Consuming our future…….

13 03 2017

Hat tip to Sam who left the link to this “Must Hear” podcast.

From the ABC RN website….:

Only lowering our living standards will achieve sustainable growth. That’s the message from Satyajit Das, a former financier who anticipated the GFC. Debt, energy consumption, housing affordability or superannuation – it’s all based on a financial system that’s in fact a completely fictional model. This model was always doomed to fail – eventually.

Beyond growth as we know it – How can we stop consuming our future? was presented by The Rescope Project. 4 February 2017

Image result for Satyajit Das

Satyajit Das

From 1977 to 1987, Das worked in banking with the Commonwealth Bank, CitiGroup and Merrill Lynch. From 1988 to 1994, Das was Treasurer of the TNT Transport Group.

 

Das is the author of Traders, Guns & Money and Extreme Money and reference books on derivatives and risk-management. He lives in Sydney, Australia.

Extreme Money was long-listed for the Financial Times/Goldman Sachs Business Book of the Year AwardThe Economist reviewed the book, stating that “Satyajit Das is well-placed to comment, having worked both for investment banks and as a consultant advising clients on their use of complex financial products”, however, “the book could have easily been 150 pages shorter without losing its thrust.”

A Banquet of Consequences was released in Australia in 2015. It was released in the United States in 2016 as The Age of Stagnation to avoid it being confused as a cookbook.

Das is a regular commentator on LNL (Late Night Live) on RN (ABC radio’s Radio National), hosted by Phillip Adams.

https://radio.abc.net.au/search?service_guid=RN-bia-20170309-8298030

OR download the mp3 file as I did with your favorite software…..





Nafeez Ahmed: Our Systems Are Failing

20 02 2017

IF you are not familiar with Chris Martenson’s immensely valuable work, then start here….

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nafeezThe most fascinating thing for me is how so much of what we take for granted becomes questionable as a result of the breakdown we’re seeing. When we begin questioning the exponential growth model then we begin questioning the value system driving our material production/consumption. It’s not that it hasn’t produced amazing knowledge of our environment and our place in the universe. It’s not that there haven’t been a huge amount of amazing technological developments, like the internet which has enabled people to be interconnected in ways that they never were able to before. In a way has paved the way for us to be able to think globally in a way that centuries ago would have never happened.

It’s not that everything about this paradigm is bad. It’s just that it has very clearly outlasted its usefulness and is now fundamentally responsible for escalating the biophysical rupture that we see happening and manifesting in so many different ways. What that tells me is that we have to grow up as a species. It’s an evolutionary moment.

When we apply systems theory to this, when we apply our knowledge of complex adaptive systems and the history of evolution, it does seem to me that it is absolutely clear really that we’re at an unprecedented moment. For the first time in human history, we are standing at a point where we need to basically undergo fundamental systemic adaptation. Exactly what that looks like we’re still trying to work out. But what is very clear is what it doesn’t look like. It doesn’t look like seeing each other as separate material entities that just fend for themselves and produce and consume to an endless degree. It looks quite different.

The ideas and the values and the ethos of that different approach has been percolating in different civilizations in different ways. There’s evidence from indigenous civilizations, from tribal societies, and even from projects that are now being seeded here and now in our current context where people are trying different things. I think we are at a moment where we’re rewriting that story and making a new story of what it means to be human.

It’s particularly important because when people look at this with fresh eyes, it’s very easy to be overwhelmed by a sense of powerlessness. That’s being reflected now with the rise of Trump and everything else. There is this sense of things getting worse. And I think in many ways it is going to get worse before it gets better. All of this is symptomatic of the crisis that is at play.

A question we all need to be able to ask ourselves is To what extent can I make myself useful going forward, building and planting seeds for what comes after this moment?

https://www.peakprosperity.com/podcast/107221/nafeez-ahmed-our-systems-failing?utm_source=dlvr.it&utm

 





More gnashing of teeth

7 02 2017

The Über-Lie

By Richard Heinberg, Post Carbon Institute

heinbergNevertheless, even as political events spiral toward (perhaps intended) chaos, I wish once again, as I’ve done countless times before, to point to a lie even bigger than the ones being served up by the new administration…It is the lie that human society can continue growing its population and consumption levels indefinitely on our finite planet, and never suffer consequences.

This is an excellent article from Richard Heinberg, the writer who sent me on my current life voyage all those years ago. Hot on the heels of my attempt yesterday of explaining where global politics are heading, Richard (whom I met years ago and even had a meal with…) does a better job than I could ever possibly muster.  Enjoy……

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Our new American president is famous for spinning whoppers. Falsehoods, fabrications, distortions, deceptions—they’re all in a day’s work. The result is an increasingly adversarial relationship between the administration and the press, which may in fact be the point of the exercise: as conservative commentators Scott McKay suggests in The American Spectator, “The hacks covering Trump are as lazy as they are partisan, so feeding them . . . manufactured controversies over [the size of] inaugural crowds is a guaranteed way of keeping them occupied while things of real substance are done.”

But are some matters of real substance (such as last week’s ban on entry by residents of seven Muslim-dominated nations) themselves being used to hide even deeper and more significant shifts in power and governance? Steve “I want to bring everything crashing down” Bannon, who has proclaimed himself an enemy of Washington’s political class, is a member of a small cabal (also including Trump, Stephen Miller, Reince Priebus, and Jared Kushner) that appears to be consolidating nearly complete federal governmental power, drafting executive orders, and formulating political strategy—all without paper trail or oversight of any kind. The more outrage and confusion they create, the more effective is their smokescreen for the dismantling of governmental norms and institutions.

There’s no point downplaying the seriousness of what is up. Some commentators are describing it as a coup d’etat in progress; there is definitely the potential for blood in the streets at some point.

Nevertheless, even as political events spiral toward (perhaps intended) chaos, I wish once again, as I’ve done countless times before, to point to a lie even bigger than the ones being served up by the new administration—one that predates the new presidency, but whose deconstruction is essential for understanding the dawning Trumpocene era. I’m referring to a lie that is leading us toward not just political violence but, potentially, much worse. It is an untruth that’s both durable and bipartisan; one that the business community, nearly all professional economists, and politicians around the globe reiterate ceaselessly. It is the lie that human society can continue growing its population and consumption levels indefinitely on our finite planet, and never suffer consequences.

Yes, this lie has been debunked periodically, starting decades ago. A discussion about planetary limits erupted into prominence in the 1970s and faded, yet has never really gone away. But now those limits are becoming less and less theoretical, more and more real. I would argue that the emergence of the Trump administration is a symptom of that shift from forecast to actuality.

Consider population. There were one billion of us on Planet Earth in 1800. Now there are 7.5 billion, all needing jobs, housing, food, and clothing. From time immemorial there were natural population checks—disease and famine. Bad things. But during the last century or so we defeated those population checks. Famines became rare and lots of diseases can now be cured. Modern agriculture grows food in astounding quantities. That’s all good (for people anyway—for ecosystems, not so much). But the result is that human population has grown with unprecedented speed.

Some say this is not a problem, because the rate of population growth is slowing: that rate was two percent per year in the 1960s; now it’s one percent. Yet because one percent of 7.5 billion is more than two percent of 3 billion (which was the world population in 1960), the actual number of people we’re now adding annually is the highest ever: over eighty million—the equivalent of Tokyo, New York, Mexico City, and London added together. Much of that population growth is occurring in countries that are already having a hard time taking care of their people. The result? Failed states, political unrest, and rivers of refugees.

Per capita consumption of just about everything also grew during past decades, and political and economic systems came to depend upon economic growth to provide returns on investments, expanding tax revenues, and positive poll numbers for politicians. Nearly all of that consumption growth depended on fossil fuels to provide energy for raw materials extraction, manufacturing, and transport. But fossil fuels are finite and by now we’ve used the best of them. We are not making the transition to alternative energy sources fast enough to avert crisis (if it is even possible for alternative energy sources to maintain current levels of production and transport). At the same time, we have depleted other essential resources, including topsoil, forests, minerals, and fish. As we extract and use resources, we create pollution—including greenhouse gasses, which cause climate change.

Depletion and pollution eventually act as a brake on further economic growth even in the wealthiest nations. Then, as the engine of the economy slows, workers find their incomes leveling off and declining—a phenomenon also related to the globalization of production, which elites have pursued in order to maximize profits.

Declining wages have resulted in the upwelling of anti-immigrant and anti-globalization sentiments among a large swath of the American populace, and those sentiments have in turn served up Donald Trump. Here we are. It’s perfectly understandable that people are angry and want change. Why not vote for a vain huckster who promises to “Make America Great Again”? However, unless we deal with deeper biophysical problems (population, consumption, depletion, and pollution), as well as the policies that elites have used to forestall the effects of economic contraction for themselves (globalization, financialization, automation, a massive increase in debt, and a resulting spike in economic inequality), America certainly won’t be “great again”; instead, we’ll just proceed through the five stages of collapse helpfully identified by Dmitry Orlov.

Rather than coming to grips with our society’s fundamental biophysical contradictions, we have clung to the convenient lies that markets will always provide, and that there are plenty of resources for as many humans as we can ever possibly want to crowd onto this little planet. And if people are struggling, that must be the fault of [insert preferred boogeyman or group here]. No doubt many people will continue adhering to these lies even as the evidence around us increasingly shows that modern industrial society has already entered a trajectory of decline.

While Trump is a symptom of both the end of economic growth and of the denial of that new reality, events didn’t have to flow in his direction. Liberals could have taken up the issues of declining wages and globalization (as Bernie Sanders did) and even immigration reform. For example, Colin Hines, former head of Greenpeace’s International Economics Unit and author of Localization: A Global Manifesto, has just released a new book, Progressive Protectionism, in which he argues that “We must make the progressive case for controlling our borders, and restricting not just migration but the free movement of goods, services and capital where it threatens environment, wellbeing and social cohesion.”

But instead of well-thought out policies tackling the extremely complex issues of global trade, immigration, and living wages, we have hastily written executive orders that upend the lives of innocents. Two teams (liberal and conservative) are lined up on the national playing field, with positions on all significant issues divvied up between them. As the heat of tempers rises, our options are narrowed to choosing which team to cheer for; there is no time to question our own team’s issues. That’s just one of the downsides of increasing political polarization—which Trump is exacerbating dramatically.

Just as Team Trump covers its actions with a smokescreen of controversial falsehoods, our society hides its biggest lie of all—the lie of guaranteed, unending economic growth—behind a camouflage of political controversies. Even in relatively calm times, the über-lie was watertight: almost no one questioned it. Like all lies, it served to divert attention from an unwanted truth—the truth of our collective vulnerability to depletion, pollution, and the law of diminishing returns. Now that truth is more hidden than ever.

Our new government shows nothing but contempt for environmentalists and it plans to exit Paris climate agreement. Denial reigns! Chaos threatens! So why bother bringing up the obscured reality of limits to growth now, when immediate crises demand instant action? It’s objectively too late to restrain population and consumption growth so as to avert what ecologists of the 1970s called a “hard landing.” Now we’ve fully embarked on the age of consequences, and there are fires to put out. Yes, the times have moved on, but the truth is still the truth, and I would argue that it’s only by understanding the biophysical wellsprings of change that can we successfully adapt, and recognize whatever opportunities come our way as the pace of contraction accelerates to the point that decline can no longer successfully be hidden by the elite’s strategies.

Perhaps Donald Trump succeeded because his promises spoke to what civilizations in decline tend to want to hear. It could be argued that the pluralistic, secular, cosmopolitan, tolerant, constitutional democratic nation state is a political arrangement appropriate for a growing economy buoyed by pervasive optimism. (On a scale much smaller than contemporary America, ancient Greece and Rome during their early expansionary periods provided examples of this kind of political-social arrangement). As societies contract, people turn fearful, angry, and pessimistic—and fear, anger, and pessimism fairly dripped from Trump’s inaugural address. In periods of decline, strongmen tend to arise promising to restore past glories and to defeat domestic and foreign enemies. Repressive kleptocracies are the rule rather than the exception.

