The past years of IIER work have mostly been focused on the creation of tangible scientific outcomes that withstand the test of scrutiny by a still skeptical audience tuned into the incredible success story of humanity during the 20th century. With an increasing polarized world around us, we have decided to turn our knowledge over to the public, in the form of an easily accessible website: www.energyandstuff.org. The objective of energy&stuff is to provide a sobering and an encouraging message at the same time: the times of unabated economic growth are over, and that doesn't need to be a negative thing for us humans. Please have a look and bookmark www.energyandstuff.org.

Energy return on investment (EROEI) is the ratio of the energy extracted or delivered by a process to the energy used directly and indirectly in that process. The unprecedented expansion of the human population, the global economy, and per capita living standards of the last 200 years was powered by high EROEI, high energy surplus fossil fuels. Standard economic analysis, focused solely on dollars/currencies that change in value due to increases/decreases in the money supply, subsidies, and other distortions, do not accurately account for physical properties and costs of our resource base. A standard framework for establishing commensurate EROEI statistics will be of great importance to policymakers in a world where energy becomes a limiting input to our economies.

The Project: Our aim is to significantly improve energy and material flow data availability necessary to perform economic and environmental analyses. One of the key challenges, for example to analyse the effects of high oil prices on individual products, is the absence of easily accessible data at a sufficient level of detail. The constraint is that data compiled in life cycle and other commonly used databases is too aggregated and cumbersome to access for us in supply chain, economic, and environmental analyses. 

The type of analyses are required to obtain an understanding of how changes in material flows and their cost, both economic and environmental, affect our societies. Without them we are blind to the influences of commodity price changes across different sectors, to the material intensity of produced goods and their reliance on scarce materials, and to the impact of supply chain disruptions in one single country to the globalized world to which it is connected. 

We want to overcome current data constraints by creating a new reference standard data inventory of individual processes across industries, sectors, and countries, wherein all the available information is compiled in an Open Source environment. The individual processes can then be integrated to a desired end-to-end boundary level by the user of said inventory.

One of IIER's most ambitious research projects will begin in Q4/2011, in cooperation with the Imperial College in London. The project is aimed at supporting the activities of the Ecological Sequestration Trust, a U.K. based non-profit organization focused on the creation of sustainable (cycling) economies. In order to make this effort successful, we are looking for employees and volunteers who would like to contribute to this project aimed at providing the most solid underpinning of an economic view based on physical resource and energy consumption.

In December 2009, the 15th Annual UN Climate Change Conference ended without a globally binding agreement to reduce greenhouse gas emissions. The outcomes from the 2010 talks in Cancún were equally non-committing, and not too much is expected from the 2011 summit in Durban. Among the reasons for these failures were concerns of emerging nations such as India and China that limits on carbon-dioxide emissions would impair their ability to further grow their economies. Given the evidence we outline below, they probably have a valid point.

In July 2011, IIER concluded a report sponsored by the U.K. Department for International Development (DFID), which looked at the question as to whether it will be possible for emerging economies to simultaneously go green and still grow economically. Our answer, which also applies to advanced societies, is that the traditional path of urbanizing and industrializing is most likely incompatible with the reduction of carbon emissions, as long as economies don't find someone else to do the "dirty" part of the work.

Resource prices have moved to the center of attention during the last couple of years. With oil spot market prices peaking in July 2008 near 150 US$ per barrel, their subsequent decline to 30$ a barrel and their rise towards a 100-120 $ price band in recent months have ensured that oil and its cost receive a lot of attention.

Most people we talk to about the future of energy ask us what we think the future of oil prices will look like. A majority of people expects them to rise continuously, as oil gets scarcer and maybe moves beyond peak production. Unfortunately, it's not that simple. The pricing mechanisms for oil (and other natural resources) follow the logic of supply and demand, but equally one additional rule that isn't usually accounted for - which drives volatility.

On June 15, 2010, when U.S. President Obama responded to the dramatic oil spill in the Gulf of Mexico during his Oval Office speech, he not only included the list of things the government wants to do about the imminent problem, but also urged the country to "transition away from fossil fuels" and to "jump start the clean energy industry". His pledge is in line with many of his predecessors, and with other leaders around the world, who for years now have supported renewable energy technologies. This is particularly true in Europe, where installed capacity for renewables has grown significantly during the past ten years. And even the U.S. - while slow in introducing renewable electricity technologies - to date has produced a significant amount of alternative fuels primarily through the mandatory addition of ethanol to gasoline.

