The Bubble Economy – Is sustainable growth possible? New book by Robert U. Ayres

Recently Prof. Ayres published his new book “The Bubble Economy” .

The author was so kind to send me a personal copy – for which I feel very honoured. In the not so distant future I plan to publish a review. Having seen earlier versions of the manuscript, I was able to discuss elements of it with Prof. Ayres. In his unique style he has endeavoured to look at economic history, apply the insights to the most recent crisis and show pathways to sustainable growth. He shows the vital role energy plays in this development. It is an important contribution to the on-going debate – providing an interdisciplinary perspective on these complex matters.
I can only recommend reading it yourself.
I know Prof. Ayres is more than willing to discuss in public the content and conclusions of his new book. If a reader of the lines would be interested to stage such an event, I would be happy to help facilitate it.



The Desertec idea to produce energy by concentrated solar power (CSP) in African deserts and exporting it to Europe is clearly dead for now. This development seems to have two reasons:

  1. The Desertec concept cannot provide energy at competitive cost to Europe at the moment and it is much too complex politically
  2. Those companies originally sponsoring Desertec were in there for relatively quick money, which DESERTEC could never provide.

The good news however is the basic principle is very much alive. The good old approach: “Think big – Start small”  is giving the whole concept a much more solid foundation. In Moroco a 500 MW complex is currently being build and we should be watching this development very closely. Once this plant is operating it will become much clearer whether solar power through heat transfer will be scalable in the region. It is a potential source of prosperity and independence giving a positive outlook for the development of the whole region.


SAP: Sustainability and Business Innovation

SAP: Sustainability and Business Innovation

Now I am the proud owner of the final exam certificate of the SAP on-line course on Sustainability and Business Innovation. SAP went through great length to provide some 10.000 participants a course full of valuable content. A lot of the messages put across any advanced sustainability business practitioner will underwrite. It is quite impressive to what length SAP went in structuring and delivering the content and also to provide extensive self tests.
They chose to have the whole content delivered by  their Chief Sustainability Officer Peter Graf in video lectures supported by Power Point slides. The course was structured as follows:

The idea of the course stems from SAP’s believe, that by actively disseminating their sustainability message it will help them to build new business and to recruit interesting new staff.
The messages in the different sections were very consistent and gave a good overview of the field. The SAP propaganda was mild. The belief however that IT tools are very important in sustainability work got a bit over emphasised. The large number of subscribers to this course show, how high the demand for knowledge in sustainability and business strategy is and I pay my respect to SAP for having put in all this effort.
I believe, whilst the course is finished, the material is still on-line: SAP-online Course


E-Mobility : my failure

After having replaced oil for heating our home by wood pellets, I thought it was time to buy an electric car. One has to be part of this new ecological relevant development and help drive it forward. I am of course aware of the technological and ecological shortcomings current e-cars have. Nevertheless I thought one should help drive technology in a direction valuable for our future. There are however limits! Having waited patiently for Volkswagen to market their e-up car, as I needed something to get me from the very rural environment where I live to the next public transport station, the e-up appeared well suited. My requirements for reach with one fill were very moderate and on top I was willing to invest extra for emitting less carbon.
Then VW announced the price: 26.000 € for an e-up; I would have to own the battery and the charging of the car was far from straight forward and the reach minimal ( in winter less than 80 km?) . This compares to the price of the same car with petrol of 14.000€. I am sure the guys in Wolfsburg do not take this serious themselves.
Being a German citizen and knowing of the influence the car industry has on our economy, I am afraid of the future for this country. Do German car manufacturers realise once the technology hurdles of using batteries are overcome, people like Samsung will be able to make very attractive cars and probably have better knowledge of the required technology than all of Volkswagen can muster.
After careful evaluation of the current e-mobility options (a Tesla not being in budgetary reach) I decided to go for a so called eco-up. It is powered by methane gas, so in theory it could be considered renewable, provided the source of methane was. I am however not kidding myself: this car is not based on renewable fuel.
However the fuel consumption is really nice and so the CO2 emissions are much better than those of many other cars currently available and I save a lot of money when filling up. The car goes easily 280 km with one fill of gas, without tapping into the reserve of at least another 150 km from the spare petrol in a separate tank. And here comes the good news: so far I spent less than 10 € for each fill. So I can drive 100 km for 3.50 € or less. That is nice especially as I am saving on carbon at the same time. This fuel consumption is achieved with an average speed of 60km/h across country lanes and in cities.
I will be watching e-mobility and when it is time to sell this car, I hope to find the right new solution, including much better repair and recycle capabilities–Gas-Betrieb-zum-halben-Spritpreis-id19275.html