If that’s what we see developing around us and we want something different, we will have to propose economic, political, and social forms that are appropriate to the biophysical realities increasingly confronting us—and that embody or promote cultural values that we wish to promote or preserve. Look for good historic examples. Imagine new strategies. What program will speak to people’s actual needs and concerns at this moment in history? Promising a return to an economy and way of life that characterized a past moment is pointless, and it may propel demagogues to power. But there is always a range of possible responses to the reality of the present. What’s needed is a new hard-nosed sort of optimism (based on an honest acknowledgment of previously denied truths) as an alternative to the lies of divisive bullies who take advantage of the elites’ failures in order to promote their own patently greedy interests. What that actually means in concrete terms I hope to propose in more detail in future essays.





2017: The Year When the World Economy Starts Coming Apart

20 01 2017

Conclusion

The situation is indeed very concerning. Many things could set off a crisis:

  • Rising energy prices of any kind (hurting energy importers), or energy prices that don’t rise (leading to financial problems or collapse of exporters)
  • Rising interest rates.
  • Defaulting debt, indirectly the result of slow/negative economic growth and rising interest rates.
  • International organizations with less and less influence, or that fall apart completely.
  • Fast changes in relativities of currencies, leading to defaults on derivatives.
  • Collapsing banks, as debt defaults rise.
  • Falling asset prices (homes, farms, commercial buildings, stocks and bonds) as interest rates rise, leading to many debt defaults.

FOLLOWING ON from my last post exposing HSBC’s forecast of a peak oil caused economic collapse, along comes this piece from Gail Tverberg predicting it may all start this year…….

Most of this article is a rehash of things she’s said before all consolidated in one lengthy essay, and some of them were published here before. It’s becoming increasingly difficult to not recognise all our ducks are lining up on the wall…….

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Some people would argue that 2016 was the year that the world economy started to come apart, with the passage of Brexit and the election of Donald Trump. Whether or not the “coming apart” process started in 2016, in my opinion we are going to see many more steps in this direction in 2017. Let me explain a few of the things I see.

[1] Many economies have collapsed in the past. The world economy is very close to the turning point where collapse starts in earnest.  

Figure 1

The history of previous civilizations rising and eventually collapsing is well documented.(See, for example, Secular Cycles.)

To start a new cycle, a group of people would find a new way of doing things that allowed more food and energy production (for instance, they might add irrigation, or cut down trees for more land for agriculture). For a while, the economy would expand, but eventually a mismatch would arise between resources and population. Either resources would fall too low (perhaps because of erosion or salt deposits in the soil), or population would rise too high relative to resources, or both.

Even as resources per capita began falling, economies would continue to have overhead expenses, such as the need to pay high-level officials and to fund armies. These overhead costs could not easily be reduced, and might, in fact, grow as the government attempted to work around problems. Collapse occurred because, as resources per capita fell (for example, farms shrank in size), theearnings of workers tended to fall. At the same time, the need for taxes to cover what I am calling overhead expenses tended to grow. Tax rates became too high for workers to earn an adequate living, net of taxes. In some cases, workers succumbed to epidemics because of poor diets. Or governments would collapse, from lack of adequate tax revenue to support them.

Our current economy seems to be following a similar pattern. We first used fossil fuels to allow the population to expand, starting about 1800. Things went fairly well until the 1970s, when oil prices started to spike. Several workarounds (globalization, lower interest rates, and more use of debt) allowed the economy to continue to grow. The period since 1970 might be considered a period of “stagflation.” Now the world economy is growing especially slowly. At the same time, we find ourselves with “overhead” that continues to grow (for example, payments to retirees, and repayment of debt with interest). The pattern of past civilizations suggests that our civilization could also collapse.

Historically, economies have taken many years to collapse; I show a range of 20 to 50 years in Figure 1. We really don’t know if collapse would take that long now. Today, we are dependent on an international financial system, an international trade system, electricity, and the availability of oil to make our vehicles operate. It would seem as if this time collapse could come much more quickly.

With the world economy this close to collapse, some individual countries are even closer to collapse. This is why we can expect to see sharp downturns in the fortunes of some countries. If contagion is not too much of a problem, other countries may continue to do fairly well, even as individual small countries fail.

[2] Figures to be released in 2017 and future years are likely to show that the peak in world coal consumption occurred in 2014. This is important, because it means that countries that depend heavily on coal, such as China and India, can expect to see much slower economic growth, and more financial difficulties.

While reports of international coal production for 2016 are not yet available, news articles and individual country data strongly suggest that world coal production is past its peak. The IEA also reports a substantial drop in coal production for 2016.

Figure 2. World coal consumption. Information through 2015 based on BP 2016 Statistical Review of World Energy data. Estimates for China, US, and India are based on partial year data and news reports. 2016 amount for "other" estimated based on recent trends.

The reason why coal production is dropping is because of low prices, low profitability for producers, and gluts indicating oversupply. Also, comparisons of coal prices with natural gas prices are inducing switching from coal to natural gas. The problem, as we will see later, is that natural gas prices are also artificially low, compared to the cost of production, So the switch is being made to a different type of fossil fuel, also with an unsustainably low price.

Prices for coal in China have recently risen again, thanks to the closing of a large number of unprofitable coal mines, and a mandatory reduction in hours for other coal mines. Even though prices have risen, production may not rise to match the new prices. One article reports:

. . . coal companies are reportedly reluctant to increase output as a majority of the country’s mines are still losing money and it will take time to recoup losses incurred in recent years.

Also, a person can imagine that it might be difficult to obtain financing, if coal prices have only “sort of” recovered.

I wrote last year about the possibility that coal production was peaking. This is one chart I showed, with data through 2015. Coal is the second most utilized fuel in the world. If its production begins declining, it will be difficult to offset the loss of its use with increased use of other types of fuels.

Figure 3. World per capita energy consumption by fuel, based on BP 2016 SRWE.

[3] If we assume that coal supplies will continue to shrink, and other production will grow moderately, we can expect total energy consumption to be approximately flat in 2017. 

Figure 5. World energy consumption forecast, based on BP Statistical Review of World Energy data through 2015, and author's estimates for 2016 and 2017.

In a way, this is an optimistic assessment, because we know that efforts are underway to reduce oil production, in order to prop up prices. We are, in effect, assuming either that (a) oil prices won’t really rise, so that oil consumption will grow at a rate similar to that in the recent past or (b) while oil prices will rise significantly to help producers, consumers won’t cut back on their consumption in response to the higher prices.

[4] Because world population is rising, the forecast in Figure 4 suggests that per capita energy consumption is likely to shrink. Shrinking energy consumption per capita puts the world (or individual countries in the world) at the risk of recession.

Figure 5 shows indicated per capita energy consumption, based on Figure 4. It is clear that energy consumption per capita has already started shrinking, and is expected to shrink further. The last time that happened was in the Great Recession of 2007-2009.

Figure 5. World energy consumption per capita based on energy consumption estimates in Figure 4 and UN 2015 Medium Population Growth Forecast.

There tends to be a strong correlation between world economic growth and world energy consumption, because energy is required to transform materials into new forms, and to transport goods from one place to another.

In the recent past, the growth in GDP has tended to be a little higher than the growth in the use of energy products. One reason why GDP growth has been a percentage point or two higher than energy consumption growth is because, as economies become richer, citizens can afford to add more services to the mix of goods and services that they purchase (fancier hair cuts and more piano lessons, for example). Production of services tends to use proportionately less energy than creating goods does; as a result, a shift toward a heavier mix of services tends to lead to GDP growth rates that are somewhat higher than the growth in energy consumption.

A second reason why GDP growth has tended to be a little higher than growth in energy consumption is because devices (such as cars, trucks, air conditioners, furnaces, factory machinery) are becoming more efficient. Growth in efficiency occurs if consumers replace old inefficient devices with new more efficient devices. If consumers become less wealthy, they are likely to replace devices less frequently, leading to slower growth in efficiency. Also, as we will discuss later in this  post, recently there has been a tendency for fossil fuel prices to remain artificially low. With low prices, there is little financial incentive to replace an old inefficient device with a new, more efficient device. As a result, new purchases may be bigger, offsetting the benefit of efficiency gains (purchasing an SUV to replace a car, for example).

Thus, we cannot expect that the past pattern of GDP growing a little faster than energy consumption will continue. In fact, it is even possible that the leveraging effect will start working the “wrong” way, as low fossil fuel prices induce more fuel use, not less. Perhaps the safest assumption we can make is that GDP growth and energy consumption growth will be equal. In other words, if world energy consumption growth is 0% (as in Figure 4), world GDP growth will also be 0%. This is not something that world leaders would like at all.

The situation we are encountering today seems to be very similar to the falling resources per capita problem that seemed to push early economies toward collapse in [1]. Figure 5 above suggests that, on average, the paychecks of workers in 2017 will tend to purchase fewer goods and services than they did in 2016 and 2015. If governments need higher taxes to fund rising retiree costs and rising subsidies for “renewables,” the loss in the after-tax purchasing power of workers will be even greater than Figure 5 suggests.

[5] Because many countries are in this precarious position of falling resources per capita, we should expect to see a rise in protectionism, and the addition of new tariffs.

Clearly, governments do not want the problem of falling wages (or rather, falling goods that wages can buy) impacting their countries. So the new game becomes, “Push the problem elsewhere.”

In economic language, the world economy is becoming a “Zero-sum” game. Any gain in the production of goods and services by one country is a loss to another country. Thus, it is in each country’s interest to look out for itself. This is a major change from the shift toward globalization we have experienced in recent years. China, as a major exporter of goods, can expect to be especially affected by this changing view.

[6] China can no longer be expected to pull the world economy forward.

China’s economic growth rate is likely to be lower, for many reasons. One reason is the financial problems of coal mines, and the tendency of coal production to continue to shrink, once it starts shrinking. This happens for many reasons, one of them being the difficulty in obtaining loans for expansion, when prices still seem to be somewhat low, and the outlook for the further increases does not appear to be very good.

Another reason why China’s economic growth rate can be expected to fall is the current overbuilt situation with respect to apartment buildings, shopping malls, factories, and coal mines. As a result, there seems to be little need for new buildings and operations of these types. Another reason for slower economic growth is the growing protectionist stance of trade partners. A fourth reason is the fact that many potential buyers of the goods that China is producing are not doing very well economically (with the US being a major exception). These buyers cannot afford to increase their purchases of imports from China.

With these growing headwinds, it is quite possible that China’s total energy consumption in 2017 will shrink. If this happens, there will be downward pressure on world fossil fuel prices. Oil prices may fall, despite production cuts by OPEC and other countries.

China’s slowing economic growth is likely to make its debt problem harder to solve. We should not be too surprised if debt defaults become a more significant problem, or if the yuan falls relative to other currencies.

India, with its recent recall of high denomination currency, as well as its problems with low coal demand, is not likely to be a great deal of help aiding the world economy to grow, either. India is also a much smaller economy than China.

[7] While Item [2] talked about peak coal, there is a very significant chance that we will be hitting peak oil and peak natural gas in 2017 or 2018, as well.  

If we look at historical prices, we see that the prices of oil, coal and natural gas tend to rise and fall together.

Figure 6. Prices of oil, call and natural gas tend to rise and fall together. Prices based on 2016 Statistical Review of World Energy data.

The reason that fossil fuel prices tend to rise and fall together is because these prices are tied to “demand” for goods and services in general, such as for new homes, cars, and factories. If wages are rising rapidly, and debt is rising rapidly, it becomes easier for consumers to buy goods such as homes and cars. When this happens, there is more “demand” for the commodities used to make and operate homes and cars. Prices for commodities of many types, including fossil fuels, tend to rise, to enable more production of these items.

Of course, the reverse happens as well. If workers become poorer, or debt levels shrink, it becomes harder to buy homes and cars. In this case, commodity prices, including fossil fuel prices, tend to fall.  Thus, the problem we saw above in [2] for coal would be likely to happen for oil and natural gas, as well, because the prices of all of the fossil fuels tend to move together. In fact, we know that current oil prices are too low for oil producers. This is the reason why OPEC and other oil producers have cut back on production. Thus, the problem with overproduction for oil seems to be similar to the overproduction problem for coal, just a bit delayed in timing.

