January 14, 2017

Is California's Population Forecast Greatly Overestimated?

Is California's Population Forecast Greatly Overestimated? I became interested in this while trying to imagine possible futures for my job working on buildings and their energy demand. Here is a chart of California (CA) population so far:
Figure 1. Chart of California Population 1900-2016
Next, take a look below at the annualized growth rate taken from the population data. The growth rate has been on a neat trajectory toward zero for the last 100 years, with a 0.76 correlation coefficient:
Figure 2. California Population Rate of Growth, 1900-2016
What will happen in the future? Will population growth cease in 2032, where the lines cross? We have an official forecast from the California Department of Finance. The data that I used for this post is here. Sometime in summer of 2015, the CA Department of Finance projected robust population growth through 2060. Their projection seems to serve as the basis of all planning forecasts for the state. This graphic appeared on the web about that time. The growth of non-white groups was emphasized in the media:


It's ironic now in 2016 that these inland counties forecast for high population growth have some of the worst drought-related problems in the state. Another connection: the California Energy Code Title 24.6 focuses especially on new tract housing in these warmer inland climate zones.

However, something's not right. If you look at the CA Dept. of Finance numbers in a spreadsheet and back out their assumed growth rates, they are unexpectedly high: above 0.7% through 2040 and 0.5% in the two decades after. What's the basis of these high rates? They have no relationship to the trend data. Mainstream economic models appear to not handle negative growth, so it makes sense that the California Department of Finance would just assume a small positive number for future projections, in lieu of zero or negative. How about instead, we extend the trend growth rate linearly through zero to negative. This fits the data, and fits the headlines. Here is a comparison chart of the two different growth rate scenarios:
Figure 3. Comparison of CA Dept. of Finance Projection with Trend Rate
Figure 3 shows a linear projection of the current trend, and a comparison to the 2015 Dept. of Finance projection which breaks a 100-year trend to take a new and different line. I'm not sure why they did this. Now compare the resulting estimates of future California population in Figure 4:
Figure 4. Comparison of Estimates of Future California Population
Figure 4 shows a huge difference between the trend and the official forecast of nearly 20 million people by 2060. This has significant impacts for all kinds of estimates and policy for the state. Relevant to my work in my work in buildings and energy — and why I became interested in this data — we won't need to build as much new energy infrastructure if our population and demand will be smaller in the future. We won't need as many buildings. Our greenhouse gas (GHG) emissions will not be as high as estimated assuming a growing population. We won't need to choose between the lesser evils climate change or nuclear energy because we have population and economic contraction as a third option.

I'm inclined to believe the declining curve rather than the Dept. of Finance projection, because it seems more supported by widespread evidence:

1) For example, look at this study showing fewer babies since the Great Recession, "The Hidden Cost of the Recession: Two Million Fewer Births and Still Counting [PDF]":
Professor Johnson calculated that if births had continued at the pre-recession rate, Americans would have had 3.4 million additional babies in 2008–2015. He found no evidence to suggest that this trend changed in 2016, so the total is likely near 4 million by now. (link)

2) Young people don't have high-enough paying jobs, can't afford housing, have big college loans, and are living at home. In December 2014 the LA Times reported "California millennials living longer with parents, marrying less". Will they be having lots of babies while living at home? It's possible. We had our second child while living with parents! We couldn't afford mortgage & childcare & property tax on our two incomes. :-)

3) Corresponding to these headlines, the Dept. of Finance E-2 data actually show that the residents' natural rate of increase (births minus deaths) has plunged since the 2009 recession:
Figure 5. Natural Increase = Births minus Deaths of resident population
 At this trend rate of decline shown in Figure 5, deaths will outnumber births by 2032. The date when "natural increase" turns negative — when deaths outnumber births — is similar to the overall population trend date turning negative, shown in Figure 3 above and Figure 6 below:
Figure 6. Trend Projection to California "Natural Increase" going Negative
4) Emigration to other states is increasing again. Here is a story from the San Jose Mercury news about exodus of long-time residents. "California’s skyrocketing housing costs, taxes prompt exodus of residents." It's interesting that the exodus of residents is increasing again, but the state is still attractive to foreign immigrants, who offset this emigration. Figure 7 below from historical Dept. of Finance data shows that residents are increasingly leaving for other states, but foreign immigration has held the growth rate up. The annual population growth has already been declining since 2000, and only saw a brief uptick from 2010-2014.
Figure 7. Components of California Population Change 2000-2016
Finally, compare the number of persons added between 2020 and 2060 using the Dept. of Finance forecast and this alternative estimate that I created by extrapolating the current growth rate, Figure 8 below. Which better fits the data and observations of current affairs?
Figure 8. Comparison of Forecasts for Persons Added in California 2020-2060.
My prediction: California population will shrink by 1 million people in the 2030s, 2 million in the 2040s, and shrinking will continue thereafter. To put this another way, this prediction is a forecast for permanent contraction of the economy, electricity consumption, gasoline consumption, housing construction, mortgage loans, auto sales, student loans, demand for professional services, air travel, vehicle miles traveled, need for schools, college enrollment, and GHG emissions starting in the 2030s (about 15 years from now).

