Economics on digikar's microblog

A World without Climate Change is one that promotes Freedom

Thu, 23 Apr 2026 09:53:54 +0200

What would a life without climate change look like? In this world,

Carbon emissions would be down to the pre-industrial levels,
White reflective Arctic and Greenland ice cover would be intact,
AMOC would persist,
Forest covers would be up to their preindustrial level. The land used for farming would be much less.

As side effects,

Seasons would be predictable,
Loss of crops would be less due to unpredicted weather events,
People would need to endure less heat and less cold and less rain and less storms,
Healthcare system would be less affected by cumulative effects of climate change on health,
Less pressure on societal systems would render insurance easier.

But what would day to day life look like? Without fossil fuels, private yachts, flights, and even large scale ocean and atmospheric modes of commute are difficult to imagine. Even the manufacture of semiconductors depends on fossil fuels. Perhaps, many industries that have been historically dependent on fossil fuels including the printing press might have stagnated.

The question “What would the world look like without X?” can be interpreted in two ways. One, we can go back in time and intervene and then try to imagine what life would have been like. Two, one can imagine an intervention at the current moment and try to imagine what life would be like. The latter feels extremely disruptive until we already have a world with renewable energy powering every aspect of our lives. So to speak, this world where fossil fuels suddenly return to their grave and there is no energy to fuel our day to day activities is unimaginable. But even in the first case, where we go back in time and intervene, it is still unimaginable what life would be like without an equally-early discovery of renewable energy to power the printing, semiconductor and transport industry. In other words, this world too is unthinkable.

Imagining negation is tricky. One does not negate wills and desires and possibilities. The mind does not seem to like negations. Instead, one creates positive ones that serve as alternatives to the ones we do not want. Thus, to imagine what would a world without climate change look like, we should perhaps ask, what is the kind of world we want to look at.

Now, we have already broadened our thinking horizons a bit by travelling back 4-5 centuries in trying to imagine the alternative world where printing press did not take off due to a lack of energy. We can continue further and look into the far past to envision the possibilities for the far future. Is it useful to look this far? Aren’t things always transient and in a constant flux of change? Apparantly, that is not always the case! Rather, it seems that, for many things, there is a period of time in which things are more “flexible”, so to speak. But after a period of time, things become “rigid”. To give a few examples -

Around sixth century BC in China, there were several dozen distinct schools of philosophical and cultural experimentation. But later on, only four schools remained. Of these, only one thrived until the start of the 20th century and still continues to influence East Asian cultures.
Despite twenty (or fifteen) centuries, many cultures remain deeply entrenched in Abrahamic religions. Bible was the most sold book in 2025. And that’s ignoring the even higher number of copies that are simply distributed without being bought. Indeed, from AD 40 to AD 350, Christianity grew by about 43 percent per decade, from a population of about 1,000 to 34,000,000. A similar story holds for Islam and Quran.
Consider the English language itself as another example
Or the use of Javascript in browsers
The prominence of vegeterianism in India was apparantly not before two or three millenia (It’s difficult to find sources for these that are not just verbal anecdotes or chatgpt/claude generated conversations.)
Constitutions of countries, including long lived ones such as the United States

MacAskill, in his What we owe the future, calls this “lock-in”.. Initially, some state of affairs is rather flexible or mutable or easily changeable. But as time passes, these become harder and harder to change. The causal pathways by which this happens seems underdiscussed. (Hint: It’s often not merit that determines what becomes popular or what persists through time.)

With reference to the world we are looking for, the recommendation is this: We must strive against a lock-in of state of affairs that are harmful for the long run. At least until we find the most optimal state of affairs, and perhaps even after we do, we must allow a plurality of approaches. Let time do its weeding. Try to avoid weeding out ideas prematurely. The hard to digest implication of this is the tolerance of intolerance. I myself have a hard time accepting it. But even if you reject tolerating intolerance, the central idea remains: allow plurality and diversity, since they keep a civilization flexible.

Thus, an alternative to the current world with climate change is a world that values freedom.

Enter Amartya Sen’s Development as Freedom.

If the goal of life is to live and thrive, the best way to achieve that is by giving each individual the freedom to experiment and influence others in their own ways. Now, this is a claim at the population level. It makes no claim for individual choices: whether one should choose a life that “keeps their options open” or another that lets them “walk or run in peace with their chosen option even if it closes other options” is not something I have an answer to. The mere claim is we should work towards a society that allows individuals to choose differently at least in principle across different lives. Of course, we only have one life and we only live once, but that we can imagine a different life. If the society you live in permits that, that is a good society. In contrast, if merely imagining a different life seems impossible, that is not the kind of society you (or at least I) want to lock humanity in.

