Haute Lumière
Commerce · III.02 · MMXXVI · daylight
ASSESSMENT · Chapter III.02 — Energy as the Denominator
Three instruments: a ten-point quiz, eight reflection questions, five essay prompts. The quiz checks comprehension rather than recall. The reflections are private and first-person. The essays are arguable from more than one side.
THE QUIZ — ten points
Four on recall.
1. Name the three jobs a numeraire must do, and say which of them Technocracy's energy certificates kept.
Unit of account, medium of exchange, store of value. The certificates kept the first only — they were non-transferable and expired at the end of a two-year balancing period. 1 of 3, or 33.3 percent. One mark for the three jobs, one for the observation that follows: the energy standard was therefore never tested. What was tested was the abolition of exchange and saving.
2. What is a transformity, in what unit is it measured, and what does it hang on?
The solar energy required, directly and indirectly, to produce one joule of something, measured in solar emjoules per joule (
sej/J). It hangs on the planetary emergy baseline — 9.44 × 10²⁴ sej/yr in Odum (1996), 15.83 × 10²⁴ in the 2000 revision, 12.00 × 10²⁴ in Brown and Ulgiati (2016).
3. Write the Carnot factor and state the exergy of electricity, of 80 °C water and of 40 °C water against a 20 °C ambient.
eta = 1 - T0/T, with T in kelvin. Electricity 100.00 percent; 80 °C water 16.99 percent; 40 °C water 6.39 percent.
4. Define relative and absolute decoupling, and give one measured example of each from the chapter.
Relative: resource use grows more slowly than output — material footprint rising with an elasticity near 0.60 to GDP (Wiedmann et al.). Absolute: resource use falls while output grows — UK territorial greenhouse gases down 52.6 percent from 1990 to 2023 while output grew about 82 percent.
Four on application.
5. A colleague proposes settling intercompany transfers in kilowatt-hours "because a joule is a fact and a dollar is an opinion." Diagnose the proposal.
It confuses a denominator with a numeraire. A kilowatt-hour is an excellent measure and a poor settlement unit, because its value moves by 409.1 times across hours in one market and 11.54 times across an ocean in one month. The stronger answer keeps the good half: put the energy figure in a second column beside the money, and settle in money.
6. An emergy analysis values a consultant's hour at 3.00 × 10¹³ sej. Real GDP grows 3 percent, national emergy use is flat. What happens to that figure over ten years, and what does it tell you about the method?
The emergy-to-money ratio falls 2.91 percent a year, 25.6 percent over the decade, so the same hour is valued at 2.23 × 10¹³ sej — with nothing physical changed. It tells you that emergy values human services by multiplying a price by a ratio, so the system built to escape prices closes its books with one. Full marks require stating this without treating it as fraud: it is disclosed practice, and it bounds the claim of independence rather than destroying the method.
7. Iceland's energy intensity is 15.6 MJ per PPP dollar and Ireland's is 1.6. A minister concludes Ireland is ten times more efficient. What is wrong?
Both figures are structural. Iceland smelts aluminium with stranded geothermal and hydro; Ireland's GDP carries booked profits of firms burning energy on other continents. Strip both and the defensible spread is 3.15 times, Russia against the United Kingdom. Credit any answer naming either the industrial mix or the GDP denominator; full marks for both.
8. Your reserves are reported in barrels of oil equivalent at 6 mcf to 1. Under what market conditions does that conversion most mislead, and in which direction?
It misleads whenever the price ratio departs from the energy ratio. At $80 oil and $3 gas, an energy-equal barrel of gas is worth $17.40 — the conversion overstates gas by 4.60 times. At Europe's August 2022 price, €339.20/MWh, the same energy-equal barrel is worth €576.58 against oil near €95.00 — understated by 6.07 times. The direction reverses with the market, which is the point.
Two that require the arithmetic to be done.
9. A transformity of 26,000 sej/J was published on Odum's 1996 baseline. You are comparing it with figures computed on the 2016 baseline. Restate it, give the percentage change, and say what does not change. Show your working.
