The Collapse of Civilization May Have Already Begun

27 11 2019

Scientists disagree on the timeline of collapse and whether it’s imminent. But can we afford to be wrong? And what comes after?

Another long, but as always very well researched post by Nafeez Ahmed
Nov 23 2019

“It is now too late to stop a future collapse of our societies because of climate change.”

These are not the words of a tinfoil hat-donning survivalist. This is from a paper delivered by a senior sustainability academic at a leading business school to the European Commission in Brussels, earlier this year. Before that, he delivered a similar message to a UN conference: “Climate change is now a planetary emergency posing an existential threat to humanity.”

In the age of climate chaos, the collapse of civilization has moved from being a fringe, taboo issue to a more mainstream concern.

As the world reels under each new outbreak of crisis—record heatwaves across the Western hemisphere, devastating fires across the Amazon rainforest, the slow-moving Hurricane Dorian, severe ice melting at the poles—the question of how bad things might get, and how soon, has become increasingly urgent.

The fear of collapse is evident in the framing of movements such as ‘Extinction Rebellion’ and in resounding warnings that business-as-usual means heading toward an uninhabitable planet.

But a growing number of experts not only point at the looming possibility that human civilization itself is at risk; some believe that the science shows it is already too late to prevent collapse. The outcome of the debate on this is obviously critical: it throws light on whether and how societies should adjust to this uncertain landscape.

Yet this is not just a scientific debate. It also raises difficult moral questions about what kind of action is warranted to prepare for, or attempt to avoid, the worst. Scientists may disagree about the timeline of collapse, but many argue that this is entirely beside the point. While scientists and politicians quibble over timelines and half measures, or how bad it’ll all be, we are losing precious time. With the stakes being total collapse, some scientists are increasingly arguing that we should fundamentally change the structure of society just to be safe.

Jem Bendell, a former consultant to the United Nations and longtime Professor of Sustainability Leadership at the University of Cumbria’s Department of Business, delivered a paper in May 2019 explaining how people and communities might “adapt to climate-induced disruption.”

Bendell’s thesis is not only that societal collapse due to climate change is on its way, but that it is, in effect, already here. “Climate change will disrupt your way of life in your lifetimes,” he told the audience at a climate change conference organized by the European Commission.

Devastating consequences, like “the cascading effects of widespread and repeated harvest failures” are now unavoidable, Bendell’s paper says.

He argues this is not so much a doom-and-gloom scenario as a case of waking up to reality, so that we can do as much as we can to save as many lives as possible. His recommended response is what he calls “Deep Adaptation,” which requires going beyond “mere adjustments to our existing economic system and infrastructure, in order to prepare us for the breakdown or collapse of normal societal functions.”

Bendell’s message has since gained a mass following and high-level attention. It is partly responsible for inspiring the new wave of climate protests reverberating around the world.

In March, he launched the Deep Adaptation Forum to connect and support people who, in the face of “inevitable” societal collapse, want to explore how they can “reduce suffering, while saving more of society and the natural world.” Over the last six months, the Forum has gathered more than 10,000 participants. More than 600,000 people have downloaded Bendell’s paper, called Deep Adaptation: A Map for Navigating our Climate Tragedy, published by the University of Cumbria’s Institute of Leadership and Sustainability (IFALS). And many of the key organizers behind the Extinction Rebellion (XR) campaign joined the protest movement after reading it.

“There will be a near-term collapse in society with serious ramifications for the lives of readers,” concludes that paper, released in 2017.

Catastrophe is “probable,” it adds, and extinction “is possible.” Over coming decades, we will see the escalating impacts of the fossil fuel pollution we have already pumped into the atmosphere and oceans. Even if we ceased emissions tomorrow, Bendell argues, the latest climate science shows that “we are now in a climate emergency, which will increasingly disrupt our way of life… a societal collapse is now inevitable within the lifetimes of readers of this paper.”

Bendell puts a rough timeline on this. Collapse will happen within 10 years and inflict disruptions across nations, involving “increased levels of malnutrition, starvation, disease, civil conflict, and war.”

Yet this diagnosis opens up far more questions than it answers. I was left wondering: Which societies are at risk of collapsing due to climate change, and when? Some societies or all societies? Simultaneously or sequentially? Why some rather than others? And how long will the collapse process take? Where will it start, and in what sector? How will that impact others sectors? Or will it take down all sectors of societies in one fell swoop? And what does any of this imply for whether, or how, we might prepare for collapse?

In attempting to answer these questions, I spoke to a wide-range of scientists and experts, and took a deep dive into the obscure but emerging science of how societies and civilizations collapse. I wanted to understand not just whether Bendell’s forecast was right, but to find out what a range experts from climate scientists to risk analysts were unearthing about the possibility of our societies collapsing in coming years and decades.

The emerging science of collapse is still, unfortunately, a nascent field. That’s because it’s an interdisciplinary science that encompasses not only the incredibly complex, interconnected natural systems that comprise the Earth System, but also has to make sense of how those systems interact with the complex, interconnected social, political, economic, and cultural systems of the Human System.

What I discovered provoked a wide range of emotions. I was at times surprised and shocked, often frightened, sometimes relieved. Mostly, I was unsettled. Many scientists exposed flaws in Bendell’s argument. Most rejected the idea of inevitable near-term collapse outright. But to figure out whether a near-term collapse scenario of some kind was likely led me far beyond Bendell. A number of world leading experts told me that such a scenario might, in fact, be far more plausible than conventionally presumed.

Science, gut, or a bit of both?

According to Penn State professor Michael Mann, one of the world’s most renowned climate scientists, Bendell’s grasp of the climate science is deeply flawed.

“To me, this paper is a perfect storm of misguidedness and wrongheadedness,” he told me.

Bendell’s original paper had been rejected for publication by the peer-reviewed Sustainability Accounting, Management and Policy Journal. According to Bendell, the changes that editorial reviewers said were necessary to make the article fit for publication made no sense. But among them, one referee questioned whether Bendell’s presentation of climate data actually supported his conclusion: “I am not sure that the extensive presentation of climate data supports the core argument of the paper in a meaningful way.”

In his response, sent in the form of a letter to the journal’s chief editor, Bendell wrote: “Yet the summary of science is the core of the paper as everything then flows from the conclusion of that analysis. Note that the science I summarise is about what is happening right now, rather than models or theories of complex adaptive systems which the reviewer would have preferred.”

But in Mann’s view, the paper’s failure to pass peer review was not simply because it didn’t fit outmoded academic etiquette, but for the far more serious reason that it lacks scientific rigor. Bendell, he said, is simply “wrong on the science and impacts: There is no credible evidence that we face ‘inevitable near-term collapse.’”

Dr. Gavin Schmidt, head of NASA’s Goddard Institute for Space Studies, who is also world-famous, was even more scathing.

“There are both valid points and unjustified statements throughout,” he told me about Bendell’s paper. “Model projections have not underestimated temperature changes, not everything that is non-linear is therefore ‘out of control.’ Blaming ‘increased volatility from more energy in the atmosphere’ for anything is silly. The evidence for ‘inevitable societal collapse’ is very weak to non-existent.”

Schmidt did not rule out that we are likely to see more instances of local collapse events. “Obviously we have seen such collapses in specific locations associated with extreme storm impacts,” he said. He listed off a number of examples—Puerto RicoBarbudaHaiti, and New Orleans—explaining that while local collapses in certain regions could be possible, it’s a “much harder case to make” at a global level. “And this paper doesn’t make it. I’m not particularly sanguine about what is going to happen, but this is not based on anything real.”

Jeremy Lent, systems theorist and author of The Patterning Instinct: A Cultural History of Humanity’s Search for Meaningargues that throughout Bendell’s paper he frequently slips between the terms “inevitable,” “probably,” and “likely.”

“If he chooses to go with his gut instinct and conclude collapse is inevitable, he has every right to do so,” Lent said, “but I believe it’s irresponsible to package this as a scientifically valid conclusion, and thereby criticize those who interpret the data otherwise as being in denial.”

When I pressed Bendell on this issue, he pushed back against the idea that he was putting forward a hard, scientifically-valid forecast, describing it as a “guess”: “I say in the original paper that I am only guessing at when social collapse will occur. I have said or written that every time I mention that time horizon.”

But why offer this guess at all? “The problem I have with the argument that I should not give a time horizon like 10 years is that not deciding on a time horizon acts as a psychological escape from facing our predicament. If we can push this problem out into 2040 or 2050, it somehow feels less pressing. Yet, look around. Already harvests are failing because of weather made worse by climate change.”

Bendell points out that such impacts are already damaging more vulnerable, poorer societies than our own. He says it is only a matter of time before they damage the normal functioning of “most countries in the world.”

Global food system failure

According to Dr. Wolfgang Knorr, Principal Investigator at Lund University’s Biodiversity and Ecosystem Services in a Changing Climate Program, the risk of near-term collapse should be taken far more seriously by climate scientists, given the fact that so much is unknown about climate tipping points: “I am not saying that Bendell is right or wrong. But the criticism of Bendell’s points focuses too much on the detail and in that way studiously tries to avoid the bigger picture. The available data points to the fact that some catastrophic climate change is inevitable.”

Bendell argues that the main trigger for some sort of collapse—which he defines as “an uneven ending of our normal modes of sustenance, security, pleasure, identity, meaning, and hope”—will come from accelerating failures in the global food system.

We know that it is a distinct possibility that so-called multi-breadbasket failures (when major yield reductions take place simultaneously across agricultural areas producing staple crops like rice, wheat, or maize) can be triggered by climate change—and have already happened.

As shown by American physicist Dr. Yaneer Ban Yam and his team at the New England Complex Systems Institute, in the years preceding 2011, global food price spikes linked to climate breakdown played a role in triggering the ‘Arab Spring’ uprisings. And according to hydroclimatologist Dr. Peter Gleick, climate-induced drought amplified the impact of socio-political and economic mismanagement, inflicting agricultural failures in Syria. These drove mass migrations within the country, in turn laying the groundwork for sectarian tensions that spilled over into a protracted conflict.

In my own work, I found that the Syrian conflict was not just triggered by climate change, but a range of intersecting factors—Syria’s domestic crude oil production had peaked in the mid-90s, leading state revenues to hemorrhage as oil production and exports declined. When global climate chaos triggered food price spikes, the state had begun slashing domestic fuel and food subsidies, already reeling from the impact of economic mismanagement and corruption resulting in massive debt levels. And so, a large young population overwhelmed with unemployment and emboldened by decades of political repression took to the streets when they could not afford basic bread. Syria has since collapsed into ceaseless civil war.

This is a case of what Professor Thomas-Homer Dixon, University Research Chair in the University of Waterloo’s Faculty of Environment, describes as “synchronous failure”—when multiple, interconnected stressors amplify over time before triggering self-reinforcing feedback loops which result in them all failing at the same time. In his book, The Upside of DownCatastrophe, Creativity and the Renewal of Civilization, he explains how the resulting convergence of crises overwhelms disparate political, economic and administrative functions, which are not designed for such complex events.

From this lens, climate-induced collapse has already happened, though it is exacerbated by and amplifies the failure of myriad human systems. Is Syria a case-study of what is in store for the world? And is it inevitable within the next decade?

In a major report released in August, the UN’s Intergovernmental Panel on Climate Change (IPCC) warned that hunger has already been rising worldwide due to climate impacts. A senior NASA scientist, Cynthia Rosenzweig, was a lead author of the study, which warned that the continued rise in carbon emissions would drive a rise in global average temperatures of 2°C in turn triggering a “very high” risk to food supplies toward mid-century. Food shortages would hit vulnerable, poorer regions, but affluent nations may also be in the firing line. As a new study from the UK Parliamentary Environment Audit Committee concludes, fruit and vegetable imports to countries like Britain might be cut short if a crisis breaks out.

When exactly such a crisis might happen is not clear. Neither reports suggest it would result in the collapse of civilization, or even most countries, within 10 years. And the UN also emphasizes that it is not too late to avert these risks through a shift to organic and agro-ecological methods.

NASA’s Gavin Schmidt acknowledged “increasing impacts from climate change on global food production,” but said that a collapse “is not predicted and certainly not inevitable.”

The catastrophic ‘do-nothing’ scenario

A few years ago, though, I discovered first-hand that a catastrophic collapse of the global food system is possible in coming decades if we don’t change course. At the time I was a visiting research fellow at Anglia Ruskin University’s Global Sustainability Institute, and I had been invited to a steering committee meeting for the Institute’s Global Research Observatory (GRO), a research program developing new models of global crisis.

One particular model, the Dawe Global Security Model, was focused on the risk of another global food crisis, similar to what triggered the Arab Spring.

“We ran the model forward to the year 2040, along a business-as-usual trajectory based on ‘do-nothing’ trends—that is, without any feedback loops that would change the underlying trend,” said institute director Aled Jones to the group of stakeholders in the room, which included UK government officials. “The results show that based on plausible climate trends, and a total failure to change course, the global food supply system would face catastrophic losses, and an unprecedented epidemic of food riots. In this scenario, global society essentially collapses as food production falls permanently short of consumption.”

Jones was at pains to clarify that this model-run could not be taken as a forecast, particularly as mitigation policies are already emerging in response to concern about such an outcome: “This scenario is based on simply running the model forward,” he said. “The model is a short-term model. It’s not designed to run this long, as in the real world trends are always likely to change, whether for better or worse.”

Someone asked, “Okay, but what you’re saying is that if there is no change in current trends, then this is the outcome?”

“Yes,” Jones replied quietly.

