The document discusses the compatibility of saving energy, employment, and economic growth. It notes that less energy availability often leads to fewer jobs and lower GDP, as seen in the examples of Spain, Greece, and Portugal since 1965. It argues that energy security in Europe is threatened by declining production of oil, gas, and coal, as well as capital requirements and climate change policies. Achieving goals like the 2°C target and Paris Agreement may require dramatic changes to energy consumption and GDP growth. Compatibility of these goals is presented as an open question.

1. jancovici.com
Can we save energy,
employment and growth at the
same time?
Jean-Marc Jancovici
jmj@manicore.com
jean-marc.jancovici@carbone4.com
jean-marc.jancovici@theshiftproject.org
Ecole Normale Supérieure
January 8, 2018

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If we listen to the UN, we can do that and
much more: Alice in Wonderland
☺ Economists ☺ Doctors ☺ Feminists ☺ Industry ☺ Consumers ☺ Teachers
☺ Mayors ☺ Ecologists ☺ “Circularists” ☺ Pacifists ☺ Drinkers

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One (and only one) question
Are all this goals
compatible?

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According to you, what is energy?
My electricity or gas bill

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Fraction of the world revenues devoted to energy purchases. Author’s calculations, on data
from BP Statistical Review & World Bank, 2017
If energy is mainly a bill, it’s not a
huge one

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It’s only 5%!
= 5%
= 2%
= 5%

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According to you, what is energy?
My electricity or gas bill
The answer C
Something to be saved!
(why can be unclear)
Something I’m full of
when I really feel great

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Because of the law of conservation, “using energy” is actually extracting
energy from the environment and using it to put a converter into action.
To use “something else” (oil, gas, waterfalls, uranium, wind…) we need
another converter which is called “a machine”.
The only energy that our body can use and convert, is food, that is a
particular type of chemical energy
“using energy”, an incorrect
expression for a major process
W
“Using more and more energy” is therefore “commanding more and
more machinery”

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1 L
≈ 0,5 kWh
80 kg + 10 kg
up 2000 m
0,05 kWh per day
(10 kWh/year)
6 m3 earth lifted
up 1 m
x 10
10 kWh
2-4 kWh
mechanical
output
x 100
@ 1000 €/month: 200 €/kWh
1,5 €/L :
0,4 €/kWh
2000 €/kWh
÷ 500
÷ 5000
1 day out of 2: 100 kWh/year
Even a slave: 4-40 €/kWh
÷ 10-100
Nietzsche wanted supermen, oil did
the job

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At the very beginning we had carbon
Carbon!
Once dead, falls partially on the ocean floor
Where it gets mixed with mineral sediment
The mixture is buried by tectonics
And cooked by geothermal energy
And, miracle… (after 15 to 800 million
years, and for 0,0000000001% of initial
biomass)
FREE!

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=
10 m
10m
80 km/h
3 millilitres !
6-8 cents per kWh
without security of
supply, 25 to 50 with
0,3 cents per
kWh (0,3 cents
per kWh (with
security of
supply
Renewables -> fossil : price ÷ 50-100
Why on Earth did we waive magic
renewables to use devilish oil?

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“Energy consumption” per capita, world average, 1860-2016. Jancovici, 2017
Yummy kWh
66% = machines that produce electricity
50% = machines that
move around people and
things
What gets journalists excited (and thus politicians)
20.000 kWh per capita and per
year ≈ 200 “energy slaves” per
capita
Carbone!

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2 centuries ago, he won the fight of
physics vs economics
Natural resources cannot be exhausted, otherwise, we
couldn’t get them for free. As we can neither multiply
them, nor deplete them, there are out of the scope of
economic sciences.
Jean-Baptiste Say, Traité d’économie politique (1803)

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Our economy seen by Super Mario
Productive system

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With the previous “flow chart”, the GDP is
endogenous in regard of capital and work, but
exogenous in regard of energy
And then…
In this system, there is no limit to more people
and capital, thus a forever growing GDP, and thus
a forever growing energy supply
The economist therefore thinks as follows: more
capital and work is enough to trigger more GDP
that triggers more energy consumed (the IPCC
emission scenarios are done this way, by the
way)

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But trusting (then) the engineer would
have saved us time
Charles DUPIN (X 1801)
FORCES PRODUCTIVES ET COMMERCIALES DE LA FRANCE
BACHELIER - PARIS 1827
[with draft animals], man has found a way to multiply by 5 the power put into agricultural works.
Living agricultural forces of France
Human beings
Horses
Cows and Oxen
Donkeys
equivalent to full time male workers
Water mills
Wind mills
Sailing boats
Steam machines
workers workers
TOTAL

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Actually, you'd better have some
resource!
Productive system
= 200
Work
+= 1
Capital

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1965
2016
Energy consumption vs. GDP in constant $, 1965 to 2016. Source World Bank
2017 for the GDP, BP Statistical Review 2017 for energy
The best macroeconomic model in
the world: a straight line
Energy consumption = number of machines!

