Conjuring Up the Next Depression

11 09 2018

chrishedges

Chris Hedges

During the financial crisis of 2008, the world’s central banks, including the Federal Reserve, injected trillions of dollars of fabricated money into the global financial system. This fabricated money has created a worldwide debt of $325 trillion, more than three times global GDP. The fabricated money was hoarded by banks and corporations, loaned by banks at predatory interest rates, used to service interest on unpayable debt or spent buying back stock, providing millions in compensation for elites. The fabricated money was not invested in the real economy. Products were not manufactured and sold. Workers were not reinstated into the middle class with sustainable incomes, benefits and pensions. Infrastructure projects were not undertaken. The fabricated money reinflated massive financial bubbles built on debt and papered over a fatally diseased financial system destined for collapse.

What will trigger the next crash? The $13.2 trillion in unsustainable U.S. household debt? The $1.5 trillion in unsustainable student debt? The billions Wall Street has invested in a fracking industry that has spent $280 billion more than it generated from its operations? Who knows. What is certain is that a global financial crash, one that will dwarf the meltdown of 2008, is inevitable. And this time, with interest rates near zero, the elites have no escape plan. The financial structure will disintegrate. The global economy will go into a death spiral. The rage of a betrayed and impoverished population will, I fear, further empower right-wing demagogues who promise vengeance on the global elites, moral renewal, a nativist revival heralding a return to a mythical golden age when immigrants, women and people of color knew their place, and a Christianized fascism.

The 2008 financial crisis, as the economist Nomi Prins points out, “converted central banks into a new class of power brokers.” They looted national treasuries and amassed trillions in wealth to become politically and economically omnipotent. In her book “Collusion: How Central Bankers Rigged the World,” she writes that central bankers and the world’s largest financial institutions fraudulently manipulate global markets and use fabricated, or as she writes, “fake money,” to inflate asset bubbles for short-term profit as they drive us toward “a dangerous financial precipice.”

“Before the crisis, they were just asleep at the wheel, in particular, the Federal Reserve of the United States, which is supposed to be the main regulator of the major banks in the United States,” Prins said when we met in New York. “It did a horrible job of doing that, which is why we had the financial crisis. It became a deregulator instead of a regulator. In the wake of the financial crisis, the solution to fixing the crisis and saving the economy from a great depression or recession, whatever the terminology that was used at any given time, was to fabricate trillions and trillions of dollars out of an electronic ether.”

The Federal Reserve handed over an estimated $29 trillion of this fabricated money to American banks, according to researchers at the University of MissouriTwenty-nine trillion dollars! We could have provided free college tuition to every student or universal health care, repaired our crumbling infrastructure, transitioned to clean energy, forgiven student debt, raised wages, bailed out underwater homeowners, formed public banks to invest at low interest rates in our communities, provided a guaranteed minimum income for everyone and organized a massive jobs program for the unemployed and underemployed. Sixteen million children would not go to bed hungry. The mentally ill and the homeless—an estimated 553,742 Americans are homeless every night—would not be left on the streets or locked away in our prisons. The economy would revive. Instead, $29 trillion in fabricated money was handed to financial gangsters who are about to make most of it evaporate and plunge us into a depression that will rival that of the global crash of 1929.

Kevin Zeese and Margaret Flowers write on the website Popular Resistance, “One-sixth of this could provide a $12,000 annual basic income, which would cost $3.8 trillion annually, doubling Social Security payments to $22,000 annually, which would cost $662 billion, a $10,000 bonus for all U.S. public school teachers, which would cost $11 billion, free college for all high school graduates, which would cost $318 billion, and universal preschool, which would cost $38 billion. National improved Medicare for all would actually save the nation trillions of dollars over a decade.”

An emergency clause in the Federal Reserve Act of 1913 allows the Fed to provide liquidity to a distressed banking system. But the Federal Reserve did not stop with the creation of a few hundred billion dollars. It flooded the financial markets with absurd levels of fabricated money. This had the effect of making the economy appear as if it had revived. And for the oligarchs, who had access to this fabricated money while we did not, it did.

The Fed cut interest rates to near zero. Some central banks in Europe instituted negative interest rates, meaning they would pay borrowers to take loans. The Fed, in a clever bit of accounting, even permitted distressed banks to use these no-interest loans to buy U.S. Treasury bonds. The banks gave the bonds back to the Fed and received a quarter of a percent of interest from the Fed. In short, the banks were loaned money at virtually no interest by the Fed and then were paid interest by the Fed on the money they borrowed. The Fed also bought up worthless mortgage assets and other toxic assets from the banks. Since Fed authorities could fabricate as much money as they wanted, it did not matter how they spent it.

“It’s like going to someone’s old garage sale and saying, ‘I want that bicycle with no wheels. I’ll pay you 100 grand for it. Why? Because it’s not my money,’ ” Prins said.

“These people have rigged the system,” she said of the bankers. “There is money fabricated at the top. It is used to pump up financial assets, including stock. It has to come from somewhere. Because money is cheap there’s more borrowing at the corporate level. There’s more money borrowed at the government level.”

“Where do you go to repay it?” she asked. “You go into the nation. You go into the economy. You extract money from the foundational economy, from social programs. You impose austerity.”

Given the staggering amount of fabricated money that has to be repaid, the banks need to build greater and greater pools of debt. This is why when you are late in paying your credit card the interest rate jumps to 28 percent. This is why if you declare bankruptcy you are still responsible for paying off your student loan, even as 1 million people a year default on student loans, with 40 percent of all borrowers expected to default on student loans by 2023. This is why wages are stagnant or have declined while costs, from health care and pharmaceutical products to bank fees and basic utilities, are skyrocketing. The enforced debt peonage grows to feed the beast until, as with the subprime mortgage crisis, the predatory system fails because of massive defaults. There will come a day, for example, as with all financial bubbles, when the wildly optimistic projected profits of industries such as fracking will no longer be an effective excuse to keep pumping money into failing businesses burdened by debt they cannot repay.

“The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses,” Bethany McLean writes of the fracking industry in an article titled “The Next Financial Crisis Lurks Underground” that appeared in The New York Times. “In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter.”

The global financial system is a ticking time bomb. The question is not if it will explode but when it will explode. And once it does, the inability of the global speculators to use fabricated money with zero interest to paper over the debacle will trigger massive unemployment, high prices for imports and basic services, and a devaluation in which the dollar will become nearly worthless as it is abandoned as the world’s reserve currency. This manufactured financial tsunami will transform the United States, already a failed democracy, into an authoritarian police state. Life will become very cheap, especially for the vulnerable—undocumented workers, Muslims, poor people of color, girls and women, anti-capitalist and anti-imperialist critics branded as agents of  foreign powers—who will be demonized and persecuted for the collapse. The elites, in a desperate bid to cling to their unchecked power and obscene wealth, will disembowel what is left of the United States.