For many people hoping for a future with less greenhouse gases and less environmental damage this focus on renewable energies might sound like a step in the right direction; for those who want low cost energy, maybe less so. But what both sides of the discussion forget is something quite simple: an energy future without fossil fuels will eventually arrive, and there is no way to extend current energy usage patterns and delivery systems into the future. In a nutshell: our current plans will fail. Let's explore why that is.

A vivid debate is currently going between two groups of economists, politicians and financial analysts. One camp argues that government deficits have to be kept within reasonable limits or avoided altogether, because fast-increasing public debt will become unmanageable in the foreseeable future. We wholeheartedly agree.

The other group advocates a continuation of stimulus spending and credit driven investment by governments. In a New York Times op-ed piece published on June 17, 2010, Paul Krugman explained why slamming the brakes on government spending would throw us back into recession. On June 28, he doubled up, now arguing that with reduced government stimulus, we're headed straight for a new Depression. We fully agree with his assessment.

How come IIER is simultaneously able to agree with two camps which are ready to turn to fists when making their argument? It's quite simple: both have a point. But equally, both have no real answer.

One of the most surprising things we encounter these days is that no country, no established economic research institute, and no international organization (such as the IMF) publicly discusses scenarios that don't plan for a return to stable economic (GDP) growth. Even Greece's government, after 2012, expects growth, which would allow the country to slowly reduce its staggering debt. Equally, the U.S. government forecasts annual average (real) growth rates of 4.4% for the years 2012-2014, and 2.4% thereafter until 2020. And so it continues, no matter where we look.

What we find most intriguing, but equally most worrying, is that in all the economic projections we have seen lately, decline or zero growth aren't even mentioned as a faint possibility. We can only speculate why that is the case, but we see significant evidence that only limited effort - if any - is put into understanding the possible consequences and required mitigation strategies. We are highly alarmed about the fact that so few people seem to be ready to think the not-so-unthinkable.

When discussing possible limits to human ecosystems, IIER is regularly meeting with individuals and organizations promoting actively planned and managed de-growth as a possible solution. This approach comes in various flavors. Some suggest an active reduction of rich countries' energy use and consumption, while others point out that there are too many people on our planet, and that we have to reduce or reverse population growth in order to prevent a collapse in the near future. Yet irrespective of individual focus, organizations promoting de-growth either suggest a path of voluntary reductions of consumption by individuals or wish for governments to act by mandating behavioral change or by establishing incentives to drive their de-growth objective.

IIER research suggests that all those de-growth approaches will not be successful at an aggregate societal level, at least not before reality enforces de-growth when economic expansion is no longer possible. Although small groups of people actually might sign up, societies as a whole likely won't. We see three key reasons for our skepticism: evolution, substitution effects and financial markets locked into a growth model.

Nobel Prize winning economist Paul Krugman has - and correctly so - stated that economics has failed to predict the economic crisis of 2008/09 that led to a reduction in GDP all around the world, with very few exceptions. He says that "few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy." We definitely agree with this assessment.

Among the many useful man-made „artifacts“, money is probably the most versatile. It is not only a means of exchange for trading goods and services; it also provides an easy and simple store for previously generated wealth.

The importance of money has grown over the course of thousands of years, yet only during the past few centuries has it made inroads into most people’s lives. Along with this rise of money’s role, debt has become a close companion. Originally mostly used to finance government and trade, it is now present everywhere. One way to see credit is that it serves as a way to make the benefits of an individual's or a company's future surpluses available today, by enabling investments or consumption before having saved enough to make a purchase happen. This obviously comes at the price of interest.

The debate about future energy alternatives can be an emotional and heated one. Many people believe that renewables, such as wind and solar power, are the answer; others dismiss those technologies outright. The same is true for energy applications, including passenger cars, where various alternative concepts are under evaluation or beginning production – including more efficient internal combustion engines, electric vehicles, and hydrogen powered cars.

Often, proponents lose their objectivity when defending a particular approach. At IIER, we see it as our responsibility to provide an unbiased perspective on alternative technologies, aimed at helping individuals, companies and governments make their decisions.