The Dawe Global Security Model put this potential crisis two decades from now. Is it implausible that the scenario might happen much earlier? And if so why aren’t we preparing for this risk?

When I asked UN disaster risk advisor Scott Williams about a near-term global food crisis scenario, he pointed out that this year’s UN flagship global disaster risk assessment was very much aware of the danger of another global “multiple breadbasket failure.”

“A projected increase in extreme climate events and an increasingly interdependent food supply system pose a threat to global food security,” warned the UN Global Assessment Report on Disaster Risk Reduction released in May. “For instance, local shocks can have far-reaching effects on global agricultural markets.”

Climate models we’ve been using are not too alarmist; they are consistently too conservative, and we have only recently understood how bad the situation really is.

Current agricultural modelling, the UN report said, does not sufficiently account for these complex interconnections. The report warns that “climate shocks and consequent crop failure in one of the global cereal breadbaskets might have knock-on effects on the global agricultural market. The turbulences are exacerbated if more than one of the main crop-producing regions suffers from losses simultaneously.”

Williams, who was a coordinating lead author of the UN global disaster risk assessment, put it more bluntly: “In a nutshell, Bendell is closer to the mark than his critics.”

He pointed me to the second chapter of the UN report which, he said, expressed the imminent risk to global civilization in a “necessarily politically desensitized” form. The chapter is “close to stating that ‘collapse is inevitable’ and that the methods that we—scientists, modellers, researchers, etc—are using are wholly inadequate to understand that nature of complex, uncertain ‘transitions,’ in other words, collapses.”

Williams fell short of saying that such a collapse scenario was definitely unavoidable, and the UN report—while setting out an alarming level of risk—did not do so either. What they did make clear is that a major global food crisis could erupt unexpectedly, with climate change as a key trigger.

Climate tipping points

A new study by a team of scientists at Oxford, Bristol, and Austria concludes that our current carbon emissions trajectory hugely increases this risk. Published in October in the journal Agricultural Systems, the study warns that the rise in global average temperatures is increasing the likelihood of “production shocks” affecting an increasingly interconnected global food system.

Surpassing the 1.5 °C threshold could potentially trigger major “production losses” of millions of tonnes of maize, wheat and soybean.

Right now, carbon dioxide emissions are on track to dramatically increase this risk of multi-breadbasket failures. Last year, the IPCC found that unless we reduce our emissions levels by five times their current amount, we could hit 1.5°C as early as 2030, and no later than mid-century. This would dramatically increase the risk of simultaneous crop failures, food production shocks and other devastating climate impacts.

In April this year, the European Commission’s European Strategy and Policy Analysis System published its second major report to EU policymakers, Global Trends to 2030: Challenges and Choices for Europe. The report, which explores incoming national security, geopolitical and socio-economic risks, concluded: “An increase of 1.5 degrees is the maximum the planet can tolerate; should temperatures increase further beyond 2030, we will face even more droughts, floods, extreme heat and poverty for hundreds of millions of people; the likely demise of the most vulnerable populations—and at worst, the extinction of humankind altogether.”

But the IPCC’s newer models suggest that the situation is even worse than previously thought. Based on increased supercomputing power and sharper representations of weather systems, those new climate models—presented at a press conference in Paris in late September—reveal the latest findings of the IPCC’s sixth assessment report now underway.

The models now show that we are heading for 7°C by the end of the century if carbon emissions continue unabated, two degrees higher than last year’s models. This means the earth is far more sensitive to atmospheric carbon than previously believed.

This suggests that the climate models we’ve been using are not too alarmist; they are consistently too conservative, and we have only recently understood how bad the situation really is.

I spoke to Dr. Joelle Gergis, a lead author on the IPCC’s sixth assessment report, about the new climate models. Gergis admitted that at least eight of the new models being produced for the IPCC by scientists in the US, UK, Canada and France suggest a much higher climate sensitivity than older models of 5°C or warmer. But she pushed back against the idea that these findings prove the inevitability of collapse, which she criticized as outside the domain of climate science. Rather, the potential implications of the new evidence are not yet known.

“Yes, we are facing alarming rates of change and this raises the likelihood of abrupt, non-linear changes in the climate system that may cause tipping points in the Earth’s safe operating space,” she said. “But we honestly don’t know how far away we are from that just yet. It may also be the case that we can only detect that we’ve crossed such a threshold after the fact.”

In an article published in August in the Australian magazine The Monthly, Dr. Gergis wrote: “When these results were first released at a climate modelling workshop in March this year, a flurry of panicked emails from my IPCC colleagues flooded my inbox. What if the models are right? Has the Earth already crossed some kind of tipping point? Are we experiencing abrupt climate change right now?”

Half the Great Barrier Reef’s coral system has been wiped out at current global average temperatures which are now hovering around 1°C higher than pre-industrial levels. Gergis describes this as “catastrophic ecosystem collapse of the largest living organism on the planet.” At 1.5°C, between 70 and 90 percent of reef-building corals are projected to be destroyed, and at 2°C, some 99 percent may disappear: “An entire component of the Earth’s biosphere—our planetary life support system—would be eliminated. The knock-on effects on the 25 percent of all marine life that depends on coral reefs would be profound and immeasurable… The very foundation of human civilization is at stake.”

But Gergis told me that despite the gravity of the new models, they do not prove conclusively that past emissions will definitely induce collapse within the next decade.

“While we are undeniably observing rapid and widespread climate change across the planet, there is no concrete evidence that suggests we are facing ‘an inevitable, near term society collapse due to climate change,’” she said. “Yes, we are absolutely hurtling towards conditions that will create major instabilities in the climate system, and time is running out, but I don’t believe it is a done deal just yet.”

Yet it is precisely the ongoing absence of strong global policy that poses the fatal threat. According to Lund University climate scientist Wolfgang Knorr, the new climate models mean that practically implementing the Paris Accords target of keeping temperatures at 1.5 degrees is now extremely difficult. He referred me to his new analysis of the challenge published on the University of Cumbria’s ILFAS blog, suggesting that the remaining emissions budget given by the IPCC “will be exhausted at the beginning of 2025.” He also noted that past investment in fossil-fuel and energy infrastructure alone will put us well over that budget.

The scale of the needed decarbonization is so great and so rapid, according to Tim Garrett, professor of atmospheric sciences at the University of Utah, that civilization would need to effectively “collapse” its energy consumption to avoid collapsing due to climate catastrophe. In a 2012 paper in Earth System Dynamics, he concluded therefore that “civilization may be in a double-bind.”

“We still have time to try and avert the scale of the disaster, but we must respond as we would in an emergency”

In a previous paper in Climatic Change, Garrett calculated that the world would need to switch to non-carbon renewable energy sources at a rate of about 2.1 percent a year just to stabilize emissions. “That comes out [equivalent] to almost one new nuclear power plant per day,” Garrett said. Although he sees this as fundamentally unrealistic, he concedes that a crash transition programme might help: “If society invests sufficient resources into alternative and new, non-carbon energy supplies, then perhaps it can continue growing without increasing global warming.”

Gergis goes further, insisting that it is not yet too late: “We still have time to try and avert the scale of the disaster, but we must respond as we would in an emergency. The question is, can we muster the best of our humanity in time?”

There is no straightforward answer to this question. To get there, we need to understand not just climate science, but the nature, dynamics, and causes of civilizational collapse.

Limits to Growth

One of the most famous scientific forecasts of collapse was conducted nearly 50 years ago by a team of scientists at MIT. Their “Limits to Growth” (LTG) model, known as “World3,” captured the interplay between exponential population and economic growth, and the consumption of raw materials and natural resources. Climate change is an implicit feature of the model.

LTG implied that business-as-usual would lead to civilizational breakdown, sometime between the second decade and middle of the 21st century, due to overconsumption of natural resources far beyond their rate of renewal. This would escalate costs, diminish returns, and accelerate environmental waste, ecosystem damage, and global heating. With more capital diverted to the cost of extracting resources, less is left to invest in industry and other social goods, driving long-term economic decline and political unrest.

The forecast was widely derided when first published, and its core predictions were often wildly misrepresented by commentators who claimed it had incorrectly forecast the end of the world by the year 2000 (it didn’t).

Systems scientist Dennis Meadows had headed up the MIT team which developed the ‘World3’ model. Seven years ago, he updated the original model in light of new data with co-author Jorgen Randers, another original World3 team-member.

“For those who respect numbers, we can report that the highly aggregated scenarios of World3 still appear… to be surprisingly accurate,” they wrote in Limits to Growth: the 30 year update. “The world is evolving along a path that is consistent with the main features of the scenarios in LTG.”

One might be forgiven for suspecting that the old MIT team were just blowing their own horn. But a range of independent scientific reviews, some with the backing of various governments, have repeatedly confirmed that the LTG ‘base scenario’ of overshoot and collapse has continued to fit new data. This includes studies by Professor Tim Jackson of the University of Surrey, an economics advisor to the British government and Ministry of Defense; Australia’s federal government scientific research agency CSIRO; Melbourne University’s Sustainable Society Institute; and the Institute and Faculty of Actuaries in London.

“Collapse is not a very precise term. It is possible that there would be a general, drastic, uncontrolled decline in population, material use, and energy consumption by 2030 from climate change,” Meadows told me when I asked him whether the LTG model shines any light on the risk of imminent collapse. “But I do not consider it to be a high probability event,” he said. Climate change would, however, “certainly suffice to alter our industrial society drastically by 2100.” It could take centuries or millennia for ecosystems to recover.

But there is a crucial implication of the LTG model that is often overlooked: what happens during collapse. During an actual breakdown, new and unexpected social dynamics might come into play which either worsen or even lessen collapse.

Those dynamics all depend on human choices. They could involve positive changes through reform in political leadership or negative changes such as regional or global wars.

That’s why modelling what happens during the onset of collapse is especially tricky, because the very process of collapse alters the dynamics of change.

Growth, complexity and resource crisis

What if, then, collapse is not necessarily the end? That’s the view of Ugo Bardi, of the University of Florence, who has developed perhaps the most intriguing new scientific framework for understanding collapse.

Earlier this year, Bardi and his team co-wrote a paper in the journal BioPhysical Economics and Resource Quality, drawing on the work of anthropologist Joseph Tainter at Utah State University’s Department of Environment and Society. Tainter’s seminal book, The Collapse of Complex Societies, concluded that societies collapse when their investments in social complexity reach a point of diminishing marginal returns.

Tainter studied the fall of the Western Roman empire, Mayan civilization, and Chaco civilization. As societies develop more complex and specialized bureaucracies to solve emerging problems, these new layers of problem-solving infrastructure generate new orders of problems. Further infrastructure is then developed to solve those problems, and the spiral of growth escalates.

As each new layer also requires a new ‘energy’ subsidy (greater consumption of resources), it eventually cannot produce enough resources to both sustain itself and resolve the problems generated. The result is that society collapses to a new equilibrium by shedding layers of complex infrastructure amassed in previous centuries. This descent takes between decades and centuries.

In his recent paper, Bardi used computer models to test how Tainter’s framework stood-up. He found that diminishing returns from complexity were not the main driver of a system’s decline; rather the decline in complexity of the system is due to diminishing returns from exploiting natural resources.

In other words, collapse is a result of a form of endless growth premised on the unsustainable consumption of resources, and the new order of increasingly unresolvable crises this generates.

In my view, we are already entering a perfect storm feedback loop of complex problems that existing systems are too brittle to solve. The collapse of Syria, triggered and amplified partly by climate crisis, did not end in Syria. Its reverberations have not only helped destabilize the wider Middle East, but contributed to the destabilization of Western democracies.

In January, a study in Global Environment Change found that the impact of “climatic conditions” on “drought severity” across the Middle East and North Africa amplified the “likelihood of armed conflict.” The study concluded that climate change therefore played a pivotal role in driving the mass asylum seeking between 2011 and 2015—including the million or so refugees who arrived in Europe in 2015 alone, nearly 50 percent of whom were Syrian. The upsurge of people fleeing the devastation of their homes was a gift to the far-right, exploited by British, French and other nationalists campaigning for the break-up of the European Union, as well as playing a role in Donald Trump’s political campaigning around The Wall.

To use my own terminology, Earth System Disruption (ESD) is driving Human System Destabilization (HSD). Preoccupied with the resulting political chaos, the Human System becomes even more vulnerable and incapable of ameliorating ESD. As ESD thus accelerates, it generates more HSD. The self-reinforcing cycle continues, and we find ourselves in an amplifying feedback loop of disruption and destabilization.

Beyond collapse

Is there a way out of this self-destructive amplifying feedback loop? Bardi’s work suggests there might be—that collapse can pave the way for a new, more viable form of civilization, whether or not countries and regions experience collapses, crises, droughts, famine, violence, and war as a result of ongoing climate chaos.

Bardi’s analysis of Tainter’s work extends the argument he first explored in his 2017 peer-reviewed studyThe Seneca Effect: When Growth is Slow but Collapse is Rapid. The book is named after the Roman philosopher Lucius Annaeus Seneca, who once said that “fortune is of sluggish growth, but ruin is rapid.”

Bardi examines a wide-range of collapse cases across human societies (from the fall of past empires, to financial crises and large-scale famines), in nature (avalanches) and through artificial structures (cracks in metal objects). His verdict is that collapse is not a “bug,” but a “varied and ubiquitous phenomena” with multiple causes, unfolding differently, sometimes dangerously, sometimes not. Collapse also often paves the way for the emergence of new, evolutionary structures.

