The Full Earth Friedman and the Problematic Externalities of Globalization

Introduction

At the closing of The World is Flat, the “Flat Earth Friedman” discusses several potential barriers to the continued pace of globalization.  He wrote the following in 2005 (1):

“But another barrier to the flattening of the world is emerging, one that is not a human constraint but a natural resources constraint.  If millions of people from China, Latin America, and the former Soviet Empire who were living largely outside the flat world all start to walk on to the flat world playing field at once - and all come with their own dream of owning a car, a house, a refrigerator, a microwave, and a toaster - we are going to experience either a serious energy shortage or, worse, wars over energy that would have a profoundly unflattering effect on the world.”

This might be the first glimpse of Friedman in the context of the intersection of his ideas on globalization and concerns regarding global sustainability.  In 2011, the “Full Earth Friedman becomes more vocal and visible - - writing the following in his June 7, 2011 The New York Times column (“The Earth is Full”) (2):

“You really do have to wonder whether a few years from now we’ll look back at the first decade of the 21^st century - when food prices spiked, energy prices soared, world population surged, tornadoes plowed through cites, floods and droughts set records, populations were threatened by the confluence of it all - and ask ourselves: What were we thinking?  How did we not panic when the evidence was so obvious that we’d crossed some growth/climate/natural resource/population redlines all at once?”

The “Flat Earth Friedman” sees the power of globalization in the context of the Triple Convergence.  The “Full Earth Friedman” sees the challenges and constraints of globalization embedded in the “Quadruple Convergence” - the coming together of our global desires for economic growth; the potential for climate change and extreme weather; the depletion of critical natural resources; and the march toward a global population of almost 10 billion people (3) (4).

The “Full Earth Friedman” has very “lumpy” problems.  Carbon dioxide emissions per head have been strongly correlated with GDP per head (The U.S. energy consumption is 87,216 kilowatt-hours per person - - the global average is 21,283 kilowatt-hours per person.  Energy consumption is very “lumpy.” (5)).  As a result, since 1850, North America and Europe have produced 70% of all the CO₂ emissions due to energy production, while developing countries have accounted for less than one quarter (6) (7).  Most future emissions growth will come from today’s developing countries, because of their more rapid population and GDP growth and their increasing share of energy-intensive industries.  The potential outcomes of global warming are also “lumpy” – the impacts of climate change are not evenly distributed.  The poorest countries and people will suffer earliest and most (2) (8).  And if and when the damages appear it will be too late to reverse the process.  Thus we are forced to look a long way ahead (9).

Defining Sustainability in Terms of Globalization and Engineering

The idea of sustainability is an issue that engineers, educators, and organizations are beginning to understand as the “Flat Earth” and “Full Earth” Friedmans converge.  The American Society of Civil Engineers defines sustainability as, “The ability to meet human needs for natural resources, industrial products, energy, food, transportation, shelter, and effective waste management while conserving and protection of environmental quality and the natural resource base essential for the future” (10).  There are social, economic, and physical aspects of sustainability.  The last includes both natural resources and the environment.  Technology and engineering affects all three.  On page 50 of The Engineer of 2020, understanding sustainability is outlined as a key aspiration for the engineer of 2020 (11). 

The Quadruple Convergence – Energy

The unsustainable nature of our current global energy infrastructure provides our most contemporary challenge (6) (12).  Every aspect of our flat and globalized world is dependent upon the availability of clean, affordable, flexible, and sustainable energy resources.  Although never addressed in the list of ten forces that have flattened the global economy, energy is certainly embedded in each one.  From open source software (electricity) to insourcing by UPS (jet fuel) to collapsing borders (truck diesel) - - energy has played a role in the flattening process (1).  Both the “Flat Earth” and “Full Earth” are still fueled by fossil-fuels that date to the start of the industrial revolution (One glass of orange juice, for example, contains the equivalent of two glasses of oil, if you include the transportation cost (13)).  Our flat world remains an overwhelming fossil-fueled civilization: In 2009 it derived 88% of its modern energies (leaving traditional biomass fuels, wood, and crop residues aside) from oil, coal, and natural gas whose global shares are now at, respectively, 35, 29, and 34 percent (9).  Annual combustion of these fuels has now reached 10 billion tones of oil equivalent or about 420 exajoules (420 X 10¹⁸ joules).  This is an annual fossil fuel flux nearly 20 times larger than at the beginning of the 20^th century (9).

