State of the Gotha

A world with ideological struggles

A world where other hominid species survived

A world without exploitable fossil fuels

At the heart of any world's economic vitality lies its energy landscape, shaping industries, determining costs, and influencing the daily lives of its inhabitants. Gotha presents an intriguing divergence from what we understand on Earth, particularly when viewed through the prism of Gotha's current technological development level which is comparable to earth's in 1995.

With its distinct absence of economically viable fossil fuels, Gotha offers a scenario that challenges our conventional knowledge about economic growth, industrial dynamics, and societal constructs. This stark energy divergence is largely attributed to the unique geological evolution of Gotha. Its distinct geological development curtailed the formation of extensive fossil fuel reserves, with coal being a notable exception. This ventures into uncharted territory, drawing contrasts and parallels between the two worlds. By unravelling the energy cost structures of Gotha, the broader economic implications, from shifts in industrial landscapes to the nuances of daily life can be better understood.

Calculating the Cost of Different Energy Sources on Gotha

Understanding Gotha's energy landscape is crucial, especially in light of its limited economically viable fossil fuels. To provide context, we analysed energy costs based on Earth's 1999 data. In establishing baseline costs, nuclear energy served as our consistent benchmark. From this, we determined relative cost ratios for a suite of ten energy technologies, factoring in technological progress after 1995. Unique challenges arise when addressing the costs of each energy type. For instance, wind power's intermittent nature means it necessitates storage solutions and grid modifications. Biogas operations often demand expansive land and involve intricate purification processes. Moreover, peat extraction is resource-intensive, requiring considerable infrastructure. To ensure clarity in our comparisons, we standardized the data. The energy type with the steepest cost was set as the reference point at 1.0, with other sources adjusted in relation to this. It's pivotal to acknowledge the underlying assumptions of this method. Notably, our reliance on 1999 data might not encapsulate all potential scenarios, and the multipliers, although grounded in industry knowledge, were not extracted from specific empirical studies. This approach, albeit with its constraints, offers a streamlined perspective into the energy economics of Gotha in comparison to Earth.

Obtained energy cost ratios
Energy Source	Cost Ratio
Wind	1.0
Biogas	0.89
Peat	0.89
Nuclear	0.88
Geothermal	0.87
Biomass	0.69
Oil	0.65
Coal	0.64
Natural Gas	0.50
Hydroelectric	0.33

Economic ramifications of not having economically extractable fossil fuels

In evaluating the economic ramifications of eliminating fossil fuels from settings like Gotha, it's essential to first understand the global energy proportions as of 1999. At that time, coal dominated, contributing 38% of the world's energy, followed by oil at 7.5%, natural gas at 19%, nuclear at 17%, hydroelectric at 16%, and a combined total of 3% for renewables like wind, biogas, peat, geothermal, and biomass. Historically, the appeal of fossil fuels lay in their abundance and established infrastructure, making them more economical than most renewables. The global average cost of electricity in 1999 primarily floated between $40 and $60 per MWh due to the heavy reliance on fossil fuels.

But, in a hypothetical scenario where we erase fossil fuels from the equation, as in the Gotha setting, the contribution of 64.5% from these fuels would have to be re-allocated to the other energy sources. This redistribution would lead to nuclear energy accounting for approximately 29% of global energy, hydroelectric around 27%, and renewables ballooning to a significant 67.5%. Using wind energy as a reference with a benchmark cost of $100/MWh and then adjusting the relative costs for other energy sources, the average cost for an MWh in such a fossil fuel-free world would rise sharply to $97.96. To put this into perspective, when compared to the 1999 rates, this signifies a potential price surge of up to 144%. Such a significant leap underscores the economic stability and cushioning that the presence of fossil fuels historically offered to global economies.

Resulting economic landscape summary

Earth - World With Fossil Fuels

• Economic Momentum: Fossil fuels have provided a cheap and reliable energy source, facilitating rapid industrialization and economic growth.
• Industrial Landscape: Hydrocarbons as feedstock have made mass production of plastics and chemicals possible, further enabling industries ranging from automotive to healthcare.
• Energy Affordability: With a global average electricity cost ranging between $40 and $60 per MWh, energy was relatively affordable for many sectors of the world population.
• Environmental Concerns: However, the flip side was the significant environmental impact, with greenhouse gas emissions contributing to climate change.