Caveat, I haven’t read Development as Freedom yet. So far, I touched some chapters of What we owe the future - particularly, 1, 2, 4. My own thoughts on the book are that it has some insights, but it seems to get carried away. Particularly, I disagree that a life choice that enhances humanity’s survival by 0.0001% as being better than another life choice that enhances the life of a million or even a few thousand. Because, by enhancing the life of a thousand others, especially in significant ways and endowing them with freedom, you raise the chances that someone (perhaps many) amongst these would go on to make choices that ultimately enhance humanity’s survival by not 0.0001% but by 10% even! And there are other critics.

For the more technical minded there, you cannot make optimal worldly interventions basing them on probability distributions formed out of observational data. For, the act of intervention changes the distribution and you will need to resample again! A potential alternative is to build a causal model of the world, but that seems an open topic for research!

The Inevitability of Environmental Collapse with Rapid Resource Extraction

Thu, 01 Jan 2026 11:14:23 +0100

Imagine being stranded on a small island. The island only has a few coconut trees, no fish or other vegetation or other food sources; coconuts are the only source of food. Furthermore, in about two weeks, it will be the full moon. The island is a vanishing one - the island submerges during the full and new moon. In other words, you have two choices:

Keep eating the coconuts from coconut trees, and sink and die as the island submerges during the upcoming full moon.
Cut the coconut trees and make them into a raft. This will cut down your food source. But hopefully, if you know or learn how to make a good raft, you might survive!

The scenario might seem artificial, but turns out to be very real. What do I mean?

Consider that life as we know it is stranded on the planet Earth.

If we do just the bare minimum to keep ourselves surviving, some day, some cosmic event will eventually wipe us out. It happened with dinosaurs, remember?
Alternatively, we could extract resources from our environment. Lacking omniscience, we do not know what the effect of our resource extraction will be. Perhaps, it might trigger events that themselves either harm us or even lead to the very extinction we are trying to avoid!

It is not even a case of underdeveloped science. Science provides the how to of reasoning over nature. The over what are the specific scenarios that occur in the particular natural habitat. It doesn’t take rocket science to realize that the release of trapped $CO_2$, methane, or microbes can pose a threat as a mine is excavated. However, no amount of science can tell us that there is trapped $CO_2$, methane or microbes in the mine. That requires exploring or inspecting the environment. Furthermore, can pose a threat does not mean will pose a threat. And again, lacking omniscience, it is not possible to make perfect predictions.

Rapid resource extraction – which does not bother or even denies inspecting the side-effects of the particular resource extraction – will thus eventually lead to environmental collapse. It would merely be luck that a civilization survives any particular length of rapid resource extraction.

How rapid?

Rapid enough that the resulting environmental collapse triggers events on a scale the civilization cannot deal with. Climate change is one example.

The alternative?

Slow down.

How slow?

If the civilization can restructure or metamorphize itself into not requiring any more resources, or at least, only minimally more resources, that would be ideal.

In other words, if the civilization can make do with the resources it already has at hand, it should avoid extracting more resources. At the same time, it should develop its scientific understanding as well as explore its environment to better understand the effects of particular resource extractions. As the knowledge of these effects becomes available, only then, should it extract the resources. However, it will be competing against the cosmic events. But hopefully, “industrialization and modernization” over a span of 40,000 years rather than 400 years can easily be a sweet spot that does both

Develop tools to overcome the cosmic event.
Don’t harm oneself or go extinct by environmental collapse triggered by rapid resource extraction.

Slow down.

Extremely unequal distribution of resources not insufficiency is the root of modern global problems.

the richest 1% of humanity now produce as much carbon as the poorest two-thirds combined. Likewise, the top 10% of emitters account for half of all global $CO_2$

The civilization must optimize the use of its resources to meet the needs of its individuals and develop science and environmental knowledge while trying not to extract further resources. Any growth, development, or betterment that stems from resource extraction instead of optimization is a short-sighted move that can will pose an extinction threat to the civilization.

Note that resource optimization has to be carried out at the scale of civilization, particularly amongst its top resource extractors. Resource optimization amongst the bottom resource extractors without the top is futile. In case this is not obvious, suppose:

Group A comprising 1 billion people consume 90 units of a resource
Group B comprising 9 billion people consume 10 units of a resource

Combined, the two groups consume 100 units of the resource.

What will happen if group B starts consuming 50% less resources? Naively, 90% people consuming 50% less resources sounds like a great win! However -

Group A will still consume 90 units
Group B will consume 5 units

Combined, the two groups still consume 95 units of the resource. The resource saving is a mere 5%, extraordinarily different from the intuition generated by “90% people consuming 50% less resources”.

What will happen if group A starts consuming 50% less resources?

Group A will consume 45 units
Group B will continue to consume 10 units

Combined, the two groups consume 55 units of the resource! A conservation of 45% resources is resulted from merely 10% of the top resource extractors cutting their extractions in half.

