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Update: Mercedes Benz city distribution truck.

Trucking around the world is a major pollutor. In the developed countries the engines and fuels may be optimized, but in the rest of the world they are not, and soot and NOx and fine dust is spread into our streets and fields. It is a part of our real economic system that would be easy to neutralize in terms of climate impact : Just use Ammonia, NH3 instead of diesel, and the CO2 and VOC (Volatile Organic Compounds) and of course the pollution of the supplying fossil industry would be eradicated. NH3 however seems to be one of the fuels that will never happen.

The first thing we should ask, before we rejoice in innovation is why we are shipping goods over such incredible distances. Is it because of economic divide and conquer? Because this gives banks control over our lives? Maybe first start to do locally what we can..

Electric trucks are another solution. Trucks don’t have restrictions on form factor, really, they do want to carry a certain weight, but they are not in a hurry. So they can carry bigger batteries and recharge more often than consumer cars. Hydrogen/electric is also an option, but hydrogen is understood to be too  gas intensive and NH3 would be a cheaper and safer way to get hydrogen into trucks (or rail locomotives, we have writen about it here). Another option is to have trolly like power lines to power the engines of electric trucks, this approach would be very efficient, as the truck would not have to carry much batteries. It was found that aerodynamics can improve fuel efficiency by up to 30%!! Walmart found this too (20% in their case)

Wallmart hybrid electric truck

Walmart optimizes its fuel use and now experiments with a hybrid truck, a gas turbine/electric system. Soon it will find it can eliminate the driver and create drone trucks. The hybrid systems seem efficient but can not match electric.

Electric trucks have been driving around ports for ages, but over short distances and at slow speeds. Still some lessons may be learned from their use.

BMW took a page from the port truck it seems and made a road legal version

BMW and Scherm launched the above electric truck in 2015

 Truck building companies however have to jump into the opportunity to build electric trucks or be left behind, so big is the efficiency advantage. Its not impossible as can be seen in the image below..

Transpower heavy duty electric truck

“Pure battery-electric trucks can operate for up to about 100 miles on a single battery charge, while trucks with range extenders are expected to operate for 200 miles or more before needing recharging or refueling.”

Swiss based E-force AG also has an electric truck. The conversion of a normal to electric truck is not that complicated so it is likely that a lot of other manufacturers will pop up. It seems this company has been create soley for producing electric trucks.

The eforce Electric freight truck

Rail transport has been more efficient than road transport, simply because the rail system creates less friction and losses. It does require transfer of f.i. containers from the truck bed to the rail carriage, and this is an energy and time consuming process. The trolley system is like electric road rail, and is more than 100 years old. Maybe if it is adopted more widely some will suggest to adopt the rail bed for truck wheels, or give trucks rail wheels to hop on rails when they can. This would be even easier if the logistics along rail tracks is fully automated, so no drivers in the trucks.

Test in Sweden

Siemens is ready

This is a railroad diesel truck towing wagons..Why not electric?

Ammonia was considered for hydrogen distribution. It was tested (as we reported) against other fuels and find to be safer due to it’s higher combustion temperature and lower toxicity. It has a distribution system in place (for agriculture) and can be made using renewable energy. Either burned directly or first split into N2 and H2 and used in a PEM cell to generate electricity.

Ammonia production from electricity, air and water..

Ammonia used in a pick up truck. It is really the fastest way to transition to CO2 free trucking. The man in the video explains how he created his CO2 free truck 20 years ago, but was stopped by the oil lobby. The oil industry has been fighting for it’s position with extreme force (as the dominant player) for decades, and the damage to our future is dramatic. Time to give it a shot, go for fast track inprovements in emissions, at least in the short term. Once CO2 is in our atmosphere it is like ink in a swimming pool, very hard to wash out again..

And of course new trucks can be self driving..

Self driving trucks for freight are a logical extension of the already partially unmanned logistics systems in ports and distribution centers. Several companies are working on them. Unlike with cars though trucks will have to be fully automomous, or remote controlled. Drone trucks so to say..

Solar today is free for all, but we are caught by a group of fossil fuel salesmen, aided by banks that clearly have an interest to channel the resource to their own best advantage. We moved beyond solar to fossil and we are now moving back at an accelerating pace.

The first Tesla car was a roadster, a high end car that cost a lot to create

Solar electric panels entered the scene in the 70s and where held back by Shell for a considerable time. Prices would have dropped and investment would have flooded in much earlier if fossil interest had not worked hard to slow it down. Today PV (photovoltaics) projects go by the Megawatt, installations on roofs and on land and water are enormous.

The second Tesla car was the Model S, still at the price level of the Lexus

Today Tesla, the electric car company, announced it wants to fuse with Solar City, a solar installation company. Solar City is planning to use more panels of the company Silevo who are producing a different type of cell than is common from Chinese manufacturers. There’s innovation everywhere, and especially in Tesla and Solar city the drive to optimize is strong.

The Model X was made to service the demand for SUVs. It was a lesson in manufacturing.

Elon Musk uses the ‘reason from physics’ approach to problem solving. This means that not the actuall present situation or method is taken as a starting point, but what is physically possible. The creation of a car is the question “How do I arrange the metal, plastic, etc in such a way that I have a car”.  The cost of the metal, raw materials are the base cost of the car. Optimally there is a minimal difference between those cost and that of the car. Of course when you look at the cost of the aluminum of the Tesla you can wonder “How do I get the aluminum at the start of the production process from any possible source”. This may lead it to talk to the mines, logistics companies, aluminum smelters so that the cost of the aluminum drops and so the cost of the car can drop also. There are physical limits to optimal mining and smelting would create a clear goal to strive for.

The Tesla Model 3 will be the opposite of the X, a study of optimizing production. More than 300.000 have been ordered.

