Running the numbers on the journey to insight

I’m a product of the case method approach to an MBA. After two years of analyzing three cases a day, I then spent time as a case writer. One of the first questions you would always face was “have you run the numbers?”

Figuring out which numbers you should run and what the heck “running the numbers” was supposed to mean was all part of the learning process.

Vaclav Smil’s most recent book, How the World Really Works: The Science Behind How We Got Here and Where We’re Going provides an excellent example of the power of this strategy. It also offers a flavor of the experience I encountered too often when I faced a professor without running the numbers first. Here’s Smil’s motivation for this book:

The gap between wishful thinking and reality is vast, but in a democratic society no contest of ideas and proposals can proceed in rational ways without all sides sharing at least a modicum of relevant information about the real world, rather than trotting out their biases and advancing claims disconnected from physical possibilities.

Smil lays out his case for the relevant information about the real world that we ought to share. He starts with energy and food. Hard to get much more fundamental than that. If you’ve got eight billion people on the planet, that’s going to call for a lot of food to produce and distribute. That production and distribution depends on energy and most of that energy comes from fossil fuels. Fossil fuels that won’t be easily displaced by renewable sources at the scale implied by a population of eight billion.

This is a theme that Smil continues to hammer on; that you have to look at systems and scale in sync. He drives that home in a series of chapters examining his candidates for the four material systems that underpin our current economic environment; steel, cement, plastics, and ammonia. Not exactly the “software is eating the world” message that we’ve become accustomed to.

Smil stops short of offering specific policy recommendations. His desire is to see policy debates grounded in a better understanding of the relevant underlying systems and their scale. He hints at options that he deems plausible;

Solutions, adjustments, and adaptations are available. Affluent countries could reduce their average per capita energy use by large margins and still retain a comfortable quality of life. Widespread diffusion of simple technical fixes ranging from mandated triple windows to designs of more durable vehicles would have significant cumulative effects. The halving of food waste and changing the composition of global meat consumption would reduce carbon emissions without degrading the quality of food supply. Remarkably, these measures are absent, or rank low, in typical recitals of coming low-carbon “revolutions” that rely on as-yet-unavailable mass-scale electricity storage or on the promise of unrealistically massive carbon capture and its permanent storage underground.

The reality is that any sufficiently effective steps will be decidedly non-magical, gradual, and costly.

This is a book that should be widely read. What it needs is a companion volume that delves into the human systems side of how we might go about tying the politics of large scale system change with a grounded acceptance of the facts on the ground.


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