In fact, we also know that US natural gas prices have been very low for several years, suggesting another similar problem. The United States is the single largest producer of natural gas in the world. Its natural gas production hit a peak in mid 2015, and production has since begun to decline. The decline comes as a response to chronically low prices, which make it unprofitable to extract natural gas. This response sounds similar to China’s attempted solution to low coal prices.

Figure 7. US Natural Gas production based on EIA data.

The problem is fundamentally the fact that consumers cannot afford goods made using fossil fuels of any type, if prices actually rise to the level producers need, which tends to be at least five times the 1999 price level. (Note peak price levels compared to 1999 level on Figure 6.) Wages have not risen by a factor of five since 1999, so paying the prices that fossil fuel producers need for profitability and growing production is out of the question. No amount of added debt can hide this problem. (While this reference is to 1999 prices, the issue really goes back much farther, to prices before the price spikes of the 1970s.)

US natural gas producers also have plans to export natural gas to Europe and elsewhere, as liquefied natural gas (LNG). The hope, of course, is that a large amount of exports will raise US natural gas prices. Also, the hope is that Europeans will be able to afford the high-priced natural gas shipped to them. Unless someone can raise the wages of both Europeans and Americans, I would not count on LNG prices actually rising to the level needed for profitability, and staying at such a high level. Instead, they are likely to bounce up, and quickly drop back again.

[8] Unless oil prices rise very substantially, oil exporters will find themselves exhausting their financial reserves in a very short time (perhaps a year or two). Unfortunately, oil importerscannot withstand higher prices, without going into recession. 

We have a no win situation, no matter what happens. This is true with all fossil fuels, but especially with oil, because of its high cost and thus necessarily high price. If oil prices stay at the same level or go down, oil exporters cannot get enough tax revenue, and oil companies in general cannot obtain enough funds to finance the development of new wells and payment of dividends to shareholders. If oil prices do rise by a very large amount for very long, we are likely headed into another major recession, with many debt defaults.

[9] US interest rates are likely to rise in the next year or two, whether or not this result is intended by the Federal reserve.

This issue here is somewhat obscure. The issue has to do with whether the United States can find foreign buyers for its debt, often called US Treasuries, and the interest rates that the US needs to pay on this debt. If buyers are very plentiful, the interest rates paid by he US government can be quite low; if few buyers are available, interest rates must be higher.

Back when Saudi Arabia and other oil exporters were doing well financially, they often bought US Treasuries, as a way to retain the benefit of their new-found wealth, which they did not want to spend immediately. Similarly, when China was doing well as an exporter, it often bought US Treasuries, as a way retaining the wealth it gained from exports, but didn’t yet need for purchases.

When these countries bought US Treasuries, there were several beneficial results:

  • Interest rates on US Treasuries tended to stay artificially low, because there was a ready market for its debt.
  • The US could afford to import high-priced oil, because the additional debt needed to buy the oil could easily be sold (to Saudi Arabia and other oil producing nations, no less).
  • The US dollar tended to stay lower relative to other currencies, making oil more affordable to other countries than it otherwise might be.
  • Investment in countries outside the US was encouraged, because debt issued by these other countries tended to bear higher interest rates than US debt. Also, relatively low oil prices in these countries (because of the low level of the dollar) tended to make investment profitable in these countries.

The effect of these changes was somewhat similar to the US having its own special Quantitative Easing (QE) program, paid for by some of the counties with trade surpluses, instead of by its central bank. This QE substitute tended to encourage world economic growth, for the reasons mentioned above.

Once the fortunes of the countries that used to buy US Treasuries changes, the pattern of buying of US Treasuries tends to change to selling of US Treasuries. Even not purchasing the same quantity of US Treasuries as in the past becomes an adverse change, if the US has a need to keep issuing US Treasuries as in the past, or if it wants to keep rates low.

Unfortunately, losing this QE substitute tends to reverse the favorable effects noted above. One effect is that the dollar tends to ride higher relative to other currencies, making the US look richer, and other countries poorer. The “catch” is that as the other countries become poorer, it becomes harder for them to repay the debt that they took out earlier, which was denominated in US dollars.

Another problem, as this strange type of QE disappears, is that the interest rates that the US government needs to pay in order to issue new debt start rising. These higher rates tend to affect other rates as well, such as mortgage rates. These higher interest rates act as a drag on the economy, tending to push it toward recession.

Higher interest rates also tend to decrease the value of assets, such as homes, farms, outstanding bonds, and shares of stock. This occurs because fewer buyers can afford to buy these goods, with the new higher interest rates. As a result, stock prices can be expected to fall. Prices of homes and of commercial buildings can also be expected to fall. The value of bonds held by insurance companies and banks becomes lower, if they choose to sell these securities before maturity.

Of course, as interest rates fell after 1981, we received the benefit of falling interest rates, in the form of rising asset prices. No one ever stopped to think about how much of the gains in share prices and property values came from falling interest rates.

Figure 8. Ten year treasury interest rates, based on St. Louis Fed data.

Now, as interest rates rise, we can expect asset prices of many types to start falling, because of lower affordability when monthly payments are based on higher interest rates. This situation presents another “drag” on the economy.

In Conclusion

The situation is indeed very concerning. Many things could set off a crisis:

  • Rising energy prices of any kind (hurting energy importers), or energy prices that don’t rise (leading to financial problems or collapse of exporters)
  • Rising interest rates.
  • Defaulting debt, indirectly the result of slow/negative economic growth and rising interest rates.
  • International organizations with less and less influence, or that fall apart completely.
  • Fast changes in relativities of currencies, leading to defaults on derivatives.
  • Collapsing banks, as debt defaults rise.
  • Falling asset prices (homes, farms, commercial buildings, stocks and bonds) as interest rates rise, leading to many debt defaults.

Things don’t look too bad right now, but the underlying problems are sufficiently severe that we seem to be headed for a crisis far worse than 2008. The timing is not clear. Things could start falling apart badly in 2017, or alternatively, major problems may be delayed until 2018 or 2019. I hope political leaders can find ways to keep problems away as long as possible, perhaps with more rounds of QE. Our fundamental problem is the fact that neither high nor low energy prices are now able to keep the world economy operating as we would like it to operate. Increased debt can’t seem to fix the problem either.

The laws of physics seem to be behind economic growth. From a physics point of view, our economy is a dissipative structure. Such structures form in “open systems.” In such systems, flows of energy allow structures to temporarily self-organize and grow. Other examples of dissipative structures include ecosystems, all plants and animals, stars, and hurricanes. All of these structures constantly “dissipate” energy. They have finite life spans, before they eventually collapse. Often, new dissipative systems form, to replace previous ones that have collapsed.





Mass Extinction and Mass Insanity

16 12 2016

I was very taken and moved by this article from the Automatic Earth, written by Raul Ilargi Meijer….

I’m too busy setting up my market garden right now to write anything, so a big thank you to Raul for this content you should all read.

_____________________________

Everything dies, baby, that’s a fact
But maybe everything that dies someday comes back …

Springsteen, Atlantic City

“Erwin Schrodinger (1945) has described life as a system in steady-state thermodynamic disequilibrium that maintains its constant distance from equilibrium (death) by feeding on low entropy from its environment – that is, by exchanging high-entropy outputs for low-entropy inputs. The same statement would hold verbatium as a physical description of our economic process. A corollary of this statement is that an organism cannot live in a medium of its own waste products.”
Herman Daly and Kenneth Townsend

 

What drives our economies is waste. Not need, or even demand. Waste. 2nd law of thermodynamics. It drives our lives, period.

First of all, don’t tell me you’re trying to stop the ongoing extinction of nature and wildlife on this planet, or the destruction of life in general. Don’t even tell me you’re trying. Don’t tell me it’s climate change that we should focus on (that’s just a small part of the story), and you’re driving an electric car and you’re separating your trash or things like that. That would only mean you’re attempting to willfully ignore your share of destruction, because if you do it, so will others, and the planet can’t take anymore of your behavior.

This is the big one. And the only ones amongst us who don’t think so are those who don’t want to. Who think it’s easier to argue that some problems are too big for them to tackle, that they should be left to others to solve. But why should we, why should anyone, worry about elections or even wars, when it becomes obvious we’re fast approaching a time when such things don’t matter much anymore?

The latest WWF Living Planet Report shows us that the planet is a whole lot less alive than it used to be. And that we killed that life. That we replaced it with metal, bricks, plastic and concrete. Mass consumption leads to mass extinction. And that is fully predictable, it always was; there’s nothing new there.

We killed 58% of all vertebrate wildlife just between 1970 and 2012, and at a rate of 2% per year we will have massacred close to 70% of it by 2020, just 4 years from now. So what does it matter who’s president of just one of the many countries we invented on this planet? Why don’t we address what’s really crucial to our very survival instead?

 

 

The latest report from the WWF should have us all abandon whatever it is we’re doing, and make acting to prevent further annihilation of our living world the key driver in our everyday lives, every hour of every day, every single one of us. Anything else is just not good enough, and anything else will see us, that self-nominated intelligent species, annihilated in the process.

Granted, there may be a few decrepit and probably halfway mutant specimens of our species left, living in conditions we couldn’t even begin, nor dare, to imagine, with what will be left of their intelligence wondering how our intelligence could have ever let this happen. You’d almost wish they’ll understand as little as we ever did; that some form of ignorance equal to ours will soften their pain.

It’s important to note that the report does not describe a stagnant situation, there’s no state of affairs, not something still, it describes an ongoing and deteriorating process. That is, we don’t get to choose to stop the ongoing wildlife annihilation at 70%; we are witnessing, and indeed we are actively involved in, raising that number by 2% every year that we ‘live’ (can we even call it that anymore, are you alive when you murder all life around you?) in this world.

This is our only home.

 

Without the natural world that we were born into, or rather that our species, our ancestors, were born into, we have zero chance of survival. Because it is the natural world that has allowed for, and created, the conditions that made it possible for mankind to emerge and develop in the first place. And we are nowhere near making an earth 2.0; the notion itself is preposterous. A few thousand years of man ‘understanding’ his world is no match for billions of years of evolution. That’s the worst insult to whatever intelligence it is that we do have.

Much has been made through the years of our ability to adapt to changing circumstances, and much of that is just as much hubris as so much of what we tell ourselves, but the big question should be WHY we would volunteer to find out to what extent we can adapt to a world that has sustained the losses we cause it to suffer. Even if we could to a degree adapt to that, why should we want to?

Two thirds of our world is gone, and it’s we who have murdered it, and what’s worse – judging from our lifestyles- we seem to have hardly noticed at all. If we don’t stop what we’ve been doing, this can lead to one outcome only: we will murder ourselves too. Our perhaps biggest problem (even if we have quite a few) in this regard is our ability and propensity to deny this, as we deny any and all -serious, consequential- wrongdoing.

 

 

There are allegedly serious and smart people working on, dreaming of, and getting billions in subsidies for, fantasies of human colonies on Mars. This is advertized as a sign of progress and intelligence. But that can only be true if we can acknowledge that our intelligence and our insanity are identical twins. Because it is insane to destroy the planet on which we depend one-on-one for everything that allows us to live, and at the same time dream of human life on another planet.

While I see no reason to address the likes of King of Subsidies Elon Musk, Stephen Hawking is different. Unfortunately, in Hawking’s case, with all his intelligence, it’s his philosophical capacity that goes missing.

Humanity Will Not Survive Another 1,000 Years If We Don’t Escape Our Planet

Professor Stephen Hawking has warned humanity will not survive another 1,000 years on Earth unless the human race finds another planet to live on. [..] Professor Hawking, 74, reflected on the understanding of the universe garnered from breakthroughs over the past five decades, describing 2016 as a “glorious time to be alive and doing research into theoretical physics”. “Our picture of the universe has changed a great deal in the last 50 years and I am happy if I have made a small contribution,“ he went on.