Multiplier = 12.00 × 10²⁴ / 9.44 × 10²⁴ = 1.271. So 26,000 × 1.271 = 33,051 sej/J, a change of 27.12 percent. What does not change is the ratio to any other figure on the same baseline: 26,000 / 39,800 = 0.6533, and 33,051 / 50,593 = 0.6533. The whole mark is in the second half. Rebaselining multiplies numerator and denominator alike, which is why emergy is reliable comparatively and unreliable absolutely.
10. A £4,000,000 facility is repaid from 75 percent of a verified 14.0 GWh annual saving over five years. Compute the breakeven energy price, the headroom against a £95.00/MWh index, and what happens at a forward price of £70.00.
Breakeven = 4,000,000 / (5 × 14,000 × 0.75) = £76.19/MWh. Headroom = 95.00 − 76.19 = £18.81, or 24.7 percent. At £70.00 the facility recovers 70.00 / 76.19 = 91.9 percent of capital over the term and fails. The stronger answer notes what the calculation has produced: a strike price. An efficiency proposal has become a position a treasurer can hedge, and the covenant to negotiate is the floor price, not the coverage ratio.
REFLECTION — eight questions, for one person and a pen
These are not for a room. Write the answers by hand if you can; the slowness is the point.
- Where in your own thinking have you treated a physical measure as though it were beyond argument — and what was the convention hidden inside it?
- Think of a number you have relied on for years without ever asking what it was divided by. What is it, and what would it take to find out this week?
- When have you wanted a single unit that would settle an argument for good? What was the argument actually about?
- Where are you spending high-grade energy — attention, skill, uninterrupted hours — on work that would accept a lower grade? Answer about your own week before answering about any plant.
- Recall a time you moved a cost rather than removed it, and it counted as a saving. What would a consumption-based account of your own work show that your territorial one does not?
- What in your work is like the 40 °C megajoule — genuinely present, correctly counted, and unable to do the thing it is being counted for?
- Whose conversion table are you using? Who wrote it, when, and what would it cost you if they changed it without telling you?
- What is the hour in your week where the price of your attention is four hundred times its average — and what is running in it?
ESSAY PROMPTS — five
Each is arguable from more than one side. Each requires at least one source the chapter cites and at least one it does not.
1. Was the energy standard ever tested? The chapter argues that Technocracy's certificates failed as a design for exchange rather than as a design for an energy unit, scoring 1 of 3 on the jobs of a numeraire. Argue either that this rescues the energy-standard proposition — that a transferable, storable energy-denominated claim remains untried — or that transferability and storability are impossible for a unit whose referent must be delivered at a node in an hour, so the failure was intrinsic after all. Use Akin or Elsner on Technocracy, and one source on monetary design or free banking that the chapter does not cite.
2. Emergy: comparative instrument or pseudo-precision? The chapter concedes the baseline criticism and keeps the ratio defence. Take a position. Is an accounting system whose absolute figures moved by 1.271 within its own lifetime a legitimate science of value, or a taxonomy with decimal places? Engage Brown and Ulgiati (2016) directly, and at least one of Sciubba (2010) or Hau and Bakshi (2004), plus one published emergy application the chapter does not cite.
3. The circularity, taken seriously. Emergy values human services by multiplying price by the emergy-to-money ratio. Argue either that this is a fatal circularity that disqualifies emergy from any claim to independence from the price system, or that it is an ordinary and disclosed convention of the same kind as a deflator, no worse than what national accounting already does. Use Odum (1996) and one source on index numbers, the deflator problem, or the Cambridge capital controversy that the chapter does not cite.
4. Decoupling: sufficient, or merely real? The chapter holds two findings at once — the UK's 52.6 percent territorial cut, and Haberl's review of 835 studies finding decoupling at the required rate essentially unevidenced. Argue which of those two facts should govern policy, and what follows. Use Le Quéré et al. (2019) and Haberl et al. (2020), and one source arguing the green-growth case that the chapter does not cite — Ritchie, Stern or the IEA's own scenario work would each serve.
5. Would an exergy-weighted national account change any decision? The chapter proposes energy as a published second column beside money, weighted by exergy and indexed to time and place. Argue either that this would change real capital allocation — name the decision and the number — or that it would produce a series nobody acts on, of the kind already published and already ignored. Use Ayres and Warr (2009) on useful work, and one source on satellite accounts, natural capital accounting or the System of Environmental-Economic Accounting that the chapter does not cite.