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Climate ‘doom’ is already here

2 08 2018

nafeez

Nafeez Ahmed

The extreme weather events of the summer of 2018 are not just symptoms of climate breakdown. They are early stage warnings of a protracted process of civilisational collapse as industrial societies face some of the opening symptoms of having already breached the limits of a safe climate. These events are a taste of things to come on a business-as-usual trajectory. They elicit a sense of how industrial civilisational systems are vulnerable to collapse due to escalating climate impacts. And they highlight the urgent necessity of communities everywhere undertaking steps to achieve a systemic civilisational transition toward post-capitalist systems which can survive and prosper after fossil fuels.

Climate ‘doom’ is already here

This summer’s extreme weather has hit home some stark realities.

Climate disaster is not slated to happen in some far-flung theoretical future.

It’s here, and now.

Droughts threatening food supplies, floods in Japan, extreme rainfall in the eastern US, wildfires in California, Sweden and Greece.

In the UK, holiday-makers trying to cross the Channel tunnel to France faced massive queues when air conditioning facilities on trains failed due to the heatwave. Thousands of people were stranded for five hours in the 30C heat without water.

In southern Laos, heavy rains led to a dam collapse, rendering thousands of people homeless and flooding several villages.

The stories came in thick and fast, from all over the world.

Most of the traditional media did not report these incidents as symptoms of an evolving climate crisis.

Some commentators did point out that the events might be linked to climate change.

None at all acknowledged that these extreme weather events might be related to the fact that since 2015, we have essentially inhabited a planet that is already around 1C warmer than the pre-industrial average: and that therefore, we are already, based on the best available science, inhabiting a dangerous climate.

The breaching of the 1C tipping point — which former NASA climate science chief James Hansen pinpointed as the upper limit to retain a safe climate — was followed this March by atmospheric carbon concentrations reaching, for the first time since records began, 400 ppm (parts per million).

Once again, the safe upper limit highlighted by Hansen and colleagues — 350 ppm — has already been breached.

Yet these critical climate milestones have been breached consecutively with barely a murmur from either the traditional and alternative media.

The recent spate of catastrophic events are not mere anomalies. They are the latest signifiers of a climate system that is increasingly out of balance — a system that was already fatally struck off balance through industrial overexploitation of natural resources centuries ago.

Our sense-making apparatus is broken

But for the most part, the sense-making apparatus by which we understand what is happening in the world — the Global Media-Industrial Complex (a network of media communications portals comprised of both traditional corporate and alternative outlets) — has failed to convey these stark realities to the vast majority of the human population.

We are largely unaware that 19th and early 20th century climate change induced by industrial fossil fuel burning has already had devastating impacts on the regional climate of Sub-Saharan Africa; just as it now continues to have escalating devastating impacts on weather systems all over the world.

The reality which we are not being told is this: these are the grave consequences of inhabiting a planet where global average temperatures are roughly 1C higher than the pre-industrial norm.

Sadly, instead of confronting this fundamentally existential threat to the human species — one which in its fatal potential implications point to the bankruptcy of the prevailing paradigms of social, political and economic organisation (along with the ideology and value-systems associated with them) — the preoccupation of the Global Media-Industrial Complex is at worst to focus human mind and behaviour on consumerist trivialities.

At best, its focus is to pull us into useless, polarising left-right dichotomies and forms of impotent outrage that tend to distract us from taking transformative systemic action, internally (within and through our own selves, behaviours psychologies, beliefs, values, consciousness and spirit) and externally (in our relationships as well as our structural-institutional and socio-cultural contexts).

Collapse happens when the system is overwhelmed

These are the ingredients for the beginning of civilisational collapse processes. In each of these cases, we see how extreme weather events induced by climate change creates unanticipated conditions for which international, national and local institutions are woefully unprepared.

In order to respond, massive new expenditures are involved, including emergency mobilisations as well as new spending to try to build more robust adaptations that might be better prepared ‘next time’.

But the reality is that we are already failing to avert an ongoing trajectory of global temperatures rising to not merely a dangerous 2C (imagine a doubling intensity of the sorts of events we’ve seen this summer happening year on year); but, potentially, as high as 8C (the catastrophic impacts of which would render much of the planet uninhabitable).

In these contexts, we can begin to see how a protracted collapse process might unfold. Such a collapse process does not in itself guarantee the ‘end of the world’, or even simply the disappearance of civilisation.

What it does imply is that specific political, economic, social, military and other institutional systems are likely to become increasingly overwhelmed due to rising costs of responding to unpredictable and unanticipated climate wild cards.

It should be noted that as those costs are rising, we are simultaneously facing diminishing economic returns from our constant overexploitation of planetary resources, in terms of fossil fuels and other natural resourcs.

In other words, in coming decades, business-as-usual implies a future of tepid if not declining economic growth, amidst escalating costs of fossil fuel consumption, compounded by exponentially accelerating costs of intensifying climate impacts as they begin to erode and then pummel and then destroy the habitable infrastructure of industrial civilisation as we know it.

Collapse does not arrive in this scenario as a singular point of terminal completion. Rather, collapse occurs as a a series of discrete but consecutive and interconnected amplifying feedback processes by which these dynamics interact and worsen one another.

Earth System Disruption (ESD) — the biophysical processes of climate, energy and ecological breakdown — increasingly lead to Human System Destabilisation (HSD). HSD in turn inhibits our capacity to meaningfully respond and adapt to the conditions of ESD. ESD, meanwhile, simply worsens. This, eventually, leads to further HSD. The cycle continues as a self-reinforcing amplifying feedback loop, and each time round the cycle comprises a process of collapse.

This model, which I developed in my Springer Energy Briefs study Failing States, Collapse Systems, demonstrates that the type of collapse we are likely to see occurring in coming years is a protracted, cyclical process that worsens with each round. It is not a final process, and it is not set-in-stone. At each point, the possibility of intervening at critical points to mitigate, ameliorate, adapt, or subvert still exists. But it gets harder and harder to do so effectively the deeper into the collapse cycle we go.

Insanity

One primary sympton of the collapse process is that as it deepens, the capacity of the prevailing civilisational configuration to understand what is happening becomes increasingly diminished.

Far from waking up and taking action, we see that the human species is becoming increasingly mired in obsessing over geopolitical and economic competition, self-defeating acts of ‘self’-preservation (where the ‘self’ is completely misidentified), and focused entirely on projecting problems onto the ‘Other’.

A key signifier of how insidious this is, is in yourself. Look to see how your critical preoccupations are not with yourself or those with which you identify; but that and those whom you oppose and consider to be ‘wrong.’