The goal for optimization is to require less resources and create a product in less time so that demand can be met, but also so that the effect of the products can be realized. The sooner more electric cars are on the road, the sooner our air will become cleaner, and the sooner people will expect more of them, learn they are enjoyable etc. As part of that process Tesla is building the mega battery factory in Nevada that will double the worlds capacity to make batteries when it goes live (although the worlds capacity to build batteries elswhere will have increased). Part of that factory is a huge solar power plant on its roof. The energy it produces will power the plant and perhaps charge the electric cars of the employees. Perhaps it will power the trucks bringing in the raw materials.

The Tesla Giga factory will produce as much batteries as the worlds competitors combined..They are needed

Those Giga factory solar panels however do something else : They lower the cost of production of batteries. The question can be : where does that need to stop? The answer is : It doesn’t. Renewables in the production chain can lower the cost of running it to zero. You can compare it to the solar powerplants in the leaves of trees. They power the process of building the trees, growing the flowers and fruit (if it is fruit bearing), and the whole organism extracts resources and gets help from nothing outside itself but the sun and environment.

The Powerwal is a way to have a power backup in house, store solar energy. It can cycle 10.000 times.

Like the tree a company can become a mechanism that operates without need for anything else but the raw materials, and if the mechanism extends to the mines it can operate without need for anything else but access to those mines. As long as it produces enough energy it can trade that away for anything else it may need, but it will not be needing money to buy anything. The oil industry has operated like that for a century. You may think they need money, but they dont, they only need their product oil (or gas or coal) and they can sell it for anything they may need. That has been the reason fossil companies are so hard to stop, they don’t depend on cooperation from outside.

Solar City, partly owned by Elon Musk, has it’s own Gigafactory

If Tesla/SolarCity decide to convert their entire production chain in one that they can power themselves, with raw materials they can either get themselves (from owned ground or from a modest consession) and they produce energy in surplus which they can use to aquire whatever they may need to keep going, the cost of their products can go to zero. This is true for any operation, but Tesla is a nice example of how optimization is applied to its maximum effect.

Cost free production? It is possible with renewables as part of the production system

That day will come, because Tesla is a tree that bears fruit people want. They will pluck the model 3 and the model 4 as they do the Roadster, S and the X. If Tesla optimizes its production process increasingly the cost reduction is caused by a lack of necessity for money. This is a logical evolution, because it makes sense that any automated process will become like organic processes. The integration of solar into the DNA of production chains will blend automated, robotic, productive environment into the background of life as we know it.

Renewable energy will make mechanized systems equal to organic ones..

After a century of fossil fuel slavery, of suboptimal solutions to real problems, of economic expansion and useless waste of energy to provide business to banks and energy companies, we will find that solar (and other renewable energy sources) provide a permanent path of ascension to a nature compatible mode of existence for humanity. In order to accelerate that we can expect zero cost solar from Tesla. It will happen.

 

We have written here about the banks running the so called carbon credit system in tandem with the fossil fuel industry. This system that allows creation of fossil fuel credit is the major obstacle to climate action, which involves moving to renewables, making fossil fuel credit obsolete. Banks are not taking this lying down.

The rules in the new secret agreements create a one way street to privatization. This means the market will take over from the government, giving banks ultimate control through their ability to extend or withold credit for certain activies. Also the power of corporations is extended so that it can introduce laws, meaning these players can totally rig the game.

Banks want cashflow. Privatization guarantees that, use of fossil fuels does

We need to take action against the initiators of these rules, because they will try again if they fail now. Why would we live in a world where profit is the only motive, and human happyness or natural resources are never part of the equation? Why would we create a centrally run planet consuming centrally created content through centrally run media channels etc. if we are so far apart, in our separate resilient nations? The only authority that is driving all these large agreements is the pervasive corruption achieved by corporations and banks that have escaped control of any countries law. All this to make the banks and their obsolete model survive.

When wages can differ from $15 per hour to $0,65 between US and Asia. The cost of logistics can be ignored..

Baks need the economy in which everything costs money, so that every transaction involves them, and they will use their power to make it so. Banks like big companies better, because they require less work, allow more kickbacks with deals, are more predictable. So bank is boss, big is better. Voting citizens don’t matter.

There is no political freedom in Vietnam

According to Bernie Sanders many workers in Malasia are actually slaves, 94% who’s passports have been taken away. This means they have no rights at all. Working conditions where subhuman. No privacy and no property. This is what trade agreemens force us to ‘compete’ with. For what purpose? Because all we need is food and shelter. Why should we have retchet lives because some want profit? Why would we forgo our governments powers in favor of such a situation..

More logistics means more cashflow so the economy, run by the banks, will make logistic chains longer than necessary, and find people working for less to justify it

We had the opportunity to visit the Urban Farming project in UF de Schilde in The Hague, to satisfy our curiosity for this type of solution to long supply chains and energy waste in farming. The site is situated on top of an old telecom building, which was selected for the weight the floors could carry.

This Urban Farming project is part of an international rooftop farming enterprise funded from Switzerland. This should ring some “that’s wierd” bells right off the bat. Our question to be answered by our visit was “Is this really a project aimed to utilize unused resources (roofs) to bring cheaper and healthier and less climate impacitng food to local communities?” and also “Does this project teach us what we need to replicate it fast?”

The site cost about 2.6 million to build. It was initiated from Swiss investors, who found local companies (holland has an enormous amount of greenhouse know how) to design and build the system. Paul, below, who made a aquaphonic system (combining fish farming and aquaculture) himself, guided us through the site, which now consists of two floors, one with fish tanks, one with greenhouses.

The site is still starting up. The guided tour costs 19,- Euro. As we would learn the site is there to make money, the produce is targeted at restaurants and priced above regular organic food.

A lot of plastic being used. No holds barred on doing it the ‘best practice’ industrial way. Below we check out the fish tanks, holding Tilapia. the fish is bought from outside and grown in the tanks. The green food distributers (automated) contain fish food combining meat, fish and vegetables. The idea is to cycle the water from fish to plants and back, although we don’t know if there is any benfit from the plant root water getting to the fish.

