This month touches on dopamine, the energy transition, and items I have been personally thinking about.
Dopamine:
Originally, experiments on drug addicts led scientists to believe dopamine was all about pleasure. The greater the activity in the dopamine reward pathway, the greater the high. After more experiments, dopamine was better explained as a reward prediction error (when something happens that is better than we expect, it is literally an error in our forecast of the future). Reward prediction error = actual reward minus the expected reward.
The possibility of a reward prediction error is enough for dopamine to increase. The novelty that fuels dopamine doesn’t last forever and must transition to the H&N (Here & Now) chemicals (i.e. serotonin, oxytocin, endorphins, and endocannabinoids).
Dopamine is the molecule of more. H&N are the chemicals that give us pleasure from sensation and emotion. It makes us desire things, while the H&Ns allow us to appreciate them.
Another way to view dopamine is as a currency and the way you track pleasure, success, whether are not you are doing well or poorly. Your experience of life and motivation/drive is relative to how much dopamine you have. The ability to experience motivation and pleasure next is dictated by how much motivation and pleasure you experienced in the past.
There’s the dopamine desire circuit and the dopamine control circuit, which act in opposition to each other. Desire dopamine is the wanting, the more. The control weighs if the desire is worth going after.
“both circuits give us the capacity to consider ‘phantoms’ — things that don’t physically exist. For desire dopamine, those phantoms are things we wish to have but don’t have right now…For control dopamine, the phantoms are the building blocks of imagination and creative thought: ideas, plans, theories, abstract concepts.”
Source: The Molecule of More
Dr. Huberman says it is best not to spike dopamine prior to engaging in effort, and don’t spike dopamine after engaging in effort. Instead, learn to spike dopamine from effort itself.
Dopamine controls our perception of time — another reason it is important to learn to access rewards from the effort and doing. If you are doing a task for some future reward, it makes the process more painful and less efficient because you’re not accessing dopamine via your effort. It makes time feel longer by focusing on a reward at the end as dopamine is released with the reward rather than during the process.
For especially hard endeavors, don’t start layering in other sources of dopamine in order to get to the starting line or to continue. It undermines the ability to lean into the activity next time (will need 2x as much coffee, 3x loud music, etc.). Rather, subjectively start to attach the feeling of friction and effort to an internally generated reward system. Tell yourself the effort part is the good part: “I know it’s painful and doesn’t feel good but I’m focused on this”.
In moments of intense friction, tell yourself it is very painful and because it is painful it will evoke an increase in dopamine later. In this moment, you are doing it by choice and because you love it. (Remains within the context of truth because you want it to feel better/pleasureful.)
The friction/frustration we all too often fight against is actually good and a key to neuroplasticity:
“The mental strain you feel when you’re learning something is the trigger for neuroplasticity for your brain to change. Neuroplasticity is a process of taking something where there’s a duration path and outcome — where I’m working hard. I’m thinking hard. Maybe it’s a hard conversation. Maybe it’s a business plan. Maybe it’s a scientific career. And the goal of neuroplasticity is to make things reflexive.”
Source: The Science of a Success Mindset
Associating dopamine with effort is hard to do because it engages the prefrontal component. Over time you can start to associate a dopamine release from the friction and the challenge. Like anything worth achieving, repetition is involved. However, an added payoff is it will start to become reflexive for all types of effort.
Ironically, confirmation bias is so hard-wired into us that we may actually get a rush of dopamine when we encounter information that confirms what we already believe.
Sources: Huberman Labs podcast episodes on Dopamine and Addiction; The Molecule of More book
Energy Transition:
The ongoing energy transition is misunderstood. This isn’t an argument as to the values surrounding moving to green energy, but rather the facts as we now know them.
Demand for energy will increase by 50% through 2050. Yet the individual components (fossil fuels vs. green) will remain relatively static.
Supply-side shows capex investments remaining below pre-COVID levels until 2025 per Fitch.
It’s Econ 101 that this will result in energy price volatility and higher sustained prices. Talk about a mega shift with the fossil fuels narrative going from peak demand to peak production!
I am inclined to believe the greatest opportunity here lies in private markets. Public markets are subject to the activist ESG movement which will not result in prudent capital allocation. Banks are being pressured to not lend to fossil fuel firms. Independent operators with good rock and investment capital should do well.
Drilled assets by nature are shorter duration than the transition given production curves and the need for higher capex levels to sustain production.