”The fact that we humans, who are ourselves mere fundamental particles of nature, have been able to come this close to understanding the laws that govern us and the universe is certainly a triumph.” Highlighting “ambitious” experiments that will give an even more precise picture of the universe, he continued: “We will map the position of millions of galaxies with the help of [super] computers like Cosmos. We will better understand our place in the universe.”

“But we must also continue to go into space for the future of humanity. I don’t think we will survive another 1,000 years without escaping beyond our fragile planet.”

The tragedy is that we may have gained some knowledge of natural laws and the universe, but we are completely clueless when it comes to keeping ourselves from destroying our world. Mars is an easy cop-out. But Mars doesn’t solve a thing. Because it’s -obviously- not the ‘fragile planet’ earth that is a threat to mankind, it’s mankind itself. How then can escaping to another planet solve its problems?

What exactly is wrong with saying that we will have to make it here on planet earth? Is it that we’ve already broken and murdered so much? And if that’s the reason, what does that say about us, and what does it say about what we would do to a next planet, even provided we could settle on it (we can’t) ? Doesn’t it say that we are our own worst enemies? And doesn’t the very idea of settling the ‘next planet’ imply that we had better settle things right here first? Like sort of a first condition before we go to Mars, if we ever do?

In order to survive, we don’t need to escape our planet, we need to escape ourselves. Not nearly as easy. Much harder than escaping to Mars. Which already is nothing but a pipedream to begin with.

Moreover, if we can accept that settling things here first before going to Mars is a prerequisite for going there in the first place, we wouldn’t need to go anymore, right?

 

 

We treat this entire extinction episode as if it’s something we’re watching from the outside in, as if it’s something we’re not really a part of. I’ve seen various undoubtedly very well-intentioned ‘green people’, ‘sustainable people’, react to the WWF report by pointing to signs that there is still hope, pointing to projects that reverse some of the decline, chinook salmon on the North American Pacific coast, Malawi farmers that no longer use chemical fertilizers, a giant sanctuary in the Antarctic etc.

That, too, is a form of insanity. Because it serves to lull people into a state of complacency that is entirely unwarranted. And that can therefore only serve to make things worse. There is no reversal, there is no turnaround. It’s like saying if a body doesn’t fall straight down in a continuous line, it doesn’t fall down at all.

The role that green, sustainability, conservationist groups play in our societies has shifted dramatically, and we have failed completely to see this change (as have they). These groups have become integral parts of our societies, instead of a force on the outside warning about what happens within.

Conservationist groups today serve as apologists for the havoc mankind unleashes on its world: all people have to do is donate money at Christmas, and conservation will be taken care of. Recycle a few bottles and plastic wrappings and you’re doing your part to save the planet. It is utterly insane. It’s as insane as the destruction itself. It’s denial writ large, and in the flesh.

It’s not advertized that way, but that doesn’t mean it’s not how it works. Saying that ‘it’s not too late’ is not a call to action as many people continue to believe. It’s just dirt poor psychology. It provides people with the impression, which rapidly turns into an excuse, that there is still time left. As almost 70% of all vertebrates, those animals that are closest to us, have disappeared. When would they say time is up? At 80%, 90%?

 

 

We do not understand why, or even that, we are such a tragically destructive species. And perhaps we can’t. Perhaps that is where our intelligence stops, at providing insight into ourselves. Even the most ‘aware’ amongst us will still tend to disparage their own roles in what goes on. Even they will make whatever it is they still do, and that they know is hurtful to the ecosystem, seem smaller than it is.

Even they will search for apologies for their own behavior, tell themselves they must do certain things in order to live in the society they were born in, drive kids to school, yada yada. We all do that. We soothe our consciences by telling ourselves we mean well, and then getting into our cars to go pick up a carton of milk. Or engage in an equally blind act. There’s too many to mention.

Every species that finds a large amount of free energy reacts the same way: proliferation. The unconscious drive is to use up the energy as fast as possible. If only we could understand that. But understanding it would get in the way of the principle itself. The only thing we can do to stop the extinction is for all of us to use a lot less energy. But because energy consumption provides wealth and -more importantly- political power, we will not do that. We instead tell ourselves all we need to do is use different forms of energy.

Our inbuilt talent for denying and lying (to ourselves and others) makes it impossible for us to see that we have an inbuilt talent for denying and lying in the first place. Or, put another way, seeing that we haven’t been able to stop ourselves from putting the planet into the dismal shape it is in now, why should we keep on believing that we will be able to stop ourselves in the future?

Thing is, an apology for our own behavior is also an apology for everyone else’s. As long as you keep buying things wrapped in plastic, you have no right, you lose your right, to blame the industry that produces the plastic.

 

 

We see ourselves as highly intelligent, and -as a consequence- we see ourselves as a species driven by reason. But we are not. Which can be easily demonstrated by a ‘reverse question’: why, if we are so smart, do we find ourselves in the predicament of having destroyed two thirds of our planet?

Do we have a rational argument to execute that destruction? Of course not, we’ll say. But then why do we do it if rationality drives us? This is a question that should forever cure us of the idea that we are driven by reason. But we’re not listening to the answer to that question. We’re denying, we’re even denying the question itself.

It’s the same question, and the same answer, by the way, that will NOT have us ‘abandon whatever it is we do’ when we read today that 70% of all wildlife will be gone by 2020, that 58% was gone by 2012 and we destroy it at a rate of 2% per year. We’re much more likely to worry much more about some report that says returns on our retirement plans will be much lower than we thought. Or about the economic growth that is too low (as if that is possible with 70% of wildlife gone).

After all, if destroying 70% of wildlife is not enough for a call to action, what would be? 80%? 90? 99%? I bet you that would be too late. And no, relying on conservationist groups to take care of it for us is not a viable route. Because that same 70% number spells out loud and clear what miserable failures these groups have turned out to be.

We ‘assume’ we’re intelligent, because that makes us feel good. Well, it doesn’t make the planet feel good. What drives us is not reason. What drives us is the part of our brains that we share in common with amoeba and bacteria and all other more ‘primitive forms of life, that gobbles up excess energy as fast as possible, in order to restore a balance. Our ‘rational’, human, brain serves one function, and one only: to find ‘rational’ excuses for what our primitive brain has just made us do.

We’re all intelligent enough to understand that driving a hybrid car or an electric car does nothing to halt the havoc we do to our world, but there are still millions of these things being sold. So perhaps we could say that we’re at the same time intelligent enough, and we’re not.

We can see ourselves destroying our world, but we can not stop ourselves from continuing the destruction. Here’s something I wrote 5 years ago:

Most. Tragic. Species. Ever.

We have done exactly the same that any primitive life form would do when faced with a surplus, of food, energy, and in our case credit, cheap money. We spent it all as fast as we can. Lest less abundant times arrive. It’s an instinct, it comes from our more primitive brain segments, not our more “rational” frontal cortex. It’s not that we’re in principle, or talent, more devious or malicious than more primitive life forms. It’s that we use our more advanced brains to help us execute the same devastation our primitive brain drives us to, but much much worse.

That’s what makes us the most tragic species imaginable. We’ll fight each other, even our children, over the last few scraps falling off the table, and kill off everything in our path to get there. And when we’re done, we’ll find a way to rationalize to ourselves why we were right to do so. We can be aware of watching ourselves do what we do, but we can’t help ourselves from doing it. Most. Tragic. Species. Ever.

The greatest miracle you will ever see, that you could ever hope to see, is so miraculous you can’t even recognize it for what it is. We don’t know what the word beautiful means anymore. Or the word valuable. We’ve lost all of that, and are well on our way, well over 70% of it, to losing the rest too.

 

 

 

PS Please note I could not gather all sources for all pictures here, but I’d be more than happy to add them. It’s not that I don’t recognize the effort that goes into them; it’s an emotional thing.





Limits to growth: policies to steer the economy away from disaster

14 09 2016

Samuel Alexander, University of Melbourne

Samuel Alexander

If the rich nations in the world keep growing their economies by 2% each year and by 2050 the poorest nations catch up, the global economy of more than 9 billion people will be around 15 times larger than it is now, in terms of gross domestic product (GDP). If the global economy then grows by 3% to the end of the century, it will be 60 times larger than now.

The existing economy is already environmentally unsustainable. It is utterly implausible to think we can “decouple” economic growth from environmental impact so significantly, especially since recent decades of extraordinary technological advancement have only increased our impacts on the planet, not reduced them.

Moreover, if you asked politicians whether they’d rather have 4% growth than 3%, they’d all say yes. This makes the growth trajectory outlined above all the more absurd.

Others have shown why limitless growth is a recipe for disaster. I’ve argued that living in a degrowth economy would actually increase well-being, both socially and environmentally. But what would it take to get there?

In a new paper published by the Melbourne Sustainable Society Institute, I look at government policies that could facilitate a planned transition beyond growth – and I reflect on the huge obstacles lying in the way.

Measuring progress

First, we need to know what we’re aiming for.

It is now widely recognised that GDP – the monetary value of all goods and services produced in an economy – is a deeply flawed measure of progress.

GDP can be growing while our environment is being degraded, inequality is worsening, and social well-being is stagnant or falling. Better indicators of progress include the Genuine Progress Indicator (GPI), which accounts for a wide range of social, economic and environmental factors.

Cap resources and energy

Environmental impact is driven by demand for resources and energy. It is now clear that the planet cannot possibly support current or bigger populations if developing nations used the same amount of resources and energy as developed nations.

Demand can be reduced through efficiency gains (doing more with less), but these gains tend to be reinvested in more growth and consumption, rather than reducing impacts.

A post-growth economy would therefore need diminishing “resource caps” to achieve sustainability. These would aim to limit a nation’s consumption to a “fair share” of available resources. This in turn would stimulate efficiency, technological innovation and recycling, thereby minimising waste.

This means that a post-growth economy will need to produce and consume in far less resource-intensive ways, which will almost certainly mean reduced GDP. There will of course be scope to progress in other ways, such as increased leisure time and community engagement.

Work less, live more

Growth in GDP is often defended on the grounds that it is required to keep unemployment at manageable levels. So jobs will have to maintained in other ways.

Even though GDP has been growing quite consistently in recent decades, many Westerners, including Australians, still seem to be locked into a culture of overwork.

By reducing the average working week to 28 hours, a post-growth economy would share the available work among the working population. This would minimise or eliminate unemployment even in a non-growing or contracting economy.

Lower income would mean we would have less stuff, reducing environmental impact, but we would receive more freedom in exchange. Planned degrowth is therefore very different to unplanned recession.

Redirect public spending

Governments are the most significant player in any economy and have the most spending power. Taking limits to growth seriously will require a fundamental rethink of how public funds are invested and spent.

Among other things, this would include a swift divestment from the fossil fuel economy and reinvestment in renewable energy systems. But just as important is investing in efficiency and reducing energy demand through behaviour change. Obviously, it will be much easier to transition to 100% renewable energy if energy demand is a fraction of what it is today.

We could fund this transition by redirecting funds from military spending (climate change is, after all, a security threat), cutting fossil fuel subsidies and putting an adequate price on carbon.

Reform banking and finance

Banking and finance systems essentially have a “growth imperative” built into their structures. Money is loaned into existence by private banks as interest-bearing debt. Paying back the debt plus the interest requires an expansion of the monetary supply.

There is so much public and private debt today that the only way it could be paid back is via decades of continued growth.

So we need deep reform of banking and finance systems. We’d also need to cancel debt in some circumstances, especially in developing nations that are being suffocated by interest payments to rich world lenders.

The population question

Then there’s population. Many people assume that population growth will slow when the developing world gets rich, but to globalise affluence would be environmentally catastrophic. It is absolutely imperative therefore that nations around the world unite to confront the population challenge directly.

Population policies will inevitably be controversial but the world needs bold and equitable leadership on this issue, because current trends suggest we are heading for 11 billion by the end of this century.

Anyone who casually dismisses the idea that there is a limit to how many people Earth can support should be given a Petri dish with a swab of bacteria. Watch as the colony grows until it consumes all of the available nutrients or is poisoned by its own waste.

