#209: Our Evanescent Culture And the Awesome Duty of Librarians

MuseLetter 209 / October 2009 by Richard Heinberg
Download printable PDF version here (PDF, 123 KB)

richardheinberg.com

1. Our Evanescent Culture
And the Awesome Duty of Librarians

How secure is our civilization’s accumulated knowledge?

It is a question that, in a fundamental sense, transcends many life-and-death concerns (threats of sickness, natural disaster, or military invasion) that prompt us collectively to spend fortunes on insurance, health care, and weaponry. We know that we each individually will die, though we are willing to go to great lengths to delay the event as long as possible. But we have an overarching shared interest that the world of ideas will go on without us: that our descendants will continue to compose music, invent tools, refine scientific knowledge, and write histories, extending into the indefinite future the cumulative, constantly evolving universe of signs, symbols, and skills that have enriched our lives. Cultural death—the passing of the wisdom, artistic creations, and practical knowledge of an entire people, painstakingly built up over many generations—is a loss almost too wrenching to contemplate.

Yet cultural death happens. The examples from history are legion. Anthropologists and archaeologists have identified well over 10,000 distinct human cultures, of which most have perished, many by absorption into one multi-ethnic civilization or another. Linguists have catalogued over 6,000 human languages; again, most are extinct or endangered, often for a similar reason—absorption of indigenous populations into multi-ethnic urban civilizations. But civilizations are also mortal: about 24 are known to have existed over the past 5,000 years, and again most are now dust.

Here is perhaps the most salient fact: when past civilizations were in the process of decline and collapse, they seem to have given insufficient thought to preserving the best of their achievements; indeed, the reverse often happened—libraries were burned, statues defaced, tombs looted. Archaeologists make heroic efforts to piece together the histories of these vanished empires, but they face enormous hurdles. Even the monumental and long-lasting civilization of ancient Egypt left behind more questions about itself than answers: we’re not even sure how much arithmetic and geography the average educated Egyptian knew.

It might seem that our own civilization’s achievements are less vulnerable. After all, the sheer weight, volume, and variety of contemporary cultural materials is unprecedented, including hundreds of millions of books, and more hundreds of millions of newspapers, magazines, paintings, sculptures, photographs, motion picture films, phonograph records, CDs, DVDs, websites, and on and on.

But all this volume and diversity may be deceiving. In some respects our culture is arguably more ephemeral than most others, and a surprisingly large proportion of our cultural materials is in danger of being swept away with astonishing speed, leaving virtually no trace—like a candle flame vanishing in a puff of wind.

If we want future generations to have the benefit of our achievements, we should start thinking more seriously about what to preserve, and how to preserve it.

The Ascendancy of Electronic Media

The survival struggle of America’s remaining newspapers is symptomatic of a trend that began in the 1970s, when computers began finding their way into businesses, schools, and homes. Today many of us get our news from the screen, not from the local print daily—and the proportion is growing. Major newspapers like the New York Times now have robust websites to accompany their print editions; but many industry forecasters say the print editions may not survive. Even before the beginning of the current recession, newspaper advertising revenues were declining steeply, and this year daily average circulation for 395 newspapers has fallen 7.1 percent to 34.4 million (from 37.1 million last year). In recent months the Rocky Mountain News and the Seattle Post-Intelligencer have ceased print news operations, and both the Chicago Sun Times and the Tribune have filed for bankruptcy.

The magazine and book trades are likewise evolving quickly under pressure from the Internet. Something like 50,000 new book titles still appear each year, and the book industry remains profitable in most years; however, according to Book Industry TRENDS 2009, many insiders think advances in digital publishing will force an unprecedented transformation of the industry, as ever fewer books are released in print versions and more in online or e-book formats—a trend already sweeping the textbook sector.

As with newspapers, most magazines now publish their content online, and some (like The Ecologist) have already gone all-electronic, jettisoning their print versions. Perhaps the most economically secure of print publications are also the most ephemeral in their content—People magazine and other fixtures of the supermarket checkout line.

The production processes for books, magazines, and newspapers—from writing to typesetting, printing, and distribution—are already thoroughly computerized.

Digitization has nearly completed its takeover of the motion picture, photography, and music industries. Just try to buy a package of Kodachrome film for your 35mm camera, or an analog recording of your favorite band’s latest songs. And with the explosive growth of I-tunes, YouTube (and other sources of streaming video), and online photo galleries, the Internet is gradually becoming the primary delivery medium for all these media.

Libraries are being forced to adapt, as they face enormous pressure to expand digital media at the expense of traditional media. For archivists, the emerging trend can be summarized in one word: digitization. Whether the original exists on paper, vinyl, or celluloid, its future lies in endless strings of ones and zeroes encoded on magnetic or laser-etched media, which will presumably preserve the original content while making it accessible to millions or billions of people today and in future generations.

At the same time, the very function of libraries is up for grabs: a presentation at the 2008 American Library Association conference reported in Library Journal suggested that libraries should be “more and more a place to do stuff, not just to find stuff. We need to stop being a grocery store and start being a kitchen.” As libraries become multi-purpose cultural centers (in many occasions serving as informal daytime homeless shelters), one of their primary practical functions is the provision of free public Internet access, with computer included. Yet these new demands and functions arrive at a time when funding for libraries is shrinking, as city and state budgets are downsized to fit evaporating tax revenues.