The plant water also sees a lot of evaporation, so loss, and becomes more saline.

Above you see a tank with black plastic pellets, that function as a home to two types of bacteria that turn the Tilapia excrement into something nutritious for the plants (they need phosphates and nitrates).

Looking inside the fish tanks..

Tilapia in two stages.. We assume they don’t get bored. There are plans to grow musquito’s to feed the Tilapia. This is easier in an open pond aquaculture, but as you will see this setup is not designed that way.

The blue box below contains a water cascated that removes excess CO2 from the water, and plans are to use this as fertilizer in the greenhouse.

One floor up is a different world. The heavy construction (because of wind forces no doubt) holds several spaces, one in which tomatos are grown. We where not allowed into any growing space for risk of contamination, as we where asked not to touch the fishtank water. Is that risk real?

Some freely growing pickle plants create a nice backdrop. The intent is to rent out the floor for events. This is a key part of the UF projects, “To tell a story” and to maximize the urban farming gimmick it seems. Of course it is not a gimmick.

Above the tomato’s being grown. Several crops come out of the greenhouse, pickes, bitter cucumber, cherry tomatos. All organic, mostly because the fish won’t tolerate toxins and have to be human edible. They are like tasters in a French court, not a bad system..

The tomatos root in a plastic trough which has three layers through which the water trickles down. This helps airrate it which is good for the plants. Pests are controlled by little cars with insect ‘seeds’ that will eat them. This growing method saves water, insecticides and produces higher priced vegetables.

Other crops are started in a separate greenhouse. Its business as usual, what happens in any agricultural professional setup.

The tour ends with a view into the above greenhouse. We where asked our thoughts about it. We did not feel that the setup or project was what we need because it did not cut any corners and simply threw millions at the challenge of rooftop farming. With thousands of acres of greenhouse just around the corner and the option for electric logistics this project can never compete. Also the so called Westland greenhouses can decide to grow Tilapia under their greenhouses..

Amongst the other visitors was a spanish plastic manufacturer and a South African that knew about this from a friend who build a similar system from trash lying around..

Like we have seen with Uber, there is a new taste of big money to own every activity. We are told it is a bottom up organic thing but it isn’t. It is millions put into the taxi market, data sold off, laws broken. The financial world can always do this with ideas that are to be implented at a small scale and locally, and thus always shape thinking of the wider public about these approaches. Local companies see an opportunity to make money and protect their business.

This is not the way urban farming is done in the wider world (it for one does not seek to supply at lower cost to the local community), so we will look more at those projects. That said this project will have to meet it’s financial constrains so hopefully this will make a living lab for moving to high cost industrial approaches to greenhouse farming to more cost effective methods applicable to all..

Democratic movements often talk about transparency. They want all the information about who thinks what and does what, and what was written as a result to be open to outside investigation. The simple reason is that those people, what they say, how they motivate their actions (by morality or the prospect of financial gain), and what is written into law control our lives. Of course there’s a big difference between the law and what gets enforced, which is another area in which maximum transparency is desired.

But one immediately sees that full public disclosure and transparency can’t work in all cases, because the public consists of people desiring to play by the rules, and many that don’t. Opening up every piece of information to the pubic means you also inform those that are looking to evade detection or capture or that are looking for opportunities to commit a crime.

These are your website postboxes. Who has access to them?

Internets non-transparency

The digital sphere, being all encompassing in our lives today, is also struggling with a choice between openness and closedness (apart from the efforts to control access to people, direct them to and make them pay as much as possible for content). The bottom line is : The digital sphere is not transparent. The reason why is that it is not a space, it is a giant warehouse of post boxes with letters in them. Worse still, to access any of the post boxes with letters you need to use messages carried by messengers, and those messengers may not be reliable. So for instance this web page sits in a post box at One.com. When you ask for it by entering www.greencheck.nl in your browser or clicking a link, a message is send to one.com via a number of relay stations, it arrives at one.com, the message is read, it says “Send me the homepage”, the homepage is composed (usually on the fly), and send back via relay stations. Then your browser takes that information (usually incomplete, and to be completed over a few seconds after you see the first content), and renders it, which is like performing music from musical score. If you want to see that score you can right click you mouse and select ‘View source’ or ‘Pagina bron weergeven’.

A web browser

We put post box, relay station, the reading of the message and the rendering in bold because those are all elements that influence the message, the content you will see. They are also very abstract processes that you have limited access or influence over. The way you could survey this system digitally is like driving through dark tunnels with a patrol car, coming across little mailtrucks with boxes of letters, opening them, and then driving on. You can’t see what is in front or behind at all. Every now and then you enter a cavern where roads split and a traffic director is sending some mail trucks into one other tunnel and others another way. But you only have a flashlight and can perhaps ask the traffic director something like “Dit truck so and so pass by here”. The answer may not be true. The digital sphere is super non-transparent.

Vatican mail system

This tunnel based nature of the internet makes it impossible to survey or protect. You can try. You put seals and stamps on the messages, protect the relay caverns, put a tutor next to the browser reading the score, but the nature of the digital sphere is that the process can not observe itself reliably enough to prevent tampering, changing or out right destruction of data.

Encryption

Encryption is the new buzz word, we wrote about block chain technology here, which is a system of serially encrypted data that has the property that once you encrypt data and you include a fingerprint of that encrypted data to encrypt more data, any change (and thus tampering) with data encrypted earlier will be noticable. This is like sending data in little capsules through a pressured water pipe. If someone anywhere along the pipe drills a hole you will see the pressure drop instantly and know not to trust the data. The systems in use today are simply not robust enough, meaning they can be made to stop performing as expected really easily. Encryption does not change that.

