The Weekly Planet #5: Metabolics

All human activity is grounded in energetic and informational sources. These two plug us into the larger (much larger!) non-human world. Future cooperation as well as competition will be predicated on access and control over the two. That's the basic insight behind Metabolics.

We're living through a moment where the fundamental metabolism of civilization, i.e., how we convert energy into motion, heat, light, and computation, is being rewired at planetary scale. This week's Daily Planets have been circling the central truth of future geopolitics: the next century won't be determined by oil fields or coal mines, but by who controls the Electric Stack and the renewable energy systems that power it as well as the Intelligence Stack and the compute that underlies it.

Start with risk. The hedge fund world offers a perverse lesson in how we think about planetary-scale gambles. As Jason Kennedy says about traders who've lost tens of millions, "even a wounded lion is still a lion." Millennium, Citadel, Point72--these firms treat massive losses as expensive educations, offering second chances to portfolio managers who've blown up spectacularly. The logic is simple: someone capable of losing $50 million has proven they can handle $500 million, and their failure might just be the tuition for future success.

We're applying this same logic to planetary risk-taking, except the lions aren't in cages anymore. They're running the circus. When hedge funds blow up, investors lose money. When planetary risk-takers blow up, we lose coastlines, breadbaskets, and the insurance systems that make modern life possible. The question isn't whether we should have a class of planetary risk-takers, for we already do. The question is whether they're playing with house money or the house itself.

The answer becomes clearer when you look at energy geopolitics. Helen Thompson's brilliant analysis reveals how the green transition isn't some smooth technical upgrade but a Herculean reversal of energy physics. For the first time in human history, we're moving from more concentrated to less concentrated energy - from oil's 42 megajoules per kilogram to batteries at 0.5.

It's an ongoing rewrite of civilization's metabolic base.

The geopolitical implications are staggering. China recognized this first, beginning its renewable pivot in the 1990s while the West was still drunk on neoliberalism. Now China produces 80% of solar panels and 70% of lithium-ion batteries. They've turned the thermodynamic disadvantages of renewables into strategic advantages through sheer scale and state coordination. As Bentley Allan notes, clean technology drives down costs, creates economic opportunity, and offers geopolitical freedom - but only if you control the means of production.

Meanwhile, the old energy powers are scrambling. The Gulf states, whose entire social contract rests on petrodollars, are desperately trying to diversify. Saudi Arabia and the UAE are investing billions in renewables abroad, not from environmental concern but existential terror. They see China's oil demand peaking, Ethiopia banning combustion engines, Pakistan drowning in cheap Chinese solar. The recent defense pact between Pakistan and Saudi Arabia hints at future developments.

This transformation is already breaking our risk-management systems. Insurance, that great metabolizer of uncertainty into manageable premiums, is starting to choke. Kate Mackenzie and Tim Sahay's analysis of insurance in the polycrisis reveals a doom loop in formation: climate change makes properties uninsurable, uninsurable properties become unmortgageable, unmortgageable properties crash markets, crashed markets destroy economies. California's wildfires alone caused $37.5 billion in insured losses this year - 70% of global disaster costs.

But insurers aren't going out of business; they're just passing the buck. State Farm and Allstate quit California entirely. In Florida, premiums have tripled. The UK's Flood Re scheme, designed to transition to market pricing over 25 years, has instead watched flood risk grow while the government fails to stop building in flood zones. The US National Flood Insurance Program is perversely subsidizing coastal McMansions for the wealthy while the poor get priced out or washed out.

The insurance crisis reveals something deeper: we're trying to maintain twentieth-century property relations in a twenty-first-century climate. The "risk signal" that higher premiums supposedly send gets drowned out by political pressure, mortgage requirements, and the simple fact that people can't just abandon their homes. We're not dealing with fungible assets but communities, memories, entire ways of life built in what are increasingly the wrong places.

Enter catastrophe bonds, where finance capital bets against disaster for uncorrelated returns. It's risk-taking at its most abstract--turning hurricanes into yield curves, floods into derivatives. The market has exploded to billions, with pension funds and hedge funds treating climate catastrophe as a diversification strategy. They're literally betting that when the storms come, they won't correlate with tech stock crashes. It's planetary risk-taking as portfolio theory, and it's growing fast.