Gotha - World Without Fossil Fuels

• Energy Costs: Absence of the economical buffer of fossil fuels would mean that the global average electricity cost might hover around $97.96 per MWh, marking a 144% increase.
• Industrial Challenges: Without hydrocarbons, industries would have had to rely on potentially costlier alternatives like bioplastics, metal, glass, wood and fibres. Manufacturing, transportation, and other sectors would likely face higher operational costs due to pricier energy.
• Economic Impact: The higher production costs and reduced consumer spending due to decreased disposable income might lead to slower GDP growth. A potential decline of 9-13% in per capita GDP, marking a tangible dip in living standards.
• Societal Structure: With energy being pricier, socio-economic disparities might become more pronounced, as lower-income households would feel the pinch of higher energy costs more acutely.
• Environmental Silver Lining: On the positive side, this world would likely have a significantly lower carbon footprint, translating to lesser climate-related concerns.

Quantifying difference in GDP between Earth and Gotha

In analysing the potential decline in GDP as a consequence of the elimination of fossil fuels, it is crucial to first comprehend the sectoral impact on various industries and economic activities.

Industrial and Manufacturing: These sectors are cornerstones of many economies due to their high dependence on energy. In general, they contribute about 20-30% of the GDP in several nations. However, an escalation in energy prices could very well diminish its GDP contribution by an estimated 2-3%. Transport: Transportation is another sector significantly reliant on energy, affecting everything from the prices consumers pay for goods to the logistics of businesses. Given its substantial role in global economies, we might anticipate a GDP decrease ranging from 1-2%.

Consumer Spending: Constituting a staggering 60-70% of the GDP for numerous economies, even a slight decline in consumer spending due to the ripple effects of heightened energy and product prices can be disastrous. An estimated 5% decrease in spending would correspond to a 3-3.5% downturn in GDP. Investment: Investments, vital for economic growth and expansion, might see a dip because of prohibitive energy costs. A conservative analysis suggests this could result in a 1% drop in GDP.

Multiplier Effects: These effects cannot be disregarded. As one sector faces an economic downturn, the effects can cascade and compound across other sectors. This phenomenon could introduce an additional GDP decrease of 2-3%.

Sector		GDP Impact
Industrial and Manufacturing	-2 to -3%
Transport	-1 to -2%
Consumer Spending	-3 to -3.5%
Investment	-1%
Multiplier Effects	-2 to -3%

Summing up these impacts, the anticipated total range of decline amounts to a striking **-9 to -12.5%** difference.

Effects on living standards

The explored differences between Earth and Gotha are further enhanced by contrasting different hypothetical profiles of people in each world for countries in different development levels, using 1995 incomes as a benchmark.

High-Income Countries

Aspect	Earth	Gotha
Annual Income	$40,000	$34,800 - $36,800
Housing	Lives in a spacious suburban home with modern amenities.	Lives in a moderately-sized home in suburban or urban areas, with an emphasis on energy efficiency.
Transport	Owns a gasoline-powered car. Public transportation is also available and efficient.	Primarily relies on public transportation and energy-efficient vehicles. Gasoline-powered private vehicles are less common.
Utilities	Consistent electricity, heating, and cooling. Rarely any service disruptions.	Occasional electricity service disruptions due to reliance on variable renewables. Increased use of energy storage units and energy-saving practices.
Consumables	Variety of goods available at competitive prices. Regularly purchases imported goods.	Slight preference for local and sustainable products with some imported goods.
Recreation	Takes yearly international vacations. Regularly dines out and attends entertainment events.	Takes shorter or less frequent international vacations. Occasionally dines out and attends local entertainment events.

Medium-Income Countries

Aspect	Earth	Gotha
Annual Income	$10,000	$8,700 - $9,300
Housing	Lives in a modest urban or suburban home.	Compact living, possibly in multi-generational homes or with fewer rooms to save on energy costs.
Transport	Owns a motorbike or uses shared public transport.	Heavily relies on public transport; fewer personal vehicles.
Utilities	Reliable electricity in urban areas, occasional disruptions.	Frequent electricity disruptions during peak demand.
Consumables	Mix of local and imported goods, occasionally buys luxury items.	Primarily local goods with occasional luxury or imported purchases.
Recreation	Takes yearly local vacations.	Less frequent vacations. Engages in local recreational activities.

Developing (Low-Income) Countries

Aspect	Earth	Gotha
Annual Income	$1,000	$870 - $930
Housing	Lives in basic housing, often in rural or peri-urban settings.	Basic housing with more communal shared facilities.
Transport	Walks, bicycles, or uses shared public transportation.	Primarily walks or bicycles; limited public transport.
Utilities	Inconsistent electricity; many rely on biomass for cooking and heating.	Limited access to electricity; heavier reliance on manual methods for tasks.
Consumables	Prioritizes essential goods, rarely buys non-essentials.	Focuses strictly on essentials, with occasional non-essential purchases when affordable.
Recreation	Local community gatherings, rarely has formal vacations.	Infrequent local recreational activities and community gatherings.

A world with numerous strait divided oceans and less ocean cover