A usb connector that secretly allows wifi intrusion

Recently it was discovered that a VPN system (Juniper), had a ‘hole’. This system was used for decades to create private tunnels through the network, so like a separate fenced lane in the tunnel, by which people could view their company servers. All big companies use the technology and where thinking they had the highest form of protection, they did not. The ‘hole’ seemed to be created by the NSA, so the US could have spied on companies around the world for decades. The NSA has a catalog of products and devices to spy on or disturb your communications and data.

Illustration of how your home wifi network can be hacked. Do you know you see the internet that is out there?

So while the internet tunnel system is super non-transparent, it is transparent to some people that simply drill holes into it and hijack/replace the mail trucks. Even though you may have encrypted your letters it is highly likely that that encryption will contain a flaw or that your private domain will be hacked into (if it is worth it). This means there is yet another way in which those with means can weaken and exploit those without, for instance if it comes to research, the US, with means to spy and introduce ways to siphen off data, can exploit researcg and innovation efforts in other countries. In extrema the interception of messages can allow internet connected people that cooperate to live in separate worlds. This has happened with documents in the European parlaiment, which would be altered as they where transmitted between parties. Imagine the chaos you can create by doing that! The US congress has similar problems where the content of bills (usually hundreds of pages of mostly unrelated laws) has been found to change between the vote and the filing as new law!

Can the internet carry the burden of attacks and it’s own protection, and
will it ever be succesfull?

Economics of security

Recently the SWIFT system was hacked. This is the digital inter bank money transfer system used by banks to reconcile individual transactions (say if dutch tourists shop in Barcelona, that bank will have to get Euro’s from dutch accounts). First a bank was compromized then the SWIFT system using the account of that bank. Like the internet it is very hard to track money flowing through that system, it is not designed to keep track of money or give an overview (and banks like that a lot). The fact is that the battle between those trying to protect valuable digital systems and those that want to attack and exploit them is assymetric. The protector has to do it right all the time, the attacker only once. The protector is more or less on his/her own. The attacker is not and can access a real market for exploits. And it’s not only the digital sphere in which attacks on digital systems take place. This assymetry plus the economic incentive causes the internet to become overburdened and forces it to change constantly, closing vulnerabilities but in the process opening up new ones. Internet can not monitor or secure itself ever, and the market for hacks will mean there is a constant cost to running it that will never pay for real security.

Privacy and Paranoia 

On the other side of the spectrum is the constant erosion of privacy. Personal data is spread to unknown parties from unknown sources. Your eye care company may sell the picture of your iris to biometric surveillance firms or governments that want that data to identify you if they want to. Companies like Microsoft aquiring Linkedin gaining valuable information about personal networks of you and me, who do not know who uses that knowledge. Financial data shared between banks and governments, and who else. The tunnel system protects those kinds of cooperation and transfer of data with a granite cloak. The paranoia (about you doubting if you even control your life) this could result in is fair, and people that are not paranoid about it aren’t because they either never thought about it or don’t have the energy. You don’t know if there is not a blacklist for employees, you don’t know if your medical treatment is not done based on your financial reserves. You don’t know if insurance is more expensive for you because the insurer knows about medical history in your family. You don’t know who sees the draft investment rapport. You don’t know if you are browsing the real web, your real bank website, and who knows about your searches (Google clearly does and shares this data).

If someone tells you your data is safe you know there is no way to tell if that is true and it probably isn’t

The internet of things, basically connecting all electrical devices and a lot of non electric ones to the internet, wireless or wired, will only increase the chaos. It will allow sensing in places you may not want it, it will control systems (and be hacked while doing that) you may not want to be vulnerable in that way. Domotica, or devices for computerized control of homes, is aligned with this IoT trend and will make it so your oven can be hacked from Ukraine (or anywhere where there’s an economic incentive), maybe it can be made to do things that are unsafe, maybe hacking can provide entrance to your house or office in ways you had not thought about. Add to that the econmic and energetic and environmental burden of all that silicon and processing. Sure it’s neat to have a tub that knows when you want to take a bath, but there are downsides.

Conclusion

If we assume the internet is not safe and never will be then we have to start thinking where we want it. The economic system does not think about that, it sees an opportunity for change, involving introduction of IoT, internetization of everything. This change will create jobs and keep people bussy, spending fossil fuels, the way the economic rules like it. But reality is that we may be smarter to not go the route the economic opportunities hint at. Criminals show there are many ways to make money, achieve financial gain, but you know you don’t want to engage in those activities. So perhaps some systems are best kept offline, perhaps IoT should be taxed so it only invades parts of our lives where we understand it and can manage it safely.

The transparency principle : The fundamental non-transparent nature of the internet causes it to be fully transparent to unkown parties.

A bigger conclusion following from the above is the need to question large systems. So why do we need data in the EU from the US, why do we need to be served content from Hollywood while we are in the Netherlands. Why do we need to have such large companies and systems that we have such vulnerable infrastructures. Maybe we should not want the companies that need the vulnerable systems to even exist. And what does industrial spying ultimately serve, investments of US banks vs European banks. Why do we compete if once the competition is over everyone drinks coffee at Starbucks. Is localizing food, energy and industrial dependendency chains the ultimate answer to internet vulnerabilites? It sure as hell is cheaper and better for our future to not permeate our existence with a digital retina we intrinsically can’t trust.

 

 

 

 

 

Greentech is about to explode. It is already booming around the world and Holland is a major player. Dutch flowers and greenhouse technology are advanced, and there’s plenty of cash and other funds for innovation. Sustainability is not only needed but also more profitable (although it also reduces the need for profit). So we took a look. We found a couple of interesting companies, and have probably missed a few as well.

We believe that renewables will bring a revolution to the restoration of nature. Now we are still in a global fossil credit driven market, where people compete for the same fossil fuel resources they buy with credit from banks. This will change. Because of the use of renewables prices of many products will drop. Also production chains and logistics chains will become cheaper so that product availability will increase. Automation and AI, and new sensing will make it easier to put together a system that can grow crops or other plants in regions now considered uninteresting. Think robots planting forrests where it is cheapest, irrigating and tending it with near zero operational cost.