Now what do you want to invest money in? Health care for the elderly! :-)

What factors would need to change to make this prediction wrong?

The decline in birthrates is happening all over the industrialized world, with Japan in the lead. Read more about demographics at Econimica. Why are birthrates declining? Theory: Because of diminishing returns on human labor. Young people are finding that it requires two incomes to support a lower standard of living than their parents had from one income. The fundamental reason for diminishing returns on labor may be that industrialized countries have been unable since the 1970s to continue leveraging increasingly inexpensive energy sources (petroleum) to improve labor productivity, and this decline has increased since 2000. At the same time, cost of living has shot up due to asset price inflation. Read more about the energetic basis for falling returns on human labor at Our Finite World.

Economists and banks seem upset about demographic slowdown and reversal. There will be fewer consumers to take out new loans and support asset prices.

My take is this: Population contraction is great news! Fantastic! Whew, what a relief that it's finally here! Thank goodness that crazy petroleum interlude is coming to an end. We'll be able to spend more time with family. There may be a resurgence of wildlife. Air quality may improve. The stars may shine brighter.

December 20, 2016

Kindness is generally the best policy

"But, today, for good or ill, we do live in that interconnected world and global society everyone talks about.  What happens to someone in Nigeria, or Brazil, or China matters to me.  Their happiness, their health, their prosperity, affects mine....Their well-being affects mine.  It is in my interest for them to be better off.Heaven on Earth: the Kindness Maxim

This is relevant to my interests in human ecology and buildings because it's a good reminder that we'll get better outcomes by securing the needs of the least-well-off, rather than focusing on what elite consumers are doing. It is in my interest for them to be better off. See also the post "Better to Insulate Old Homes than to Increase Regulations for New Homes". 

Also relevant: California's Air Resources Board has published its 2030 Action Plan Update for phasing out GHG emissions in the state. The initial recommendations of the Environmental Justice Action Committee (EJAC) (https://www.arb.ca.gov/cc/scopingplan/ejac_initial_recommendations082616.pdf) are worth reading. "ARB must better balance reducing greenhouse gases and reducing costs (cost compliance) with the other AB 32 goals of improving air quality in EJ communities while maximizing benefits for all Californians." This list of recommendations is a great reminder to academics and consultants like me. Because elite consumers provide funding for a lot of construction work (green second homes), and we work with Energy Codes for new construction, we can get distracted in this realm. The links in this post help me remember to broaden focus to include everyone, and non-human life. 

June 3, 2015

Put on a sweater

Update: Researchers aim for smarter people, not smarter thermostats

We see everyday more examples of "smart" products that presume people are dumb. We should instead leverage human intelligence and instinct.
Research Project Aims to Make 'Smart' Clothes for Personalized Cooling and Heating.
SAN DIEGO—A new research project aims to develop a fabric that will keep people at a comfortable temperature regardless of how hot or cold it actually is. Press release.

Wait, we have this already! It's called a sweater! 
The ATTACH (Adaptive Textiles Technology with Active Cooling and Heating) project at the University of California, San Diego is funded with a $2.6 million grant from the U.S. Department of Energy's Advanced Research Projects Agency—Energy (ARPA-E). The smart fabric will be designed to regulate the temperature of the wearer's skin—keeping it at 93°F (34°C)—by adapting to temperature changes in the room. When the room gets cooler, the fabric will become thicker. When the room gets hotter, the fabric will become thinner. To accomplish this feat, the researchers will insert polymers inside the smart fabric that expand in the cold and shrink in the heat. "Regardless if the surrounding temperature increases or decreases," said Wang, "the user will still feel the same without having to adjust the thermostat." 
With smart people who know how to dress themselves for the seasons, you won't need to heat the room as much in winter....uh, wait, there is now an app for that? 
“With the smart fabric, you won’t need to heat the room as much in the winter, and you won’t need to cool the room down as much in the summer. That means less energy is consumed. Plus, you will still feel comfortable within a wider temperature range,” added Renkun Chen, assistant professor of mechanical and aerospace engineering at UC San Diego.
Tech and 3D printing, blah blah blah. 