Smil (who is Canadian) and others have argued that global energy perspective makes two things clear at the intersection of the “Flat Earth” and the “Full Earth” – the first is most of humanity needs to consume a great deal more energy in order to experience reasonably healthy lives and to enjoy at least a modicum of prosperity (14).  The second, affluent nations in general, and the United States and Canada in particular, should reduce their excessive energy use (the United States and Canada are the only two major economies whose average annual per capita use surpasses 300 gigajoules (an equivalent of nearly eight tones or more than 50 barrels, of crude oil, this is twice the average in the richest European Union economies) (14) (9).  Keep in mind that the first conclusion (the “Flat Earth” Friedman and the goodness of globalization) seems obvious, many find the second one (the “Full Earth” Friedman and the need for sustainability considerations) wrong or outright objectionable (9).

The Engineer of 2020 addresses our energy problems embedded in a host of technological challenges -physical infrastructure in urban settings; information and communication infrastructure; and the environment (11).  Robert Metcalfe, the inventor of the Ethernet, does a somewhat better job of outlining the opportunities and challenges for engineers in the context of improving and expanding our global energy infrastructure (15):

“The energy market is one of the largest in the world, yet the least innovative.  Many of the products are not what people want, many of the markets exhibit no genuine competition, and the oil industry especially is an oligopoly.  In the 1960s, when AT&T had a cartel over telephone service, the phone market was poorly served, there was no competition, phones were attached to the wall and very expensive to use, and the big players claimed no other situation was possible.  A bunch of inventors, entrepreneurs, and venture capitalist attacked AT&T - and look what happened.  Now phone service is far cheaper, better and even uses fewer resources, since its all low-power devices based on miniature parts.  Energy is ripe for the same sorts of fundamental change that results in better quality at lower price, even as we eliminate waste.”

The points that Mr. Metcalfe make are correct, however they are limited in the full nature of the challenges (and of course opportunities) that engineers face.  A reason that key flatteners, such as the Internet, expanded so quickly, is that relatively little capital investment was required for the hardware and the software, once designed, could be copied for free.  By contrast, the energy economy is entirely based on hardware, most of it big, complex, and costly (15).  The recent issue of Foreign Affairs points out the crisis potential with any energy transition, “Big changes in the energy industry do not happen overnight.  The bold goals of energy independence and of radically shifting to renewable energy may be attractive to politicians who prize what is popular over what actually works in the long run.  Short-term motivations have created boom-bust patterns that have hurt the clean-energy industry; they have produced business models that depend too much on subsidies and on technologies that cannot compete at scale with conventional energy” (16).

How costly?  The International Energy Agency estimates that in order to double world energy production and deal with sustainability issues (i.e., reduce greenhouse gases), $45 trillion will need to be invested in the global energy economy by 2050 (roughly $4,500 per person for a base population of 10 billion people).  To reach $45 trillion by then, 2 to 3 percent of the world’s economy would need to be devoted annually to capitalizing energy projects (15).

The magnitude of the energy dollars should draw more smart people into this field, improving the odds of technical advances.  But time and other factors are not on our side.  Consider the following (9):

·         In the United States the foremost problem in replacing most conventional electrical production with renewable is to get power from where it is most effectively produced to where it is most needed.  The existing U.S. grid is divided into zones, which do not normally share power on a large scale, and a new nationwide grid would be needed to connect them.

·         Energy transitions (shifts from a dominant source or combination or sources to a new supply arrangement) are typically measured in decades and generations.  It took natural gas about 60 years since the beginning of its commercial extraction (in the early 1870s) to reach 5% of the global energy market, and then another 55 years to account for 25% of all primary energy supply.

·         Consider where we are versus where we want to be in terms of global energy production.  In 2010 ethanol and biodiesel supplied only about 0.5% of the world’s primary energy, wind generated about 2% of global electricity and photovoltaics (PV) produced less that 0.05%.  Contrast this with assorted mandated or wished-for targets: 18% of Germany’s total energy and 35% of electricity from renewable flows by 2020, 10% of U.S. electricity from PV by 2025 and 30% form wind by 2030 and 15%, perhaps even 20%, of China’s energy from renewable by 2020.

·         Since 2005, construction has begun annually on only about a dozen new nuclear reactors worldwide, most of them in China, where nuclear generation supplies only about 2% of all electricity.  Except for the completion of the Tennessee Valley Authority’s Watts Bar Unit 2, there is no construction underway in the United States, and the completion and cost overruns of Europe’s supposed new showcase units, Finnish Olkiluoto and French Flamanville, were resembling the U.S. nuclear industry horror stories of the 1980s.  Then, in March 2011, an earthquake and tsunami struck Japan, leading to Fukushina’s loss of coolant, destruction of reactor buildings in explosions, and radiation leaks.