A tomato greenhouse project that eats CO2 without buring fuel..

The above picture shows a project by van der Hoeven called Sundrop. Build in Port Augusta, South Australia, it combines a solar thermal power plant, ocean water desalination and ustilization of CO2 (from external processes). Except for the CO2, which may come from carbon burning power plants, and probable fertilizer input (made with natural gas) this is a big improvement over gas burning for CO2 and heat, using fresh water by depleting wells.

The other side of this equation, which is being forced to deal with fossil scarcity and pretending there is no solar, wind etc. is also interesting. Hydrophonic systems are evolving, there are even examples of closed systems (except for LED electricity input). Indoor and multistory growing are trends. With LED minimizing light energy to orient and power plants as they grow. Plans will still only convert 5% of the energy available, so growing for energy would make no sense with solar approaching 20% efficiency.

Different light bands have different roles for plants, the light can be pretty intense as shown here in a tiny greenhouse for us on board cruise ships..

As long as the inputs needed are not considered too expensive tiny automatic greenhouses, or larger systems can be operated practically anywhere, on ships, in highrises, on roofs of buildings and in basements. Maybe even in individual homes (as is already the case without LED for herbs). This drive to squeeze the most out of every cubic inch is driven by economics, mainly land prices, which are as high as they can be without hindering use and trade. Of course if the true value of land or real estate was considered (usually as low as undesirable farm land) this effort to put more plants in less space would not be so important. It really isn’t, it’s just convenient in a fossil fuel deprived world that lacks enough renewables. These systems are a bit like off grid power systems. We should not stive for a world where we really need them, just have them when it is the best solution. (nedled)

Many of the parts and systems use plastic, because that’s a very cheap and versatile. There’s a lot of waste biomass (1/3 of European production!)

Artikel

The economist Rens van Tilburg has commented on the liabilities on the financial market of amongst others the so called carbon bubble. We have written here about carbon credit for a while, basically explaining the same phenomenon but from a clearer perspective.

In the video above he compares the current mismatch between natural resources and the predictions in the financial sector to the ‘mispricing’ during the internet and mortgage bubbles. He considers stocks and mortgages part of the real economy, which we don’t. There’s nothing real about financial debt except the CO2 that was burned spending the (carbon) credit. Stocks are also just a type of currency, a means of exchange of right to divident and influence, not something real. We will ignore these typical economic misconceptions here.

The main message is that future profits of oil companies will come under pressure due to their inability to actually ‘harvest’ the fossil fuels. Mean while they are investing heavily in new exploration. That investment will not be financeable as people smell the demise of the sector. Also all manufacturers that either produce heavily fossil fuel dependent products or consume a lot of fossil fuels will see investors prefer companies that do not have such vulnerabilities.

The rise in CO2, plastic in our oceans and displaced/depleted resources are what remains of consumed carboncredit (debt)

His statement is that this change may be foreshadowed more severely and faster than we expect, or in short he suggest that the financial sector makes the choice we have been advocating for a long time, namely direct investments into high EROI (Energy Return on Energy Invested), sustainable or renewable energy enterprises.

What Rens can not do is talk about this situation clearly, because we all know that money is not a real issue in fossil fuel exploration and exploitation. How else can prices be so low while the energy it cost to get a barrel out of the ground has increased steadily? To get fossil fuels you need only fossil fuels. How can oil companies be in jeopardy if they still clearly call the shots. Without gasoline and diesel society grinds to a halt, no matter how much money the financial sector has to spend. Fossil fuels are the primary currency of our economy, and money derives its value from it.

Most jobs deplete resources that can not be recovered

The price of anything in a fossil fuel economy is not like the price of things 100 years ago. Then you could be a shoemaker, make shoes, sell them and get potatos from a farmer, who made potatos. Today you can be a car salesman, sell cars and earn money, but as you do so you use fossil fuels, used in making the cars, heating your showroom and lighting it that can never be recovered. Then you spend that money on potatos with a farmer who has put ten times the calories in terms of fossil fuels than he sells you in terms of potatos in them, so he too is using fossil fuels (gas for fertilizer, diesel to run his equipment) which can never be recovered. You and the farmer are both operating at a net loss in terms of total resources, while the shoemaker and farmer that lived in a society run on solar and wind (before coal and the industrial revolution) did not.

The fossil cost of all work today is basically our fossil consumption if you substract recreation. We are now trying to migrate to renewables (at least a large portion of us), but we fail to realise how fossil fuels consuption and resource depletion has become the standard in all our operations. This is not of any bad intention, just a result of miguidedly believing economic theory.

The financial sector will not exist post fossil fuels

Rens claims that investors and financial sector companies have to be aware of the risk to their bottom line, as trust in the longevity of some assets, companies and products implodes. This is great. But there are two flaws with this thinking. The financial sector deals with a lot of different aspects of financing and banking, some of which will not work post fossil fuel. This is of no concern to Rens, who as a typical economist has a short horizon. For example as we explained earlier, loans and debt will work differently or not at all.

To explain if you now want to build a school, you can borrow credit based on future income from running the school. Then you can use that credit to build the school, meaning you have to buy resources that will be brought together by workers and turned into a school. That process is now highly dependent on fossil fuels, for trucking, cement, and all the things the workers buy with their salaries. This is possible because fossil fuels are stored energy, and we have more than we need (or we can redirect it).

Suppose we have our needs covered with renewables, so solar, wind, batteries to cover low wind and sun periods, then can we loan out 30 million for a new school? Not really. Where will the energy come from to make the cement, to transport it to poor it, where will the energy come from for the workers, if they where jobless, how can there be any activity if all renewable energy is already used. You’d have to build a solar/wind farm first and you’d have to save energy and store it. Banks would be real banks again, not just offices where you get your carboncredit.

