Applying Time to Energy Analysis

Typically thoughtful stuff on energy from Nate Hagens. Read it, and be sure to read the many interesting comments afterwards.

Is a BTU today worth more or less than a BTU ten years from now? It’s seemingly an easy question. A BTU will heat one pound of water one degree whether its 2010, 2020, or 2100. And, in a world of entropy where the easiest and best quality energy sources (generally) get used up first, one unit of energy should increase in value over time, as its ability to accomplish work becomes more valuable to society as time progresses. However this is solely a physical perspective, one that ignores biology of time preference. Once humans with finite lifespans and cultures with sunk costs enter the picture, a BTU today, behaviorally, becomes worth more than one in the future. This fact has pretty big implications for biophysical analysis of energy alternatives, which will be explored below.

More here.