The first thing needed is a global fund that focuses on providing the education, empowerment and contraception required to minimise the estimated 87 million unintended pregnancies worldwide every year.

Eliminating poverty

The conventional path to poverty alleviation is the strategy of GDP growth, on the assumption that “a rising tide will lift all boats”. But, as I’ve argued, a rising tide will sink all boats.

Poverty alleviation must be achieved more directly, via redistribution of wealth and power, both nationally and internationally. In other words (and to change the metaphor), a post-growth economy would eliminate poverty not by baking an ever-larger pie (which isn’t working) but by sharing it differently.

The richest 62 people on the planet own more than the poorest half of humanity. Dwell on that for a moment, and then dare to tell me that redistribution is not an imperative of justice.

So what’s stopping us?

Despite these post-growth policy proposals seeming coherent, they face at least four huge obstacles – which may be insurmountable.

First, the paradigm of growth is deeply embedded in national governments, especially in the developed world. At the cultural level, the expectation of ever-increasing affluence is as strong as ever. I am not so deluded as to think otherwise.

Second, these policies would directly undermine the economic interests of the most powerful corporations and institutions in society, so fierce resistance should be expected.

Third, and perhaps most challenging, is that in a globalised world these policies would likely trigger either capital flight or economic collapse, or both. For example, how would the stock markets react to this policy agenda?

Finally, there is also a geopolitical risk in being first to adopt these policies. Reduced military spending, for instance, would reduce a nation’s relative power.

So if these “top-down” policies are unlikely to work, it would seem to follow that if a post-growth economy is to emerge, it may have to be driven into existence from below, with communities coming together to build the new economy at the grassroots level.

And if we face a future where the growth economy grows itself to death, which seems to be the most likely scenario, then building up local resilience and self-sufficiency now will prove to be time and energy well spent.

In the end, it is likely that only when a deep crisis arrives will an ethics of sufficiency come to inform our economic thinking and practice more broadly.

The Conversation

Samuel Alexander, Research fellow, Melbourne Sustainable Society Institute, University of Melbourne

This article was originally published on The Conversation. Read the original article.





The Extreme Implausibility of Ecomodernism.

20 07 2016

Another essay by Ted Trainer.

tedtrainer

Ted Trainer

16.3.2016

Abstract: “Ecomodernism” is a recently coined term for that central element in mainstream Enlightenment culture previously well-described as “Tech-fix faith”. The largely taken for granted assumption has been that by accelerating modern technologies high living standards can be achieved for all, while resolving resource and ecological problems.  The following argument is that ecomodernism falls far short of having a substantial, persuasive or convincing case in its support. It stands as a contradiction of the now voluminous “limits to growth” literature, but it does not attempt to offer a case against the limits thesis. Elements in the limits case will be referred to below but the main line of argument will be to do with the reasons why achievement of the reductions and “decouplings” assumed by ecomodernism is extremely implausible. The conservative social and political implications are noted before briefly arguing that the solution to global problems must be sought via The Simpler Way.

What is ecomodernism?.

The 32 page Ecomodernist Manifesto (2015), by 18 authors, is a clear and emphatic restatement of the common belief that technical advance within the existing social structure can or will solve global problems, and there is therefore no need for radical change in directions, systems, values or lifestyles. Thus the fundamental commitment to ever more affluent “living standards”, capital intensive systems, technical sophistication and constantly rising levels of consumption and GDP is sound, and indeed necessary as it is the only way to enable the future technical advance that it is believed will solve global problems. This will enable human demands to be met while resource and ecological impacts on nature are reduced, thus making it possible to set more of nature aside to thrive. Modern agriculture for instance will producer more from less land, enabling more to be returned to nature and freeing Third World people from backbreaking work while moving into urban living.  Thus the fundamental assumption frequently asserted is that economic growth can be “decoupled” from the environment.

These kinds of visions would obviously require vastly increased quantities of energy but renewable sources are judged not to be capable of providing these, so it is no surprise to find late in the document that it is being assumed that nuclear reactors are going to do the job, nor that the pro-nuclear Breakthrough Institute champions the Manifesto.

Unfortunately the Manifesto is little more than a claim.  It provides almost no supporting case apart from giving some examples where technical advance has improved human welfare at reduced resource or ecological impact. It does not deal with the many reasons for thinking that technical advance cannot do what the ecomodernists are assuming it can do.  Above all it does not provide grounds for thinking that that resource demand and ecological damage can be sufficiently decoupled from economic growth. When one of the authors was asked for the supporting case reference was made to the 106 page document Nature Unbounded by Blomqvist, Nordhaus and Shellenberger, (2015.) However this document too is essentially a statement of claims and faith and can hardly be said to present a case that those claims can be realized.

The following discussion is mainly intended to show how implausible and unsubstantiated the general “tech-fix” and decoupling claims are, and that they are contrary to existing evidence.  Most if not all critical discussions of ecomodernism and of left modernization theorists such as Phillips (2015), e.g., by Hopkins (2015), Caradonna et al., 2015, Crist, (2015) and Smaje, (2015a, 2015b), have been impressionistic and “philosophical”. In contrast, the following analysis focuses on numerical considerations which establish the enormity of the ecomodernist claims. When estimates and actual numbers to do with resource demands, resource bases, and ecological impacts are attended to it becomes clear that the task for technical advance set by the ecomodernists is implausible in the extreme.

The basic limits to growth thesis.

The “limits to growth” thesis is that with respect to many factors crucial to planetary sustainability affluent-industrial-consumer society is grossly unsustainable. It has already greatly exceeded important limits. Levels of production and consumption are far beyond those that could be kept up for long or extended to all people.  Present consumption levels are achieved because resource and ecological “stocks” are being depleted much faster than they can regenerate.

But the unsustainable present levels of production, consumption, resource use and environmental impact only begin to define of the problem.  What is overwhelmingly crucial is the universal obsession with continual, never ending economic growth, i.e., with increasing production and consumption, incomes and GDP as much as possible and without limit.  The most important criticism of the ecomodernist position is its failure to grasp the magnitude of the task it confronts when the present overshoot is combined with the commitment to growth.  The main concern in the following discussion is with quantities and multiples, to show how huge and implausible ecomodernist achievements and decouplings would have to be.

The magnitude of the task.

It is the extent of the overshoot that is crucial and not generally appreciated. This is the issue which the ecomodernists fail to deal with and it only takes a glance at the numbers to see how implausible their pronouncements are in relation to the task they set themselves. Their main literature makes no attempt to carry out quantitative examinations of crucial resources and ecological issues with a view to showing that the apparent limits can be overcome.

Let us look at the overall picture revealed when some simple numerical aggregates and estimates are combined.  The normal expectation is for around 3% p.a. growth in GDP, meaning that by 2050 the total amount of producing and consuming going on in the world would be about three times as great as at present. World population is expected to be around 10 billion by 2050.  At present world  $GDP per capita is around $13,000, and the US figure is around $55,000. Thus if we take the ecomodernist vision to imply that by 2050 all people will be living as Americans will be living then, total world output would have to be around 3 x 10/7 x 55,000/13,000 = 18 times as great as it is now.  If the assumptions are extended to 2100 the multiple would be in the region of 80.

However, even the present global level of producing and consuming has an unsustainable level of impact.  The world Wildlife Fund’s “Footprint” measure (2015) indicates that the general overshoot is around 1.5 times a sustainable rate.  (For some factors, notably greenhouse gas emissions, the multiple is far higher.) This indicates that the target for the ecomodernist has to be to reduce overall resource use and ecological impact per unit of output by a factor of around 27 by 2050, and in the region of 120 by 2100. In other words, by 2050 technical advance will have to have reduced the resource demand and environmental impact per unit of output to under 4% of their present levels.

The consideration of required multiples shows the inadequacy of the earlier pronouncements and expectations of the well-known tech-fix optimist Amory Lovins who enthused about the possibility of “Factor Four” or better reductions in materials and energy uses per unit of GDP.  (Von Weisacker and Lovins, 1997, and Hawken, Lovins and Lovins, 1999).If there is a commitment to constant, limitless increase in economic output then the reductions in resource use and environmental damage that can be achieved by such technical advance are soon likely to be overwhelmed.  For instance if use and impact rates per unit of GDP were cut by one-third, but 3% p.a. growth in total output continued, then in about 17 years the resource demands and impacts would be back up to as high as they were before the cuts, and would be twice as great in another 23 years.

This issue of multiples is at the core of the limits and decoupling issues. If ecomodernists wish to be taken seriously they must provide a numerical case showing that in all the relevant domains the degree of decoupling that can be achieved is likely to be of the magnitude that would be required.  There appears to be no ecomodernist text which even attempts to do this.  At best their case refers to a few instances where impressive decoupling has taken place.

Note also the importance here of the Leibig “law of the minimum.” It does not matter how spectacular various technical gains can be if there remains one crucial area where they can’t be made on the required scale.  Plants for instance might have available all the nutrients they need except for one required in minute quantities but if it is not available there will be little or no growth.  High-tech systems often depend heavily on tiny quantities of “mineral vitamins”, notably rare earths which are extremely scarce.

The typically faulty national accounting.

An easily overlooked factor is that in general measures and indices of rich world resource and ecological performance greatly misrepresent and underestimate the seriousness of the situation, because they do not include the large volumes of energy, materials and ecological impact embodied in imported goods.  Rich countries now do not carry out much manufacturing but import most of the goods they consume from Third World plantations and factories.  The implications for resource depletion and ecological impact have only recently begun to be studied. (Weidmann, et al., 2014, 2015, Lenzen, et al., 2012, Wiebe, et al,

2012, Dittrich, et al., 2014, Schütz, et al., 2004.)

An example is given by the conventional measure of CO2 emissions. Australia’s 550 MtCO2e/y equates to a per capita rate of around 25 t/y, which is about the highest in the world. But this does not include the emissions in Third World countries generated by the production of goods imported into Australia.  For Australia and for the UK this amount is actually about as great as the emissions within the country.  (Clark, 2011, Australian Government Climate Change Authority, 2013.)

In addition Australia’s “prosperity” is largely achieved by exporting coal, oil and gas and these contain about three times as much carbon as all the energy used within Australia.  It could be argued therefore that the country’s contribution to the greenhouse gas problem more or less corresponds to five times the official and usually quoted 25 t/pp/y.  The IPCC estimates that by 2050 global emissions must be cut to about 0.3 t/pp/y. (IPCC, 2014.)  This is around one-three hundredth of the amount Australia is now responsible for. Again the centrality of the above magnitude point is evident; how aware are tech-fix optimists of the need for reductions of such proportions?

Assessing the validity of the general “tech-fix” thesis.

Firstly attention will be given to some overall numerical considerations which show the extreme implausibility of the general tech-fix claim, such as the gulf between current “decoupling” achievements and the far higher levels that ecomodernism would require. But that does not take into account the fact that it is going to take increasing effort just to maintain current achievements, for instance as ore grades deteriorate. This what the limits to growth analysis makes clear.  The added significance of this will be discussed later via brief examination of some domains such as energy scarcity, declining ore grades, and deteriorating ecological conditions.

How impressive have the overall gains been?

It is commonly assumed that in general rapid, large or continuous technical gains are being routinely made in crucial areas such as energy efficiency, and will continue if not accelerate.  As a generalisation this belief is quite challengeable. Ayres (2009) notes that for many decades there have been plateaus for the efficiency of production of electricity and fuels, electric motors, ammonia and iron and steel production. His Fig. 4.21a shows no increase in the overall energy efficiency of the US economy since 1960.  He reports that the efficiency of electrical devices in general has actually changed little in a century (2009) “…the energy efficiency of transportation probably peaked around 1960.” This has been partly due to greater use of accessories since then. Ayres notes that reports tend to publicise selected isolated spectacular technical advances and this is misleading regarding long term average trends across whole industries or economies. Mackay (2008) reports that little gain can be expected for air transport.  Huebner’s historical study (2005) found that the rate at which major technical advances have been made (per capita of world population) is declining.  He says that for the US the peak was actually in 1916.