At core, the critical precondition for effective action at this point is for each of us to radically subvert and challenge these processes through a combination of internal introspection and outward action.

In ourselves, the task ahead is for each of us to become the seeds of that new, potential civilisational form — ‘another world’ which is waiting to be birthed not through some far-flung ‘revolution’ in the future, but here and now through the transformations we undertake in ourselves and in our contexts.

We first wake up. We wake up to the reality of what is happening in the world. We then wake up to our own complicity in that reality and truly face up to the intricate acts of self-deception we routinely undertake to conceal ourselves from this complicity. We then look to mobilise ourselves anew to undo these threads of complicity where feasible, and to create new patterns of work and play that connect us back with the Earth and the Cosmos. And we work to connect our own re-patterning with the re-patterning work of others, with a view to plant the seed-networks of the next system — a system which is not so much ‘next’, but here and now, emergent in the fresh choices we make everyday.

So… welcome. Welcome to a 1C planet. Welcome to the fight to save ourselves from ourselves.

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The Receding Horizons of Renewable Energy

15 07 2018

Another excellent article by Nicole Foss…  also known as Stoneleigh.

Renewable energy is best used in situ, adjacent to demand. It is best used in conjunction with a storage component which would insulate consumers from supply disruption, but FIT programmes typically prohibit this explicitly. Generators are expected to sell all their production to the grid and buy back their own demand. This leaves them every bit as vulnerable to supply disruption as anyone who does not have their own generation capacity. This turns renewable generation into a personal money generating machine with critical vulnerabilities. It is no longer about the energy, which should be the focus of any publicly funded energy programme.

nicolefoss

Nicole Foss

Stoneleigh: Renewable energy has become a topic of increasing interest in recent years, as fossil fuel prices have been volatile and the focus on climate change has sharpened. Governments in many jurisdictions have been instituting policies to increase the installation of renewable energy capacity, as the techologies involved are not generally able to compete on price with conventional generation.

The reason this is necessary, as we have pointed out before, is that the inherent fossil-fuel dependence of renewable generation leads to a case of receding horizons. We do not make wind turbines with wind power or solar panels with solar power. As the cost of fossil fuel rises, the production cost of renewable energy infrastructure also rises, so that renewables remain just out of reach.

Renewable energy is most often in the form of electricity, hence subsidies have typically been provided through the power system. Capital grants are available in some locations, but it is more common for generators to be offered a higher than market price for the electricity they produce over the life of the project. Some jurisdictions have introduced a bidding system for a set amount of capacity, where the quantity requested is fixed (RFP) and the lowest bids chosen.

Others have introduced Feed-In Tariff (FIT) programmes, where a long-term fixed price is offered essentially to any project willing to accept it. Tariffs vary with technology and project size (and sometimes inversely with resource intensity) with the intention of providing the same rate of return to all projects. FIT programmes have been much more successful in bringing capacity online, especially small-scale capacity, as the rate of return is higher and the participation process much less burdensome than the RFP alternative. Under an RFP system accepted bids often do not lead to construction as the margin is too low.

The FIT approach has been quite widely adopted in Europe and elsewhere over the last decade, and has led to a great deal of capacity construction in early-adopter countries such as Germany, Spain and Denmark. In Canada, Ontario was the first north American jurisdiction to introduce a similar programme in 2009. (I was involved in negotiating its parameters at the time.)

Renewable energy subsidies are becoming increasingly controversial, however, especially where they are very large. The most controversial are those for solar photovoltaics, which are typically very much higher than for any other technology. In a number of countries, solar tariffs are high enough to have produced a bubble, with a great deal of investment being poured into infrastructure production and capacity installation. Many of the countries that had introduced FIT regimes are now backing away from them for fear of the cost the subsidies could add to power prices if large amounts of capacity are added.

As Tara Patel wrote recently for Bloomberg:

EDF’s Solar ‘Time Bomb’ Will Tick On After France Pops Bubble:

To end what it has called a “speculative bubble,” France on Dec. 10 imposed a three-month freeze on solar projects to devise rules that could include caps on development and lowering the so-called feed-in tariffs that pay the higher rate for renewable power. The tariffs were cut twice in 2010. “We just didn’t see it coming,” French lawmaker Francois- Michel Gonnot said of the boom. “What’s in the pipeline this year is unimaginable. Farmers were being told they could put panels on hangars and get rid of their cows.”…. ….EDF received 3,000 applications a day to connect panels to the grid at the end of last year, compared with about 7,100 connections in all of 2008, according to the government and EDF.

Stoneleigh: The policy of generous FIT subsidies seems to be coming to an end, with cuts proposed in many places, including where the programmes had been most successful. The optimism that FIT programmes would drive a wholesale conversion to renewable energy is taking a significant hit in many places, leaving the future of renewable energy penetration in doubt in the new era of austerity:

Germany:

Half of the 13 billion euro ($17.54 billion) reallocation charges pursuant to Germany’s renewable energy act was put into solar PV last year. The sector produced about 7 GW of electricity, surpassing the 5-GW estimate. The government deemed the industry boom as counterproductive, pushing it to reduce subsidies and narrow the market.

The Czech Republic:

In an attempt to get hold of what could be a runaway solar subsidy market, the Senate approved an amendment April 21 that will allow the Energy Regulatory Office (ERÚ) to lower solar energy prices well below the current annual limit of 5 percent cuts. At the start of 2011, the state will now be able to decrease solar energy prices up to 25 percent – if President Klaus signs the amendment into law. Even with a quarter cut, the government’s subsidies for feed-in tariffs remain so high that solar energy remains an attractive investment.

France:

The Ministry of Sustainable Development is expected to cut the country’s generous feed-in tariffs by 12 percent beginning September 1 in an effort to rein in demand and curb spending, according to analysts and news reports from France.

Italy:

Incentives for big photovoltaic (PV) installations with a capacity of more than 5 megawatts (MW) will be slashed every four months by a total of up to 30 percent next year, said Gianni Chianetta, chairman of the Assosolare industry body. Incentives for smaller PV installations will be gradually cut by up to 20 percent next year. One-off 6 percent annual cuts are set for 2012 and 2013 under the new plan, the industry source said.

The UK:

The U.K. government signaled it may cut the prices paid for electricity from renewable energy sources, saying it began a “comprehensive review” of feed-in tariffs introduced last year. Evidence that larger-scale solar farms may “soak up” money meant for roof-top solar panels, small wind turbines and smaller hydropower facilities prompted the study, the Department of Energy and Climate Change said today in an statement. A review was originally planned to start next year.

The move will allow the government to change the above- market prices paid for wind and solar electricity by more than already planned when the new prices come into force in April 2012. The department said it will speed up an analysis of solar projects bigger than 50 kilowatts and that new tariffs may be mandated “as soon as practical.” “This is going to put the jitters into some market segments,” Dave Sowden, chief executive officer of the Solihull, England-based trade group Micropower Council, said today in a phone interview.

