Problem

Declining energy return on investment

Other Names:
Negative EROI
Nature:

The concept of EROI fleshes out the recognition that a significant surplus of energy is required to fuel economic activity, separate to energy that is consumed precisely to extract energy in the first place.  The less energy used to get new energy out, the more energy is left to invest in the wider goods and services of economic activity. But if we keep using more energy just to get energy out, the amount of net energy we have left to fuel our economies decreases.
 

Background:

Energy Return on Investment (EROI) is the amount of energy used to extract a particular quantity of energy.  The higher the EROI of an energy supply technology, the more ‘valuable’ it is in terms of producing (economically) useful energy output. In other words, a higher EROI allows for more net energy to be available to the economy, which is valuable in the sense that all economic activity relies on energy use to a greater or lesser extent.

Incidence:

In 2017, a major scientific study found that for the last two decades and beyond, Britain’s economic growth was fundamentally constrained by domestic net energy decline.  The UK as a whole has had a declining EROI in the first decade of the 21st century, going from 9.6 in 2000 to 6.2 in 2012, ie these initial results show that more and more energy is having to be used in the extraction of energy itself rather than by the UK’s economy or society.  Citing the work of French economists Florian Fizaine and Vincent Court, which estimates a minimal societal EROI of 11 for continuous economic growth, the paper concludes that the UK is below that benchmark.

Problem Type:
E: Emanations of other problems
Date of last update
04.10.2020 – 22:48 CEST