Beyond the urgent needs of today’s increasingly global and knowledge-driven society, engineering must address several “grand challenges” of our world in the years that can only be addressed by new technologies implemented on a global scale (17).  Engineering must be very clear regarding the scale and scope of the global challenges.  A recent assessment by the U.S. Department of Energy in the spring of 2005 warned, “The world has never faced a problem like this.  Without massive mitigation more than a decade before the face, the problem will be pervasive and will not be temporary.  Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary” (17). 

The Quadruple Convergence – Climate Change

Robert Socolow, an engineering professor, and Stephen Pacala, an ecology professor, who together lead the Carbon Mitigation Initiative at Princeton University break the notion of climate change down into a very basic idea (6).  Human beings globally can emit only so much carbon dioxide into the atmosphere.  After a certain point, carbon dioxide reaches a level unknown in recent history and the earth’s climate system starts to change.  This change has several potential global outcomes.  These could include rising temperatures, rising sea levels, changes in the water cycle, changes in the nitrogen cycle, loss of biodiversity, and antibiotic resistance (18) (19).

Pacala states that if we basically do nothing, and global CO₂ emissions continue to grow at the pace of the last 30 years for the next 50 years, we will pass the doubling level.  The doubling is defined at the concentration of CO₂ that was in the atmosphere before the Industrial Revolution – a CO₂ concentration of 560 parts per million (6) (20).  Just a few basic facts are starting to coalesce into a strong global consensus (13):

·         Current levels of CO₂ are almost 1/3 higher than at any other time in the past 650,000 years.  This includes much of human history, a period of time in which, despite periodic ice ages, the overall climate was conducive to human life.

·         Concentrations of CO₂ in oceans and biomass are far above historic levels, causing problems such as ocean acidification and raising questions about how much more these natural CO₂ sinks can absorb.

·         There is a long time lag before the full effects of CO₂ are felt on temperature and climate; scientific estimates put this at thirty to fifty years.

·         At some point, rising CO₂ and greenhouse gas levels trigger “runaway” effects in which climate change causes further climate change.

The Stern Review is an independent review commissioned by the Chancellor of the Exchequer of Great Britain (21).  The report states the following (21):

“Climate change is global in its causes and consequences, and international collective action will be critical in driving an effective, efficient, and equitable response on the scale required.  This response will require deeper international co-operation in many areas – most notably in creating price signals and markets for carbon, spurring technology research, development and deployment, and promoting adaptation, particularly for developing countries.”

The Stern Review further states that “climate change presents a unique challenge for economics” (21).   In a recent interview, Mr. Stern commented that if climate change is not addressed, it will be equivalent to losing 5 to 20 percent of the global gross domestic product (22).  It can also be stated that climate change will both a unique and monumental challenge for engineering.  Two of the Quadruple Convergences have basically converged into one inseparable issue.  Engineers are faced with the challenge of simultaneously increasing energy supply, yet reducing greenhouse-gas emissions, and doing so on a global scale.

The Engineer of 2020 addresses global warming in the context of sustainability and environmental protection.  The report highlights that it’s impossible to predict the flow of resources; however, the report observes that it is certain that conservation and technological innovation will be part of any solution.  Table 4 of The Engineer of 2020 – Guiding Principles in Green Engineering, highlights nine guiding principles for engineers ranging from a better understanding of systems analysis, to understanding life-cycle thinking, to a focus on waste prevention – all useful as a starting point when looking at the Quadruple Convergence (11).

But The Engineer of 2020 falls short in outlining the daunting challenges engineers and organizations will face over the next 50 years.  Both Pacala and Solocow have pointed out that, even using extremely optimistic global assumptions based on current  knowledge – fifty times more wind turbines than today, twice as many nuclear power plants, doubling the miles per gallon ratings of all the world’s cars – greenhouse-gas buildup in the atmosphere will continue for decades (6). 

Consider the scenario of the United States moving from a natural gas based economy to a wind economy (Just moving from coal to natural gas has huge potential in the context of carbon dioxide reduction.  Coal has an emission factor of roughly 98 kg CO₂/MMBtu (one million BTUs), while natural gas has 54 kg CO₂/MMBtu (14)).  Natural gas currently generates about 22% of the U.S. electricity needs (9).  Can this be handily replaced by wind power?  In the U.S. today, baseline power production is met by coal-fired stations and nuclear plants, which respectively, work 70% and 90% of the time delivering electricity into the national and regional grid.  Natural gas power plants operate, on average, only 21% of the time, meeting peak demand on hot summer days and cold winter nights (9).  The following points out the technical and economic challenges with any natural gas to wind power transition (9) (23):

·         In 2007, U.S. utilities installed 3,200 turbines with a total generating capacity of 5.25 gigawatts of electricity.  A typical load factor for wind turbines in 25% (i.e., they operate 25% of the time).  To generate 22% of our electricity needs, wind turbine installed capacity would require 40 gigawatts – roughly 8 times the number of turbines installed in 2007.

