Fossil fuels could have been left in the dust 25 years ago

23rd May, 2024

Gordon Moore’s famous prediction about computing power must count as one of the most astonishingly accurate forecasts in history. But it may also have been badly misunderstood — in a way that now looks like a near-catastrophic missed opportunity. If we had grasped the details behind Moore’s Law in the 1980s, we could be living with an abundance of clean energy by now. We fumbled it.

A refresher on Moore’s Law: in 1965, electronics engineer Gordon Moore published an article noting that the number of components that could efficiently be put on an integrated circuit was roughly doubling every year. “Over the short term this rate can be expected to continue, if not increase,” he wrote. “There is no reason to believe it will not remain nearly constant for at least 10 years. That means, by 1975, the number of components per integrated circuit for minimum cost will be 65,000.”

That component number is now well into the billions. Moore adjusted his prediction in 1975 to doubling every two years, and the revised law has remained broadly true ever since, not only for the density of computer components but for the cost, speed and power consumption of computation itself. The question is, why?

The way Moore formulated the law, it was just something that happened: the sun rises and sets, the leaves that are green turn to brown, and computers get faster and cheaper.

But there’s another way to describe technological progress, and it might be better if we talked less about Moore’s Law, and more about Wright’s Law. Theodore Wright was an aeronautical engineer who, in the 1930s, published a Moore-like observation about aeroplanes: they were getting cheaper in a predictable way. Wright found that the second of any particular model of aeroplane would be 20 per cent cheaper to make than the first, the fourth would be 20 per cent cheaper than the second, and every time cumulative production doubled, the cost of making an additional unit would drop by a further 20 per cent.

A key difference is that Moore’s Law is a function of time, but Wright’s Law is a function of activity: the more you make, the cheaper it gets. What’s more, Wright’s Law applies to a huge range of technologies: what varies is the 20 per cent figure. Some technologies resist cost improvements. Others, such as solar photovoltaic modules, become much cheaper as production ramps up.

In a new book, Making Sense of Chaos, the complexity scientist Doyne Farmer points out that both Moore’s Law and Wright’s Law provide a good basis for forecasting the costs of different technologies. Both nicely describe the patterns that we see in the data. But which one is closer to identifying the underlying causes of these patterns? Moore’s Law suggests that products get cheaper over time, and because they are cheaper they then are demanded and produced in larger quantities. Wright’s Law suggests that rather than falling costs spurring production, it’s mass production that causes costs to fall.

And therein lies the missed opportunity. We acted as though Moore’s Law governed the cost of photovoltaics. While there were of course subsidies for solar PV in countries such as Germany, the default view was that it was too expensive to be much use as a large-scale power source, so we should wait and hope that it would eventually become cheap. If instead we had looked through the lens of Wright’s Law, governments should have been falling over themselves to buy or otherwise subsidise expensive solar PV, because the more we bought, the faster the price would fall.

PV is now so cheap that the question is moot. Yet if we had acted more boldly 40 years ago, solar PV might have been cheap enough to put fossil fuels out of business at the turn of the millennium.

That, of course, presupposes that Wright’s Law really does apply. It might not. Perhaps technological progress depends more on a stream of results from university research labs, and cannot be rushed — in which case, patience is the relevant virtue and a huge splurge on new technologies would be a waste of money.

So — Moore’s Law, or Wright’s Law? Farmer and his colleagues Diana Greenwald and François Lafond turned to the second world war for data. After 1939, the US vastly expanded production of military hardware, from radar to blankets. We can be confident that this was because of the wartime needs of the US and its allies, not because President Roosevelt noticed that tank manufacturers were offering some great discounts. Across a large range of products, Farmer, Greenwald and Lafond found that Wright’s Law explained about half of the fall in production costs during the war.

As Farmer writes, “we can say with some confidence that increasing cumulative production can drive prices down, even if this is not the full story”. Buy more, and they get cheaper.

Wright’s Law isn’t magic, and although it seems to apply to many products, it is rare for the price declines on offer to be as spectacular as those for aeroplanes, solar PV and computer chips. Still, where the data suggest that Wright’s Law holds strongly, governments can drive down prices by subsidising production or demand, one way or another. The individual incentive, after all, is to be a late adopter.

Moore himself saw his own prediction as a challenge, and co-founded the chip manufacturer Intel. Ironically, Moore seems to have been more of a follower of Wright’s Law. Moore’s Law suggests that good things come to those who wait. Wright’s Law says that good things come to those who act.

Written for and first published in the Financial Times on 26 April 2024.

My first children’s book, The Truth Detective is now available (not US or Canada yet – sorry).

I’ve set up a storefront on Bookshop in the United States and the United Kingdom. Links to Bookshop and Amazon may generate referral fees.

Pin It on Pinterest

Share This