Portugal:

The Portuguese government has announced that it will review the existing feed-in tariff mechanism following calls that the subsidies are excessive and contribute to the increase of electricity prices to final consumers.

Ontario

Initial enthusiasm among ratepayers for the scheme is flagging in the wake of perceived links between the FiT and increased energy prices. The FiT passed into law in May 2009 as part of the Green Energy Act, which aims to promote the development of wind and solar generation in the province. With provincial elections slated for 6 October next year, the opposition Progressive Conservative Party is threatening to substantially revise and possibly even scrap the FiT should it win. Even if it the subsidy scheme were to be revoked, the legal implications of rescinding the over 1500MW in existing FiT contracts would be highly problematic.

Stoneleigh: Spain is the example everyone wishes to avoid. The rapid growth in the renewable energy sector paralleled the bubble-era growth of the rest of Spain’s economy. The tariffs offered under their FIT programme now come under the heading of ‘promises that cannot be kept’, like so many other government commitments made in an era of unbridled optimism. Those tariffs are now being cut, and not just for new projects, but for older ones with an existing contract. People typically believe that promises already made are sacrosanct, and that legal committments will not be broken, but we are moving into a time when rules can, and will, be changed retroactively when the money runs out. Legal niceties will have little meaning when reality dictates a new paradigm.

Spain:

Spain’s struggling solar-power sector has announced it will sue the government over two royal decrees that will reduce tariffs retroactively, claiming they will cause huge losses for the industry. In a statement, leading trade body ASIF said its 500 members endorsed filing the suit before the Spanish high court and the European Commission. They will allege that royal decrees 156/10 and RD-L 14/10 run against Spanish and European law. The former prevents solar producers from receiving subsidized tariffs after a project’s 28th year while the latter slashes the entire industry’s subsidized tariffs by 10% and 30% for existing projects until 2014. Both bills are “retroactive, discriminatory and very damaging” to the sector. They will dent the profits of those companies that invested under the previous Spanish regulatory framework, ASIF argued.

Austerity bites:

The government announced soon after that it would introduce retroactive cuts in the feed-in tariff program for the photovoltaic (PV) industry in the context of the austerity measures the country is currently undergoing. According to this plan, existing photovoltaic plants would have their subsidies cut by 30%, a figure that would go up to 45% for any new large scale plants. Smaller scale roof installations would lose 25% of their existing subsidy, while installations with a generating capacity of less than 20 KW would have 5% taken from their tariff.

Spain is too big to fail and too big to bail out:

Spain has been forced to cut back on solar subsidies because of the impact on ratepayers. But Spain’s overall economy is in much worse shape and the subsidies for feed in tariff are threatening to push the country into bailout territory or, at lease, worsen the situation should a bailout be needed.

FIT and Debt:

The strain on government revenue is in part due to the way Spain has designed its feed-in tariff system. Usually, this type of subsidy is paid for by utilities charging more for the electricity they sell to consumers, to cover the cost of buying renewable energy at above-market prices. Therefore no money is actually paid out of government revenues: consumers bear the cost directly by paying higher electricity bills.

In Spain, however, the price of electricity has been kept artificially low since 2000. The burden has been shouldered by utilities, which have been operating at a loss on the basis of a government guarantee to eventually pay them back. The sum of this so-called ‘tariff deficit’ has accumulated to over €16 billion (US$ 20 billion) since 2000. For comparison, Spain’s deficit in 2009 was around €90 billion (US$ 116 billion) in 2009 and its accumulated debt around €508 billion (US$ 653 billion).

Stoneleigh: Ontario threatens to take the Spanish route by instituting retroactive measures after the next election. For a province with a long history of political interference in energy markets, further regulatory uncertainty constitutes a major risk of frightening off any kind of investment in the energy sector. Considering that 85% of Ontario’s generation capacity reaches the end of its design life within 15 years, and that Ontario has a huge public debt problem, alienating investment is arguably a risky decision. FIT programmes clearly sow the seeds of their own destruction. They are an artifact of good economic times that do not transition to hard times when promises are broken.

Ontario

The outcome of an autumn election in Ontario could stunt a budding renewable energy industry in the Canadian province just as it is becoming one of the world’s hot investment destinations. If the opposition Progressive Conservatives win power on Oct. 6, the party has promised to scrap generous rates for renewable energy producers just two years after their launch by the Liberal government. That could threaten a program that has lured billions of dollars in investment and created thousands of jobs.

The Conservatives, who are leading in the polls, have yet to release an official energy manifesto. Even so, the industry is privately voicing concern, especially after the party said it would scrutinize contracts already awarded under Ontario’s feed-in tariff (FIT) program. “They are going to go through the economic viability of the energies and review all of the past contracts … I think that is going to cause a lot of delays, a lot of problems and a lot of risk to Ontario,” said Marin Katusa, chief energy analyst at Casey Research, an investor research service.

George Monbiot, writing for The Guardian in the UK, provides an insightful critique of FIT programmes in general:

The real net cost of the solar PV installed in Germany between 2000 and 2008 was €35bn. The paper estimates a further real cost of €18bn in 2009 and 2010: a total of €53bn in ten years. These investments make wonderful sense for the lucky householders who could afford to install the panels, as lucrative returns are guaranteed by taxing the rest of Germany’s electricity users. But what has this astonishing spending achieved? By 2008 solar PV was producing a grand total of 0.6% of Germany’s electricity. 0.6% for €35bn. Hands up all those who think this is a good investment…. .

As for stimulating innovation, which is the main argument Jeremy [Leggett] makes in their favour, the report shows that Germany’s feed-in tariffs have done just the opposite. Like the UK’s scheme, Germany’s is degressive – it goes down in steps over time. What this means is that the earlier you adopt the technology, the higher the tariff you receive. If you waited until 2009 to install your solar panel, you’ll be paid 43c/kWh (or its inflation-proofed equivalent) for 20 years, rather than the 51c you get if you installed in 2000.

This encourages people to buy existing technology and deploy it right away, rather than to hold out for something better. In fact, the paper shows the scheme has stimulated massive demand for old, clunky solar cells at the expense of better models beginning to come onto the market. It argues that a far swifter means of stimulating innovation is for governments to invest in research and development. But the money has gone in the wrong direction: while Germany has spent some €53bn on deploying old technologies over ten years, in 2007 the government spent only €211m on renewables R&D.

In principle, tens of thousands of jobs have been created in the German PV industry, but this is gross jobs, not net jobs: had the money been used for other purposes, it could have employed far more people. The paper estimates that the subsidy for every solar PV job in Germany is €175,000: in other words the subsidy is far higher than the money the workers are likely to earn. This is a wildly perverse outcome. Moreover, most of these people are medium or highly skilled workers, who are in short supply there. They have simply been drawn out of other industries.