Decoupling can be regarded as much the same as productivity growth and this has been in long term decline since the 1970s. Even the advent of computerisation has had a surprisingly small effect, a phenomenon now labelled the “Productivity Paradox.”

The historical record suggests that at best productivity gains have been modest. It is important not to focus on national measures such as “Domestic Materials Consumption” as these do not take into account materials in imported goods.  Thus the OECD (2015) claims that materials used within its countries has fallen 45% per dollar of GDP, but this figure does not take into account materials embodied in imported goods. When they are included rich countries typically show very low or worsening ratios. The commonly available global GDP (deflated) and energy use figures between 1980 and 2008 reveals only a 0.4% p.a. rise in GDP per unit of energy consumed.   Hattfield-Dodds et al. (2015) say that the efficiency of materials use has been improving at c. 1.5% p.a., but they give no evidence for this and other sources indicate that the figure is too high. Weidmann et al. (2014) show that when materials embodied in imports are taken into account rich countries have not improved their resource productivity in recent years. They say “…for the past two decades global amounts of iron ore and bauxite extractions have risen faster than global GDP.” “… resource productivity…has fallen in developed nations.” “There has been no improvement whatsoever with respect to improving the economic efficiency of metal ore use.”

The fact that the “energy intensity” of rich world economies, i.e., ratio of GDP to gross energy used within the country has declined is often seen as evidence of decoupling but this is misleading. It does not take into account the above issue of failure to include energy embodied in imports. Possibly more important is the long term process of “fuel switching”, i.e., moving to forms of energy which are of “higher quality” and enable more work per unit. For instance a unit of energy in the form of gas enables more value to be created than a unit in the form of coal, because gas is more easily transported, switched on and off, or converted from one function to another, etc. (Stern and Cleveland, 2004, p. 33, Cleveland et al., 1984, Kaufmann, 2004,  Office of Technology Assessments, 1990, Berndt, 1990, Schurr and Netschurt, 1960.)

Giljum et al. (2014, p. 324) report only a 0.9% p.a. improvement in the dollar value extracted from the use of each unit of minerals between 1980 and 2009, and that over the 10 years before the GFC there was no improvement. “…not even a relative decoupling was achieved on the global level.” They note that the figures would have been worse had the production of much rich world consumption not been outsourced to the Third World. Their Fig. 2, shows that over the period 1980 to 2009 the rate at which the world decoupled materials use from GDP growth was only one third of that which would have achieved an “absolute” decoupling, i.e., growth of GDP without any increase in materials use.

Diederan’s account (2009) of the productivity of minerals discovery effort is even more pessimistic. Between 1980 and 2008 the annual major deposit discovery rate fell from 13 to less than 1, while discovery expenditure went from about $1.5 billion p.a. to $7 billion p.a., meaning the productivity expenditure fell by a factor in the vicinity of around 100, which is an annual decline of around 40% p.a. Recent petroleum figures are similar; in the last decade or so discovery expenditure more or less trebled but the discovery rate has not increased.

A recent paper in Nature by a group of 18 scientists at the high-prestige Australian CSIRO (Hatfield-Dodds et al., 2015) argued that decoupling could eliminate any need to worry about limits to growth at least to 2050. The article contained no support for the assumption that the required rate of decoupling was achievable and when it was sought (through personal communication) reference was made to the paper by Schandl et al. (2015.)  However that paper contained the following surprising statements, “ … there is a very high coupling of energy use to economic growth, meaning that an increase in GDP drives a proportional increase in energy use.”  (They say the EIA, 2012, agrees.) “Our results show that while relative decoupling can be achieved in some scenarios, none would lead to an absolute reduction in energy or materials footprint.” In all three of their scenarios “…energy use continues to be strongly coupled with economic activity…”

The Australian Bureau of Agricultural Economics (ABARE, 2008) reports that the energy efficiency of energy-intensive industries is likely to improve by only 0.5% p.a. in future, and of non-energy-intensive industries by 0.2% p.a. In other words it would take 140 years for the energy efficiency of the intensive industries to double the amount of value they derive from a unit of energy.

Alexander (2014) concludes his review of decoupling by saying, ”… decades of extraordinary technological development have resulted in increased, not reduced, environmental impacts.”  Smil (2014) concludes that even in the richest countries absolute dematerialization is not taking place. Alvarez found that for Europe, Spain and the US GDP increased 74% in 20 years, but materials use actually increased 85%. (Latouche, 2014.) Similar conclusions re stagnant or declining materials use productivity etc. are arrived at by Aadrianse, 1997, Dettrich et al., (2014), Schutz, Bringezu and Moll, (2004), Warr, (2004), Berndt, (undated), and Victor (2008, pp. 55-56).

These sources and figures indicate the lack of support for the ecomodernists’ optimism. It was seen above that they are assuming that in 35 years time there can be massive absolute decoupling, i.e., that energy, materials and ecological demand associated with $1 of GDP can be reduced by a factor of around 27. But even if the 1.5% p.a. rate Hattfield-Dodds et al. say has been the recent achievement for materials use could be maintained the reduction would only be around a factor of 1.7, and various sources noted above say that their assumed rate is incorrect. There appears to be no ecomodernist literature that even attempts to provide good reason to think a general absolute decoupling is possible, let alone on the required scale.

The overlooked role of energy in productivity growth and decoupling.

Discussions of technical advance and economic growth have generally failed to focus on the significance of increased energy use. Previously productivity has been analysed only in terms of labour and capital “factors of production”, but it is now being recognized that in general greater output etc. has been achieved primarily through increased use of energy (and switching to fuels of higher “quality”, such as from coal and gas to electricity.)  Agriculture is a realm where technical advance has been predominantly a matter of increased energy use. Over the last half century productivity measured in terms of yields per ha or per worker have risen dramatically, but these have been mostly due to even greater increases in the amount of energy being poured into agriculture, on the farm, in the production of machinery, in the transport, pesticide, fertilizer, irrigation, packaging and marketing sectors, and in getting the food from the supermarket to the front door, and then dealing with the waste food and packaging. Less than 2% of the US workforce is now on farms, but agriculture accounts for around 17% of all energy used (not including several of the factors listed above.) Similarly the “Green Revolution” has depended largely on ways that involve greater energy use.

Ayres, et al., (2013), Ayres, Ayres and Warr (2002) and Ayres and Vouroudis (2013) are among those beginning to stress the significance of energy in productivity, and pointing to the likelihood of increased energy problems in future and thus declining productivity. Murillo-Zamorano, (2005, p. 72) says  “…our results show a clear relationship between energy consumption and productivity growth.” Berndt (1990) finds that technical advance accounts for only half the efficiency gains in US electricity generation. These findings caution against undue optimism regarding what pure technical advance can achieve independently from increased energy inputs; in general its significance for productivity gains appears not to have been as great as has been commonly assumed.

The productivity trend associated with this centrally important factor, energy, is itself in serious decline, evident in long term data on EROI ratios. Several decades ago the expenditure of the energy in one barrel of oil could produce 30 barrels of oil, but now the ratio is around 18 and falling. The ratio of petroleum energy discovered to energy required has fallen from 1000/1 in 1919 to 5/1 in 2006. (Murphy, 2010.) Murphy and others suspect  that an industrialised society cannot be maintained on a general energy ratio under about 10. (Hall, Lambert and Balough, 2014.)

The changing components of GDP.

Over recent decades there has been a marked increase in the proportion of rich nation GDP that is made up of “financial” services. These stand for “production” that takes the form of key strokes moving electrons around.  A great deal of it is wild speculation, making risky loans and making computer driven micro-second switches “investments”. These operations deliver massive increases in income to banks and managers, and these have significantly contributed to GDP figures. It could be argued that this domain should not be included in estimates of productivity because it misleadingly inflates the numerator in the output/labour ratio.

When output per worker in the production of “real” goods and services such as food and vehicles, or aged care is considered very different impressions can be gained.  For instance Kowalski (2011) reports that between 1960 and 2010 world cereal production increased 250%, but nitrogen fertilizer use in cereal production increased 750%, and land area used increased 40%. This aligns with the above evidence on steeply falling productivity of various inputs for ores and energy. It is therefore desirable to avoid analysing productivity, the “energy intensity” of an economy, and decoupling achievements in relation to the GDP measure.

Factors limiting the benefits from a technical advance.

There are several factors which typically determine the gains a technical advance actually enables are well below those that seem possible at first.  Engineers and economists make the following distinctions.

“Technical potential”  refers to what could be achieved if the technology could be fully applied with no regard to cost or other problems.

Economic (or ecological) potential”.  This is usually much less than the technical potential because to achieve all the gains that are technically possible would cost too much.  For instance some The Worldwide Fund for Nature quotes Smeets and Faiij (2007) as finding that it would be technically possible for the world’s forests to produce another 64 EJ/y of biomass energy p.a., but they say that the ecologically tolerable potential is only 8 EJ/y.

What are the net gains?  Enthusiastic claims about a technical advance typically focus on the gains and not the costs which should be subtracted to give a net value.  For instance the energy needed to keep buildings warm can be reduced markedly, but it costs a considerable amount of energy to do this, in the electricity needed to run the air-conditioning and heat pumps, and in the energy embodied in the insulation and triple glazing. There are also knock-on effects.  The Green Revolution doubled food yields, but only by introducing crops that required high energy inputs in the form of expensive fertlilzer, seeds and irrigation, and created social costs to do with the disruption of peasant communities.

  • What is socially/politically possible?  There are limits set by what people will accept.  It would be technically possible for many more people in any city to get to work by public transport, but large numbers would not give up the convenience of their cars even if they saved money doing so.
  • The Jeavons or “rebound” effect.  There is a strong tendency for savings made possible by a technical advance to be spent on consuming more of the thing saved, or something else.

Thus it is important to recognise that initial claims usually refer to “technical potential”, but significantly lower savings etc. are likely in the real world.

Now add the worsening limits.

The discussion so far has only dealt with decoupling achievements to date, but the difficulties involved in those achievements are in general likely to have been much less severe than those ahead, as there is continued deterioration in ore grades, forests, soils, chemical pollution, water supplies etc.  It is important now to consider briefly some of these domains, to see how they will make the task for the ecomodernist increasingly difficult.

Before looking at some specific areas the general “low hanging fruit” effect should be mentioned.  When effort is put into dealing with problems, recycling, conserving, increasing efficiency etc. the early achievements might be spectacular but as the easiest options are used up progress typically becomes more difficult and slow. This is so even when there are no problems of dwindling resource availability.

                        Minerals.

The grades of several ores being mined are falling and production costs have increased considerably since 1985. Topp (2008) reports that the productivity for Australian mining has declined 24% between 2000 and 2007. While reserve estimates can be misleading as they only state quantities miners have found to date, and they often increase over time, there is considerable concern about the depletion rate.

Dierderen (2009) says that continuation of current consumption rates will mean that we will have much less than 50 years left of cheap and abundant access to metal minerals, and that it will take exponentially more energy and minerals input to grow or even sustain the current extraction rate of metal minerals. He expects copper, nickel, molybdenum and cobalt to peak before 2035. Deideren’s conclusion is indeed, as his title says, sobering; “The peak in primary production of most metals may be reached no later than halfway through the 2020s.” (p. 23.) “Without timely implementation of mitigation strategies, the world will soon run out of all kinds of affordable mass products and services.”  Such as… “cheap mass-produced consumer electronics like mobile phones, flat screen TVs and personal computers, for lack of various scarce metals (amongst others indium and tantalum). Also, large-scale conversion towards more sustainable forms of energy production, energy conversion and energy storage would be slowed down by a lack of sufficient platinum-group metals, rare-earth metals and scarce metals like gallium. This includes large-scale application of high-efficiency solar cells and fuel cells and large-scale electrification of land-based transport.” Deideren points out that Gallium, Germanium, Indium and Tellurium are crucial for renewable technologies but are by-products currently available in low quantity from the mining of other minerals.  If the latter peak so will the availability of the former.

