Energy + the Economy

recession-recoveryOne of the key goals of The Energy Xchange is to provide a platform for information-sharing and critical discourse about a broad issue that, in our assessment, has been grossly under-examined relative to its importance to our future. That issue is the interconnection between energy and the economy.

Even within the academic and professional field of energy economics, most attention is focused on economic analysis of the energy industry and energy markets—not on the implications of energy issues for the broader macro-economy.

There is actually a long heritage of scholarship regarding the special role of energy and resources in the overall economy. Physiocracy, a less-known school of economic thought developed in the 18th Century, focused on land productivity as the primary enabler and limiter of economic activity. Much of the current work in this area is now found under the banner of biophysical or ecological economics and industrial ecology (e.g., see Energy and the Wealth of Nations: An Introduction to the Biophysical Economy). Despite long historical roots, these are still emerging as distinct fields of study.

A number of researchers and practitioners working within the framework of conventional economics are also focused on these issues, but they are sparsely scattered among various institutions without an organizing body to provide a home base for their work.

How can such an important issue garner relatively scant attention? The simple answer may lie in the fact that the field of modern economics was developed largely during a long period of growing, affordable energy supplies, most notably for fossil fuels of coal, oil, and natural gas. For nearly the entirety of this period, energy did not appear to be a significant variable for economic activity—it was, for most intents and purposes, just “there.” That stable condition, however, cannot hold indefinitely and some observers have asserted that a new reality regarding energy and the economy is emerging for the 21st Century.

How the relationship between energy and the economy may be shifting and how that will shape our future are central questions that The Energy Xchange endeavors to address. Some of the key questions we aim to address more specifically include:

  • How will shifting trends regarding the cost, demand, and supply for energy affect overall economic activity and economic growth?
  • How will these trends affect different regions and nations and critical industries and sectors–such as transportation, food and agriculture, construction, manufacturing, and others?
  • What economic factors and constraints will affect the pace and scale of new energy development? How will different economies respond to increasing competition for energy resources and the prospect of lower overall energy inputs?
  • What economic opportunities and risks does a transition to sustainable forms of energy present? How will a society running primarily on renewable forms of energy be fundamentally different than the fossil fuel economy we’ve known?
  • What adaptations can nations, regions, industries, and communities effect to make the transition to a truly sustainable energy economy as smooth as possible?

There are of course many other variants and derivative questions regarding energy and the economy. We will examine and refine these questions as we go, and we welcome your thoughts and input on specific topics and questions on which we should focus.