In an unpublished manuscript titled Before the Collapse: A Guide to the Other Side of Growth, due to be published by science publisher Springer-Nature next year, Bardi’s examination of the collapse and growth of human civilizations reveals that after collapse, a “Seneca Rebound” often takes place in which new societies grow, often at a rate faster than preceding growth rates.

This is because collapse eliminates outmoded, obsolete structures, paving the way for new structures to emerge which often thrive from the remnants of the old and in the new spaces that emerge.

He thus explains the Seneca Rebound as “as an engine that propels civilizations forward in bursts. If this is the case, can we expect a rebound if the world’s civilization goes through a new Seneca Collapse in the coming decades?”

Bardi recognizes that the odds are on a knife-edge. A Seneca Rebound after a coming collapse would probably have different features to what we have seen after past civilizational collapses and might still involve considerable violence, as past new civilizations often did—or may not happen at all.

“Very little if anything is being done to stop emissions and the general destruction of the ecosystem”

On our current trajectory, he said, “the effects of the destruction we are wreaking on the ecosystem could cause humans to go extinct, the ultimate Seneca Collapse.” But if we change course, even if we do not avoid serious crises, we might lessen the blow of a potential collapse. In this scenario, “the coming collapse will be just one more of the series of previous collapses that affected human civilizations: it might lead to a new rebound.”

It is in this possibility that Bardi sees the seeds of a new, different kind of civilization within the collapse of civilization-as-we-know-it.

I asked Bardi how soon he thought this collapse would happen. Although emphasizing that collapse is not yet inevitable, he said that a collapse of some kind within the next decade could be “very likely” if business-as-usual continues.

“Very little if anything is being done to stop emissions and the general destruction of the ecosystem,” Bardi said. “So, an ecosystemic collapse is not impossible within 10 years.”

Yet he was also careful to point out that the worst might be avoided: “On the other hand, there are many elements interacting that may change things a little, a lot, or drastically. We don’t know how the system may react… maybe the system would react in a way that could postpone the worst.”

Release and renewal

The lesson is that even if collapse is imminent, all may not be lost. Systems theorist Jeremy Lent, author of The Patterning Instinct, draws on the work of the late University of Florida ecologist C. S. Holling, whose detailed study of natural ecosystems led him to formulate a general theory of social change known as the adaptive cycle.

Complex systems, whether in nature or in human societies, pass through four phases in their life cycle, writes Lent. First is a rapid growth phase of innovation and opportunity for new structures; second is a phase of stability and consolidation, during which these structures become brittle and resistant to change; third is a release phase consisting of breakdown, generating chaos and uncertainty; the fourth is reorganization, opening up the possibility that small, seemingly insignificant forces might drastically change the future of the forthcoming new cycle.

It is here, in the last two phases, that the possibility of triggering and shaping a Seneca Rebound becomes apparent. The increasing chaos of global politics, Lent suggests, is evidence that we are “entering the chaotic release phase,” where the old order begins to unravel. At this point, the system could either regress, or it could reorganize in a way that enables a new civilizational rebound. “This is a crucially important moment in the system’s life cycle for those who wish to change the predominant order.”

So as alarming as the mounting evidence of the risk of collapse is, it also indicates that we are moving into a genuinely new and indeterminate phase in the life cycle of our current civilization, during which we have a radical opportunity to mobilize the spread of new ideas that can transform societies.

I have been tracking the risks of collapse throughout my career as a journalist and systems theorist. I could not find any decisive confirmation that climate change will inevitably produce near-term societal collapse.

But the science does not rule this out as a possibility. Therefore, dismissing the risk of some sort of collapse—whether by end of century, mid-century, or within the next 10 years—contravenes the implications of the most robust scientific models we have.

All the scientific data available suggests that if we continue on our current course of resource exploitation, human civilization could begin experiencing collapse within coming decades. Exactly where and how such a collapse process might take off is not certain; and whether it is already locked in is as yet unknown. And as NASA’s Gavin Schmidt told me, local collapses are already underway.

From Syria to Brexit, the destabilizing socio-political impacts of ecosystemic collapse are becoming increasingly profound, far-reaching and intractable. In that sense, debating whether or not near-term collapse is inevitable overlooks the stark reality that we are already witnessing climate collapse.

And yet, there remains an almost total absence of meaningful conversation and action around this predicament, despite it being perhaps the most important issue of our times.

The upshot is that we don’t know for sure what is round the corner, and we need better conversations about how to respond to the range of possibilities. Preparation for worst-case scenarios does not require us to believe them inevitable, but vindicates the adoption of a rational, risk-based approach designed to proactively pursue the admirable goal for Deep Adaptation: safeguarding as much of society as possible.

Jem Bendell’s Deep Adaptation approach, he told me, is not meant to provide decisive answers about collapse, but to catalyze conversation and action.

“For the Deep Adaptation groups that I am involved with, we ask people to agree that societal collapse is either likely, inevitable or already unfolding, so that we can have meaningful engagement upon that premise,” he said. “Deep Adaptation has become an international movement now, with people mobilizing to share their grief, discuss what to commit to going forward, become activists, start growing food, all kinds of things.”

Confronting the specter of collapse, he insisted is not grounds to give-up, but to do more. Not later, but right now, because we are already out of time in terms of the harm already inflicted on the planet: “My active and radical hope is that we will do all kinds of amazing things to reduce harm, buy time and save what we can,” he said. “Adaptation and mitigation are part of that agenda. I also know that many people will act in ways that create more suffering.”

Most of all, the emerging science of collapse suggests that civilization in its current form, premised on endless growth and massive inequalities, is unlikely to survive this century. It will either evolve into or be succeeded by a new configuration, perhaps an “ecological civilization”, premised on a fundamentally new relationship with the Earth and all its inhabitants—or it will, whether slowly or more abruptly, regress and contract.

What happens next is still up to us. Our choices today will not merely write our own futures, they determine who we are, and what our descendants will be capable of becoming. As we look ahead, this strange new science hints to us at a momentous opportunity to become agents of change for an emerging paradigm of life and society that embraces, not exploits, the Earth. Because doing so is now a matter of survival.





“Renewables” – reality or illusion?

27 03 2019

ERIK MICHAELS·WEDNESDAY, MARCH 27, 2019

Originally posted in the Methane News Group (a considerable additional amount of information and discussion can only be seen by joining): https://www.facebook.com/groups/methanehydratesnews/

Lately I have fielded some rather interesting perspectives on “solutions” to climate change; not just here but in many other groups as well. I have pointed out that the ideas proposed as solutions are in fact just ideas; most of which require substantial amounts of energy not only to build, transport, erect, maintain, and replace at the end of their service life, but most of which serve no useful purpose to any other life form on this planet but us. Not only are these ideas unsustainable; if they don’t benefit other species, then they are ecologically extinct. Building a sustainable future means that we must incorporate ideas and things that interact with our biosphere in a manner that provides some sort of ecosystem service.

“Renewables” do not fit that description, so they are patently unsustainable.Ladies and Gentlemen, “optimism must be based in reality. If hope becomes something that you express through illusion, then it isn’t hope; it’s fantasy.” — Chris Hedges

I have spent a great deal of time lately discussing the issue of “renewables” and since this has been so pervasive as of late, I decided to draft a new file specifically for this purpose of outlining the facts.Before proceeding, please view this short video featuring Chris Hedges: https://vimeo.com/293802639

Recently, I discussed the fact that “renewables” are not a solution, and in fact, are actually making our existing predicaments worse. A considerable number of individuals are questioning these facts using all types of logical fallacies. I understand these questions; as I once thought that “renewable” energy and “green” energy and other ideas would save us as well – as little as 5 years ago. As I joined more climate change groups, I recognized the constantly repeating attack on these devices as non-solutions; so I decided to find out for myself once and for all, precisely whether they would work or not.Before going into further detail, I need to explain that IF these devices had been developed and installed back in the 1970s and 80s, along with serious efforts to quell population growth and tackling other unsustainable practices, they may have been beneficial.

However, the popular conclusion is not simply that they do not work (to serve their original intended purpose); but that they are actually causing more trouble than if they hadn’t been built at all. Many claim that these “solutions” are better than utilizing fossil energy; but this too, is an illusion. Having said that, please note that this article is in NO WAY promoting fossil energy; fossil energy use is every bit as bad, if not worse, than these devices; AND its use created the desire to build these devices in the first place.

Many people are utilizing a false dichotomy to justify continuing to build and use these devices. Using them creates no real desire to learn how to live without externally-produced energy, a loss we ALL face as time moves forward. Once the fossil fuel platform that these devices currently depend on disappears, so will the devices. Some individuals claim that we can continue to extract resources, manufacture, transport, and erect these devices after fossil energy is no longer available. This is true only on a MUCH smaller scale than the energy systems we have today, and only in small localities. On top of that, the systems of the future will continue to degrade over time and eventually, electricity will disappear altogether. Given this imminent fact, it makes little sense to continue building these devices, recognizing the environmental damage they are causing which only promotes the continued use of fossil energy as well.In order to comprehend why these devices are such a delusion, one must understand many different predicaments at once.

First, an understanding of energy and resource decline is critical. Secondly, a thorough understanding of pollution loading is essential, especially of the electronics, rare earths, mining, metals, plastics, and transportation industries. Understanding climate change and how our energy “addiction” has propelled it and continues to fuel it is absolutely necessary. Comprehension of biology along with the ecological and environmental degradation of habitat destruction and fragmentation is also necessary.

New information is constantly being made available as well, highlighting yet more reasons to stop building these devices. They are little more than energy “traps” that chain us to the same paradigm that is already killing life on this planet. The secret to resolving these issues isn’t a “new or different” energy source. It is eliminating the energy addiction altogether.The reason that eliminating energy addiction altogether is the only real strategy towards living a sustainable lifestyle is because of one seriously inconvenient fact: the diminishing returns on increasing complexity along with the fact that continuing to build these devices requires the continuation of mining, energy use, and industrial civilization – the very things killing all life on this planet.

As a system increases its complexity, the returns on that increasing complexity decrease. As we find more new ways to reduce the harm caused by energy use, misuse, and abuse, we continue to increase the complexity of producing said energy. Resistance and friction cause losses in motors, and inefficiency and sheer transmission losses produce yet further losses in all electrical systems. All these losses produce waste heat, no differently than traditional mechanical systems.

There is NO system that can be made 100% efficient, so there will ALWAYS be losses. This waste heat does nothing but add to the existing predicaments we already face; considering that in order to produce the energy to begin with, one must also pollute our atmosphere, water, and soil with toxins and byproducts of the processes themselves. Watch these three videos to understand why building each of these devices is a disaster in and of itself to wildlife around it. Focus on the devastation of the land that each unit sits on, as well as the habitat fragmentation caused by each road:

https://www.youtube.com/watch?v=mwwlxlMoVVQ

https://www.youtube.com/watch?v=84BeVq2Jm88

https://www.youtube.com/watch?v=1AAHJs-j3uw

Here is a handy reference guide about “renewables” with frequently asked questions:

https://deepgreenresistance.org/en/who-we-are/faqs/green-technology-renewable-energy Here are some links to more information that will help you understand WHY “renewable” energy is NOT a solution to climate change in any way, shape, or form:

  1. http://www.sixthtone.com/news/1002631/the-dark-side-of-chinas-solar-boom-
  2. https://www.wired.co.uk/article/lithium-batteries-environment-impact
  3. https://phys.org/news/2018-05-e-waste-wrong.html
  4. http://www.bbc.com/future/story/20150402-the-worst-place-on-earth
  5. https://www.scmp.com/news/china/society/article/2104162/chinas-ageing-solar-panels-are-going-be-big-environmental-problem
  6. https://www.nationalreview.com/2017/06/solar-panel-waste-environmental-threat-clean-energy/
  7. https://www.city-journal.org/wind-power-is-not-the-answer
  8. https://www.resilience.org/stories/2018-08-01/an-engineer-an-economist-and-an-ecomodernist-walk-into-a-bar-and-order-a-free-lunch/
  9. https://news.harvard.edu/gazette/story/2018/10/large-scale-wind-power-has-its-down-side/
  10. https://iopscience.iop.org/article/10.1088/1748-9326/aae102
  11. https://phys.org/news/2018-11-farm-predator-effect-ecosystems.html
  12. https://www.theatlantic.com/science/archive/2018/05/how-do-aliens-solve-climate-change/561479/
  13. https://patzek-lifeitself.blogspot.com/2018/10/all-is-well-on-our-planet-earth-isnt-it.html
  14. https://www.versobooks.com/blogs/3797-end-the-green-delusions-industrial-scale-renewable-energy-is-fossil-fuel

On a particular thread which featured the story link above, I wrote this detailed observation: “Ecocide is continuing BAU, which is precisely what “renewables” will allow for. They are nothing but a distraction for three reasons:

1. Building “renewables” does nothing to solve the predicament of energy use and energy growth. Replacing one type of energy with another is doing nothing but choosing a slightly less evil bad choice.

2. “Renewable” energy will never be able to replace the concentrated energy available in fossil fuels, and this fact is missed by both the MSM and most people in society. This is a recipe for disaster as the amount of fossil energy available inevitably dwindles and countries begin to fight for survival.

3. “Renewables” can not replace fossil energy in another way besides concentration of energy – each popular device such as solar panels and wind turbines only last around 20 years. This is if they survive that long – many have met an early demise due to extreme weather events. So not only do they represent a never-ending merry-go-round of maintain and replace, rinse and repeat; but due to continued energy growth, more are constantly needed as well. That is precisely what makes them every bit as unsustainable as fossil fuels.