This is why we talk about carboncredit, because money is carboncredit today and banks know that they have to radically change and may not have a role in the future in providing credit at all. It is much more likely that a cement company has it’s own renewable energy source to make cement, and then  cement is cheap for those that need it. And a trucking company makes its own NH3 truck fuel with a couple of wind turbines, and all trucking is more or less free. After all it’s for a school for the community, or one close by, because multinationals operating across the globe will make no sense in a post carboncredit economy. A real world example of this is Tata Steel who is switching (after decades of subsidized coal use keeping a lot of people happy) to electrolysis on solar. The price to the consumer of steel processing wil no longer depend on the price of cockes, and will be much lower, but a lot of ‘economic activity’ and cashflow for banks associated with coal logistics will disappear.

Invisible wall

Meanwhile the same carboncredit can pull the wool over our eyes in terms of real economic risks. Why? Because fossil fuel is priced in carboncredit, so Euro, Dollar. Because these currencies can be inhaled and exhaled by banks at their whim we never know anything about the availability of the underlying asset, fossil fuels. Prices don’t only depend on the availability of the product, but also on the availability of the currency they are bought in.

Banks will want to preserve cashflow and keep it as stabile as possible. As we have seen lower fossil availability is paired with liquidity contraction. And if the last gas tanker is arriving in Rotterdam to supply the greenhouses with CO2 they will still not tell anyone. What would the use be? There would be immediat rationing, no free economy, to protect the population the government would confiscate all reserves and work on a super fast fossil exit plan. That is why the economy is blind to resource depletion : It would reduce profits if people constantly knew the time we can survive living like this is finite. They are keeping the wall as invisible as possible.

Rens points the wall out in a convoluted way. His exit plan (divest into more sustainable activities) is not going to fly with the fossil sector, because they don’t like working with zero control, no profits, they will be servants of the sustainable agenda. They will call it communism (as they always did any suggestion that would put a break on thier blind expansion of fossil fuel use). Rens is right but his warning is not enough. The fossil sector will have to hand over power to some more democratic organization, and the financial sector will also have to obey strick rules set by this new autority, as fossil fuel use is cut and a lot of fossil fuel intensive activites will simply be banned. No flying to italy for 100 Euro to have a cappucino next to the Trevi fountains. What makes you so entitled to do that while your own town may be in chaos because of fuel shortages and climate change? Do something usefull! Of course the italians are much better off, even though we consider them poorer. They never needed that carboncredit!

Take home message

The carboncredit, or fossil/financial sector is in trouble. Hopefully because you use your democratic power to tell them to stop wasting resources and hand over control (or be swayed by new rules) that directs those resources to secure our lives, instead of making them harder. For a few decades survival will be the name of the game, but soon this will be over and we will have more renewable energy than we have fossil fuel today. We will find that solving energy needs with renewables is a low maintenance, low cashflow, zero credit activity. We will find that banks are places where there is a store of some realrealeconomic asset, like natural gas or elecrtricity or wood or some other commodity. The economy wil become real and the rules will adapt, and economistmay find that finally there is some method to their metier. Resource utility optimization is a complex field, less bullshitting to make people accept the rate of fossil fuel production, more thinking about ways to use that super abundance (2500 times our current fossil ration) of solar energy to turn our planet into paradise (finally).

 

Fossil fuel use, and it’s status as the principle driver behind a destructive world economy, is causing changes around the world. Climate change is one of the most prominent processes we see as a result of continued use of fossil resources, and the continued freedom of companies bringing fossil fuels to market. Changes we are seeing today, more than 100 years after the process of carbon fuel driven climate change was understood, are grave, and news about them can be unsettling.

Examples of serious consequences to leaneancy towards fossil fuels and the corruption of our politics by fossil fuel interest are exteem heat, drought, floods, rain, ocean biosphere destruction and more. Floods and droughts can both be caused by warming, because the increased temperatures keep water in the cloud longer, so when it finaly breaks out rains are torrential, this traditionally was only the case in Monsoon regions.
A map of how fare people should move to maintain the same temp as before fossil fuel use driven warming

A map of how far people should move to stay in temperatures from before fossil fuel driven warming

All these changes and their predicted continuation makes some scientist suggest that some regions will become uninhabitable. The idea is to move the people to still habitable regions. In some cases, f.i. for trees, it has been found that they can not move to their best habitat (with the same temperaturs) fast enough to survive as a species. For people this is easier. It is no fantasy that this may be necessary or desired, because today in some parts of India people really can’t go outside for the searing heat of 51 degrees Celsius.

The right way to respond to this situation is not to retreat. It is not to leave hotter zones and withdraw to where one can still cope.This would be an acceptable response if we could expect the situation to relent in the near future, but this situation will not. It will eat up all life on earth if it gets the chance. If we make room for climate change it will destroy our oceans, soil, forrests, basically everything alive and there is no winning for humanity in the end.

Some people will say “But Dinsaurs live in hot temperatures and they where fine!”, yes, but during the period of heating that led up to the era of the dinosaurs 85% of all life on Earth disappeared. The rise of the Dinosaurs was possible because a rapid rise in global temperatures by 12 degrees (Celsius) wiped the planet clean of most plants and animals, especially those that needed a lot of oxygen (warm blooded species). The process of warming now triggered by the large oil, gas and coal companies will have exactly the same effect.

To survive we need to fight climate change, its causes and effects

The conclusion thus is that we need to fight climate change where it deteriorates the situation, not retreat to where we can still survive, because still really means still, for a while more. Luckily where rains fall and the sun scorches the earth there is energy and opportunity, just not one that the living environment can easily counter. A living environment aided by mechanized or specially designed systems however can. Small changes can have large impact, like digging trenches in dry land so when the rain comes it permeates into the soil and doesn’t wash everything away. Or using solar energy to cool and grow/maintain trees. Or using solar to build the structures needed to store rainwater. Because this requires a lot of manpower we may not have automation in this area is going to be crucial. Hence our concept of the Roboeconomy.