Stoneleigh: Widespread installed renewable electricity capacity would be a very good resource to have available in an era of financial austerity at the peak of global oil production, but the mechanisms that have been chosen to achieve this are clearly problematic. They plug into, and depend on, a growth model that no longer functions. If we are going to work towards a future with greater reliance on renewable energy, there are a number of factors we must consider. These are not typically addressed in the simplistic subsidy programmes that are now running into trouble worldwide.

We have power systems built on a central station model, which assumes that we should build large power station distant from demand, on the grounds of economic efficiency, which favours large-scale installations. This really does not fit with the potential that renewable power offers. The central station model introduces a grid-dependence that renewable power should be able to avoid, revealing an often acute disparity between resource intensity, demand and grid capacity. Renewable power (used in the small-scale decentralized manner it is best suited for) should decrease grid dependence, but we employ it in such a way as to increase our vulnerability to socioeconomic complexity.

Renewable energy is best used in situ, adjacent to demand. It is best used in conjunction with a storage component which would insulate consumers from supply disruption, but FIT programmes typically prohibit this explicitly. Generators are expected to sell all their production to the grid and buy back their own demand. This leaves them every bit as vulnerable to supply disruption as anyone who does not have their own generation capacity. This turns renewable generation into a personal money generating machine with critical vulnerabilities. It is no longer about the energy, which should be the focus of any publicly funded energy programme.

FIT programmes typically remunerate a wealthy few who install renewables in private applications for their own benefit, and who may well have done so in the absence of public subsidies. If renewables are to do anything at all to help run our societies in the future, we need to move from publicly-funded private applications towards public applications benefitting the collective. We do not have an established model for this at present, and we do not have time to waste. Maximizing renewable energy penetration takes a lot of time and a lot of money, both of which will be in short supply in the near future. The inevitable global austerity measures are not going to make this task any easier.

We also need to consider counter-cyclical investment. In Ontario, for instance, power prices have been falling on falling demand and increased conventional supply, and are now very low. In fact, the pool price for power is often negative at night, as demand is less than baseload capacity. Under such circumstances it is difficult to develop a political mandate for constructing additional generation, when the spending commitment would have to be born by the current regime and the political benefits would accrue to another, due to the long construction time for large plants.

Politicians are allergic to situations like that, but if they do not make investments in additional generation capacity soon, most of Ontario’s capacity could end up being retired unreplaced. Large, non-intermittent, plants capable of load following are necessary to run a modern power system. These cannot be built overnight.

Many jurisdictions are going to have to build capacity (in the face of falling prices in an era of deflation) if they are to avoid a supply crunch down the line. Given how dependent our societies are on our electrified life-support systems, this could be a make or break decision. The risk is that we wait too long, lose all freedom of action and are then forced to take a much larger step backwards than might other wise have been the case.

Europe’s existing installed renewable capacity should stand it in good stead when push comes to shove, even though it was bought at a high price. Other locations, such as Ontario, really came too late to the party for their FIT initiatives to do any good. Those who have not built replacement capacity, especially load-following plants and renewables with no fuel cost going forward, could be very vulnerable in the future. They will be buffeted first by financial crisis and then by energy crisis, and there may be precious little they can do about either one.





Areas Of The World More Vulnerable To Collapse

16 06 2018

ANOTHER great post from SRSrocco…..  this one should be of particular interest to Australians though, because we are in a more vulnerable region…. and while Australia may look not too bad on those charts, it’s only because our relatively small population means we consume way less than most of the other nations of the Asia Pacific region…

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Certain areas of the world are more vulnerable to economic and societal collapse.  While most analysts gauge the strength or weakness of an economy based on its outstanding debt or debt to GDP ratio, there is another factor that is a much better indicator.  To understand which areas and regions of the world that will suffer a larger degree of collapse than others, we need to look at their energy dynamics.

For example, while the United States is still the largest oil consumer on the planet, it is no longer the number one oil importer.  China surpassed the United States by importing a record 8.9 million barrels per day (mbd) in 2017.  This data came from the recently released BP 2018 Statistical Review.  Each year, BP publishes a report that lists each countries’ energy production and consumption figures.

BP also lists the total oil production and consumption for each area (regions and continents).  I took BP’s figures and calculated the Net Oil Exports for each area.  As we can see, the Middle East has the highest amount of net oil exports with 22.3 million barrels per day in 2017:

The figures in the chart above are shown in “thousand barrels per day.”  Russia and CIS (Commonwealth Independent States) came in second with 10 mbd of net oil exports followed by Africa with 4 mbd and Central and South America with 388,000 barrels per day.  The areas with the negative figures are net oil importers.

The area in the world with the largest net oil imports was the Asia-Pacific region at 26.6 mbd followed by Europe with 11.4 mbd and North America (Canada, USA & Mexico) at 4.1 mbd.

Now, that we understand the energy dynamics shown in the chart above, the basic rule of thumb is that the areas in the world that are more vulnerable to collapse are those with the highest amount of net oil imports.  Of course, it is true that the Middle Eastern or African countries with significant oil exports can suffer a collapse due to geopolitics and civil wars (example, Iraq, and Libya), but this was not a result of domestic oil supply and demand forces.  Rather the collapse of Iraq and Libya can be blamed on certain superpowers’ desire to control the oil market as they are strategic net oil importers.

The areas with the largest net oil imports, Asia-Pacific and Europe, have designed complex economies that are highly dependent on significant oil supplies to function.  Thus, the areas and countries with the largest net oil imports will experience a higher degree of collapse. Yes, there’s more to it than the amount of net oil imports, but that is an easy gauge to use.   I will explain the other factors shortly.  If we look at the Asia-Pacific countries with the largest net oil imports, China, India, and Japan lead the pack:

China is a net importer of nearly 9 mbd of oil, followed by India at 4 mbd and Japan with 3.9 mbd.  Thus, as these net oil imports decline, so will the degree of economic activity.  However, when net oil imports fall to a certain level, then a more sudden collapse of the economy will result… resembling the Seneca Cliff.

We must remember, a great deal of the economic infrastructure (Skyscrapers, commercial buildings, retail stores, roads, equipment, buses, trucks, automobiles, etc etc.) only function if a lot of oil continually runs throughout the system.  Once the oil supply falls to a certain level, then the economic system disintegrates.

While China is the largest net oil importer, the United States is still the largest consumer of oil in the world.  Being the largest oil consumer is another very troubling sign.  The next chart shows the countries with the highest oil consumption in the world and their percentage of net oil imports:

Due to the rapid increase in domestic shale oil production, the United States net oil imports have fallen drastically over the past decade.  At one point, the U.S. was importing nearly three-quarters (75%) of its oil but is now only importing 34%.  Unfortunately, this current situation will not last for long.  As quickly as shale oil production surged, it will decline in the same fashion… or even quicker.