·         Wind turbines would require building new high-voltage transmission links to carry electricity from the Great Plains to the coasts.  Some 40,000 miles of new lines would be required costing between $2 million and $5 million per mile.  In the 1990s, the U.S. built 9,700 miles of lines and this past decade we built 8,000 miles.

There is little doubt that energy utilization must shift away from fossil fuels toward non-hydrocarbon energy sources (17).  This will be another of engineering’s “grand challenges.”  As humanity grows in size and wealth, it increasingly presses against the limits of the planet.  Already we pump out carbon dioxide three times as fast as the oceans and land can absorb it; mid-century is when climatologists think global warming will really begin to bite (17).

Engineering and the Quadruple Convergence

Big changes in the energy economy and their direct interface with global climate change will be disconcerting.  Just as the ten flatteners and the Triple Convergence have been disconcerting.  Big, disconcerting changes also represent tremendous opportunity.  Generating more energy while consuming less oil and emitting less carbon dioxide is a knowledge challenge.  The reason artificially triggered climate change seems unstopped today and any energy transition seems economically daunting with multi-generational timelines is that the knowledge that will be used to stop these problems does not yet exist.  But that’s where the opportunity comes in.  Remember that the opportunity is in the $45 trillion range.  Clean energy may be the number one economic growth opportunity of the next few years.  The flat world will be grabbling with transforming their energy economies – and engineering and innovation will be critical. 

The World Is Flat	Engineering and the Quadruple Convergence
1.       Ten forces that flattened the world. 2.       The Triple Convergence. 3.       Chapter 12 – The Unflat World (we are still lumpy and energy consumption and climate change are perfect examples).	1.       Lumpy world of unequal energy consumption.  Engineers are faced with increasing the supply of energy in the developing world, while reducing energy consumption in the developed world.  This needs to take place before 2050 (14). 2.       Lumpy world of unequal outcomes from climate change.  Potential water shortages in several African countries, flooding in coastal areas in Asia, and extreme weather impacting the poor.  Engineers will be tasked with mitigating the risks of climate change (2). 3.       The Quadruple Convergence – increasing global population, fueling economic developing, produces the need for more energy, which has the potential for climate change.  Engineers must understand the systemic nature of the Quadruple Convergence (2). 4.       Sustainability and waste reduction becomes a critical global issue for all engineers in every discipline (6). 5.       Global Innovation and technology play key roles in developing solutions to the Quadruple Convergence (6).
The Engineer of 2020	Engineering and the Quadruple Convergence
1.       Identification of breakthrough technologies. 2.       Identification of technological challenges. 3.       Implication for engineers and engineering education.	1.       Development of the Engineer of 2030. 2.       Holistic thinking and systems analysis are important (11). 3.       Conserve and improve natural ecosystems (17). 4.       Life-cycle assessments of materials and processes (11). 5.       Prevention of waste – Cradle to Cradle mindset. 6.       Improve, innovate, invent – with the goal of smooth and timely energy transitions (15). 7.       Participate in public policy debates, discussions, and development (10).
From Global to Metanational	Engineering and the Quadruple Convergence
1.       How dispersed are the clusters of critical capabilities and markets that companies need to succeed? 2.       How can globally dispersed knowledge best be combined to succeed?	The Quadruple Convergence will be a time of challenge, opportunity, and responsibility.  The planet’s prosperity and security will depend on the innovative spirit, technological strength, and entrepreneurial skills of many of our metanational firms.  For example. 1.       IBM – Their Smart Planet Initiative is a global metanational activity.  The three ideas of a smarter planet – (1) Instrument the world’s systems, (2) Interconnect them, and (3) Make them more intelligent.  The theory is more intelligent systems = less waste = greater sustainability.  Improving national electric grids across the globe and the installation of smart electric meters are good examples (24). 2.       GE – GE Energy provides a range of global products and services, from combined cycle power plants (utilizing waste heat to generate steam), to carbon capture/sequestration, to 4.1 – 113 wind turbines designed for offshore environments, to thin film solar panels (25). 3.       Siemens – Between now and 2030, 90% of global population growth will occur in megacities (those with populations over 10 million).   Siemens has a corporate strategic focus on making these types of cities more efficient and sustainable.  One idea is what Siemens calls “light infrastructure” – which refers to systems whose strength is derived from a network of numerous small parts.  Distributed fuel cells and wind power applications are examples (26).

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