The causes of climate change are primarily the existence of the fossil fuel industry, and the banking industry because the cooperation between those two industries creates an incentive in the economic system to stay with fossil fuels/ The primary reason is that credit can be created almost without limit based on fossil reserves that can be accessed with that credit. THis does not work with renewables. Second reason is that a steady fossil consumption cashflow keeps a lot of bankers in their jobs, and they will protect thos cashflows, just like public servants will protect tax cashflows. Basically because people’s incomes are from local sources (their company) this creates an incentive for hoarding and protecting cashflow intensive processes, and a very important one of those is the consumption of fossilfuels.

We need to start fighting now

Some may say we are doing what we can to fight climate change, but that is not true. Clearly all kinds of operations serving the fossil fuel industry are still free to function without any directive to shut down or even stop growing. Fighting means some pain is suffered in order to prevail, and we have not taken the fight to any cause of climate change yet. The main reason is that the intrinsic climate damageing nature of ‘economic growth’ is not recognized. The nature of money as fossil credit is not recognized. If we are to fight climate change though we have to do it now, because now we still have order, we still have a sizable amount of fossil fuels to start things up. We may lose that f.i. due to a water or fossil fuel war, or due to increased misery. We may be ok on the fossil ration for a while, but we should not take that situation for granted as is done now. Being content with gradual change is being content with waiting on the needs of a damaging and destructive and politically adversarial industry. The fossil sector lobbies, spreads propaganda, funds political ”grass roots organizations’ funds scientific research all to thward whoever wants them to shut down. They are fighting, we are waiting. That must change.

Update: Industry is looking into this technology as was clear at the Dutch Blockchain Conference, held at the KPMG office.

Yesterday I visited the blockchain conference in Amsterdam. There is a string of these conferences around the world you can see the link here. The conference in the Crown Plaza business center in Hooftddorp could be called small. About 60 people, with a suprising number flying in from London. The proceedings consisted of an introductory talk about blockchains, presentations of startups and panel discussions.

Blockchain as a concept is associated with cryptocurrencies, mainly Bitcoin, now also Ehtereum, and many more. Usually virtual currency platforms are open source, because whoever gets involved wants to see that there’s no backdoors or bugs in the code that may threaten serious use of the currencies or the blockchain code. I will go through a number of aspects of blockchain technology, first the blockchain itself.

What is a blockchain?

To most a blockchain has no meaning, so to explain, a blockchain (because it is a more or less general design) is a system that stores transactions. It does so by grouping transactions into blocks, and then chain encrypting them. This means that all information on transactions of block one creates a code, called a hash, that is included in the information of block two. Block two also creates a hash, which will be included in block three.

The result of this mechanism is that it is very hard or impossible to change information in block one (or any previous block), because it would change the hash, both for block two and block three. The data of the blockchain is distributed over the people that want to use it to store transactions, and if you try to look up a block it is only blocks that can be verified to exist and have a certain hash (the one included in the following block) that you can use to check your transaction. This means the distributed system running the blockchain creates a single transaction history, which is immutable as long as you don’t change all subsequent blocks on a majority of existing datastorage devices.

Blockchains are not new, they are the principle way in which most document encryption works. If you take a large document and try to encrypt it, the encryption algorythm can’t just take the whole thing at once, it cuts it into blocks of a standard size and uses so called  padding to fill in the rest. Then it encrypts the first block, uses a hash of the first to encrypt the second block and so on. So all encrypted data is in blockchain format. When it is decrypted the process is reversed. The hash is not used because it is a one way process.

Trustless networks

Why Bitcoin and Ethereum and others are disruptive is that it uses the blockchain as described above to maintain a public ledger. Bitcoin was designed to exchange so called Bitcoins over a blockchian being run over many nodes. None of the nodes, peers or computers in the network would have authority over what did or did not get included in blocks, this would be a democratic process. Today the Bitcoin sphere is dominated by a handfull of large miners, but because bitcoins are used by many for transactions, it has a value like any currency, it can be traded without tax between other currencies at least in the EU.

A trustless network is like a game you play by the rules. The rules can only be changed democratically, nobody needs to trust anyone to follow the rules, they are baked into the cake.

At times there are alarm bells on Bitcoin because mining becomes increasingly unattractive (this is the process of creating new blocks of transactions and peer verifying them) as it is a energy intensive enterprise, It is not clear if Bitcoin will retain its value in the long run. It does prove a point that the creation and use of such a virtual currency in a network that is basically uncontrolled is possible. This is not surprising, gold coins worked for centuries and where also trustless. What is surprising is that this worked in the digital sphere, which always has a cost associated with it.

Bitcoin and Ethereum and other blockchain currencies do have a development community, and sometimes this community is divided. This community decides on parameters that affect the usefullness and value of a blockchain, and for most users who can not code this means they have to trust these developers to do the right thing.

Rewarding the work

A blockchain require work to exist. It requires peers to collect transactions and put them into  a block. It requires the verification of existing blocks by peers. This means a lot of calculations and these are energy intensive. Running a wallet (the name for a node in the network of blockchain peers) means you join in confirmation of hash calculations of blocks, sometimes from the first to the present of the blockchain in question. To compensate there is a mechanism that rewards this work, which is called mining. Mining is the term for ‘working’ to gain Bitcoin or Ether or some other cryptocurrency associated with a blockchain. It is not finding a prime number, it is basically guessing a number. One of the least attractive aspects of the current blockchain is that all mining participants are trying to gain currency by mining and to that end expend money on electricity. The idea is that the first one to ‘guess the number’ closes the latest block and gets a reward, and all participants are competing for this reward. On average the reward can be calculated and this provides the incentive to invest in hardware and electricity.

This guessing is otherwise completely useless. This is the worst aspect of Bitcoin and Ethereum. It causes immense CO2 pollution where this is not needed. The main reason is that the network is trustless, so it needs more protection against attacks, and one of the ways to do it is to distribute a burden which one ‘player’ could never carry. In a closed system this need not be the case. Ehtereum allows you to create currencies that use the general Ethereum blockchain and mining so many currencies can be created at the cost of one ‘guess the number’ process. This has also been implemented with bitcoin but was not inbuild.