You will notice that Saudi Arabia is the sixth largest oil consumer in the world followed by Russia.  Both Saudi Arabia and Russia export a much higher percentage of oil than they consume.  However, Russia will likely survive a much longer than Saudi Arabia because Russia can provide a great deal more than just oil.  Russia and the Commonwealth Independent States can produce a lot of food, goods, commodities, and metals domestically, whereas Saudi Arabia must import most of these items.

Of the largest consumers of oil in the chart above, Japan and South Korea import 100% (or nearly 100%) of their oil needs.  According to the data put out by BP 2018 Statistical Review, they did not list any individual oil production figures for Japan or South Korea.  However, the U.S. Energy Information Agency reported in 2015 that Japan produced 139,000 bd of total petroleum liquids while S. Korea supplied 97,000 bd.  Production of petroleum liquids from Japan and South Korea only account for roughly 3% of their total consumption…. peanuts.

Analysts or individuals who continue to believe the United States will become energy independent are ignorant of the impacts of Falling EROI – Energy Returned On Investment or the Thermodynamics of oil depletion.  Many analysts believe that if the price of oil gets high enough, say $100 or $150; then shale oil would be hugely profitable.  The error in their thinking is the complete failure to comprehend this simple relationship… that as oil prices rise, SO DO the COSTS… 

Do you honestly believe a trucking company that transports fracking sand, water or oil for the shale oil industry is going to provide the very same costs when the oil price doubles????  We must remember, the diesel price per gallon increases significantly as the oil price moves higher.  Does the energy analyst believe the trucking companies are just going to eat that higher cost for the benefit of the shale oil industry??  This is only one example, but as the oil price increases, inflationary costs will thunder throughout the shale oil industry.

If the oil price shoots up to $100 or higher and stays there (which I highly doubt), then costs will start to surge once again for the shale oil industry.  As costs increase, we can kiss goodbye the notion of higher shale oil profits.  But as I mentioned in the brackets, I don’t see the oil price jumping to $100 and staying there.  Yes, we could see an oil price spike, but not a long-term sustained price as the current economic cycle is getting ready to roll over.  And with it, we are going to experience one hell of a deflationary collapse.  This will take the oil price closer to $30 than $100.

Regardless, the areas and countries with the highest oil consumption and net oil imports will be more vulnerable to collapse and will fall the hardest.  Just imagine the U.S. economy consuming 5 million barrels of oil per day, rather than the current 20 mbd.  The United States just has more stuff that will become worthless and dysfunctional than other countries.

Lastly, the end game suggests that the majority of countries will experience an economic collapse due to the upcoming rapid decline in global oil production.  However, some countries will likely be able to transition better than others, as the leverage and complexity of the economies aren’t as dependent on oil as the highly advanced Western and Eastern countries.





Three Things We Don’t Understand About Climate Change

3 09 2017

ANOTHER great article from Ahmed Nafeez’ new Medium website…….  Please support his magnificent efforts.

This is the most honest item on Climate Change I hace seen in quite a while. It almost goes as far as saying what I’ve now concluded, we must de-industrialise. Almost.

Go to the profile of Aarne Granlund
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Thinking about climate change is not something that comes natural to humans — or ‘consumers’ as we have been called for decades. It is not only emotionally unpleasant, but analytically extremely challenging.

I argue that most of us do not grasp how immediate this situation has become, how fast it is progressing and what the scale of change needed is to reach the stabilisation targets of the Paris Agreement.

I also argue that after individuals, nations and corporations understand the urgency and the rate, they should be honest about the scale of action needed in order to avoid collapse of the biosphere and thus civilisation.

North America on 29th of August 2017. Tundra and forest fires in the Arctic + British Columbia and Hurricane Harvey off the coast of South Texas (Terra / MODIS @ Nasa WorldView).

Human society is deeply and permanently coupled to the Earth System. In the geological epoch we have entered called the Anthropocene, that system is undergoing immediate, massive disruption. The previous epoch of Holocene gave us agriculture and settled living arrangements.

Since the onset of industrial production at an accelerating rate and scale, human society has had deep and far ranging influence on natural processes which it depends on. Climate change is only one of the manifestations — there are multiple large-scale indicators of our presence on this planet from erosion to nitrogen runoff, species extinction to uncontrolled population growth.

1. Urgency

The first misunderstanding about climate change is related to how we perceive its impacts in the temporal space. It is not (only) a future issue, not a polar bear issue and certainly not an issue which only affects a few remote parts of the world.

Situation has become dangerous during the last three years of 2014, 2015, 2016 and now continuing into 2017. Certain parts of the world see less immediate danger but systematic changes affect us all.

NASA GISS dataset on land and ocean temperature anomalies (2017).

How is it possible that the Earth System has taken up our presence on the surface so lightly even when we have changed the chemistry of the atmosphere and the ocean with our carbon pollution?

Ocean heat uptake has doubled since 1997 (Gleckler et al, 2016).

Most of the energy (heat) human carbon pollution creates ends up warming the world ocean, some 93% of our pyromania ends up there. Every passing year we pump 41 gigatons (that is a very big number) of carbon dioxide into the Earth System, where roughly half of it is absorbed by natural sink capabilities of the ocean and the land biosphere. Rest of it ends up in the atmosphere with all the other gases we put up, including aerosols and certain novel entities that have never occured in the natural state of the Earth System.

The fact that increasing greenhouse gas loading from human sources in the carbon cycle is cumulative makes this an extremely vicious political, economic and social problem. The increment which ends up in the atmosphere can only be drawn down by the natural climate system on time scales extending to tens or hundreds of thousands of years.

The Global Carbon Budget from GCP, 2017.

One component of urgency is that when surface temperatures increase after being buffered by the ocean — without the world ocean we would already be 36°C hotter on the surface of continents from the increased atmospheric forcing — they can do so in a non-linear fashion.

This creates immediate impacts. Single exceptional extreme weather events are not caused by climate change but happen in a distinctively new climate. Hotter atmosphere holds more moisture which increases precipitation. Extreme heatwaves become more common. Ice in all its forms melts.

Right now there are multiple imminent disasters occuring in various parts of the planet. Global fire situation has been exceptional in Siberia, Greenland, Canada and in other parts of North America. Tundra burns, forests burn, people suffer. Europe has been under severe heat waves and there have been mass casualties from forest fires in Portugal.

There is extreme flooding in South Asia, impacting multiple cities and the country of Bangladesh of which one third is currently under water. Hurricane Harvey just hit South Texas at Category 4 strength and produced record precipitation totals for many locations, including but not limited to the City of Houston. Tens of millions suffer from these impacts — right now.