eco-up-auto-plenumFoto von :

Homage to Professor Robert U. Ayres at INSEAD Fontainebleau, 10 April 2013

“The economic growth enigma: money or energy?”

As mentioned elsewhere in this blog, I had the privilege in participating in the preparation of a full day seminar in honor of Prof. Robert Ayres the title of the event – held at INSEAD business school in France was :”The economic growth enigma: money or energy?” Prof Landis Gabel (EmeritusProfessor of Economics and Management INSEAD. The Novartis Chairin Management and the Environment, Emeritus) chaired the proceedings.

Prof Ernst Ulrich von Weizsäcker (Resources Panel, UNEP, former Dean, Bren School, Univ. California, Santa Barbara, President, Wuppertal Institute) talked about Resources, Dr. Colin Campbell about Peak Oil, Dr. Paolo Frankl (Head, Renewables unit, IEA) Renewables. Energy and the Economy was covered by Prof Reiner Kümmel(Emeritus Prof. of Astrophysics, Univ. Würzburg).

An Eye in the Hurricane was the title of an inspiring talk by Prof Robert U. Ayres (INSEAD) himself covering his most relevant research in this context as well as new thinking around, how to overcome the deadlock of the financial crisis.

Later Dematerialization was the subject of Prof Marina Fischer-Kowalski (Founder and Head, Institute for Social Ecology, Univ. Vienna) . Dr. Skip Laitner (Chief Economist, American Council for an Energy Efficient Economy, formerly Senior Economist, EPA) gave an Energy Conservation, Overview, Prof Jeroen van den Bergh (ICREA Research Professor at Universita Autonoma de Barcelona, Professor of Environmental and Resource, VU Univ. Amsterdam) talked about Macroeconomics, financial crisis and sustainability transition and finallyMr. Paul Horne (Independent International Market Economist) gave a View from Wall Street.

In the concluding discussion all participants expressed the wish to make the high quality contributions of this event known to a wider public. It was agreed to contribute to a special edition of the Elsevier Journal:Environmental Innovation and Societal Transitions


In the meantime this issue has been published:


Prof. Robert Ayres

 Over the last years I have had the privilege to work with Prof. Ayres at the INSEAD Social Innovation Centre. It has been an exciting experience, Prof. Ayres is a distinguished independent thinker who is able to apply the method of natural science to major economic questions of our time.

Prof. Ayres was born in 1932 in Plainfield New Jersey USA.  He trained as a physicist at the University of Chicago, University of Maryland, and King’s College London (PhD in Mathematical Physics in 1958) leading already to five journal publications.

In 1962, during atmospheric nuclear test series in the Pacific, Prof. Ayres took some instrument readings.  According to Bob Ayres himself, this experience changed his life. After returning from the Pacific he took a job at the Hudson Institute to study the environmental consequences of a (hypothetical) nuclear war: a three year study, which encompassed biology, ecology, atmospheric physics and climate science, as well as some economic analysis. One of the most interesting results was the possibility of “nuclear winter” – analogous to what happened after the Indonesian volcano Tomboro exploded in 1815.

In 1992 Bob became the Novartis Professor of Environment and Management at the international business school INSEAD in France, where he is now Emeritus Professor. Since his formal retirement in 2000 he has been Jubilee Visiting Professor (2000–2001) and King Karl Gustav XVII professor of environmental science (2004–2005) at Chalmers Institute of Technology, Gothenburg, Sweden.