Scarcities in one domain often have knock-on and negative feedback effects in others.  Diederan says, “The most striking (and perhaps ironic) consequence of a shortage of metal elements is its disastrous effect on global mining and primary production of fossil fuels and minerals: these activities require huge amounts of main and ancillary equipment and consumables (e.g. barium for barite based drilling mud)”. (p. 9.)

The ecomodernist’s response must be to advocate mining poorer grade ores, but this means dealing with marked increases in energy and environmental costs.

  • The quantity of rock that has to be dug up increases. For ores at half the initial grade the quantity doubles, and so does the energy needed to dig, transport and crush it.
  • Poorer ores require finer grinding and more chemical reagents to release mineral components, meaning greater energy demand and waste treatment.
  • Meanwhile the easiest deposits to access are being depleted so it takes more energy to find, get to, and work the newer ones. They tend to be further away, deeper, and smaller.
  • Processing rich ores can be chemically quite different to processing poor ores. Only a very small proportion of any mineral existing in the earth’s crust has been concentrated by natural processes into ore deposits, between .001% and .01%, and the rest exists in common rock, mostly in silicates which are more energy-intensive to process than oxides and sulphides.  To extract a metal from its richest occurrence in common rock would take 10 to 100 times as much energy as to extract if from the poorest ore deposit. To extract a unit of copper from the richest common rocks would require about 1000 times as much energy per kg as is required to process ores used today.

Now consider the minerals situation in relation to the multiples issue. At present only a few countries are using most of the planet’s minerals production.  For instance the per capita consumption of iron ore for the ten top consuming countries is actually around 90 times the figure for all other countries combined. (Weidmann et al., 2013.) How long would mineral supply hold up, at what cost, if 9 – 10 people billion were to try to rise to rich world “living standards”? How likely is it that in view of current ore grade depletion rates and the miniscule decoupling achievement for minerals, the global amount of producing and consuming could multiply by 27, or 120, while the absolute amount of minerals consumed declined markedly?

The ecomodernist cannot hope to deal with the minerals problem without assuming very large scale adoption of nuclear energy, which they are willing to do.

Climate.

Most climate scientists now seem to accept the approach put forward by Meinshausen et al., (2009), and followed by the IPCC (2013) in analyzing in terms of a budget, an amount of carbon release that must not be exceeded if the 2 degree target is to be met.  They estimate that to have a 67% chance of keeping global temperature rise below this the amount of CO2e that can be released between 2000 and 2050 is 1,700 billion tonnes. By 2012 emissions accounted for 36% of this amount, meaning that if the present emission rate is kept up the budget would have been used up by 2033.  Given the seriousness of the possible consequences many regard a 67% chance as being too low and a2 degree rise as too high. (Anderson and Bows, 2008, and Hansen, 2008.)  For an 80% chance the budget limit would be 1,370 billion tonnes.

Few would say there is any possibility of eliminating emissions by 2033. Many emissions come from sources that would be difficult to control or reduce, such as carbon electrodes in the electric production of steel and aluminium. Only about 40% of US emissions come from power generation. Thus power station Carbon Capture and Storage technology cannot solve the problem.

Even the IPCC’s most optimistic emissions reduction scenario, RCP 2.6, could be achieved only if as yet non-existent technology will be able to take 1 billion tonnes of carbon out of the atmosphere every year through the last few decades of this century. (IPCC, 2014.)

Ecomodernists mostly regard the climate problem as solvable by the intensive adoption of nuclear energy. However even the most rapid build conceivable could not achieve the Meinschausen et al. target.

Urbanisation.

About half the world’s people now live in cities, and the ecomodernist strongly advocates increasing this markedly, on the grounds that intensification of settlement will enable freeing more space for nature.  This is an area where knock-on effects are significant. Urban living involves many high resource and ecological costs, including having to move in vast amounts of energy, goods, services and workers, to maintain elaborate infrastructures including those to lift water and people living in high-rise apartments, having to move out all “wastes”, having to provide artificial light, heating, cooling, air purification, having to build freeways, bridges, railways, airports, container terminals, and having to staff complex systems with expensive highly trained professionals and specialists.  Little or none of this dollar, energy, resource or ecological cost has to be met when people live in villages (See on Simpler Way settlements below).

The frequent superficiality and invalidity of the Manifesto’s case is illustrated by the following statement. “Cities occupy just 1 to 3 percent of the Earth’s surface, yet are home to nearly 4 billion people. As such, cities both drive and symbolize the decoupling of humanity from nature, performing far better than rural economies in providing efficiently for material needs…” This statement overlooks the vast areas needed to produce and transport food etc. into the relatively small urban areas. If four billion were to live as San Franciscans do now, with a footprint over 7 ha per person, the total global footprint would be almost 30 billion ha, 200% of the Earth’s surface, not 1- 3%. (WWF, 2014.) Urbanisation does not  “decouple humanity from nature”.

Biological resources and impacts.

Perhaps the most worrying limits being encountered are not to do with minerals or energy but involve the deterioration of biological resources and environmental systems. The life support systems of the planet, the natural resources and processes on which all life on earth depends, are being so seriously damaged that the World Wildlife Fund claims there has been a 30% deterioration since about 1970. Steffen et al., (2015) state much the same situation. A brief reference to a number of impacts is appropriate here to again indicate the magnitude of present problems and their rate of growth.

Biodiversity loss.

Species are being driven to extinction at such an increasing rate that it is claimed the sixth holocaust of biodiversity loss has begun. The rate has been estimated at 114 times the natural background rate. (Ceballos, et al., 2015, Kolbert, 2014.) The numbers or mass of big animals has declined dramatically. “… vertebrate species populations across the globe are, on average, about half the size they were 40 years ago.” (Carrington, 2014.) The mass of big animals in the sea is only 10% of what it was some decades ago. The biomass of corals on the Great Barrier Reef is only half what it was about three decade ago. By the end of the 20th century half the wetlands and one third of coral reefs had been lost. (Washington, 2014.)

Disruption of the nitrogen cycle.

Humans are releasing about as much nitrogen via artificial production, especially for agriculture, as nature releases. This has been identified as one of the nine most serious threats to the biosphere by the Planetary Boundaries Project. (Rockstrom and Raeworth, 2014.)

The increasing toxicity of the environment.

Large volumes of artificially produced chemicals are entering ecosystems disrupting and poisoning them.  This includes the plastics concentrating in the oceans and killing marine life.

Water.

Serious water shortages are impacting in about 80 countries. More than half the world’s people live in countries where water tables are falling. Over 175 million Indians and 130 million Chinese are fed by crops watered by pumps running at unsustainable rates. (Brown, 2011, p. 58.) Access to water will probably be the major source of conflict in the world in coming years. About 480 million people are fed by food produced from water pumped from underground. The water tables are falling fast and the petrol to run the pumps might not be available soon. In Australia overuse of water has led to serious problems, such as salinity in the Murray-Darling system. By 2050 the volume of water in these rivers might be cut to half the present amount, as the greenhouse problem impacts.

Fish.

Nearly all fisheries are being over-fished and the global fish catch is likely to go down from here on.  The mass of big fish in the oceans, such as shark and tuna, is now only 10% of what it was some decades ago. Ecomodernists assume that aquaculture will solve the fish supply problem. It is not clear what they think the farmed fish will be fed on.

Oceans.

Among the most worrying effects is the increasing acidification of the seas, dissolving the shells of many ocean animals, including the krill which are at the base of major ocean food chains.  This effect plus the heating of the oceans is seriously damaging corals.  The coral life on the Great Barrier Reef is down 30% on its original level, and there is a good chance the whole reef will be lost in forty years. (Hoegh-Guldberg, 2015.)

Food, land, agriculture.

Food supply will have to double to provide for the expected 2050 world population, and it is increasingly unlikely that this can be done. Food production increase trends are only around 60% of the rate of increase needed. (Ray, et al., 2013.) Food prices and shortages are already serious problems, causing riots in some countries.  If all people we will soon have on earth had an American diet we would need 5 billion ha of cropland, but there are only 1.4 billion ha on the planet and that area is likely to reduce as ecosystems deteriorate, water supply declines, salinity and erosion continue, population numbers and pressures to produce increase, land is used for new settlements and to produce more meat and bio-fuels, and as global warming has a number of negative effects on food production.

Burn, (2015) and Vidal (2010) both report the rate of food producing land loss at 30 million ha p.a. Vidal says, “…the implications are terrifying”, and he believes major food shortages are threatening. Pimentel says one third of all cropland has been lost in the last 40 years. China might be the worse case, losing 600 square miles p.a. in the 1950 – 1970 period, but by 2000 the rate had risen to 1,400 square miles p.a.  For 50 years about 500 villages have had to be abandoned every year due to incoming sand from the expanding deserts. If the estimates by Burn and Vidal are correct then more than 1 billion ha of cropland will have been lost by 2050, which is two-thirds of all cropland in use today.

The Ecomodernist Manifesto devotes considerable attention to the issue of future food production, using it as an example of the wonders technical advance can bring, including liberating peasants from backbreaking work. It is claimed that advances in modern agriculture will enable production of far more food on far less land, enabling much land to go back to nature. There is no recognition of the fact that modern agriculture is grossly unsustainable, on many dimensions.  It is extremely energy intensive, involving large scale machinery, international transport, energy-intensive inputs of fertilizer and pesticides, packaging, warehousing, freezing, dumping of less than perfect fruit and vegetables, serious soil damage through acidification and compaction, carbon loss and erosion, the energy-costly throwing away of nutrients in animal manures, the destruction of small scale farming and rural communities, the loss of the precious heritage that is genetic diversity … and the loss of food nutrient and taste quality (most evident in the plastic tomato.)

On all these dimensions peasant and home gardening and other elements in local agriculture such as ”edible landscapes”, community gardens and commons are superior. The one area where modern agriculture scores better is to do with labour costs, but that is due to the use of all that energy-intensive machinery. Ecomodernists do not seem to realize what a fundamental challenge is set for them by the well-established “inverse productivity relationship”, i.e., the fact that small scale food producers achieve higher yields per ha. (Smaje, 2015a, 2015b.) They are able to almost completely avoid food packaging, advertising and transport costs, to recycle all nutrients to local soils, benefit from overlaps and multiple functions (e.g., geese weed orchards, ducks eat snails, kitchen scraps feed poultry…) Possibly most importantly, local food production systems maximize the provision of livelihoods and are fundamental elements in resilient and sustainable communities.

Again a daunting challenge is set for the ecomodernist. Presumably the far higher yields from far less land will involve energy intensive high-rise greenhouses, water desalinisation, aquaculture, near 100% phosphorus and other nutrient recycling, elimination of nitrogen run-off, restoration of soil carbon levels, synthetic meat, and extensive global transport and packaging systems. Again numerical analyses aimed at showing what the energy, materials  and dollar budgets would be, or that the goals can be met, are not offered. In addition a glance at the tech fix vision for future food supply reveals the many knock on effects that would multiply problems in many other areas, most obviously energy, infrastructure and water provision and the associated demand for materials.

A glance at the energy implications for beef production should again establish the magnitude point. To produce one kg of beef take can take 20,000 litres of water, and it can take 4 kWh to desalinize 1 liter of water. Again it is evident that there would have to be very large scale commitment to nuclear energy.

            Summarising the biological resource situation.

The environmental problem is essentially due to the huge and unsustainable volumes of producing and consuming taking place.  Vast quantities of resources are being extracted from nature and vast quantities of wastes are being dumped back into nature. Present flows are grossly unsustainable but the ecomodernist believes the basic commitment to ever-increasing “living standards” that is creating the problems can and should continue, while population multiplies by 1.5, resources dwindle, and consumption multiplies perhaps by eight by 2100.

The energy implications.

In all the fields discussed it is evident that the ecomodernist vision would have to involve a very large increase in energy production and consumption, including for processing lower grade ores, producing much more food from much less land, desalinisation of water, dealing with greatly increased amounts of industrial waste (especially mining waste), and constructing urban infrastructures. The “no-limits-to-growth” scenario for Australia 2050 put forward by Hattfield-Dodds et al. concludes that present energy use would have to multiply by 2.7, more than most if not all other projections, and their scenarios do not take into account the energy needed to deal with any of the knock-on effects discussed above. (And their conclusion is based on a highly implausible rate of decoupling materials use from GDP growth, i.e., up to 4.5% p.a.)