Arctic climate change is proceeding at fast pace (AMAP SWIPA, 2017 http://www.amap.no/swipa2017).

2. Rate and Scale of Change

The Arctic, area located on the top of the planet from 66°N north, is a prime example of systematic exponential change. It is warming at least twice as fast as the rest of the planet. There is less inertia in the Arctic than there is in the general climate system.

But even the general climate system is being pushed in ways which have no previous analogue in natural climate changes going back tens of millions of years. It is about the rate of carbon dioxide and other greenhouse gases added. There have been periods in the deep geological past of Earth when greenhouse gas concentrations have been much, much higher than they are today but increases have never occured this rapidly.

Proxy measurements of carbon dioxide from ice cores (NOAA @ NASA Climate Change https://climate.nasa.gov/vital-signs/carbon-dioxide/).

Earth is a fluid, non-linear system capable of abrupt and total change. Earth System has been in a hothouse state and for a while was mostly covered by ice. At current pathways we are literally going to lose very large portions of both continental polar ice sheets, possibly in their entirety. This will take centuries but when we commit, the result will be permanent. Permafrost is thawing, threathening both the carbon cycle and our settled living arrangements in the Arctic.

When climate scientists project future climate change up to and beyond 2050 and 2100 they refer to scenarios. They are used in policy making to set stabilisation targets.

Tipping elements in the climate system (Schellnhuber et al, 2015).

What is worrying is that humanity is currently putting in place an atmospheric forcing comparable to something between the RCP4.5 and 8.5 (watts per square meter) end results. The choice between the Paris Agreement ‘well below 2°C’ framing and higher, 3–4°C level of warming is the choice of having a civilisation with global governance capability or losing it.

At any pathway we choose to follow, in order for the climate to stabilise at a higher level of change, emissions need to be zero. If new carbon pollution enters the climate system, temperatures will go up. This also applies to 2.5°C emissions budgets as well as 3°C budgets.

3. Stabilisation

What is to be done? Multiple actions are under way. Our energy system is changing with global energy demand growth continuing to rise due to industrialisation of developing nations, but new added electricity capacity in the form of solar and wind power only appear to offset some of the added growth. Electricity is only a portion of our energy use profile.

The massive use of fossil fuels is the prime driver of human-caused climate change. The fraction of low-carbon energy is the same now that it was a few decades ago. Fossil fuels absolutely dominate our energy system at >80% share in total final energy consumption. Deforestation and other land-use change also contribute significantly, but our profligate use of fossil energy commits us to possibly catastrophic breakdowns of the climate system.

For a reasonable chance of keeping warming under 2℃ we can emit a further 865 billion tonnes of carbon dioxide (CO2). The climate commitments to reduce greenhouse gas emissions to 2030 are a first step, but recent analyses show they are not enough (Canadell and Smith, 2017 http://bit.ly/2jRNjIK).

The trouble with negative emissions (Peters and Anderson, 2016 http://science.sciencemag.org/content/354/6309/182).

The carbon budget framing might seem like a radical socio-political construct but it is in fact the best depiction of the physical reality of climate change. Cumulative emissions dictate the mitigation outcome — there is absolutely no doubt about this as the Intergovernmental Panel on Climate Change has shown.

The relationship between temperature change and cumulative CO2 emissions (in GtCO2) from 1870 to the year 2100. (IPCC 2014 Synthesis Report).

It is indeed the fact that many applications of fossil energy are growing exponentially that is the problem for climate stabilisationAir travel, road freight, shipping. Exponential global growth. Based on sound understanding of the physical reality, their fossil carbon use should be declining exponentially.

Three years to safeguard our climate (Figueres at al, 2017 http://go.nature.com/2t1gwUD).

All of this is sadly true and supremely distressing. Emissions from fossil fuels and land use change are 60% higher than they were in 1990 when scientists established most of what has been shown above with high certainty. Only the resolution of understanding has increased along with worsening climate impacts.

F/ Honesty

Finding out the reality of this situation is a profound experience. It is a state shift in human cognition, comparable to expansion of internet and global connectivity.

What I argue as citizen is to stop lying to ourselves. We have to obey the ancient laws of nature. No amount of economic growth, green shift, denial or activism can negotiate with physical constraints of the Earth System.

Our energy system will never be able to transform fast enough to meet the Paris Agreement stabilisation target without mad assumptions of building a carbon draw down device on this planet three times the size of the current oil industry, capable of sequestering greenhouse gases from ambient air on the order of what the natural sinks like the world ocean and the land biosphere are currently doing.

Roughly 10% of us generate almost as much greenhouse gas emissions from our lifestyle as the rest of the people on this planet. Finnish household consumption added to territorial emissions at >15 tons CO2 equivalent per capita will breach the global carbon budget for lower stabilisation targets within a decade. This is a pragmatic, but also a moral issue. Nobody can escape it, no matter how much one tries.

Finnish emissions reductions and negative emissions to meet Paris Agreement framing (Climate Analytics, 2016.)

We have to transform our diets, mobility systems, energy production and conspicuous consumption within a decade to limit risks of profound magnitude. The first decade should cut all of our carbon pollution in half. The next one should halve the portion left and so on. We have to put in policies which enchance natural sinks and research artificial new sinks.

This is not an obligation just to protect future generations, poor people or animals anymore. It is a threat to huge amounts of people living in the present moment on this finite planet in our vast universe.

We have to push through this mentally, keeping focus on what there is to be done with resolute purpose against nearly impossible odds. We have to be honest to ourselves, respectful of others and lead by example in everything we do.

Everybody can enter this space with relatively little sacrifice. It might be very painful in the beginning but truth is, after all, one of the most precious things this world has to offer.

Do what comes naturally, but always remember three things: how immediate this is, what kind of rates it is progressing at and what the scale of change needed must be in order to limit risk.





The era of gnashing teeth

6 02 2017

Since Trump’s election to the Oval Office, there has been an unbelievable amount of teeth gnashing going on all over the internet….. HOW could it possibly have come to this..?

To me, the answer is as clear as a bell. People all over the world can sense that everything ‘is turning to shit’, if you pardon my fluent French. The economies of the world are faltering (in real sense, not GDP money throughput), unemployment is high, manipulated to lower figures with creative accounting, the climate is falling apart causing food shortages in Europe, and the Middle East appears as a seething hot bed of war and terrorism.

The problem lies in the fact nobody knows why this is happening, because they have been conned for years by governments everywhere telling them everything is fine, we just have to ‘return to growth’.

Trump convinces enough Americans to vote for him so he can make America great again, because neither he nor his voters have the faintest idea America is actually on the cusp of collapse.

