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Future can’t be predicted, Past can’t be changed

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Global Perspective of Crisis
Future can’t be predicted, Past can’t be changed is famous wording, agreed by everybody. But its should be written with additional statement that “Present is Complicated and A lot of think that we did not know”. Let see some examples, my self. I was born in 1980s, it was prosper era after successfull Soeharto leadership in 1966. At that time, what I did not know is that the prosperity is related with the US-Indonesia strong relationship during Cold War, so FDI inflow increase during that period.

It was period where the efficient government established. It also due to Oil Crisis of 1973 and the rise of globalization that prediction of Industrialized Indonesia on the track. In the macro level, everything changed in 2000s, post 1997 Financial Crisis, the rise of China and Internet it change everything. The only accurate future prediction is on the population, which is scary, where Indonesia population in 1970s is only 120 million, and the first time I remember Indonesia population is around 180 million in 1990.

Personal Perspective of Crisis
Person A: 1960s Crisis Cold War, 1980s Prosper, 2000s Crisis – 2020s Prosper
Person B: 1950s Prosper, 1970s Crisis, 1990s Prosper, 2010s Crisis

However the perspective of crisis is different between person to person. Let say two example above. Myself, always thought that 1980s and 1990s period is the most prosper period, because it was my childhood, and it biased. Everything is happy at childhood, and when I start to work in 2000s, is a period of never ending crisis until now (2015).

But from my father perspective, it was totally different. In his opinion 1950s is the prosper era, because Indonesia got Independence from Dutch, again it was his childhood. And where he begin to work in 1970s, it was a beginning of crisis until it reach the prosperity in 1990s, even in my opinion he was managed to surviving 1997 crisis. In (short early) conclusion, the definition of crisis will be depending on person to person.

The personal perspective of crisis also make future can not be predicted. For example, there is tendency that people that experiencing crisis will live more frugal and save more. So by doing this internal discipline, unconscious this person prepare for his own future, where at the end he will be success and in the future he will feel that everything is better.

My father for example, when I argue that 2000s is crisis, he said that “in 2000s, people lives better than in the past, with all motorcycle, mobile phone and facility that we have”. My father was right, his perspective on the crisis based on his experience is correct. So my perspective is also correct based on my experience. See, the future prediction is complicated.

Energy-Environment Perspective of Crisis
From the Energy and Environment perspective, the understanding of crisis is seen on the different level. Here is some example:

Early 1970s was a period where energy environment begin to be studied intensively. The first trigger which agreed by several authors was 1973 First Oil Crisis. This crisis is the trigger of development energy modelling, which subsequently developed energy modeling to mitigate this crisis. For example MARKAL developed in late 1970 sponsored by DOE and IEA, while LEAP originally created in 1980 sponsored by Swedish, German, Netherland and US-AID. The 1973 crisis also trigger the establishment of IEA in 1974.

From environment perspective, in 1972 the first UN Conference of Human Environment in Stockholm trigger the establishment of UN Environment Program (UNEP). Afterthat in the 1988 IPCC established by two UN organization which are WMO and UNEP. SEI also established the following year in 1989. On 1992 Earth Summit in Rio becoming trigger for establishment of UNFFCCC, where entered into force on 1994. Later LEAP used by UNFCC for reporting requirements. And in 1997 Kyoto Treaty Signed, Development of Solar PV and Wind Turbine begin to rise.

Modeling Perspective of Future
LEAP is one of energy demand forecasting tools, it is used Accounting Framework Approach to generate consistent view of energy demand and supply. Study of Modeling Energy Supply and Demand, and study of Bottom Up Energy Modelling is a interdisciplinary field of study from Energy, Environment and Economics. Here are some arguments on the complexity of predicting the future by using modelling.

“Energy system models are formulated using theoretical and analytical methods from several disciplines including engineering, economics, operations research, and management science”
Energy Economics – Concepts Issues Market and Governance (Bhattacharyya, 2011)

“Energy demand in the long and short runs is complicated by many factors, such as technological change and the effect of energy prices on the composition, efficiency and utilization of deployed capital must also be considered, not to mention the influence that policy can have on demand by altering costs”
International Handbook on the Economics of Energy (Evan and Hunt, 2009)

“Energy policy involve analysis complicated and interrelated set of possible policy response, from the launching of initiatives to promote energy coservation to the articulation of coherent, sector-wide pricing policies”
Energy Policy Analysis and Modeling (Monasinghe and Meier, 1993)

And here are some illustration on several approach of modelling
Bottom Up Optimization using Markal
01-bottom-up-optimization

Bottom Up Accounting using LEAP
02-bottom-up-accounting

Top Down Econometric
03-top-down

What we should do now?
Life is Been There, Done That. I used to falling in love with Encarta in 2000s, Wikipedia in 2007 and Scopus. Platform changes, but knowledge evolve from textbook to journal and encyclopedia. We have limited knowledge capacity. A fact that “In Europe 33% dams use for hydropower and 20% for irrigation, in Asian 66% dams used for irrigation, but only 7% for hydroelectric (Edwards, 2004, Hydropower Economics)” or a fact that “The energy use of IT equipment is only 3% from total energy produced (Roth, 2004, IT Energy Use)” can make us confuse. It remind me in the early of 2009s on the idea to study about Project Management. There are 20+ something book about project management. There is PMBOK, PRINCE2 and a number of body of knowledge.

So relax, trust your feeling. Just like I mention upfront that “Present is complicated and there are a lot of thing that we did not know”

1008 words

Written by Anjar Priandoyo

Januari 7, 2016 pada 11:21 am

Ditulis dalam Business

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