If 9 billion people were to live on the per capita amount of energy Americans now average, world energy consumption in 2050 would be around x5 (for the US to world average ratio) x10/7 (for population growth) times the present 550 EJ p.a., i.e., around 3,930 EJ. Let us assume it is all to come from nuclear reactors, that technical advance cuts one-third off the energy needed to do everything, but that moving to poorer ores, desalinisation etc. and converting to (inefficient) hydrogen supply for many storage and transport functions counterbalance that gain.  The nuclear generating capacity needed would be around 450 times as great as at present.

Conclusions re the significance of the limits to growth.

This brief reference to themes within the general “limits to growth” account makes it clear that the baseline on which ecomodernist visions must build is not given by presentconditions. As Steffen et al. (2015) stress the baseline is one of not just deteriorating conditions, but accelerating deterioration. It is as if the ecomodernists are claiming that their A380 can be got to climb at a 60 degree angle, which is far steeper than it has ever done before, but at present it is in an alarming and accelerating decline with just about all its systems in trouble and some apparently beyond repair. The problem is the wild party on board, passengers and crew dancing around a bonfire and throwing bottles at the instruments, getting more drunk by the minute. A few passengers are saying the party should stop, but no one is listening, not even the pilots. The ecomodernist’s problem is not just about producing far more metals, it is about producing far more as grades decline, it is not just about producing much more food, it is about producing much more despite the fact that problems to do with water availability, soils, the nitrogen cycle, acidification, and carbon loss are getting worse.  It can be argued that on many separate fronts halting the deteriorating trends is now unlikely to be achieved. Yet the ecomodernist wants us to believe that the curves can be made to cease falling and to rise dramatically, without abandoning the quests for affluence and growth which are responsible for their deterioration.  Stopping the party is not thought to warrant consideration.

            The implications for centralisation, control and power.

The ecomodernist vision would have to involve vast, technically sophisticated, expert-run, bureaucratized and centralized global systems, most obviously for the control of the nuclear sector, e.g., to prevent access to weapons grade material. Both corporate and governmental agencies would have to be very large in scale, and relations between the corporate sector and top levels of government would set problems to do with openness, public accountability, democratic control, and corruption. Most production would be from a relatively few gigantic and automated mines, factories, feed lots, mega-greenhouses and plantations compressed into the relatively few best sites.  How this would provide jobs and livelihoods to perhaps 6 billion Third world poor would need to be explained. The provision of large amounts of capital would probably become much more centralised and problematic than it has been in the GFC era.

A “development” model focused on these massive, centralized, expert-dependent and capital intensive systems is not obviously going to improve the already severe problem of global inequality. Mega corporations will run the automated vertical farms and desal plants, assisted by governments who in the past have had no difficulty legislating to clear the locals out of the way, as when Third World governments enable GDP-raising palm oil plantations, logging, big dams and aquaculture. Thus Smaje regards ecomodernism as a new enclosure movement.

Morgan (2012) and Korrowicz (2012) provide disturbing accounts of the fragility and lack of resilience of highly integrated and complex systems. Tainter, (1988), draws attention to the way increasing system complexity leads towards negative synergisms and breakdown. For instance where two roads cross in a village no infrastructure might be needed but in a city multi-million dollar flyovers can be required. As Rome’s road system grew the effort needed just to maintain them grew towards taking up all road building capacity. Among the chief virtues of the small and local path are its robustness, redundancy and resilience, the capacity for simple repairs to simple systems, as well as its capacity to provide livelihoods to large numbers of people.

Above all the ecomodernist vision stands for the rejection of any suggestion that the economy needs altering, let alone scrapping, or that rampant-consumer culture needs to be replaced.  The problems are defined as purely technical. If minerals are becoming scare the solution is not to reduce use of them but to increase production of them. Thus there is no need to think about giving up consumerism, economic growth, the market system or the capitalist system. Radical thought and action need not be considered. Smaje describes it as “neoliberalism with a green veneer.” These messages are as consoling to the present working class and the precariat as they are to the capitalist class.

The mistaken “uni-dimensional” assumption.

Frequently evident in ecomodernist thinking is the way that development, emancipation, technology, progress, comfort, the elimination of disease and hunger are seen to lie along the one path that runs from primitive through peasant worlds to the present and the future.  At the modern end of the dimension there is material abundance, science and high technology, the market economy, freedom from backbreaking work, complex civilization with high educational standards and sophisticated culture. It is taken for granted that your choice is only about where you are on that dimension. Third World “development” can only be about moving up the dimension to greater capital investment, involvement in the global market, trade, GDP and consumer society. Thus they see localism and small is beautiful as “going back”, and condemning billions to continued hardship and deprivation.  Opposition to their advocacy of more modernism is met with, “…well, what period in history do you want to go back to?”

This world-view fails to grasp several things.  The first is the possibility that there might be more than one path; the Zapatista’s do not want to follow our path.  Another is that we  might opt for other end points than the one modernization is taking us to.  A third is that we might deliberately select desirable development goals rather than just accept where modernization takes us, and on some dimensions we might choose not to develop any further.  Ecomodernism has no concept of sufficiency or good enough; Smaje sees how it endorses being incessantly driven to strive for bigger and better, and he notes the spiritual costs. Many ecovillages are developed enough.

Possibly most important, it is conceivable that we could opt for a combination of elements from different points on the path. For instance there is no reason why we cannot have both sophisticated modern medicine and the kind of supportive community that humans have enjoyed for millennia, and have both technically astounding aircraft along with small, cheap, humble, fireproof, home made and beautiful mud brick houses, and have modern genetics along with neighbourhood poultry co-ops. Long ago humans had worked out how to make excellent and quite good enough houses, strawberries, dinners and friendships. We could opt for stable, relaxed, convivial and sufficient ways in some domains while exploring better ways in others, but ecomodernists see only two options; going forward or backward. They seem to have no interest in which elements in modernism are worthwhile and which of them should be dumped. The Frankfurt School saw some of them leading to Auschwitz and Hiroshima.

The inability to think in other than uni-dimensional terms is most tragic with respect to Third World “development”.  Conventional-capitalist development theory can only promise a “growth and trickle down” path, which if it continues would take many decades to lift all to tolerable conditions while the rich rise to the stratosphere, but which cannot continue if the limits to growth analysis of the global situation is correct. Yet The Simpler Way might quickly lift all to satisfactory conditions using mostly traditional technologies and negligible capital. (Trainer, 2012, 2013a, 2013b, Leahy, 2009.)

In his critique of Phillips (2014) Smaje (2015b) sees the Faustian bargain here, the readiness to suffer, indeed embrace, the relentless discontent, struggle, disruption and insecurity that modernism involves, without realizing that we might opt to take the benefits of modernism while dumping the disadvantages and designing ways of life that provide security, stability, a relaxed pace and a high quality of life for all.

A radically alternative vision; The Simpler Way.

Until the last decade or so there was no alternative to the dominant implicit ecomodernist world view, but now significant challenges have emerged, most evidently in the overlapping Eco-village, Degrowth, Transition Towns and localism movements. The fundamental beginning point for these is acceptance of the “limits to growth” case that levels of production, consumption, resource use and ecological impact are extremely unsustainable and that the resulting global problems cannot be solved unless there are dramatic reductions.  The core Simpler Way vision claim is that these reductions can be made while significantly improving the quality of life, even in the richest countries, but not without radical change in systems and lifestyles.  Following is a brief indication of some of the main elements in this vision. (For the detailed account see Trainer, 2011.)

The basic settlement form is the small scale town or suburb, restructured to be a highly self-sufficient local economy running mostly on local resources and requiring a minimal amount of resources and goods to be imported from further afield.  State and national governments would still exist but with relatively few functions. There would be extensive development of local commons such as community watersheds, forests, edible landscapes, workshops and windmills etc. and cooperatives would provide many goods and services. Extensive use could be made of high tech systems but mostly relatively low technologies would be used in small firms and farms, especially earth building, hand tool craft production, Permaculture, community gardening and commons. Leisure committees would maintain leisure rich communities, and other committees would manage orchards, woodlots, agricultural research, and the welfare of disabled, teenage, aged and other groups. Local economies would dramatically reduce the need for vehicles and transport, enabling conversion of many roads to community food production.

These settlements would have to be self-governing via thoroughly participatory procedures, including town meetings and referenda. Citizens are the only ones who can understand local conditions, problems and needs, and they would have to work out the best policies for the town and to own the decisions arrived at. Centralised states could not govern them at all effectively, especially given the much diminished resources that will be available to states.  More importantly the town would not meet its own needs well unless its citizens had a strong sense of empowerment and control and responsibility for their own affairs.

Systems, procedures and the overriding ethos would have to be predominantly cooperative and collective, given the recognition that individual welfare would depend heavily on how well the town was functioning. It would not be likely to thrive unless there was an atmosphere of inclusion and care, solidarity and responsibility.

An entirely new kind of economy would be needed, one that did not grow, rationally geared productive capacity to social need, had per capita levels of production, consumption, resource use and GDP far below current levels, was under public control, and was not driven by market forces, profit or competition. However, there might also be a large sector made up of privately owned small firms and farms, producing to sell in local markets, but operating under careful guidelines set by the town to ensure optimum benefit for the town. The transition period would essentially be about slowly establishing those enterprises, infrastructures, cooperatives, commons and institutions (Economy B) whereby the town developed its capacity to make sure that what needs doing is done, within the exiting mainly fee enterprise system (Economy A.) Over time experience would indicate the best balance between the two, and whether there was any need for the market sector.

There would be many free” goods from the commons, a large non-cash sector involving sharing, giving, helping and voluntary working bees, and almost no finance sector. Small public banks with elected boards would hold savings and arrange loans for maintenance or restructuring.  Some people might pay all their tax by extra contributions to the community working bees. Communities would ensure that there was no unemployment or poverty, no isolation or exclusion, all felt secure, and that all had a livelihood, a worthwhile and valued contribution to make to the town. Because the goal would be material lifestyles that were frugal but sufficient, involving for instance small and very low cost earth built houses, on average people might need to work for money only two days a week. It can be argued that the quality of life would be higher than it is for most people in rich countries today. Lest these ideas seem fanciful, they describe the ways many thousands now live in ecovillages and Transition Towns.

Beyond the town or suburban level there would be regional and national economies, and larger cities containing universities, steel works, and large scale production, e.g., of railway equipment, but their activities would be greatly reduced, and re oriented to provisioning the local economies. There would be little international trade or travel. The termination of the present vast expenditure on wasteful production would enable the amount spent on socially useful R and to be significantly increased.

A detailed analysis of an Australian suburban geography (Trainer, 2016) concludes that technically it would be relatively easy to carry out the very large reductions and restructurings indicated, possibly cutting in energy and dollar costs by around 90%.

It is obvious that the Simpler Way vision could not be realised unless there was enormous “cultural” change, especially away from competitive, acquisitive, maximising individualism and towards frugality, collectivism, sufficiency and responsible citizenship. Fortunately there is now increasing recognition that pursuing ever greater material wealth and GDP is not a promising path to greater human welfare. In a zero-growth settlement there could be no concern with the accumulation of wealth; all would have to be content with stable and secure circumstances, to enjoy non-material life satisfactions, and to be aware that their “welfare” depended not on their individual monetary wealth but on public wealth, i.e., on their town’s infrastructures, systems, edible landscapes, free concerts, working bees, committees, leisure resources, solidarity and morale.

Thus from The Simpler Way perspective the solution to global problems is not a technical issue; it is a value issue. We have all the technology we need to create admirable societies and idyllic lives. But this can’t be done if growth and affluence remain the overriding goals.

At present there would seem to be little chance that a transition to The Simpler Way will be achieved, but that is not central here; the issue is whether this vision or that of the ecomodernist makes more sense.

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