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1921
1973
1986 2001
2015
Constant $ per barrel (vertical axis) vs. oil consumption in the world (horizontal).
Jancovici, 2016, on data from BP Statistical Review
Is the price of oil elastic?

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60 kW ≈ 600 pairs of legs
100 kW ≈ 10.000 pairs of arms!
1 steel mill @ 100 MW ≈
10.000.000 pairs of arms!
100 MW ≈ 1.000.000 pairs of legs
400 kW ≈ 4.000 pairs of legs
Production: men with the help of machines,
or machines with the help of men?
10 MW ≈ 100.000 pairs of legs

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Less energy means more jobs,
then?
+ + = 600
if ->
then -> + 300 ?
It would be the case if
300
=
But today it means and and half GDPthus

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First, energy availability decreases…
Energy availability in Spain since 1965. Data from BP Statistical Review, 2017

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… then jobs
Jobs to population ratio in Spain since 1965. Data from world bank, 2018

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1965
2016
Energy consumption vs. GDP in constant $, 1965 to 2016. Source World Bank
2017 for the GDP, BP Statistical Review 2017 for energy
…and GDP
Energy consumption = number of machines!
2007

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First, energy availability decreases…
Energy availability in Greece since 1965. Data from BP Statistical Review, 2017

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… then jobs
Jobs to population ratio in Greece since 1965. Data from world bank, 2018

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1965
2016
Energy consumption vs. GDP in constant $, 1965 to 2016. Source World Bank
2017 for the GDP, BP Statistical Review 2017 for energy
No energy, no GDP
2007

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First, energy availability decreases…
Energy availability in Portugal since 1965. Data from BP Statistical Review, 2017

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… then jobs
Jobs to population ratio in Portugal since 1965. Data from world bank, 2018

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1965
2016
Energy consumption vs. GDP in constant $, 1965 to 2016. Source World Bank
2017 for the GDP, BP Statistical Review 2017 for energy
No energy, no GDP

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No energy security in oil
Oil availability in the EU since 1965. Data from BP Statistical Review, 2016
-16%

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Gas availability of an « enlarged Europe » (EU+Norway). Data from BP Statistical
Review 2016
No energy security in gas
≈ 55%
-14%
Shale gas potential 20/30 years

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Coal production and consumption in Europe. Data from BP Statistical Review, 2016
-67%
No energy security in coal

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Energy security? What security?
Energy availability in the EU since 1965. Data BP Statistical Review, 2017
Energy security threatened by world geology and CO2
Energy security threatened by
regional geology
Energy security threatened by regional geology
and CO2
Energy security threatened
by fear
Energy security
threatened by capital
requirements

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EU 28 construction index since 2000. Data from Eurostat
More square meters with less energy
doesn’t seem obvious

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Tons transported in EU 25 since 2004. Data from Eurostat
More trucks with less energy neither

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And no more jobs either
Jobs to population ratio in Greece since 1965. Data from world bank, 2018

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Annual change of the GDP per capita in Europe. Jancovici, on data World Bank.
Bloody physics!
Rapid growth of energy per capita
Stable energy supply per capita
Post-peak: oooops…
Brexit !

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Fancy a little rule of three ?
Now ≈ -1% per year
Must grow at ≈ +0,4%
per year for
unemployment =0
Now ≈ +1,5% per year
Revenues must remain still
on average for jobs to keep
pace with demographic
growth

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2°C, a piece of cake?
Temperature increase in 2100 arising from cumulated emissions since 1870. IPCC, 2015
2015
Cumulated CO2 emissions
since 1870 in Gt
÷ 3 in 2050

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And tomorrow ?
Paris agreement : -3% per
year
Say +1% per year
Dramatic increase ???
Revenues must decrease by
3% per year for jobs to keep
pace with demographic
growth

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Questions?