Thorium in the new economy

Chris van der Merwe Rare Earths Minor Metals Exploration & Production 10 October 2012

1. Adam Smith

2. Population growth dynamics

3. Population and affluence

4. Population and earth’s carrying capacity

5. Planetary boundaries

6. The new economy and ‘ipat’

7. Economic transition dynamics and drivers

Adam Smith – An Inquiry into the Nature and Causes of the Wealth of Nations, 1776. “Economies will eventually reach a stationary state when they have acquired that full complement of riches which the nature of its soil and climate allowed it to acquire; which could therefore advance not further and which was not going backwards.”

Population

Population

Population and affluence

At current consumption levels the earth’s resources are 40% over utilised

At developed world consumption levels, humanity will need more resources

It seems as if everybody wants to live like an American – Even the Americans!

Population scenario’s, impact and carrying capacity

The human population’s need for oil and how oil fuels our food production

Peak: - Oil - Coal - Gas - Water - Food? So are we in ‘overshoot’?

The result of human activity on earth is pushing against ten planetary boundaries that should not be crossed. The result of crossing these boundaries is a non-linear, erratic reaction that we cannot predict or control.

1. Climate change due to atmospheric CO2 concentration

2. Rate of biodiversity loss due to extinction

3. The nitrogen cycle as nitrogen is removed from the atmosphere

4. The phosphorous cycle as phosphorous flows into the ocean

5. Stratospheric ozone depletion

6. Ocean acidification

7. Global freshwater depletion

8. Change in land use as land is converted for human use

9. Atmospheric aerosol loading

10. Chemical pollution in emissions, pollutants and waste

The result of human activity on earth is pushing against ten planetary boundaries that should not be crossed. The result of crossing these boundaries is a non-linear, erratic reaction that we cannot predict or control.

1. Climate change due to atmospheric CO2 concentration

2. Rate of biodiversity loss due to extinction

3. The nitrogen cycle as nitrogen is removed from the atmosphere

4. The phosphorous cycle as phosphorous flows into the ocean

5. Stratospheric ozone depletion

6. Ocean acidification

7. Global freshwater depletion

8. Change in land use as land is converted for human use

9. Atmospheric aerosol loading

10. Chemical pollution in emissions, pollutants and waste

The limits for the first three resource-supports have already been exceeded As a world population we are in uncharted territory and an increased call for a ‘new economy’

World leader summit just prior to the October 2008 financial crash on – Oil price exceeding $140/barrel Escalating food prices and food riots Newsweek, 13 October 2008 – “The Future of Capitalism”, questioning the banking and other financial systems and declaring the end of Neo-Liberalism Economist – “The end of debt-financed consumerism and deregulated financial speculation”, declaring a new normal characterised by- - Lower growth rates - Constrained consumer demands - More public debt - Higher taxes - Reduced fiscal spending - Restraints on speculative financial profiteering

What did the old economists say about the new economy? Malthus "The power of population is so superior to the power of the earth to produce subsistence for man, that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation. They are the precursors in the great army of destruction, and often finish the dreadful work themselves. But should they fail in this war of extermination, sickly seasons, epidemics, pestilence, and plague advance in terrific array, and sweep off their thousands and tens of thousands. Should success be still incomplete, gigantic inevitable famine stalks in the rear, and with one mighty blow levels the population with the food of the world". —Malthus T.R. 1798. An essay on the principle of population. Chapter VII, p61

What did the old economists say about the new economy? Garret Hardin – The Tragedy of the Commons "The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone's long-term interest for this to happen". —Garret Hardin 1968. Science journal

What did the old economists say about the new economy? Joseph Schumpeter – Creative Destruction “Denotes a process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one, also called disruptive technology" —Joseph Schumpeter 1942. Capitalism, Socialism and Democracy

i = P x A x T

Economic transition dynamics Technological Revolution New Technologies and

Redefined Industries New and Redefined Infrastructures

First – 1771 onward Industrial Revolution Britain

Mechanisation Canals Roads Water wheels

Second – 1829 onward Age of steam and railway Britain, Europe, USA

Coal fuelled steam engines Iron and coal mining Railways

Rail infrastructure Ports

Third – 1875 onward Age of steel, electricity and heavy engineering USA and Germany leapfrogging Britain

Steel and heavy engineering Electrical equipment Copper and cables Canned and bottled food

Worldwide shipping Worldwide rail Bridges and tunnels Telegraph and telephone Electrical distribution networks

Economic transition dynamics Technological Revolution New Technologies and

Redefined Industries New and Redefined Infrastructures

Fourth – 1908 onward Oil, automobiles and mass production USA and Europe

Mass produced cars, engines Cheap petrochemicals Home appliances Radio and TV Refrigerated and frozen foods

Networked roads, rail, ports and airports Worldwide telecoms Broadcasting

Fifth – 1971 onward Age of information and telecommunication USA, Europe and Asia

Cheap micro electronics Information reduction and mobility

International digital communication

Sixth – Renewed thinking required of which technologies will support sustainability and growth within limits to redefine industries and infrastructure - transitions

Transition drivers Driven by - crisis, creatively destroying the then existing technologies and

hierarchies of power; - a natural resource; and going through a natural cycle of innovation, investor frenzy, bubble and devaluation, reorganisation, synergy and maturity; recognising the role of inventors, investors and state regulation. Does Thorium as an energy source fit this bill and where is it in the natural cycle of innovation locally and internationally? Population scenario’s 9Bn, 4Bn, 2Bn and 1Bn scenario This world needs a new and a clean energy source Technological solution or ‘wait-and-see’ approach

Are we developing Thorium as a new energy source?

Yes, significant action taken No action taken

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Still the right thing to do: • clean energy •as custodians of the earth • fossil fuel depletion

Status quo until fossil fuels run out

True

• Money well spent • New energy source • Cost effective, safe and reliable base

load energy • Countered the effects of Climate

Change • Humans adapted to survive

Worst case scenario when the world runs out of fuel, resulting in global catastrophe on all levels – economic, political, social, environmental. Results: • Climate change due to the continued use of fossil fuels; • war over scarce resources; • famine;

disease; and economic collapse.

We don’t need to know with absolute certainty whether the human population will increase or not to decide on the right thing to do.

What a new source of energy could achieve for the human population- New models of habitation

What a new source of energy could achieve for the human population- Agriculture

What a new source of energy could achieve for the human population- Vertical Farming

What a new source of energy could achieve for the human population- Water treatment; Dhahran – 10million gallons/day

Questions to address on Thorium Technological solution - Cost - Safety - Location Political willpower - China and India - Europe - USA Social sentiment - Power shift - Lobbying

Thank you

OEEC & OECD • The Organisation for European Economic Co-operation (OEEC), was formed in

1948 to administer American and Canadian aid in the framework of the Marshall Plan for the reconstruction of Europe after World War II. It started its operations on 16 April 1948. Since 1949, it has been headquartered in the Chateau de la Muette in Paris, France. After the Marshall Plan ended, the OEEC focused on economic questions.

• In the 1950s the OEEC provided the framework for negotiations aimed at determining conditions for setting up a European Free Trade Area, to bring the European Economic Community of the six and the other OEEC members together on a multilateral basis. In 1958, a European Nuclear Energy Agency was set up under the OEEC.

• The Organisation for Economic Co-operation and Development (OECD, French: Organisation de coopération et de développement économiques, OCDE) is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade. It is a forum of countries committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices, and co-ordinate domestic and international policies of its members