It’s no surprise that the wealthy are the biggest proponents of renewables — they are the most able to deal with price volatility. However, they only want renewable energy when it doesn’t encroach on their way of life. Renewable projects in wealthy areas face the NIMBY (Not In My Backyard) backlash and many have been cancelled.
Material investments will be needed in the electricity grid to support green energy goals. And no, the current U.S. infrastructure bill is nowhere near enough to build the necessary grid infrastructure.
The total bill could require tens of trillions in investments, though estimates like these are inherently speculative. The biggest and most measurable cost would be to generate and deliver all of the country’s electricity using renewable resources. The bill would range from $7.8 trillion to $13.9 trillion over the next 30 years, according to a team of energy researchers at Princeton University.
As a portion of the U.S. economy, the estimated costs to transform the electrical power system top out at just above 5% of the country’s annual economic output [2020 U.S. GDP was $21 trillion]. That is well below the 10% of GDP that was spent on the power system as recently as 2008. Job losses will be offset by gains, though the new jobs would mostly be in different places and require different skills. The Princeton researchers calculated the cost of a complete and partial shift to renewable energy by 2050.
Source: The U.S. Is Turning Green. What Will This Climate Plan Cost and Who Will Pay?
To keep pace with renewable energy additions, BNEF estimated that annual power grid investments will need to grow from roughly $235 billion in 2020 to $636 billion by 2050, representing a 3.4% year-over-year growth rate.
Source: World needs $14 trillion in grid spending by 2050 to support renewables
Plus, the requirements placed on the grid by EVs are crazy:
By 2050, the state projects, electric cars, trucks and buses will use 14% of New York’s total output. That’s equivalent to half of all the electricity used in New York City in 2019 — so it’s like powering a new city of 4 million people. Overall demand could grow by as much as 50%.
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If you plugged in 50 cars at once to 50 [fast] chargers, it would draw as much electricity as a high-rise office building for as long as the cars were being refueled.
Natural gas is the largest source of U.S. electricity generation at 40%. With nuclear still in the doghouse stateside, coal on its way out, and the intermittency issues we have seen around renewables, I’m pretty bullish on natural gas in the years to come.
Be prepared for many articles saying we are falling short of climate goals, as the cutbacks that would have to happen are untenable:
“According to the IPCC, just stabilizing human influences on the climate would require global annual per capita emissions of CO2 to fall to less than one ton by 2075, a level comparable to today’s emissions from such countries as Haiti, Yemen, and Malawi. For comparison, 2015 annual per capita emissions from the United States, Europe, and China were, respectively, about 17, 7, and 6 tons.”
In fact, according to the UN’s IPCC, if the goal is to limit warming to 2ºC, global carbon dioxide emissions must vanish by 2075; if the goal is a rise of no more than 1.5ºC, this date becomes 2050, just thirty years from now. In other words, to achieve the stated Paris goals, the world must almost completely forswear fossil fuels within the next thirty to fifty years.
Source: Unsettled
The chorus of apocalyptic warnings will only increase. One can understand, and indeed support the shift to cleaner energy without agreeing with the scare tactic methods. I am not angry about the shift; rather, I’m angry that certain climate change factors are being presented as a scientific fact. I’m angry that people disregard that the most vulnerable will be the hardest hit. If one disagrees with anything, he/she is automatically characterized as a climate denier. Science has become “The Science” — a form of atheism that secularizes Judeo-Christian values. This is the antithesis of science, which is pursuing knowledge via testable hypotheses and enunciating what is not known.
However, the complexity of climate science doesn’t align well with political messaging and clickbait media:
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, most of them imaginary.
Source: H.L. Mencken
One must do his/her own due diligence on this matter and will find, like many things in life, our uncertainties as to the future outweigh the certainties. Two excellent books to read about this matter are Apocalypse Never: Why Environmental Alarmism Hurts Us All and Unsettled.
Personal:
My values do not overlap with what I spend the majority of my time thinking about.
I suck the joy out of learning by pressuring myself to learn more faster. It’s actually a form of a fixed mindset — ability precedes learning; I’ll either “get it” or I won’t and what must that say about me?
We find what we look for — this is why the filter we use for life is important. If I look for goodness, I will find more goodness.
Question to myself: Do I know the problem I am solving for?
“If you think you know the problem, then you think you have the solution. But if you do not know the problem, then you will simply compound it — by trying to solve a misunderstanding!” — The Daily Coach