Inequality itself is not a problem; extreme inequality of the above kind is. It is not a mere “problem of ethics” we can disagree over but a “survival problem” that will kill everyone. It will lead to extinction.

Here’s a short lunch-time video to convey the concrete effects of what abstract “2C” rise in average temperature means.

Here’s another

Care to be the saviors who cut the resource extraction and consumption in half?

The World in 30 Years

Wed, 24 Dec 2025 21:05:40 +0530

What will happen to our world in 30 years? The past year I have been in acknowledgement of a recurring uneasiness. Earth’s climate is changing rapidly and accelerating. Different areas are warming up, cooling down, drying out, raining down, storming out faster than humans and non-human nature can keep up. It seems only inevitable that there will arise a certain sequence of years later this century that destroy all crops, flood all warehouses, kill all cattle, and bring people to famines.

A part of me wants to accept the transient nature of life and all things and “do nothing at all”. A different part feels saddened, worried, hopeless, powerless at the state of 95% of the 8 billion humans and the trillion non-human animals. In large part, the situation is worsening, acceleratingly worsening, and a tiny fraction of humans are to blame. One can ask if life is possible without suffering and the answer seems no. Why does it even matter if we do anything or not?

Is life possible without suffering?

History has known at least one human, the Buddha, trying to grapple with the nature of suffering – rather dukkha. (But there are others.) Dukkha, in Buddhist Philosophy, means something slightly different from the meaning of the english term suffering. Dukkha means unsatisfactoriness, which captures what I have in mind. Unfortunately, Dukkha is one of the three marks of existence.

The Buddhist way is the Middle Way between the two extremes of ascetism and hedonism. It concerns the Noble Eightfold Path that is expected to lead to the cessation of suffering. The eight folds or pillars include: right view (understanding), right resolve (thought), right speech, right action, right livelihood, right effort, right mindfulness, right samadhi (concentration). While useful as a general guideline for living, it seems to leave unanswered cases such as: self-defense and climate-change.

Self-defense
Climate-change

Here is a long reddit post on climate-change and buddhism from 2019. The solution to climate anxiety might just be to accept the inevitable worsening and death whenever it happens, while trying to make positive contributions wherever possible.

However, there is a third part of me, who identifies as a puzzle solver. The question it asks is this: Is life possible without suffering? More particularly, is there a way a civilization like that of humans can progress and perhaps reach the space age, without triggering a collapse of the ecosystem and food and water resources? Even if we acknowledge that most humans might fall prey to famines within the next 50-100 years, might there be a way for a new civilization to not repeat the mistakes of our civilization?

If you’ve known me in real-life, you’d have heard me talking about Doughnut Economics this past year. It suggests that humans should use multidimensional metrics instead of GDP to measure well-being. And that human activity should be such that it does not exceed planetary boundaries. While the Doughnut Graphic is helpful to communicate to the general public, it remains deficient in rigor, that’d be necessary for modeling and concrete quantitative recommendations.

It was difficult to imagine that Doughnut Economics was the only alternative economics model ever proposed over the past century and half. Indeed, a bit of searching (you can ask ChatGPT) will list you several. Are any of them useable for the new civilization?

Perhaps, one of the fatal flaws in standard neoclassical economics – both Capitalism and Marxism – when it comes to interfacing with nature, is that it assumes raw materials are limited only by the means of production. This means, if you had enough means of production, you can get an unlimited supply of raw materials from nature. It does not consider that the number of trees might be finite. That clearing land for mining might have downstream effects. And so on and so forth. A second fatal flaw would be that it makes no claims about what happens or should happen to by-products, emissions, and wastes. These assumptions are fine when the human activity were no more than a fraction of what goes on in non-human world. Unfortunately, that is not the case. The scale of collective human activity is large enough to rival or even exceed that of non-human nature.

Has anyone pondered how these different aspects can be integrated into economics?

Enter Nicholas Georgescu-Roegen, a mathematician, statistician and an eventual economist. Through his The Entropy Law and the Economic Process, Georgescu-Roegen considers entropy from thermodynamics and suggests what it means for our (economic) system. For my purposes, the important point is that, entropy (disorder) of a closed system always increases. This is a fundamental law of the universe; no closed system is immune to this. This means a closed system should naturally evolve towards disorder.

Yet, life seems to disobey thermodynamics. It seems to evolve towards order. What explains this?

Two points may be helpful. Firstly, that life is not a closed system. It exchanges matter as well as energy with its surroundings. Secondly, given a physical (chemical, nuclear, etc) process that emits energy, a part of that energy can be used to perform useful work that can increase the order of a system. This is roughly known as Gibb’s Free Energy. Taken together, life can use free energy to create order and emit waste energy into its environment. Thus, the order can increase locally.

