By serendipity, the NY Times
just today had an essay by Stephen King (not the novelist), "When Wealth Disappears" (http://www.nytimes.com/2013/10/07/opini ... .html?_r=0
) making exactly the sort of argument that Bernstein criticizes. I am not capable of adjudicating the dispute, but I was quite pleased to see Bernstein make Karl Popper's point that technological breakthroughs cannot be known in advance, since if they could be, they would have already occurred.
Bernstein thinks that it is more reasonable to project the continuation of technological breakthroughs than to predict a continuing increase in coal production.
As investors we should be aware there have been long periods (the late 19th century) when investments made poor returns, and when economies were stuck in stagnation. That's more or less what King (former Chief Economist HSBC bank?) is writing about.
The counterpoint on energy is Vaclav Smil, who shows you in several books just how slowly methods of energy production change in terms of total consumption. Coal was the world's largest energy source in 1930, and it still is number 2 in 2013 (might be marginally lapped by natural gas). Oil is something like 35-40% world energy consumption and has been since 1950 at least. Nuclear went from 0 to 8% but is now slipping. Natural gas is the big gainer over that time period and looks like the one that will make further gains in the 21st century (it's cleaner than coal, but it does not solve the problem). The oldest form of human energy, biomass, is still a big component, despite all the inherent environmental problems (smoke from cooking kills thousands if not millions of 3rd worlders very year).
Wind and solar are tiny--less than 2%. Despite exponential growth in installations. Most 'renewables' are in fact, hydro electric, almost the oldest source of electric power.
The message is one of a certain Long Run optimism, but also of Realism. Societies tend to access their cheapest resources first regardless of the long run harm. Even though this has at various times led to disastrous deforestation (the Romans and Greeks), soil erosion and even collapse.
What we are asking is humans to break an age old pattern of favouring the short term over the long term-- consider the state of fish stocks in our oceans. *that* is very difficult, it runs counter to human nature. There are plenty of examples in history where it was done (Elinor Ostrin won the Nobel Prize for her studies of communities managing common resources) but probably even more when it has not.
Hope is not a plan. 'Something will turn up' cannot be the basis for what you do.
Another way of putting it, sometimes called 'the Precautionary Principle' is 'Praise Allah, but first tie up your camel'.