Meanwhile, China isn't just dominating renewable hardware; they're reimagining the entire relationship between AI and development. Their new "AI Plus" policy represents a complete paradigm shift from the "Internet Plus" era. Where the internet connected things - restaurants to delivery drivers, riders to cars - AI promises to transform them fundamentally. The policy's three-step roadmap is breathtaking in ambition: 70% adoption of AI agents by 2027, 90% by 2030, and by 2035, full entry into what they call an "intelligent society."

China is treating AI like they treated solar panels and batteries - with industrial policy to match - as a strategic capability to be developed at any cost. They're talking about AI transforming not just the economy but philosophy, social relations, even methods of thought. When they say the intelligent economy will be a "major growth driver," they are betting it will stand alongside real estate and traditional manufacturing as the foundation of Chinese prosperity.

The contrast with Western approaches couldn't be starker. While it debates AI safety and worry about job displacement, China is mandating AI integration across agriculture, industry, and services. They're building "AI-native enterprises" whose entire architecture assumes artificial intelligence. They're even exploring "human-machine collaborative research" in philosophy and social sciences. It's as if they've decided that instead of protecting humans from AI, they'll transform humans with AI.

Not surprising if you have read Adam Tooze saying the center of modernization has now moved to China.

Having said all of this, the most interesting Daily Planet of this week comes from Packy McCormick and Sam D'Amico's analysis of the Electric Stack: that combination of lithium-ion batteries, neodymium magnets, electric motors, power electronics, and embedded compute that makes everything electric possible. The numbers are impressive: 98.7% cost decline in batteries since 1991, 98.8% decline in electromagnetic actuation, 99% drops across the board; they're complete phase changes in what's economically possible.

China controls it all.

They produce 75% of lithium-ion batteries and 90% of neodymium magnets. The story of how this happened reads like a tragedy of Western short-sightedness. GM sold its magnetics division, Magnequench, to China for $70 million - to Deng Xiaoping's son-in-law, no less. A123 Systems, which invented the lithium iron phosphate battery, went bankrupt and sold to China for $257 million. The US invented the future and then sold it for parts.

The magnets story is particularly galling. Two scientists - Croat at GM, Sagawa at Sumitomo - independently discovered neodymium-iron-boron magnets and announced them at the same conference on the same day in 1983. The West had this technology first. Now China controls 90% of production, and without magnets, nothing in the Electric Stack moves. Every motor, every actuator, every device that converts electricity to motion depends on Chinese magnets.

This gives China extraordinary system-level power. Companies like BYD don't just make electric cars; they make home energy systems, drones, even iPads. They've mastered what McCormick calls the "Electric Platform" - the ability to innovate across domains because the fundamental stack is the same. A battery breakthrough for cars immediately improves robots, drones, and grid storage.

Vertical integration at planetary scale.

The West's response has been fragmented and contradictory - say, by imposing tariffs on Chinese EVs while desperately needing their batteries. The West worries about China's AI capabilities while they worry about transforming their entire society with AI.

The insurance crisis, the energy transition, AI transformation, and Electric Stack dominance aren't separate phenomena - they're the same metabolic shift viewed from different angles.

The Fundamental Principle of Metabolics: everything is built on top of bits and volts.

The renewable transition isn't just about swapping energy sources; it's about who controls the means of converting energy into everything else. The Electric Stack is the new oil, except it's not extracted but manufactured, not depleted but improved, not geographically fixed but technologically determined. Whoever controls the stack controls the metabolism of the twenty-first century.

Arguably, China has understood this first and moved with the coordination only an authoritarian state can muster. The West, trapped between market ideology, internal conflict and democratic paralysis, is scrambling to respond. The wounded lions of high finance might get second chances after losing millions, but there are no second chances at planetary scale. When you're betting the entire circus, you can't afford to have the lions escape.

We're at an inflection point.

The old energy order is dying - you can see it in the desperate diversification of the Gulf states, the insurance retreats from climate-exposed areas, the fevered attempts to maintain fossil-fuel relevance. The new order is being born in Chinese battery factories, in massive solar deployments across the Global South, in AI systems that promise to transform not just production but consciousness itself.

The question isn't whether this transition will happen, but when and under whose control? Who will benefit from it? Will we manage it consciously or stumble through it blindly? The electric future is coming whether we're ready or not. The metabolism of civilization is shifting from fossil to electric, perhaps from Western to Eastern control. We can keep pretending otherwise, keep betting against disasters while building in flood zones, keep selling our technological future for quarterly earnings. Or we can recognize that the game has changed, the stakes are planetary, and the house itself is on the table.