Prof. Ayres worked closely with resource economist Alan Kneese. Together they wrote a series of papers. In 1969 a paper “Production, Consumption and Externalities” was published by the American Economic Review. This paper has changed the status of externalities in economic theory. Whilst seen in those days as peripheral, the paper took the position that externalities (like pollution) are pervasive and essential consequences of the first and second laws of thermodynamics.

This view is now taken for granted in the “ecological economics” community, but it was not obvious to economists in 1969. Bob Ayres applied his deep knowledge of physics/thermodynamics in the field of economics which lead him to ground breaking insights. Very early he pointed to the limits of resource consuming growth.   In fact, his work precededthe publication of Georgescu-Roegen’s famous book on the entropy law in economics (Georgescu-Roegen 1971).

After this significant scientific contribution, Robert Ayres continued on this path and from 1971-1973 he developed together with Cummings-Saxton and Stern a formal “materials-process-product model (MPPM)”. The purpose of the MPPM was to compare material-process “chains” leading to a common product, or to a category of products, a new concept which can be seen today as the first approach to what is known today as life-cycle analysis. Prof. Ayres was clearly a pioneer in this field. 

Very early on, Prof. Ayres became interested in the field of energy efficiency. Inspired by a report of a summer study at Princeton University in 1974 entitled “Efficient use of energy: A physics perspective” (Carnahan et al. 1975), Prof Ayres together with Mark Narkus-Kramer wrote a paper applying the second-law (exergy) concept to the US, concluding that the real (second-law) efficiency of the nation was of the order of 10 %, far less than the 50 + % implied by official government statistics (Ayres and Narkus-Kramer 1976). Prof. Ayres published many more articles and two books refining the theory and thus contributing to the solution of a very real and current problem:

Ayres, Robert U; Warr, Benjamin (2009), The Economic Growth Engine: How Energy and Work Drive Material Prosperity.Cheltenham, UK & Northampton, Massachusetts: Edward Elgar Publishing

Ayres, Robert U; Ayres, Edward H (2010), Crossing the Energy Divide: Moving from Fossil Fuel Dependence to a Clean-Energy Future New Jersey: Wharton School Publishing

When Robert Ayres turned 80 I started organising a seminar energy and economics, which I will report on in another contribution to this blog.

Collective Amnesia


There is surely nothing wrong being interested in news. One wants to keep up-to-date. The problem nowadays is the speed and volume of news. With quasi instant access to what’s happening in the world one can get easily overwhelmed. We all have adopted some routines to select and prioritise. It is however concerning how quickly we turn from one news item to the next : and we rarely turn backto ‘old news’. Of course clever PR managers and spin doctors have known this for a long time and are making heavily use of it. A wonderful film making fun of these practices  is the film ‘Wag the dog’ from 1997 with Robert de Niro and Dustin Hofman, where the American President starts a war to distract from a sex scandal.

We all suffer from this regular mass amnesia. Forgetting what interested us yesterday is a deeply concerning trend. We become more superficial by the day. Just to make the point I have selected a couple of examples of events that were very interesting at the time and we were told we would hear about it later and they never made the front pages again:

  • The 2001 Anthrax letter attacks: One can find a lot of interesting facts about the attacks in Wikipedia , however there remains enough uncertainty to merit a more thorough investigation.
  • The Wikileaks publications: In the beginning a lot of fuzz was created around the Wikileaks publications, surely there are more important facts contained in these files beyond what was in the headlines in the beginning. It would also be interesting to know, what the consequences of some of these revalations were: (
  • Love Parade disaster in Germany 2010
  • Deepwater Horizon Oil spill 2010
  • Dolly the clone sheep

This is just a small list that came to mind without a lot of  reflection. I am sure there are many more, where we could collectively learn from past events and do with some good journalistic research.  Of course such research requires time and resource and the question is whether there are enough people willing to splash out for such efforts. For sure the resulting publications will be a lot less exciting than the next big current event. Maybe those interested in going against news amnesia could start forming a group engaging in a few pilot research projects. As a start I would love to hear what the favourite subjects would be.