4. Now, for a fourth issue that hasn’t been mentioned in the first three – building “renewables” doesn’t serve any truly needed service. Human beings and all other life forms on this planet don’t actually require external electricity in order to survive. So the ONLY species that benefits from building these devices is us. Sadly, building these devices kills off species through habitat destruction and habitat fragmentation along with pollution loading and other causes.

So in effect, these not only don’t solve the issue they were designed for, they continue the same ecological destruction that we are accomplishing through utilizing fossil energy. As we continue pulling the Jenga blocks out of the tree of life, how long will it be before we unwittingly become functionally extinct through using these to continue BAU? As one can clearly see, if humans want to continue living, they have no choice but to reduce fossil and all other energy use and bring it down to zero very quickly.

Sadly, I have little doubt that this will not be accomplished in any kind of reasonable time frame, IF AT ALL (we are currently going the wrong direction and have been for the last two decades DESPITE these devices having been built and installed), given what has transpired over the previous five decades even though we’ve known about these predicaments since then.” Here are several links to files that contain yet more links to more info:





2019: World Economy Is Reaching Growth Limits; Expect Low Oil Prices, Financial Turbulence

10 01 2019

Posted on January 9, 2019 by Gail Tverberg

Another incisive self explanatory article by Gail Tverberg explaining the recent volatility and what outcomes we can expect from that this coming year (and next) MUST READ.

Financial markets have been behaving in a very turbulent manner in the last couple of months. The issue, as I see it, is that the world economy is gradually changing from a growth mode to a mode of shrinkage. This is something like a ship changing course, from going in one direction to going in reverse. The system acts as if the brakes are being very forcefully applied, and reaction of the economy is to almost shake.

What seems to be happening is that the world economy is reaching Limits to Growth, as predicted in the computer simulations modeled in the 1972 book, The Limits to Growth. In fact, the base model of that set of simulations indicated that peak industrial output per capita might be reached right about now. Peak food per capita might be reached about the same time. I have added a dotted line to the forecast from this model, indicating where the economy seems to be in 2019, relative to the base model.

Figure 1. Base scenario from The Limits to Growth, printed using today’s graphics by Charles Hall and John Day in Revisiting Limits to Growth After Peak Oil with dotted line at 2019 added by author. The 2019 line is drawn based on where the world economy seems to be now, rather than on precisely where the base model would put the year 2019.

The economy is a self-organizing structure that operates under the laws of physics. Many people have thought that when the world economy reaches limits, the limits would be of the form of high prices and “running out” of oil. This represents an overly simple understanding of how the system works. What we should really expect, and in fact, what we are now beginning to see, is production cuts in finished goods made by the industrial system, such as cell phones and automobiles, because of affordability issues. Indirectly, these affordability issues lead to low commodity prices and low profitability for commodity producers. For example:

  • The sale of Chinese private passenger vehicles for the year of 2018 through November is down by 2.8%, with November sales off by 16.1%. Most analysts are forecasting this trend of contracting sales to continue into 2019. Lower sales seem to reflect affordability issues.
  • Saudi Arabia plans to cut oil production by 800,000 barrels per day from the November 2018 level, to try to raise oil prices. Profits are too low at current prices.
  • Coal is reported not to have an economic future in Australia, partly because of competition from subsidized renewables and partly because China and India want to prop up the prices of coal from their own coal mines.

The Significance of Trump’s Tariffs

If a person looks at history, it becomes clear that tariffs are a standard response to a problem of shrinking food or industrial output per capita. Tariffs were put in place in the 1920s in the time leading up to the Great Depression, and were investigated after the Panic of 1857, which seems to have indirectly led to the US Civil War.

Whenever an economy produces less industrial or food output per capita there is an allocation problem: who gets cut off from buying output similar to the amount that they previously purchased? Tariffs are a standard way that a relatively strong economy tries to gain an advantage over weaker economies. Tariffs are intended to help the citizens of the strong economy maintain their previous quantity of goods and services, even as other economies are forced to get along with less.

I see Trump’s trade policies primarily as evidence of an underlying problem, namely, the falling affordability of goods and services for a major segment of the population. Thus, Trump’s tariffs are one of the pieces of evidence that lead me to believe that the world economy is reaching Limits to Growth.

The Nature of World Economic Growth

Economic growth seems to require growth in three dimensions (a) Complexity, (b) Debt Bubble, and (c) Use of Resources. Today, the world economy seems to be reaching limits in all three of these dimensions (Figure 2).

Figure 2.

Complexity involves adding more technology, more international trade and more specialization. Its downside is that it indirectly tends to reduce affordability of finished end products because of growing wage disparity; many non-elite workers have wages that are too low to afford very much of the output of the economy. As more complexity is added, wage disparity tends to increase. International wage competition makes the situation worse.

growing debt bubble can help keep commodity prices up because a rising amount of debt can indirectly provide more demand for goods and services. For example, if there is growing debt, it can be used to buy homes, cars, and vacation travel, all of which require oil and other energy consumption.

If debt levels become too high, or if regulators decide to raise short-term interest rates as a method of slowing the economy, the debt bubble is in danger of collapsing. A collapsing debt bubble tends to lead to recession and falling commodity prices. Commodity prices fell dramatically in the second half of 2008. Prices now seem to be headed downward again, starting in October 2018.

Figure 3. Brent oil prices with what appear to be debt bubble collapses marked.

Figure 4. Three-month treasury secondary market rates compared to 10-year treasuries from FRED, with points where short term interest rates exceed long term rates marked by author with arrows.

Even the relatively slow recent rise in short-term interest rates (Figure 4) seems to be producing a decrease in oil prices (Figure 3) in a way that a person might expect from a debt bubble collapse. The sale of US Quantitative Easing assets at the same time that interest rates have been rising no doubt adds to the problem of falling oil prices and volatile stock markets. The gray bars in Figure 4 indicate recessions.

Growing use of resources becomes increasingly problematic for two reasons. One is population growth. As population rises, the economy needs more food to feed the growing population. This leads to the need for more complexity (irrigation, better seed, fertilizer, world trade) to feed the growing world population.

The other problem with growing use of resources is diminishing returns, leading to the rising cost of extracting commodities over time. Diminishing returns occur because producers tend to extract the cheapest to extract commodities first, leaving in place the commodities requiring deeper wells or more processing. Even water has this difficulty. At times, desalination, at very high cost, is needed to obtain sufficient fresh water for a growing population.

Why Inadequate Energy Supplies Lead to Low Oil Prices Rather than High

In the last section, I discussed the cost of producing commodities of many kinds rising because of diminishing returns. Higher costs should lead to higher prices, shouldn’t they?

Strangely enough, higher costs translate to higher prices only sometimes. When energy consumption per capita is rising rapidly (peaks of red areas on Figure 5), rising costs do seem to translate to rising prices. Spiking oil prices were experienced several times: 1917 to 1920; 1974 to 1982; 2004 to mid 2008; and 2011 to 2014. All of these high oil prices occurred toward the end of the red peaks on Figure 5. In fact, these high oil prices (as well as other high commodity prices that tend to rise at the same time as oil prices) are likely what brought growth in energy consumption down. The prices of goods and services made with these commodities became unaffordable for lower-wage workers, indirectly decreasing the growth rate in energy products consumed.

Figure 5.

The red peaks represented periods of very rapid growth, fed by growing supplies of very cheap energy: coal and hydroelectricity in the Electrification and Early Mechanization period, oil in the Postwar Boom, and coal in the China period. With low energy prices,  many countries were able to expand their economies simultaneously, keeping demand high. The Postwar Boom also reflected the addition of many women to the labor force, increasing the ability of families to afford second cars and nicer homes.

Rapidly growing energy consumption allowed per capita output of both food (with meat protein given a higher count than carbohydrates) and industrial products to grow rapidly during these peaks. The reason that output of these products could grow is because the laws of physics require energy consumption for heat, transportation, refrigeration and other processes required by industrialization and farming. In these boom periods, higher energy costs were easy to pass on. Eventually the higher energy costs “caught up with” the economy, and pushed growth in energy consumption per capita down, putting an end to the peaks.

Figure 6 shows Figure 5 with the valleys labeled, instead of the peaks.

Figure 6.

When I say that the world economy is reaching “peak industrial output per capita” and “peak food per capita,” this represents the opposite of a rapidly growing economy. In fact, if the world is reaching Limits to Growth, the situation is even worse than all of the labeled valleys on Figure 6. In such a case, energy consumption growth is likely to shrink so low that even the blue area (population growth) turns negative.

In such a situation, the big problem is “not enough to go around.” While cost increases due to diminishing returns could easily be passed along when growth in industrial and food output per capita were rapidly rising (the Figure 5 situation), this ability seems to disappear when the economy is near limits. Part of the problem is that the lower growth in per capita energy affects the kinds of jobs that are available. With low energy consumption growth, many of the jobs that are available are service jobs that do not pay well. Wage disparity becomes an increasing problem.

When wage disparity grows, the share of low wage workers rises. If businesses try to pass along their higher costs of production, they encounter market resistance because lower wage workers cannot afford the finished goods made with high cost energy products. For example, auto and iPhone sales in China decline. The lack of Chinese demand tends to lead to a drop in demand for the many commodities used in manufacturing these goods, including both energy products and metals. Because there is very little storage capacity for commodities, a small decline in demand tends to lead to quite a large decline in prices. Even a small decline in China’s demand for energy products can lead to a big decline in oil prices.

Strange as it may seem, the economy ends up with low oil prices, rather than high oil prices, being the problem. Other commodity prices tend to be low as well.

What Is Ahead, If We Are Reaching Economic Growth Limits?

1. Figure 1 at the top of this post seems to give an indication of what is ahead after 2019, but this forecast cannot be relied on. A major issue is that the limited model used at that time did not include the financial system or debt. Even if the model seems to provide a reasonably accurate estimate of when limits will hit, it won’t necessarily give a correct view of what the impact of limits will be on the rest of the economy, after limits hit. The authors, in fact, have said that the model should not be expected to provide reliable indications regarding how the economy will behave after limits have started to have an impact on economic output.

2. As indicated in the title of this post, considerable financial volatility can be expected in 2019if the economy is trying to slow itself. Stock prices will be erratic; interest rates will be erratic; currency relativities will tend to bounce around. The likelihood that derivatives will cause major problems for banks will rise because derivatives tend to assume more stability in values than now seems to be the case. Increasing problems with derivatives raises the risk of bank failure.

3. The world economy doesn’t necessarily fail all at once. Instead, pieces that are, in some sense, “less efficient” users of energy may shrink back. During the Great Recession of 2008-2009, the countries that seemed to be most affected were countries such as Greece, Spain, and Italy that depend on oil for a disproportionately large share of their total energy consumption. China and India, with energy mixes dominated by coal, were much less affected.

Figure 7. Oil consumption as a percentage of total energy consumption, based on 2018 BP Statistical Review of World Energy data.

Figure 8. Energy consumption per capita for selected areas, based on energy consumption data from 2018 BP Statistical Review of World Energy and United Nations 2017 Population Estimates by Country.

In the 2002-2008 period, oil prices were rising faster than prices of other fossil fuels. This tended to make countries using a high share of oil in their energy mix less competitive in the world market. The low labor costs of China and India gave these countries another advantage. By the end of 2007, China’s energy consumption per capita had risen to a point where it almost matched the (now lower) energy consumption of the European countries shown. China, with its low energy costs, seems to have “eaten the lunch” of some of its European competitors.

In 2019 and the years that follow, some countries may fare at least somewhat better than others. The United States, for now, seems to be faring better than many other parts of the world.

4. While we have been depending upon China to be a leader in economic growth, China’s growth is already faltering and may turn to contraction in the near future. One reason is an energy problem: China’s coal production has fallen because many of its coal mines have been closed due to lack of profitability. As a result, China’s need for imported energy (difference between black line and top of energy production stack) has been growing rapidly. China is now the largest importer of oil, coal, and natural gas in the world. It is very vulnerable to tariffs and to lack of available supplies for import.

Figure 9. China energy production by fuel plus its total energy consumption, based on BP Statistical Review of World Energy 2018 data.

A second issue is that demographics are working against China; its working-age population already seems to be shrinking. A third reason why China is vulnerable to economic difficulties is because of its growing debt level. Debt becomes difficult to repay with interest if the economy slows.

5. Oil exporters such as Venezuela, Saudi Arabia, and Nigeria have become vulnerable to government overthrow or collapse because of low world oil prices since 2014. If the central government of one or more of these exporters disappears, it is possible that the pieces of the country will struggle along, producing a lower amount of oil, as Libya has done in recent years. It is also possible that another larger country will attempt to take over the failing production of the country and secure the output for itself.

6. Epidemics become increasingly likely, especially in countries with serious financial problems, such as Yemen, Syria, and Venezuela. Historically, much of the decrease in population in countries with collapsing economies has come from epidemics. Of course, epidemics can spread across national boundaries, exporting the problems elsewhere.

7. Resource wars become increasingly likely. These can be local wars, perhaps over the availability of water. They can also be large, international wars. The timing of World War I and World War II make it seem likely that these wars were both resource wars.

Figure 10.

8. Collapsing intergovernmental agencies, such as the European Union, the World Trade Organization, and the International Monetary Fund, seem likely. The United Kingdom’s planned exit from the European Union in 2019 is a step toward dissolving the European Union.

9. Privately funded pension funds will increasingly be subject to default because of continued low interest rates. Some governments may choose to cut back the amounts they provide to pensioners because governments cannot collect adequate tax revenue for this purpose. Some countries may purposely shut down parts of their governments, in an attempt to hold down government spending.

