves us 10% of energy that because of that savings, we end up using six or seven or eight percent more energy, but less than the 10%. That's called a rebound effect. A backfire effect is if we invent a 10% savings in some technology, but then we end up using 15% or 20% more. And if the financial Wall Street prognostic are true, we're going to have a boost in productivity, which will cause the mother of all backfire effects in the global economy due to big data and artificial intelligence.

I could argue and if they are correct, that Google and Microsoft will have a larger negative impact on climate than Exxon or Shell. Next week, Daniel Schmachtenberger is going to talk for around an hour and a half on this exact topic, and I hope you can all tune in and watch it. It was informative and terrifying. If he's right and if the AI prognosticators are right, the environmental movement needs to be very, very up to speed and aware and concerned about this. Climate itself, what if we just focus on climate? We should. We should care about the biosphere and reduce our emissions, dramatically and soon. However, the wide boundary impact of that is to truly solve climate or to

fix it to a reasonable level would be bad for the economies because carbon is the main input to our economic growth, 80 some percent of our biggest fossil army mega helpers to our global economy are fossils and to make them two or three or four times expensive will hurt economic growth. It will also hurt inequality because we can't have climate change growth and equality all. We can pick two or even one. Look at the massive growth in fossil fuel consumption in China, in India, et cetera. And it's a regressive situation if we make things more expensive. if poor people, even in developed nations, are going to struggle.

And even wider boundary than that is it focuses on carbon, ignores all the other environmental aspects of our overshoot situation, like biodiversity and what's happening to the insects and sperm count and plastics and endocrine disruptors and ecosystem disruption. And yes, climate change, global heating is probably the mother. of all these risks because it makes all of them worse. But in two weeks, there's a podcast coming out with Johann Rockstrom looking at multiple planetary boundaries that we were at or exceeding, leaving Earth away from the stable time

of the Holocene. So again, just focusing on carbon is a good goal, but there are wider boundary and then what implications. We worry about our environmental impact. We worry about climate. We worry about inequality. We worry about declining resources. So degrowth sounds like a logical thing to do. However, there are also, and then what answers responses to this. First of all, there's a ginormous financial overhang, especially in the global West, and all of that financial overhang, which we consider wealth is a claim on real resources in the future. So if there is a degrowth, there is a massive Wiley Coyote musical chairs situation that creates a bend versus break moment. Beyond that,

we've built this complex Rube Goldberg machine global economy based on just in time supply chains and complexity. And we can't go backwards easily. It's like going to the Avis rental car where it says don't back up and you back up into those spikes and it pops your tires, the economic equivalent of that. And lastly, an even wider boundary is if de-growth was actively chosen, which I don't expect it will be. But then the scarcity in the system leads to violence and war, including countries that have nuclear war, nuclear weapons, et cetera.

So and then what? after degrowth is a relevant question. What about growth? Growth is good. Growth gives more jobs. Growth gives more conveniences and allows people to take trips and buy an extra GI Joe with a Kung Fu grip for Johnny. You get a point if you remember the movie.

Growth is what our cultures aspire to. But if we yellow team, that, if we say what is the unintended consequences of that, of course, followers of this podcast are quite aware. First of all, we are slowly, inexorably eating the environmental health of this planet. We don't feel it so much in the United States or in Canada with the exception of the wildfires and the heat waves right now in the southwest. But globally, the impact on nature has been gigantic and much of it is backloaded. the same way that nuclear plant, we don't really know the cost until centuries later. We won't

really know the cost of growth until a century or later from now because a lot of the negative consequences are backloaded. Wider than that, more growth in my town, in my state, in my country, in the world builds a larger baseline for future decisions, institutions, and expectations. And so the higher, the baseline we build, the more energy, the more infrastructure, the more environmental impacts we have. So it's leading us further away every year

to a stable landing point. And if we really read Yellow Team it enough, is economic growth. It's more like it's the game, not the plan. And it's kind of an immature plan for a species self-labeled, wise man. So growth too has, and then what? If you have made it this far, you can see that just about any issue that we care about ostensibly has a benefit immediately, otherwise we wouldn't be choosing it.

But it has unintended consequences, a first order effect, a second order, a third order, an entth order. So I guess my recommendation here is especially in a time of nonlinear events in the world, of emergent, chaotic behaviors with a lot of uncertainty. If we have a strong opinion about making a big decision in our own lives, in our communities, and nationally, we should first yellow team it. What are the possible outcomes that are unintended from this? Of course, we can't, you know, Daniel Schmachtenberger was on a while ago doing a podcast

on naive versus authentic progress. We can't yellow team everything. If we worried about every single negative aspect from a decision, we would move so slowly that sparrows could feed in us. But we could choose a couple big ones and consider them in our decision. decisions. It's really hard to optimize for more than one variable at a time. So right now we're just optimizing for profits with all the chaos cluster mess that we see building in the world. But I think it's a good idea to be ecologically literate and ask more often than we have

and then what. I'll close with this thought. If you put these eight or nine bullseys together that represent narrow versus wide boundary thinking. The wider boundaries kind of blend together in the background. And it conjures up the Ilya Priyugin quote. When a system is far from equilibrium, small islands of coherence have the capacity to shift the entire system. Those small islands of coherence are in the wide boundaries. Those islands are out there and the different things that comprise the human predicament are connected. And it's my hope that more people, hopefully some of you, are listening and applying these things in your own life and in your work in service of life.

Talk to you next week. Thank you.