For some short pieces actually worth reading on this same subject, see Kris De Decker's work on clothing at Low Tech Magazine.

May 17, 2012

An Affordable Passive House by Chris Corson

"The big-picture goal of the Passive House movement is to nearly eliminate housing’s share of climate change by slashing energy consumption to about 6 percent of that used in conventional homes. But to have a practical effect, the standard can’t just apply to high-end projects with big budgets; it has to be within reach of ordinary working people. That’s why I jumped at the chance to build a 1,600-square-foot two-bedroom Passive House in Knox, Maine, for a young working couple with a $210,000 budget....For my first Passive House, I wanted not only to hit the performance targets but to build affordably, using methods familiar to any capable builder and readily available materials and products."  [Wonderful illustrations and photos in this PDF from JLC-Online]

Startup Takes Google Street View Approach to Home Energy Audits

Home energy efficiency startup Essess has a pretty cool idea for bringing building energy efficiency information to the masses. It's basically a merging of two already successful ideas: Google Street View and online real estate libraries like Zillow or Trulia. The company plans to send cars to take thermal energy scans of every building in the country, find energy leaks and give the buildings each an energy score, and then build an online library of that information. [Full story via Treehugger]

November 17, 2011

Open or Proprietary Green Standards?

"The fact that green building codification has been left to mature with private sector advocates testifies to a failure of public leadership. If governments now simply nod toward one of the existing rating systems in toto and say, “Me too,” they will create some shiny golden apples for the chosen system. Governments will better serve the cause of green building if they develop a set of prescriptive standards that act impartially toward existing private rating systems, freeing private-sector advocates to complement one another’s efforts in pushing the green frontier."  Full Article on GreenSource.

California has taken leadership in this regard by publishing CalGreen, the state's mandatory green code.  But CalGreen, like LEED, is an additional layer of regulation that makes up for failures in the IAPMO and ICC model plumbing-, mechanical-, and building-codes.
California's CalGreen perpetuates a double-standard in building regulations by having three tiers of requirements.  The bigger cities are enforcing the upper tiers, making LEED-equivalent the worst-allowable construction.  Smaller jurisdictions may require a weak local Green Building Regulation as an alternate to CalGreen.

October 28, 2011

Better to Insulate Old Homes than to Increase Regulations for New Homes

"Greater return on investment in insulation will be found by focusing on refurbishment of existing, poorly-performing homes than on increases in new build regulation."

From the 2007 thesis "What are the Financial- and Carbon-optimal Points for Return on Investment inInsulation?" by Jamie Bull, University of East London.

The work "examines whether it is worthwhile to continue lowering the elemental U-values demanded by Building Regulations in light of the diminishing returns found when increasing insulation thickness.... Key results are that the carbon-optimal point is far beyond the financial-optimal point for all materials assessed. The carbon-optimal point is also beyond the requirements of Building Regulations. However the financially-optimal point (before accounting for co-benefits) is below Building Regulations. Therefore it is found that, at the margins, super-insulation is an expensive way of reducing lifetime CO2 emissions."

October 25, 2011

California residential CO2 emissions

Here is a chart that breaks down California residential CO2 emissions into end-uses.  The data comes from the 2009 CALIFORNIA RESIDENTIAL APPLIANCE SATURATION STUDY Executive Summary.
Space heating and water heating account for nearly 50% of all CO2 emissions from residential building stock.  The energy source for these is mostly natural gas.  Compared to electricity, this fuel is cheap per pound of CO2 generated.  This makes it hard to argue for CO2 reductions on the basis of energy cost savings.

Here is the same chart, re-colored to highlight the end-uses that building designers can affect.  These end-uses may persist for the life-of-structure: for example, it's costly to change a building's orientation or significantly increase its insulation levels.
This second chart shows that resident choices and behavior (shown in gray) may account for 40% of a building's metered energy consumption.  The other 60% (shown in color) may be due to choices made by the designer and equipment specifier. 

Designing to Passive House standards can cut out most of the active heating and cooling energy.  Solar water heating can cut out most of the Water Heating category.  Daylighting can halve the Lighting category, with low-power electric lights knocking out much of the remainder.  The fun challenge is to implement these concepts cost-effectively, especially for existing buildings, in today's contracting economy.