10. A far worse and more permanent recession than that of the Great Recession seems likely because of the difficulty in repaying debt with interest in a shrinking economy. It is not clear when such a recession will start. It could start later in 2019, or perhaps it may wait until 2020. As with the Great Recession, some countries will be affected more than others. Eventually, because of the interconnected nature of financial systems, all countries are likely to be drawn in.

Summary

It is not entirely clear exactly what is ahead if we are reaching Limits to Growth. Perhaps that is for the best. If we cannot do anything about it, worrying about the many details of what is ahead is not the best for anyone’s mental health. While it is possible that this is an end point for the human race, this is not certain, by any means. There have been many amazing coincidences over the past 4 billion years that have allowed life to continue to evolve on this planet. More of these coincidences may be ahead. We also know that humans lived through past ice ages. They likely can live through other kinds of adversity, including worldwide economic collapse.





Interesting times ahead…..

29 11 2018

Very few people join all the dots, and as usual, Gail Tverberg does her best to do so here again…. There are so many signals on the web now pointing to a major reset it’s not funny.

Low Oil Prices: An Indication of Major Problems Ahead?

Many people, including most Peak Oilers, expect that oil prices will rise endlessly. They expect rising oil prices because, over time, companies find it necessary to access more difficult-to-extract oil. Accessing such oil tends to be increasingly expensive because it tends to require the use of greater quantities of resources and more advanced technology. This issue is sometimes referred to as diminishing returns. Figure 1 shows how oil prices might be expected to rise, if the higher costs encountered as a result of diminishing returns can be fully recovered from the ultimate customers of this oil.

In my view, this analysis suggesting ever-rising prices is incomplete. After a point, prices can’t really keep up with rising costs because the wages of many workers lag behind the growing cost of extraction.

The economy is a networked system facing many pressures, including a growing level of debt and the rising use of technology. When these pressures are considered, my analysis indicates that oil prices may fall too low for producers, rather than rise too high for consumers. Oil companies may close down if prices remain too low. Because of this, low oil prices should be of just as much concern as high oil prices.

In recent years, we have heard a great deal about the possibility of Peak Oil, including high oil prices. If the issue we are facing is really prices that are too low for producers, then there seems to be the possibility of a different limits issue, called Collapse. Many early economies seem to have collapsed as they reached resource limits. Collapse seems to be characterized by growing wealth disparity, inadequate wages for non-elite workers, failing governments, debt defaults, resource wars, and epidemics. Eventually, population associated with collapsed economies may fall very low or completely disappear. As Collapse approaches, commodity prices seem to be low, rather than high.

The low oil prices we have been seeing recently fit in disturbingly well with the hypothesis that the world economy is reaching affordability limits for a wide range of commodities, nearly all of which are subject to diminishing returns. This is a different problem than most researchers have been concerned about. In this article, I explain this situation further.

One thing that is a little confusing is the relative roles of diminishing returns and efficiency. I see diminishing returns as being more or less the opposite of growing efficiency.

The fact that inflation-adjusted oil prices are now much higher than they were in the 1940s to 1960s is a sign that for oil, the contest between diminishing returns and efficiency has basically been won by diminishing returns for over 40 years.

Oil Prices Cannot Rise Endlessly

It makes no sense for oil prices to rise endlessly, for what is inherently growing inefficiency. Endlessly rising prices for oil would be similar to paying a human laborer more and more for building widgets, during a time that that laborer becomes increasingly disabled. If the number of widgets that the worker can produce in one hour decreases by 50%, logically that worker’s wages should fall by 50%, not rise to make up for his/her growing inefficiency.

The problem with paying higher prices for what is equivalent to growing inefficiency can be hidden for a while, if the economy is growing rapidly enough. The way that the growing inefficiency is hidden is by adding Debt and Complexity (Figure 4).

Growing complexity is very closely related to “Technology will save us.” Growing complexity involves the use of more advanced machinery and ever-more specialized workers. Businesses become larger and more hierarchical. International trade becomes increasingly important. Financial products such as derivatives become common.

Growing debt goes hand in hand with growing complexity. Businesses need growing debt to support capital expenditures for their new technology. Consumers find growing debt helpful in affording major purchases, such as homes and vehicles. Governments make debt-like promises of pensions to citizen. Thanks to these promised pensions, families can have fewer children and devote fewer years to child care at home.

The problem with adding complexity and adding debt is that they, too, reach diminishing returns. The easiest (and cheapest) fixes tend to be added first. For example, irrigating a field in a dry area may be an easy and cheap way to fix a problem with inadequate food supply. There may be other approaches that could be used as well, such as breeding crops that do well with little rainfall, but the payback on this investment may be smaller and later.

A major drawback of adding complexity is that doing so tends to increase wage and wealth disparity. When an employer pays high wages to supervisory workers and highly skilled workers, this leaves fewer funds with which to pay less skilled workers. Furthermore, the huge amount of capital goods required in this more complex economy tends to disproportionately benefit workers who are already highly paid. This happens because the owners of shares of stock in companies tend to overlap with employees who are already highly paid. Low paid employees can’t afford such purchases.

The net result of greater wage and wealth disparity is that it becomes increasingly difficult to keep prices high enough for oil producers. The many workers with low wages find it difficult to afford homes and families of their own. Their low purchasing power tends to hold down prices of commodities of all kinds. The higher wages of the highly trained and supervisory staff don’t make up for the shortfall in commodity demand because these highly paid workers spend their wages differently. They tend to spend proportionately more on services rather than on commodity-intensive goods. For example, they may send their children to elite colleges and pay for tax avoidance services. These services use relatively little in the way of commodities.

Once the Economy Slows Too Much, the Whole System Tends to Implode

A growing economy can hide a multitude of problems. Paying back debt with interest is easy, if a worker finds his wages growing. In fact, it doesn’t matter if the growth that supports his growing wages comes from inflationary growth or “real” growth, since debt repayment is typically not adjusted for inflation.

Both real growth and inflationary growth help workers have enough funds left at the end of the period for other goods they need, despite repaying debt with interest.

Once the economy stops growing, the whole system tends to implode. Wage disparity becomes a huge problem. It becomes impossible to repay debt with interest. Young people find that their standards of living are lower than those of their parents. Investments do not appear to be worthwhile without government subsidies. Businesses find that economies of scale no longer work to their advantage. Pension promises become overwhelming, compared to the wages of young people.

The Real Situation with Oil Prices

The real situation with oil prices–and in fact with respect to commodity prices in general–is approximately like that shown in Figure 6.

What tends to happen is that oil prices tend to fall farther and farther behind what producers require, if they are truly to make adequate reinvestment in new fields and also pay high taxes to their governments. This should not be too surprising because oil prices represent a compromise between what citizens can afford and what producers require.

In the years before diminishing returns became too much of a problem (back before 2005, for example), it was possible to find prices that were within an acceptable range for both sellers and buyers. As diminishing returns has become an increasing problem, the price that consumers can afford has tended to fall increasingly far below the price that producers require. This is why oil prices at first fall a little too low for producers, and eventually seem likely to fall far below what producers need to stay in business. The problem is that no price works for both producers and consumers.

Affordability Issues Affect All Commodity Prices, Not Just Oil

We are dealing with a situation in which a growing share of workers (and would be workers) find it difficult to afford a home and family, because of wage disparity issues. Some workers have been displaced from their jobs by robots or by globalization. Some spend many years in advanced schooling and are left with large amounts of debt, making it difficult to afford a home, a family, and other things that many in the older generation were able to take for granted. Many of today’s workers are in low-wage countries; they cannot afford very much of the output of the world economy.

At the same time, diminishing returns affect nearly all commodities, just as they affect oil. Mineral ores are affected by diminishing returns because the highest grade ores tend to be extracted first. Food production is also subject to diminishing returns because population keeps rising, but arable land does not. As a result, each year it is necessary to grow more food per arable acre, leading to a need for more complexity (more irrigation or more fertilizer, or better hybrid seed), often at higher cost.

When the problem of growing wage disparity is matched up with the problem of diminishing returns for the many different types of commodity production, the same problem occurs that occurs with oil. Prices of a wide range of commodities tend to fall below the cost of production–first by a little and, if the debt bubble pops, by a whole lot.

We hear people say, “Of course oil prices will rise. Oil is a necessity.” The thing that they don’t realize is that the problem affects a much bigger “package” of commodities than just oil prices. In fact, finished goods and services of all kinds made with these commodities are also affected, including new homes and vehicles. Thus, the pattern we see of low oil prices, relative to what is required for true profitability, is really an extremely widespread problem.

Interest Rate Policies Affect Affordability

Commodity prices bear surprisingly little relationship to the cost of production. Instead, they seem to depend more on interest rate policies of government agencies. If interest rates rise or fall, this tends to have a big impact on household budgets, because monthly auto payments and home payments depend on interest rates. For example, US interest rates spiked in 1981.

This spike in interest rates led to a major cutback in energy consumption and in GDP growth.

Oil prices began to slide, with the higher interest rates.

Figure 11 indicates that the popping of a debt bubble (mostly relating to US sub-prime housing) sent oil prices down in 2008. Once interest rates were lowered through the US adoption of Quantitative Easing (QE), oil prices rose again. They fell again, when the US discontinued QE.

While these charts show oil prices, there is a tendency for a broad range of commodity prices to move more or less together. This happens because the commodity price issue seems to be driven to a significant extent by the affordability of finished goods and services, including homes, automobiles, and restaurant food.

If the collapse of a major debt bubble occurs again, the world seems likely to experience impacts somewhat similar to those in 2008, depending, of course, on the location(s) and size(s) of the debt bubble(s). A wide variety of commodity prices are likely to fall very low; asset prices may also be affected. This time, however, government organizations seem to have fewer tools for pulling the world economy out of a prolonged slump because interest rates are already very low. Thus, the issues are likely to look more like a widespread economic problem (including far too low commodity prices) than an oil problem.

Lack of Growth in Energy Consumption Per Capita Seems to Lead to Collapse Scenarios

When we look back, the good times from an economic viewpoint occurred when energy consumption per capita (top red parts on Figure 12) were rising rapidly.

The bad times for the economy were the valleys in Figure 12. Separate labels for these valleys have been added in Figure 13. If energy consumption is not growing relative to the rising world population, collapse in at least a part of the world economy tends to occur.

The laws of physics tell us that energy consumption is required for movement and for heat. These are the basic processes involved in GDP generation, and in electricity transmission. Thus, it is logical to believe that energy consumption is required for GDP growth. We can see in Figure 9 that growth in energy consumption tends to come before GDP growth, strongly suggesting that it is the cause of GDP growth. This further confirms what the laws of physics tell us.

The fact that partial collapses tend to occur when the growth in energy consumption per capita falls too low is further confirmation of the way the economics system really operates. The Panic of 1857occurred when the asset price bubble enabled by the California Gold Rush collapsed. Home, farm, and commodity prices fell very low. The problems ultimately were finally resolved in the US Civil War (1861 to 1865).

Similarly, the Depression of the 1930s was preceded by a stock market crash in 1929. During the Great Depression, wage disparity was a major problem. Commodity prices fell very low, as did farm prices. The issues of the Depression were not fully resolved until World War II.

At this point, world growth in energy consumption per capita seems to be falling again. We are also starting to see evidence of some of the same problems associated with earlier collapses: growing wage disparity, growing debt bubbles, and increasingly war-like behavior by world leaders. We should be aware that today’s low oil prices, together with these other symptoms of economic distress, may be pointing to yet another collapse scenario on the horizon.

Oil’s Role in the Economy Is Different From What Many Have Assumed

We have heard for a long time that the world is running out of oil, and we need to find substitutes. The story should have been, “Affordability of all commodities is falling too low, because of diminishing returns and growing wage disparity. We need to find rapidly rising quantities of very, very cheap energy products. We need a cheap substitute for oil. We cannot afford to substitute high-cost energy products for low-cost energy products. High-cost energy products affect the economy too adversely.”

In fact, the whole “Peak Oil” story is not really right. Neither is the “Renewables will save us” story, especially if the renewables require subsidies and are not very scalable. Energy prices can never be expected to rise high enough for renewables to become economic.

The issues we should truly be concerned about are Collapse, as encountered by many economies previously. If Collapse occurs, it seems likely to cut off production of many commodities, including oil and much of the food supply, indirectly because of low prices.

Low oil prices and low prices of other commodities are signs that we truly should be concerned about. Too many people have missed this point. They have been taken in by the false models of economists and by the confusion of Peak Oilers. At this point, we should start considering the very real possibility that our next world problem is likely to be Collapse of at least a portion of the world economy.

Interesting times seem to be ahead.





The Bumpy Road Down, Part 5: More Trends in Collapse

21 02 2018

IrvMillsIrv Mills has published the fifth and last part of his 5 part series called ‘The Bumpy Road Down’, previous instalments being available here.

 

 

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In my last post I started talking about some of the changes that will happen along the bumpy road down and the forces and trends that will lead to them. (The bumpy road down being the cyclic pattern of crash and partial recovery that I believe will characterize the rest of the age of scarcity). These changes will be forced on us by circumstances and are not necessarily how I’d like to see things turn out.

The trends I covered last time were:

  • our continued reliance on fossil fuels
  • the continuing decline in availability, and surplus energy content, of fossil fuels
  • the damage the FIRE industries (finance, insurance and real estate) will suffer in the next crash, and the effects this will have
  • the increase in authoritarianism, as governments attempt to optimize critical systems and relief efforts during and after the crash

Oscillating overshoot with declining carrying capacity

I’ve once again included the stepped or “oscillating” decline diagram from previous posts here to make it easier to visualize what I’m talking about. This diagram isn’t meant to be precise, certainly not when it comes to the magnitude and duration of the oscillations, which in any case will vary from one part of the world to the next.