Note, however, that the order-construction processes emit (waste) energy into its surroundings. Earth’s biosphere is remarkable at recycling its material resources – carbon, oxygen, nitrogen and other elements. However, it is limited by physical laws in recycling energy. For Earth to remain habitable at a certain temperature, waste energy must leave the Earth. In the absence of large-scale human activity, one expects that there was a balance between the incoming and outgoing energy on Earth. Any energy received by the sun was either reflected or put to use by geological and biological systems to extract useful work. Eventually, the waste energy was released back into the atmosphere and eventually into space.

The human activities underlying climate change have disturbed these energy exchanges. In particular, the larger amounts of greenhouse gases emitted by human activities have increased the amount of solar energy that remain in the atmosphere. I’d even suspect that harnessing fossil fuels, geothermal energy, as well solar energy from panels more efficient than plant leaves also increases the received energy. Call this latter as man-made energy. This is in contrast to other transformed energy such as hydroelectric or wind-energy. Man-made energy emits more energy, while the other forms of energies are mere conversions. Two possibilities arise:

Man-made energy is miniscule compared to the energy received from the sun. In this case, the civilization’s main concern would only be to keep the greenhouse gases at their pre-civilization levels. The Earth’s systems should take care of the rest. There arises the possibility that transformed energy reduces the amount of energy available to biological and geological systems. Thus, one can even disturb Earth’s systems without climate change. As of the current twenty-first century, that windmills could affect Earth’s biosphere or geosphere seems unrealistic.
Man-made energy is significant compared to the energy received from the sun. To keep temperatures constant, this possibility will require devising ways to transmit the excess (waste heat) energy outside Earth.

In either case, a “natural” equilibrium will be attained as the Earth’s temperature rises. It will rise enough so that the irradiated energy by the Earth equals the unreflected incoming energy and an equilibria is attained. Fortunately, this depends on the fourth power of absolute temperature, and, thus, only involves a small change in (average) temperatures. Unfortunately, the local effects of that small change in average temperature are rather large for the ecological, ocean, wind, rain, and human systems under consideration. This precisely is climate change.

Zooming out, climate change is not going to melt Earth. It is rather a disequilibria in Earth’s energy budget. The Earth will adapt. Life will adapt. That in no way implies that life or civilization as we know it would continue the same. There will be changes. Significant and expensive ones at that.

What about the new economic system? At least ChatGPT says this is an open problem. Following is a brief summary for anyone wanting to delve deeper:

Approach / School	Key Figures	Core Synthesis Idea	How Order Is Created	Main Economic Implication	Degree of Formalization	Main Limitation
Dissipative-Structure Ecological Economics	Prigogine, Ayres, Røpke	Economies as far-from-equilibrium systems exporting entropy	Energy throughput creates local order while increasing global entropy	Sustainability depends on bounded entropy throughput	Medium	Weak institutional detail
Steady-State Bioeconomics	Georgescu-Roegen, Daly	Entropy law + biological regeneration constraints	Qualitative development within fixed material/energy flows	Zero growth in throughput, stable population & capital	Low–Medium	Limited dynamics, normatively heavy
Emergy Economics	Howard & Elisabeth Odum	Unified thermodynamics, biology, and valuation	Energy hierarchy & transformity amplify usable order	Prices and policy reflect embodied energy	Medium	Contested valuation, hard market integration
Thermo-Bioeconomic Growth Models	van den Bergh, Kümmel	Growth possible only if regeneration exceeds entropy	Biological regeneration offsets entropy production	Conditional, constrained growth	High	Abstract, limited policy guidance
Information-Theoretic / Evolutionary Economics	Chaisson, Kauffman, Arthur	Economic order as information accumulation	Information reduces local entropy at energy cost	Innovation bounded by energy dissipation	Medium	Indirect link to policy
Technosphere / Autonomous Systems	Peter Haff	Civilization as self-directing energy system	Order maintained by uncontrollable energy flows	Human control over energy use is limited	Low	Pessimistic, weak prescriptions

Earlier this year or the last, I also had a read at Peter Singer’s How are We to Live?. The claim was that an ethical life is fulfiling in itself. I do not remember if it preached a particular ethics framework; what it did preach is that one should live an ethical life simply because it is more fulfiling. Like with Buddhist philosophy, this works “by and large” as a general framework, without providing us a way to decide our actions from moment-to-moment. That requires a rigorous model of the world, the kind Nicholas Georgescu-Roegen might have aspired for.

Unfortunately, then, there is no solution to How are We to Live?, no answer to Can life exist without suffering?, rigorous enough that one can structure one’s day to day life and local and national policies around them.

It’s sometimes not even clear whether anxiety is adaptive or malfunctioning. Perhaps, we would not even be in this mess if the richest and most-polluting people were more anxious (and foresightful?) in their actions.