A next generation public blockchain will have to have alternative ‘proof of work’, but the cryptocurrency associated with the blockchains is not the main advantage of them, especially not of Ethereum. The main advantage is to have a trustless data and code store that is hypertransparent and can be used for many purposes. More about that now..

Blockchain or Database

May organizations that wonder whether to use blockchain systems to store data do so because they understood that this data will be permanently stored and visible, like set in stone (as long as the blockchain exists). The IT industry does have a sector that is the current protector of data : The database community. Databases can be distributed as well, they are super proven technolology with billion dollar companies like Oracle providing solutions for most major companies. Websites usually use MySql (owned by Oracle but free for use), Microsoft has SQLServer products associated with their own server versions of the Windows OS.

The difference between a blockchain and a database is simple to explain. If you are dealing with a database you have two aspects : 1. Storage of data, done in files on the server. and 2. Mutations of this store. In the case of databases a mutation results in changes in the files on the server. If you look up data your database solution will have a file with a map of the other files, using it to find the right file, open that and look up your data.

A blockchain also has a store of data and it also allows you to mutate the data. But its store of data is distributed over all the transactions recorded on the chain. So if one wants to store data in the blockchain one could make a transaction with the table, field of choice, and leave the data in the chain. Then if someone wants to look up that data it has to find the transaction and reconstruct the data.  So the big difference between both storage media is that a database provides ready low work access (is optimized for that) and a blockchain requires more work. But in return a blockchain solution can be very low maintenance, in fact, you can download and run an Ethereum Wallet, store data, close the wallet and access the data years later with zero overhead. Even if you want to run your own blockchain nodes it is a process that can be done by non-IT personell on their desktops. 

Some applications

The best example of an application of blockchain technology was shown by Adi ben-Ari of Applied Blockhain. He uses the blockchain to store data on diamond properties and provenance. This is very important mainly to protect the major stakeholders in that market, also to protect against or exclude modern synthetic diamonds. It provides a means to control diamonds as a currency for illegal transactions. The applications are set to grow from diamonds to art to other valuable goods. Applied Blockchain uses a private network of nodes who can rely on it to keep a fair and impartial record of transactions.

Other applications where in fintech, possibly easing or elimination accounting load, and factoring, loan administration. Another application is triggering maintenance alerts.

Developer commitment

Blockchain code has to be developed and maintained. The main reasons for this are

• The structure and mechanism is under constant review
• The code contains bugs that need to be fixed
• The code may have security vulnerabilities that have to be fixed
• The code is not in it’s final state, features are being added

This process requires commitment by developers. this commitment is usually bought by initial release of the associated cryptocurrency, so Bitcoin developers who mined them easily in the biginning are now all multi miljonairs (sort of, cashing in is not a straightforward process). This also goes for Ethereum and the DAO a trustless organization that emitted it’s own currency to its stakeholders at the start.

The question is what happens once a blockchain has been launched. Once the initial work is done and a more or less stabile wallet (node) can be downloaded and transaction velocity is ok. Then who keeps track of the code, who prevents the initial builders to leave to sit on a tropical island or plant billions of trees in India. The code that is used to access and store new data in the chain may bifurcate and this obviously creates risks.

My view has been that there needs to be key stakholders to a certain blockchain, ones that require others to use it. So for instance all lawyers could require payment in legalcoin, so that anyone requiring legal assistance would need to buy those coins and thus support the existence and maintenance of the supporting blockchain. This is the only way any cryptocurrency is secure long term. All currencies we know are either physical or mandated as method to pay taxes, like the Euro.

If an industry or sector decides to adopt a blockchain mechanism for certain purposes it can do so privately, internally, and this creates an extra layer of trust in the interactions. Some private blockchains are encrypted, which does create risks because who holds the key? What if the key is lost. A major benefit of the current blockchain environment is that the code is open source, so whoever wants to experiment, can with a low treshold.

Introduction Obstacles

A panel discussion of the obstacles of introduction and adoption of blockchain tech was part of the congress. It had to suprising points 1. There are no applications and  2. The dutch culture prevents the dutch from developing lot of applications. Both where a bit weak. It seems the real reasons why there is little adoption (one other reason was offered by a spokesperson of Delloite, who said we won’t see adoption because we have not seen it yet, which is a great tribute to Neville Chamberlain). Of course there are other reasons. To guess a few:

1. The people that build trust networks are not beta, no developers, and like to keep their relationships human
2. Human trust networks are easier to move politically, so special interests and self interest can be more easily and less visibly served.
3. The current stake holders in the most important trust networks do not want to motivate people outside thier sphere to develop block chain applications.
4. Some financial applications like stock exchanges can not be implemented on a simple block chain because stocks traded often do not belong to the parties trading them (yet) or even exist. Market making would require large reserves of real stocks, which is uneconomical.

At least three speakers in the conference claimed there where no applications of blockchian technology yet where very bussy developing applications and speading information about it. Of course the common meetups (free) are a bit neurotic, so there was also someone that wanted to provide a solution to that (the good cop so to say). This all shows classic patterns of capture, protection and distraction around the blockchain community. Even in the community there where people driving a spectacle of adversarial opinions, which really don’t matter in an open source community (but do matter to people wanting to protect their hoard of inital cybercurrency).

Conclusion

Blockchain technology has real world applications, and can save a lot of money in some of them. They are no threat to some human trust networks that will never adopt them, even if they understand them, because they like and want the human in the loop. A DAO, or distributed autonomous organization with mechanistic application of rules will never fly from the developer community, and besides it is already here, it’s called capitalism or economism.

If you have questions or want to apply blockchain technology you can contact the author at frits@rincker.nl . We will offer generalized documentation certification and web content certification and are open to proposals.