The trends I want to talk about today are all interconnected. You can hardly discuss one without referring to the others, and so it is difficult to know where to start. But having touched briefly on a trend toward increased authoritarianism at the end of my last post, I guess I should continue trends in politics.

MORE POLITICAL TRENDS

Currently there seems to be a trend towards right wing politics in the developed world. I think anyone who extrapolates that out into the long run is making a basic mistake. Where right wing governments have been elected by those looking for change, they will soon prove to be very inept at ruling in an era of degrowth. Following that, there will likely be a swing in the other direction and left wing governments will get elected. Only to prove, in their turn, to be equally inept. Britain seems to be heading in this direction, and perhaps the U.S. as well.

Another trend is the sort of populism that uses other nations, and/or racial, ethnic, religious and sexual minorities at home as scapegoats for whatever problems the majority is facing. This strategy is and will continue to be used by clever politicians to gain support and deflect attention from their own shortcomings. Unfortunately, it leads nowhere since the people being blamed aren’t the source of the problem.

During the next crash and following recovery governments will continue to see growth as the best solution to whatever problems they face and will continue to be blind to the limits to growth. Farther down the bumpy road some governments may finally clue in about limits. Others won’t, and this will fuel continued growth followed by crashes until we learn to live within those limits.

One thing that seems clear is that eventually we’ll be living in smaller groups and the sort of political systems that work best will be very different from what we have now.

Many people who have thought about this assume that we’ll return to feudalism. I think that’s pretty unlikely. History may seem to repeat itself, but only in loose outline, not in the important details. New situations arise from different circumstances, and so are themselves different. Modern capitalists would never accept the obligations that the feudal aristocracy had to the peasantry. Indeed freeing themselves of those obligations had a lot to do with making capitalism work. And the “99%” (today’s peasantry) simply don’t accept that the upper classes have any right, divine or otherwise, to rule.

In small enough groups, with sufficient isolation between groups, people seem best suited to primitive communism, with essentially no hierarchy and decision making by consensus. I think many people will end up living in just such situations.

In the end though, there will still be a few areas with sufficient energy resources to support larger and more centralized concentrations of population. It will be interesting to see what new forms of political structure evolve in those situations.

ECONOMIC CONTRACTION

For the last couple of decades declining surplus energy has caused contraction of the real economy. Large corporations have responded in various ways to maintain their profits: moving industrial operations to developing countries where wages are lower and regulations less troublesome, automating to reduce the amount of expensive labour required, moving to the financial and information sectors of the economy where energy decline has so far had less effect.

The remaining “good” industrial jobs in developed nations are less likely to be unionized, with longer hours, lower pay, decreased benefits, poorer working conditions and lower safety standards. The large number of people who can’t even get one of those jobs have had to move to precarious, part time, low paying jobs in the service industries. Unemployment has increased (despite what official statistics say) and the ranks of the homeless have swelled.

Since workers are also consumers, all this has led to further contraction of the consumer economy. We can certainly expect to see this trend continue and increase sharply during the next crash.

Our globally interconnected economy is a complex thing and that complexity is expensive to maintain. During the crash and the depression that follows it, we’ll see trends toward simplification in many different areas driven by a lack of resources to maintain the existing complex systems. I’ll be discussing those trends in a moment, but it is important to note that a lot of economic activity is involved in maintaining our current level of complexity and abandoning that complexity will mean even more economic contraction.

At the same time, small, simple communities will prove to have some advantages that aren’t currently obvious.

CONSERVATION

All this economic contraction means that almost all of us will be significantly poorer and we’ll have to learn to get by with less. As John Michael Greer says, “LESS: less energy, less stuff, less stimulation.” We’ll be forced to conserve and will struggle to get by with “just enough”. This will be a harshly unpleasant experience for most people.

DEGLOBALIZATION

For the last few decades globalization has been a popular trend, especially among the rich and powerful, who are quick to extol its many supposed advantages. And understandably so, since it has enabled them to maintain their accustomed high standard of living while the economy as a whole contracts.

On the other hand, as I was just saying, sending high paying jobs offshore is a pretty bad idea for consumer economies. And I suspect that in the long run we’ll see that it wasn’t really all that good for the countries where we sent the work, either.

During the crash we’ll see the breakdown of the financial and organizational mechanisms that support globalization and international trade. There will also be considerable problems with shipping, both due to disorganization and to unreliable the supplies of diesel fuel for trucks and bunker fuel for ships. I’m not predicting an absolute shortage of oil quite this soon, but rather financial and organizational problems with getting it out of the ground, refined and moved to where it is needed.

This will lead to the failure of many international supply chains and governments and industry will be forced to switch critical systems over to more local suppliers. This switchover will be part of what eventually drives a partial recovery of the economy in many localities.

In a contracting economy with collapsing globalization there would seem to be little future for multi-national corporations, and organizations like the World Bank and the IMF. While the crash may bring an end to the so called “development” of the “developing” nations, it will also bring an end to economic imperialism. At the same time, the general public in the developed world, many of whom are already questioning the wisdom of the “race to the bottom” that is globalization, will be even less likely to go along with it, especially when it comes to exporting jobs.

Still, when the upcoming crash bottoms out and the economy begins to recover, there will be renewed demand for things that can only be had from overseas and international trade will recover to some extent.

DECENTRALIZATION

Impoverished organizations such a governments, multi-national corporations and international standards groups will struggle to maintain today’s high degree of centralization and eventually will be forced to break up into smaller entities.

Large federations such as Europe, the US, Canada and Australia will see rising separatism and eventually secession. As will other countries where different ethnic groups have been forced together and/or there is long standing animosity between various localities. If this can be done peacefully it may actually improve conditions for the citizens of the areas involved, who would no longer have to support the federal organization. But no doubt it will just as often involve armed conflict, with all the destruction and suffering that implies.

RELOCALIZATION

The cessation of services from the FIRE industries and the resulting breakdown of international (and even national) supply and distribution chains will leave many communities with no choice but to fend for themselves.

One of the biggest challenges at first will be to get people to believe that there really is a problem. Once that is clear, experience has shown that the effectiveness of response from the victims of disasters is remarkable and I think that will be true again in this case. There are a lot of widely accepted myths about how society breaks down during disaster, but that’s just what they are: myths. Working together in groups for our mutual benefit is the heart of humanity’s success, after all.

Government response will take days or more likely weeks to organize, and in the meantime there is much we can do to help ourselves. Of course it helps to be prepared… (check out these posts from the early days of this blog: 12) and I’ll have more to say on that in upcoming posts.

The question then arises whether one would be better off in an urban center or a rural area such as a small town or a farm. Government relief efforts will be focused on the cities where the need will be greatest and the response easiest to organize. But just because of the millions of people involved, that response will be quite challenging.

Rural communities may well be largely neglected by relief efforts. But, especially in agricultural areas, they will find fending for themselves much more manageable.

I live in a rural municipality with a population of less than 12,000 people in an area of over 200 square miles (60 people per sq. mile, more than 10 acres per person). The majority of the land is agricultural, and supply chains are short, walking distance in many cases. Beef, dairy and cash crops are the main agricultural activities at present and they can easily be diverted to feed the local population. Especially if the food would go to waste anyway due to the breakdown of supply chains downstream from the farm.

So I think we’re likely to do fairly well until the government gets around to getting in touch with us again, probably sometime after the recovery begins.

In subsequent crashes the population will be significantly reduced and those of us who survive will find ourselves living for the most part in very small communities which are almost entirely relocalized. The kind of economy that works in that situation is very different from what we have today and is concerned with many things other than growth and profit making.

REHUMANIZATION

The move toward automation that we’ve seen in the developed world since the start of the industrial revolution has been driven by high labour costs and the savings to be had by eliminating labour from industrial processes as much as possible. That revolution started and proceeded at greatest speed in Britain where labour rates where the highest, and still hasn’t happened in many developing nations where labour is very cheap.

Sadly, the further impoverishment of the working class in Europe and North America will make cheaper labour available locally, rather than having to go offshore. During the upcoming crash, and in the depression following it, impoverished people will have no choice but to work for lower rates and will out compete automated systems, especially when capital to set them up, the cutting edge technology needed to make them work, and the energy to power them are hard to come by. Again, the economic advantages of simplicity will come into play when it is the only alternative, and help drive the recovery after the first crash.

THE FOOD SUPPLY AND OVERPOPULATION

In the initial days of the coming crash there will be problems with the distribution systems for food, medical supplies and water treatment chemicals, all of which are being supplied by “just in time” systems with very little inventory at the consumer end of the supply chain. To simplify this discussion, I’ll talk primarily about food.

It is often said that there is only a 3 day supply of food on the grocery store shelves. I am sure this is approximately correct. In collapse circles, the assumption is that, if the trucks stop coming, sometime not very far beyond that 3 day horizon we’d be facing starvation. There may be a few, incredibly unlucky, areas where that will be more or less true.

But, depending on the time of year, much more food than that (often more than a year’s worth) is stored elsewhere in the food production and distribution system. The problem will be in moving this food around to where it is needed, and in making sure another year’s crops get planted and harvested. I think this can be done, much of it through improvisation and co-operation by people in the agricultural and food industries. With some support from various levels of government.

There will be some areas where food is available more or less as normal, some where the supply is tight, and other areas where there is outright famine and some loss of life (though still outstripped by the fecundity of the human race). In many ways that pretty much describes the situation today but supply chain breakdown, and our various degrees of success at coping with it, will make all the existing problems worse during the crash.

But once the initial crash is over, we have a much bigger problem looming ahead, which I think will eventually lead to another, even more serious crash.

With my apologies to my “crunchy” friends, modern agriculture and the systems downstream from it supply us with the cheapest and safest food that mankind has known since we were hunters and gatherers and allows us (so far) to support an ever growing human population.

The problem is that this agriculture is not sustainable. It requires high levels of inputs–primarily energy from fossil fuels, but also pesticides, fertilizers and water for irrigation–mostly from non-renewable sources. And rather than enriching the soil on which it depends, it gradually consumes it, causing erosion from over cultivation and over grazing, salinating the soil where irrigation is used and poisoning the water courses downstream with runoff from fertilizers. We need to develop a suite of sustainable agricultural practices that takes advantage of the best agricultural science can do for us, while the infrastructure that supports that science is still functioning.

The organic industry spends extravagantly to convince us that the problem with our food is pesticide residues and genetically engineered organisms, but the scientific consensus simply does not support this. The organic standards include so called “natural” pesticides that are more toxic than modern synthetic ones, and allow plant breeding techniques (such as mutagenesis) that are far more dangerous than modern genetic engineering. Organic standards could certainly be revised into something sustainable that retains the best of both conventional and organic techniques, but this has become such a political hot potato that it is unlikely to happen.

As I said above, during the upcoming crash one of the main challenges will be to keep people fed. And I have no doubt that this challenge will, for the most part, be successfully met. Diesel fuel will be rationed and sent preferentially to farmers and trucking companies moving agricultural inputs and outputs. Supplies of mineral fertilizers are still sufficient to keep industrial agriculture going. Modern pesticides actually reduce the need for cultivation and improve yields by reducing losses due to pests. It will be possible to divert grains grown for animal feed to feed people during the first year when the crisis is most serious.

Industrial agriculture will actually save the day and continue on to feed the growing population for a while yet. We will continue to make some improvement in techniques and seeds, though with diminishing returns on our efforts.

This will come to an end around mid century with the second bump on the road ahead (starting at point “g” on the graph), when a combination of increasing population, worsening climate, and decreasing availability and increasing prices of energy, irrigation water, fertilizer, pesticides and so forth combine to drastically reduce the output of modern agriculture.

Widespread famine will result, and this, combined with epidemics in populations weakened by hunger, will reduce the planet’s human population by at least a factor of two in a period of a very few years. Subsequent bumps as climate change further worsens conditions for farming will further reduce the population, resulting in a bottleneck towards the end of this century. Without powered machinery, synthetic fertilizers and pesticides and with drastically reduced water for irrigation, agricultural output will fall off considerably. And our population will fall to match the availability of food. I do think it unlikely that the human race will be wiped out altogether, but our numbers will likely be reduced by a factor of ten or more.

TURNING TO VIOLENCE AS A SOLUTION

It is a sad fact that many people, communities and nations, when faced with the sort of challenges I’ve been talking about here, will respond with violence.

In the remaining years leading up to the next crash, I think it is likely that even the least stable of world leaders (or their military advisors) will remain well aware of the horrific consequences of large scale nuclear war, and will manage to avoid it. As has been the case since the end of WWII, wars will continue to be fought by proxy, involving smaller nations in the developing world, especially where the supply of strategic natural resources are at issue.

War is extremely expensive though and, even without the help of a financial crash, military spending already threatens to bankrupt the U.S. As Dmitry Orlov has suggested, after a financial crash, the U.S. may find it difficult to even get its military personnel home from overseas bases, much less maintain those bases or pursue international military objectives.

But even in the impoverished post-crash world, I expect that border wars, terrorism, riots and violent protests will continue for quite some time yet.

MIGRATION AND REFUGEES

Whether from the ravages of war, climate change or economic contraction many areas of the world, particularly in areas like the Middle East, North Africa and the U.S. southwest, will become less and less livable. People will leave those areas looking for greener pastures and the number of refugees will soon grow past what can be managed even by the richest of nations. This will be a problem for Europe in particular, and more and more borders will be closed to all but a trickle of migrants. Refugees will accumulate in camps and for a while the situation will find an uneasy balance.