In France, Marine Le Pen wants to make France strong again……. and just like in America, this resonates with the electorate who now look like they may make her the country’s first woman President, and the first from the extreme right.

Here in Australia, we have a similar rise from the right, with Pauline Hanson and her one nation party making scary inroads into popularity rating. A recent article in the Sydney Morning Herald states:

In the aftermath of Mr Trump’s US election victory, where he strongly advocated reviving that nation’s manufacturing industry, nearly 83 per cent of surveyed Australian said they strongly agreed (42 per cent) or agreed (40.5 per cent) with the notion we are too reliant on foreign imports. Only 6 per cent disagreed.

Support for an expansion of Australia’s manufacturing sector was robust regardless of age, gender, income or locality.

This unsurprising finding comes from the Political Persona Project, a comprehensive attempt to profile different types of Australians based on their lifestyles, social values and politics. Fairfax Media in collaboration with the Australian National University and Netherlands-based political research enterprise Kieskompas conducted the project which revealed there are seven types of Australians, representing seven dominant patterns of thinking in Australian society.

Manufacturing has been declining since the 1970’s, which coincides with the USA’s Peak Oil, in case no one noticed….. then, one in four Australian workers were employed in the sector. This downturn has gathered pace in recent years with over 200,000 manufacturing jobs lost between 2008 and 2015. But no mention of dropping net energy, or an energy cliff. The manufacturing sector now accounts for only about one in 13 Australian workers. The decline means Australia is relying more on foreign producers to supply manufactured goods……… not to mention we have to import over 90% of our liquid fuel requirements, with likely no more than 3 or 4 years before this turns to 100%.

Underpinning the nostalgia for manufacturing was a strong feeling of having been left out of the new economy, said Carol Johnson, Professor of Politics and International Studies at the University of Adelaide.

Might this have anything to do with the fact that since the Thatcher/Reagan era, the economy was converted from an energy based one to a money based version…..?

“Manufacturing still matters to the economy and Australians know it,” he said.

“The public’s gut instinct is absolutely right.”

How much more wrong could they actually be……..?





Forget 1984…. 2020 is the apocalypse year

26 01 2017

The crescendo of news pointing to 2020 as the date to watch is growing apace…. it won’t be the year collapse happens, because collapse is a process, not an event; but it will definitely be the year this process starts to become obvious. To people other than followers of this blog at least…!

RIYADH, Saudi ArabiaAccording to the International Monetary Fund, Saudi Arabia’s economy is in danger of collapse as oil prices grow increasingly unstable.

The warning appeared in the “Regional Economic Outlook” for the Middle East and Central Asia published on Oct. 15, an annual report published by IMF economists. Adam Leyland, writing on Oct. 23 for The Independent, explained the grim prognosis for Saudi’s economy, which is almost completely dependent on fossil fuels:

“[T]he IMF said that the kingdom will suffer a negative 21.6 per cent ‘General Government Overall Fiscal Balance’ in 2015 and a 19.4 per cent negative balance in 2016, a massive increase from only -3.4 per cent in 2014.

Saudi Arabia currently has $654.5 billion in foreign reserves, but the cash is disappearing quickly.

The Saudi Arabian Monetary Agency has withdrawn $70 billion in funds managed by overseas financial institutions, and has lost almost $73 billion since oil prices slumped, according to Al-Jazeera. Saudi Arabia generates 90 per cent of its income from oil.”

AND……..

Tax-free living will soon be a thing of the past for Saudis after its cabinet on Monday approved an IMF-backed value-added tax to be imposed across the Gulf following an oil slump.

A 5% levy will apply to certain goods following an agreement with the six-member Gulf Cooperation Council in June last year.

Residents of the energy-rich region had long enjoyed a tax-free and heavily subsidised existence but the collapse in crude prices since 2014 sparked cutbacks and a search for new revenue.

Author Dr Nafeez Ahmed, a Visiting Fellow at Anglia Ruskin University’s Global Sustainability Institute, is making even more waves today, saying………:

“Syria and Yemen demonstrate how climate and energy crises work together to undermine state power and fuel terrorism. 

“Climate-induced droughts ravage agriculture, swell the ranks of the unemployed and destroy livelihoods.  Domestic oil depletion undercuts state revenues, weakening the capacity to sustain domestic subsidies for fuel and food.  As the state is unable to cope with the needs of an increasingly impoverished population, this leads to civil unrest and possibly radicalisation and terrorism. 

“These underlying processes are not isolated to Syria and Yemen.  Without a change of course, the danger is that eventually they will occur inside the US and Europe.”

Failing States, Collapsing Systems: BioPhysical Triggers of Political Violence, authored by Dr Nafeez Ahmed, published by Springer Briefs in Energy includes the following key points…:
  • Global net energy decline is the underlying cause of the decline in the rate of global economic growth.  In the short term, slow or absent growth in Europe and the US is complicit in voter discontent and the success of anti-establishment politicians. 
  • Europe is now a post-peak oil society, with its domestic oil production declining every year since 1999 by 6%.  Shale oil and gas is unlikely to offset this decline. 
  • Europe’s main sources of oil imports are in decline. Former Soviet Union producers, their production already in the negative, are likely to terminate exports by 2030.  Russia’s oil production is plateauing and likely to decline after 2030 at the latest. 
  • In the US, conventional oil has already peaked and is in sharp decline.  The shortfall is being made up by unconventional sources such as tight oil and shale gas, which are likely to peak by 2025. California will continue to experience extensive drought over the coming decades, permanently damaging US agriculture.
  • Between 2020 and 2035, the US and Mexico could experience unprecedented military tensions as the latter rapidly runs down its conventional oil reserves, which peaked in 2006. By 2020, its exports will revert to zero, decimating Mexican state revenues and potentially provoking state failure shortly thereafter.
  • After 2025, Iraq is unlikely to survive as a single state.  The country is experiencing worsening water scarcity, fueling an ongoing agricultural crisis, while its oil production is plateauing due to a combination of mounting costs of production and geopolitical factors.
  • Saudi Arabia will face a ‘perfect storm’ of energy, food and economic shocks most likely before 2030, and certainly within the next 20 years.
  • Egypt will begin to experience further outbreaks of civil unrest leading to escalating state failure after 2021.  Egypt will likely become a fully failed state after 2037.
  • India’s hopes to become a major economic player will falter due to looming food, water and energy crises.  India’s maximum potential domestic renewable energy capacity is insufficient to meet projected demand growth.
  • China’s total oil production is likely to peak in 2020.  Its rate of economic growth is expected to fall continuously in coming decades, while climate change will damage its domestic agriculture, forcing it to rely increasingly on expensive imports by 2022.

I wish Julian Simon could read this….. it seems all our limits to growth chickens are coming home to roost, and very soon now.