As we continue down the bumpy road, though, many nations will lose the ability to police their borders. Refugees will pour through, only to find broken economies that offer them little hope of a livelihood. Famine, disease and conflict will eventually reduce the population to where it can be accommodated in the remaining livable areas. But the ethnic makeup of those areas will have changed significantly due to large scale migrations.

IN CONCLUSION

I’ve been talking here about some of the changes that will be forced upon us by the circumstances of collapse. I’ve said very little about what I think we might do if we could face up to the reality of those circumstances and take positive action. That’s because I don’t think there is much chance that we’ll take any such action on a global or even national scale.

It’s time now to wrap up this series of posts about the bumpy road down. At some point in the future I intend to do a series about of coping with collapse locally, on the community, family and individual level. I think there is still much than can be done to improve the prospects of those who are willing to try.





System Failure

31 01 2018

SYSTEM FAILURE is, ironically, the title in the banner of this blog. This essay by George is starting to make me think he’s having an epiphany, following on as it were from By George, he finally gets it…  his promised ‘new way forward’, I now look forward to.

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Is complex society on the brink of collapse?

By George Monbiot, published in the Guardian 24th January 2018

 

It’s a good question, but it seems too narrow. “Is Western civilisation on the brink of collapse?”, the lead article in this week’s New Scientist asks. The answer is probably. But why just Western?

Yes, certain Western governments are engaged in a frenzy of self-destruction. In an age of phenomenal complexity and interlocking crises, the Trump administration has embarked on a mass deskilling and simplification of the state. Donald Trump might have sacked his strategist Steve Bannon, but Bannon’s professed intention, “the deconstruction of the administrative state”, remains the central – perhaps the only – policy.

Defunding departments, disbanding the teams and dismissing the experts they rely on, shutting down research programmes, maligning the civil servants who remain in post, the self-hating state is ripping down the very apparatus of government. At the same time, it is destroying the public protections that defend us from disaster.

A series of studies published in the past few months have started to explore the wider impact of pollutants. One, published in the British Medical Journal, suggests that the exposure of unborn children to air pollution in cities is causing “something approaching a public health catastrophe”. Pollution in the womb is now linked to low birth weight, disruption of the baby’s lung and brain development, and a series of debilitating and fatal diseases in later life.

Another report, published in the Lancet, suggests that three times as many deaths are caused by pollution as by AIDS, malaria and tuberculosis combined. Pollution, the authors note, now “threatens the continuing survival of human societies.” A collection of articles in the journal PLOS Biology reveals that there is no reliable safety data on most of the 85,000 synthetic chemicals to which we may be exposed. While hundreds of these chemicals “contaminate the blood and urine of nearly every person tested”, and the volume of materials containing them rises every year, we have no idea what the likely impacts may be, either singly or in combination.

As if in response to such findings, the Trump government has systematically destroyed the integrity of the Environmental Protection Agencyripped up the Clean Power Planvitiated environmental standards for motor vehiclesreversed the ban on chlorpyrifos (a pesticide now linked to the impairment of cognitive and behavioural function in children), and rescinded a remarkable list of similar public protections.

In the UK, successive governments have also curtailed their ability to respond to crises. One of David Cameron’s first acts on taking office was to shut down the government’s early warning systems: the Royal Commission on Environmental Pollution and the Sustainable Development Commission. He did not want to hear what they were telling him. Sack the impartial advisers and replace them with toadies: this has preceded the fall of empires many times before. Now, as we detach ourselves from the European Union, we degrade our capacity to solve the problems that transcend our borders.

But these pathologies are not confined to “the West”. The rise of demagoguery (the pursuit of simplistic solutions to complex problems, accompanied by the dismantling of the protective state) is everywhere apparent. Environmental breakdown is accelerating worldwide. The annihilation of vertebrate populationsInsectageddonthe erasure of rainforests, mangroves, soil, aquifers, the degradation of entire Earth systems, such as the atmosphere and the oceans, proceed at astonishing rates. These interlocking crises will affect everyone, but the poorer nations are hit first and worst.

The forces that threaten to destroy our well-being are also everywhere the same: primarily the lobbying power of big business and big money, that perceive the administrative state as an impediment to their immediate interests. Amplified by the persuasive power of campaign finance, covertly-funded thinktanks, embedded journalists and tame academics, these forces threaten to overwhelm democracy. If you want to know how they work, read Jane Mayer’s book Dark Money.

Up to a certain point, connectivity increases resilience. For example, if local food supplies fail, regional or global markets allow us to draw on production elsewhere. But beyond a certain level, connectivity and complexity threaten to become unmanageable. The emergent properties of the system, combined with the inability of the human brain to encompass it, could spread crises rather than contain them. We are in danger of pulling each other down. New Scientist should have asked “is complex society on the brink of collapse?”.

Complex societies have collapsed many times before. We live in a sort of civilisational interglacial, a brief respite from social entropy. It has always been a question of when, not if. But “when” is beginning to look like “soon”.

The collapse of states and social complexity has not always been a bad thing. As James C Scott points out in his fascinating book Against the Grain, the dissolution of the earliest states, that were founded on slavery and coercion, is likely to have been experienced by many people as an emancipation. When centralised power began to collapse, through epidemics, crop failure, floods, soil erosion or the self-destructive perversities of government, its corralled subjects would take the chance to flee. In many cases they joined the “barbarians”.

This so-called “secondary primitivism”, Scott notes, “may well have been experienced as a marked improvement in safety, nutrition and social order. Becoming a barbarian was often a bid to improve one’s lot.” The dark ages that inexorably followed the glory and grandeur of the state may, in that era, have been the best times to be alive.

But today there is nowhere to turn. The wild lands and rich ecosystems that once supported hunter gatherers, nomads and the refugees from imploding early states who joined them now scarcely exist. Only a tiny fraction of the current population could survive a return to the barbarian life. (Consider that, according to one estimate, the maximum population of Britain during the Mesolithic, when people survived by hunting and gathering, was 5000). In the nominally democratic era, the complex state is now, for all its flaws, all that stands between us and disaster.

So what we do? Next week, barring upsets, I will propose a new way forward. The path we now follow is not the path we have to take.

http://www.monbiot.com





The Dynamics of Depletion

27 06 2017

Originally published on the Automatic Earth, this further article on ERoEI and resource depletion ties all the things you need to understand about Limits to Growth in one neat package. 

Over the years, I have written many articles on the topic of EROEI (Energy Return on Energy Invested); there’s a whole chapter on it in the Automatic Earth Primer Guide 2017 that Nicole Foss assembled recently, which contains 17 well worth reading articles.

Since EROEI is still the most important energy issue there is, and not the price of oil or some new gas find or a set of windmills or solar panels or thorium as the media will lead you to believe, it can’t hurt to repeat it once again. Brian Davey wrote this item on his site CredoEconomics, it is part of his book “Credo”.

The reason I believe it can’t hurt to repeat this is because not nearly enough people understand that in the end, everything, the survival of our world, our way of life, is all about the ‘quality’ of energy, and about what we get in return when we drill and pump and build infrastructure; what remains when we subtract all the energy used to ‘generate’ energy, from (or at) the bottom line is all that’s left…….

nicolefoss

Nicole Foss

Nicole Foss: Energy is the master resource – the capacity to do work. Our modern society is the result of the enormous energy subsidy we have enjoyed in the form of fossil fuels, specifically fossil fuels with a very high energy profit ratio (EROEI). Energy surplus drove expansion, intensification, and the development of socioeconomic complexity, but now we stand on the edge of the net energy cliff. The surplus energy, beyond that which has to be reinvested in future energy production, is rapidly diminishing.

We would have to greatly increase gross production to make up for reduced energy profit ratio, but production is flat to falling so this is no longer an option. As both gross production and the energy profit ratio fall, the net energy available for all society’s other purposes will fall even more quickly than gross production declines would suggest. Every society rests on a minimum energy profit ratio. The implication of falling below that minimum for industrial society, as we are now poised to do, is that society will be forced to simplify.

A plethora of energy fantasies is making the rounds at the moment. Whether based on unconventional oil and gas or renewables (that are not actually renewable), these are stories we tell ourselves in order to deny that we are facing any kind of future energy scarcity, or that supply could be in any way a concern. They are an attempt to maintain the fiction that our society can continue in its current form, or even increase in complexity. This is a vain attempt to deny the existence of non-negotiable limits to growth. The touted alternatives are not energy sources for our current society, because low EROEI energy sources cannot sustain a society complex enough to produce them.

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 

Using Energy to Extract Energy – The Dynamics of Depletion

 

brian-selfie

Brian Davey

Brian Davey: The “Limits to Growth Study” of 1972 was deeply controversial and criticised by many economists. Over 40 years later, it seems remarkably prophetic and on track in its predictions. The crucial concept of Energy Return on Energy Invested is explained and the flaws in neoclassical reasoning which EROI highlights.

The continued functioning of the energy system is a “hub interdependency” that has become essential to the management of the increasing complexity of our society. The energy input into the UK economy is about 50 to 70 times as great as what the labour force could generate if working full time only with the power of their muscles, fuelled up with food. It is fossil fuels, refined to be used in vehicles and motors or converted into electricity that have created power inputs that makes possible the multiple round- about arrangements in a high complex economy. The other “hub interdependency” is a money and transaction system for exchange which has to continue to function to make vast production and trade networks viable. Without payment systems nothing functions.

Yet, as I will show, both types of hub interdependencies could conceivably fail. The smooth running of the energy system is dependent on ample supplies of cheaply available fossil fuels. However, there has been a rising cost of extracting and refining oil, gas and coal. Quite soon there is likely to be an absolute decline in their availability. To this should be added the climatic consequences of burning more carbon based fuels. To make the situation even worse, if the economy gets into difficulty because of rising energy costs then so too will the financial system – which can then have a knock-on consequence for the money system. The two hub interdependencies could break down together.

“Solutions” put forward by the techno optimists almost always assume growing complexity and new uses for energy with an increased energy cost. But this begs the question- because the problem is the growing cost of energy and its polluting and climate changing consequences.

 

The “Limits to Growth” study of 1972 – and its 40 year after evaluation

It was a view similar to this that underpinned the methodology of a famous study from the early 1970s. A group called the Club of Rome decided to commission a group of system scientists at the Massachusetts Institute of Technology to explore how far economic growth would continue to be possible. Their research used a series of computer model runs based on various scenarios of the future. It was published in 1972 and produced an instant storm. Most economists were up in arms that their shibboleth, economic growth, had been challenged. (Meadows, Meadows, Randers, & BehrensIII, 1972)

This was because its message was that growth could continue for some time by running down “natural capital” (depletion) and degrading “ecological system services” (pollution) but that it could not go on forever. An analogy would be spending more than one earns. This is possible as long as one has savings to run down, or by running up debts payable in the future. However, a day of reckoning inevitably occurs. The MIT scientists ran a number of computer generated scenarios of the future including a “business as usual” projection, called the “standard run” which hit a global crisis in 2030.

It is now over 40 years since the original Limits to Growth study was published so it is legitimate to compare what was predicted in 1972 against what actually happened. This has now been done twice by Graham Turner who works at the Australian Commonwealth Scientific and Industrial Research Organisation (CSIRO). Turner did this with data for the rst 30 years and then for 40 years of data. His conclusion is as follows:

The Limits to Growth standard run scenario produced 40 years ago continues to align well with historical data that has been updated in this paper following a 30-year comparison by the author. The scenario results in collapse of the global economy and environment and subsequently, the population. Although the modelled fall in population occurs after about 2030 – with death rates reversing contemporary trends and rising from 2020 onward – the general onset of collapse first appears at about 2015 when per capita industrial output begins a sharp decline. (Turner, 2012)

So what brings about the collapse? In the Limits to Growth model there are essentially two kinds of limiting restraints. On the one hand, limitations on resource inputs (materials and energy). On the other hand, waste/pollution restraints which degrade the ecological system and human society (particularly climate change).

Turner finds that, so far it, is the former rather than the latter that is the more important. What happens is that, as resources like fossil fuels deplete, they become more expensive to extract. More industrial output has to be set aside for the extraction process and less industrial output is available for other purposes.

With signficant capital subsequently going into resource extraction, there is insufficient available to fully replace degrading capital within the industrial sector itself. Consequently, despite heightened industrial activity attempting to satisfy multiple demands from all sectors and the population, actual industrial output per capita begins to fall precipitously, from about 2015, while pollution from the industrial activity continues to grow. The reduction of inputs produced per capita. Similarly, services (e.g., health and education) are not maintained due to insufficient capital and inputs.

Diminishing per capita supply of services and food cause a rise in the death rate from about 2020 (and somewhat lower rise in the birth rate, due to reduced birth control options). The global population therefore falls, at about half a billion per decade, starting at about 2030. Following the collapse, the output of the World3 model for the standard run (figure 1 to figure 3) shows that average living standards for the aggregate population (material wealth, food and services per capita) resemble those of the early 20th century. (Turner, 2012, p. 121)

 

Energy Return on Energy Invested

A similar analysis has been made by Hall and Klitgaard. They argue that to run a modern society it is necessary that the energy return on energy invested must be at least 15 to 1. To understand why this should be so consider the following diagram from a lecture by Hall. (Hall, 2012)

eroei

The diagram illustrates the idea of the energy return on energy invested. For every 100 Mega Joules of energy tapped in an oil flow from a well, 10 MJ are needed to tap the well, leaving 90 MJ. A narrow measure of energy returned on energy invested at the wellhead in this example would therefore be 100 to 10 or 10 to 1.

However, to get a fuller picture we have to extend this kind of analysis. Of the net energy at the wellhead, 90 MJ, some energy has to be used to refine the oil and produce the by-products, leaving only 63 MJ.

Then, to transport the refined product to its point of use takes another 5 MJ leaving 58MJ. But of course, the infrastructure of roads and transport also requires energy for construction and maintenance before any of the refined oil can be used to power a vehicle to go from A to B. By this final stage there is only 20.5 MJ of the original 100MJ left.

We now have to take into account that depletion means that, at well heads around the world, the energy to produce energy is increasing. It takes energy to prospect for oil and gas and if the wells are smaller and more difficult to tap because, for example, they are out at sea under a huge amount of rock. Then it will take more energy to get the oil out in the first place.

So, instead of requiring 10MJ to produce the 100 MJ, let us imagine that it now takes 20 MJ. At the other end of the chain there would thus, only be 10.5MJ – a dramatic reduction in petroleum available to society.

The concept of Energy Return on Energy Invested is a ratio in physical quantities and it helps us to understand the flaw in neoclassical economic reasoning that draws on the idea of “the invisible hand” and the price mechanism. In simplistic economic thinking, markets should have no problems coping with depletion because a depleting resource will become more expensive. As its price rises, so the argument goes, the search for new sources of energy and substitutes will be incentivised while people and companies will adapt their purchases to rising prices. For example, if it is the price of energy that is rising then this will incentivise greater energy efficiency. Basta! Problem solved…

Except the problem is not solved… there are two flaws in the reasoning. Firstly, if the price of energy rises then so too does the cost of extracting energy – because energy is needed to extract energy. There will be gas and oil wells in favourable locations which are relatively cheap to tap, and the rising energy price will mean that the companies that own these wells will make a lot of money. This is what economists call “rent”. However, there will be some wells that are “marginal” because the underlying geology and location are not so favourable. If energy prices rise at these locations then rising energy prices will also put up the energy costs of production. Indeed, when the energy returned on energy invested falls as low as 1 to 1, the increase in the costs of energy inputs will cancel out any gains in revenues from higher priced energy outputs. As is clear when the EROI is less than one, energy extraction will not be profitable at any price.

Secondly, energy prices cannot in any case rise beyond a certain point without crashing the economy. The market for energy is not like the market for cans of baked beans. Energy is necessary for virtually every activity in the economy, for all production and all services. The price of energy is a big deal – energy prices going up and down have a similar significance to interest rates going up or down. There are “macro-economic” consequences for the level of activity in the economy. Thus, in the words of one analyst, Chris Skrebowski, there is a rise in the price of oil, gas and coal at which:

the cost of incremental supply exceeds the price economies can pay without destroying growth at a given point in time.(Skrebowski, 2011)

This kind of analysis has been further developed by Steven Kopits of the Douglas-Westwood consultancy. In a lecture to the Columbia University Center on Global Energy Policy in February of 2014, he explained how conventional “legacy” oil production peaked in 2005 and has not increased since. All the increase in oil production since that date has been from unconventional sources like the Alberta Tar sands, from shale oil or natural gas liquids that are a by-product of shale gas production. This is despite a massive increase in investment by the oil industry that has not yielded any increase in “conventional oil” production but has merely served to slow what would otherwise have been a faster decline.

More specifically, the total spend on upstream oil and gas exploration and production from 2005 to 2013 was $4 trillion. Of that amount, $3.5 trillion was spent on the “legacy” oil and gas system. This is a sum of money equal to the GDP of Germany. Despite all that investment in conventional oil production, it fell by 1 million barrels a day. By way of comparison, investment of $1.5 trillion between 1998 and 2005 yielded an increase in oil production of 8.6 million barrels a day.

Further to this, unfortunately for the oil industry, it has not been possible for oil prices to rise high enough to cover the increasing capital expenditure and operating costs. This is because high oil prices lead to recessionary conditions and slow or no growth in the economy. Because prices are not rising fast enough and costs are increasing, the costs of the independent oil majors are rising at 2 to 3% a year more than their revenues. Overall profitability is falling and some oil majors have had to borrow and sell assets to pay dividends. The next stage in this crisis has then been that investment projects are being cancelled – which suggests that oil production will soon begin to fall more rapidly.

The situation can be understood by reference to the nursery story of Goldilocks and the Three Bears. Goldilocks tries three kinds of porridge – some that is too hot, some that is too cold and some where the temperature is somewhere in the middle and therefore just right. The working assumption of mainstream economists is that there is an oil price that is not too high to undermine economic growth but also not too low so that the oil companies cannot cover their extraction costs – a price that is just right. The problem is that the Goldilocks situation no longer describes what is happening. Another story provides a better metaphor – that story is “Catch 22”. According to Kopits, the vast majority of the publically quoted oil majors require oil prices of over $100 a barrel to achieve positive cash flow and nearly a half need more than $120 a barrel.

But it is these oil prices that drag down the economies of the OECD economies. For several years, however, there have been some countries that have been able to afford the higher prices. The countries that have coped with the high energy prices best are the so called “emerging non OECD countries” and above all China. China has been bidding away an increasing part of the oil production and continuing to grow while higher energy prices have led to stagnation in the OECD economies. (Kopits, 2014)

Since the oil price is never “just right” it follows that it must oscillate between a price that is too high for macro-economic stability or too low to make it a paying proposition for high cost producers of oil (or gas) to invest in expanding production. In late 2014 we can see this drama at work. The faltering global economy has a lower demand for oil but OPEC, under the leadership of Saudi Arabia, have decided not to reduce oil production in order to keep oil prices from falling. On the contrary they want prices to fall. This is because they want to drive US shale oil and gas producers out of business.

The shale industry is described elsewhere in this book – suffice it here to refer to the claim of many commentators that the shale oil and gas boom in the United States is a bubble. A lot of money borrowed from Wall Street has been invested in the industry in anticipation of high profits but given the speed at which wells deplete it is doubtful whether many of the companies will be able to cover their debts. What has been possible so far has been largely because quantitative easing means capital for this industry has been made available with very low interest rates. There is a range of extraction production costs for different oil and gas wells and fields depending on the differing geology in different places. In some “sweet spots” the yield compared to cost is high but in a large number of cases the costs of production have been high and it is being said that it will be impossible to make money at the price to which oil has fallen ($65 in late 2014). This in turn could mean that companies funding their operations with junk bonds could find it difficult to service their debt. If interest rates rise the difficulty would become greater. Because the shale oil and gas sector has been so crucial to expansion in the USA then a large number of bankruptcies could have wider repercussions throughout the wider US and world economy.

 

Renewable Energy systems to the rescue?

Although it seems obvious that the depletion of fossil fuels can and should lead to the expansion of renewable energy systems like wind and solar power, we should beware of believing that renewable energy systems are a panacea that can rescue consumer society and its continued growth path. A very similar net energy analysis can, and ought to be done for the potential of renewable energy to match that already done for fossil fuels.

eroei-renewables

Before we get over-enthusiastic about the potential for renewable energy, we have to be aware of the need to subtract the energy costs particular to renewable energy systems from the gross energy that renewable energy systems generate. Not only must energy be used to manufacture and install the wind turbines, the solar panels and so on, but for a renewable based economy to be able to function, it must also devote energy to the creation of energy storage. This would allow for the fact that, when the wind and the sun are generating energy, is not necessarily the time when it is wanted.

Furthermore, the places where, for example, solar and wind potential are at this best – offshore for wind or in deserts without dust storms near the equator for solar – are usually a long distance from centres of use. Once again, a great deal of energy, materials and money must be spent getting the energy from where it is generated to where it will be used. For example, the “Energie Wende” (Energy Transformation) in Germany is involving huge effort, financial and energy costs, creating a transmission corridor to carry electricity from North Sea wind turbines down to Bavaria where the demand is greatest. Similarly, plans to develop concentrated solar power in North Africa for use in northern Europe which, if they ever come to anything, will require major investments in energy transmission. A further issue, connected to the requirement for energy storage, is the need for energy carriers which are not based on electricity. As before, conversions to put a current energy flux into a stored form, involve an energy cost.

Just as with fossil fuels, sources of renewable energy are of variable yield depending on local conditions: offshore wind is better than onshore for wind speed and wind reliability; there is more solar energy nearer the equator; some areas have less cloud cover; wave energy on the Atlantic coasts of the UK are much better than on other coastlines like those of the Irish Sea or North Sea. If we make a Ricardian assumption that best net yielding resources are developed first, then subsequent yields will be progressively inferior. In more conventional jargon – just as there are diminishing returns for fossil energy as fossil energy resources deplete, so there will eventually be diminishing returns for renewable energy systems. No doubt new technologies will partly buck this trend but the trend is there nonetheless. It is for reasons such as these that some energy experts are sceptical about the global potential of renewable energy to meet the energy demand of a growing economy. For example, two Australian academics at Monash University argue that world energy demand would grow to 1,000 EJ (EJ = 10 18 J) or more by 2050 if growth continued on the course of recent decades. Their analysis then looks at each renewable energy resource in turn, bearing in mind the energy costs of developing wind, solar, hydropower, biomass etc., taking into account diminishing returns, and bearing in mind too that climate change may limit the potential of renewable energy. (For example, river flow rates may change affecting hydropower). Their conclusion: “We nd that when the energy costs of energy are considered, it is unlikely that renewable energy can provide anywhere near a 1000 EJ by 2050.” (Moriarty & Honnery, 2012)

Now let’s put these insights back into a bigger picture of the future of the economy. In a presentation to the All Party Parliamentary Group on Peak Oil and Gas, Charles Hall showed a number of diagrams to express the consequences of depletion and rising energy costs of energy. I have taken just two of these diagrams here – comparing 1970 with what might be the case in 2030. (Hall C. , 2012) What they show is how the economy produces different sorts of stuff. Some of the production is consumer goods, either staples (essentials) or discretionary (luxury) goods. The rest of production is devoted to goods that are used in production i.e. investment goods in the form of machinery, equipment, buildings, roads, infrastracture and their maintenance. Some of these investment goods must take the form of energy acquisition equipment. As a society runs up against energy depletion and other problems, more and more production must go into energy acquisition, infrastructure and maintenance. Less and less is available for consumption, and particularly for discretionary consumption.

hall

Whether the economy would evolve in this way can be questioned. As we have seen, the increasing needs of the oil and gas sector implies a transfer of resources from elsewhere through rising prices. However, the rest of the economy cannot actually pay this extra without crashing. That is what the above diagrams show – a transfer of resources from discretionary consumption to investment in energy infrastructure. But such a transfer would be crushing for the other sectors and their decline would likely drag down the whole economy.

Over the last few years, central banks have had a policy of quantitative easing to try to keep interest rates low. The economy cannot pay high energy prices AND high interest rates so, in effect, the policy has been to try to bring down interest rates as low as possible to counter the stagnation. However, this has not really created production growth, it has instead created a succession of asset price bubbles. The underlying trend continues to be one of stagnation, decline and crisis and it will get a lot worse when oil production starts to fall more rapidly as a result of investment cut backs. The severity of the recessions may be variable in different countries because competitive strength in this model goes to those countries where energy is used most efficiently and which can afford to pay somewhat higher prices for energy. Such countries are likely to do better but will not escape the general decline if they stay wedded to the conventional growth model. Whatever the variability, this is still a dead end and, at some point, people will see that entirely different ways of thinking about economy and ecology are needed – unless they get drawn into conflicts and wars over energy by psychopathic policy idiots. There is no way out of the Catch 22 within the growth economy model. That’s why degrowth is needed.

Further ideas can be extrapolated from Hall’s way of presenting the end of the road for the growth economy. The only real option as a source for extra resources to be ploughed into changing the energy sector is from what Hall calls “discretionary consumption” aka luxury consumption. It would not be possible to take from “staples” without undermining the ability of ordinary people to survive day to day. Implicit here is a social justice agenda for the post growth – post carbon economy. Transferring resources out of the luxury consumption of the rich is a necessary part of the process of finding the wherewithal for energy conservation work and for developing renewable energy resources. These will be expensive and the resources cannot come from anywhere else than out of the consumption of the rich. It should be remembered too that the problems of depletion do not just apply to fossil energy extraction coal, oil and gas) but apply across all forms of mineral extraction. All minerals are depleted by use and that means the grade or ore declines over time. Projecting the consequences into the future ought to frighten the growth enthusiasts. To take in how industrial production can hit a brick wall of steeply rising costs, consider the following graph which shows the declining quality of ore grades mined in Australia.

mining-australia

As ores deplete there is a deterioration of ore grades. That means that more rock has to be shifted and processed to refine and extract the desired raw material, requiring more energy and leaving more wastes. This is occurring in parallel to the depletion in energy sources which means that more energy has to be used to extract a given quantity of energy and therefore, in turn, to extract from a given quantity of ore. Thus, the energy requirements to extract energy are rising at the very same time as the amount of energy required to extract given quantities of minerals are rising. More energy is needed just at the time that energy is itself becoming more expensive.

Now, on top of that, add to the picture the growing demand for minerals and materials if the economy is to grow.

At least there has been a recognition and acknowledgement in recent years that environmental problems exist. The problem is now somewhat different – the problem is the incredibly naive faith that markets and technology can solve all problems and keep on going. The main criticism of the limits to growth study was the claim that problems would be anticipated in forward markets and would then be made the subject of high tech innovation. In the next chapter, the destructive effects of these innovations are examined in more depth.