Preservation of digitized knowledge can become a problem simply because of obsolescence. Think of the billions of floppy disks manufactured and encoded during the years between 1980 and 2000: few of us still have working computers capable of retrieving the data on those disks. But this is hardly the worldwide information system’s point of greatest vulnerability.

Ultimately the entire project of digitized cultural preservation depends on one thing: electricity. As soon as the power goes off, access to the Internet goes down. CDs and DVDs become meaningless plastic disks; e-books become inscrutable and useless; digital archives become as illegible as cuneiform tablets—or more so. Altogether, digitization represents a huge bet on society’s ability to keep the lights on forever.

Without precious kilowatts, what would survive? Sculpture and architecture would persist. Previous generations of sound and visual media might be decipherable: old phonograph records could still be made to emit music, given a hand crank, needle, and megaphone, and silent films would be relatively easy to show. Books and collections of physical newspapers and magazines would fare reasonably well for a few decades, but deteriorating acid-laden paper threatens the survival of about 85 percent of books and nearly 100 percent of newspapers and magazines (ancient books written on parchment and acid-free paper could last many more centuries).

It’s ironic to think that the cave paintings of Lascaux may be far more durable than the photos from the Hubble space telescope.

Altogether, if the lights were to go out now, in just a century or two the vast majority of our recently recorded knowledge would be gone or inaccessible.

How Likely Is Blackout?

If we could be fully confident that a more-or-less permanent blackout is unthinkable, then this discussion would be a purely academic exercise. Where might such confidence come from?

Two questions could help us assess the magnitude of risk: What has to go wrong for the lights to go out?, and, What has to go right for them to stay on?

Here’s a short list of what would have to go wrong:

  • Failure to replace aging infrastructure. All knowledgeable observers agree that North America’s electricity grid system is overdue for a massive upgrade. According to electrical industry consultant Jason Makansi in his 2007 book Lights Out: The Electricity Crisis, the Global Economy, What it Means to You, “You almost can’t read a report on the U.S. electricity industry that doesn’t decry the state of the nation’s transmission grid.” The consequences of failure to invest tens of billions in new infrastructure will be more frequent and ever-longer blackouts and brownouts, leading perhaps to electricity rationing and a host of fairly dire economic impacts.
  • Unavailability of sufficient investment capital. Replacing infrastructure will require capital and political will. The current grid was built when energy was cheap, demand for electricity was lower, and the economy was growing at a rapid pace. Today investment capital is scarce, so the Federal government will have to pay for most of the grid upgrade. But the U.S. budget is already overextended in paying for bailout and stimulus packages, not to mention a couple of lingering wars. Until an unavoidable crisis arises, grid investment is likely to continue being moved back in the line of projects needing money.
  • Inability of the industry to maintain sufficient supplies of fossil fuels for electricity generation. In my new book Blackout, I discuss credible reports suggesting that U.S. coal production could peak in the years between 2020 and 2030 and decline afterward, with prices for the resource inevitably escalating. Natural gas seems plentiful for the time being, but continued exploration and production from new shale gas plays require high gas prices; further, problems with well productivity and low energy return on energy invested may render the new gas plays a mere flash in the pan.
  • Inability of alternatives to make up for fossil fuels. If higher-priced and soon-to-be scarce coal and gas could be easily, quickly, and cheaply replaced with other energy sources, fossil fuel supply limits would pose no problem. However, all of the available alternatives are problematic in one way or another. Yes, we could have more wind, solar, geothermal, and tidal power—but it will take time and enormous amounts of investment capital (see above), and most of these alternatives are intermittent energy sources. (Post Carbon Institute and International Forum on Globalization have prepared a lengthy, soon-to-be published report, Searching for a Miracle: “Net Energy” and the Fate of Industrial Societies, that examines 18 energy sources across 10 criteria, concluding that no combination of alternatives is likely to be able to replace fossil fuels within a reasonable time frame, and that therefore the world must rely on energy conservation as its primary strategy to deal with climate change as well as oil, coal, and gas depletion.)
  • Nuclear war. The electromagnetic pulse generated by the explosion of hydrogen bombs has the capacity to fry the grid, and hundreds of millions of electrical devices plugged into it, nearly instantaneously. For war planners, this possibility is not only real and credible, it is one of the greatest causes of worry with regard to national survival following any nuclear exchange.
  • Systemic vulnerabilities. We live in a world that is increasingly interconnected, and in which the pursuit of economic efficiency has reduced overall resilience. In such a system, problems in one area have a way of spilling over to create more problems elsewhere. For example, difficulties with oil supply will also eventually impact the electricity system, since spare parts and fuel (coal) for that system are made and/or transported with oil; similarly, problems with the electric grid will impact oil supply, since pumps and refineries require alternating current. Similarly, natural disasters, sabotage, social breakdown, and economic collapse could have knock-on effects (some too circuitous to predict) that would imperil continued, reliable delivery of electrical power.

What has to go right in order to avert grid breakdown? In many respects, this list could be a mirror image of the previous one:

  • Successful massive investments in grid upgrades. As discussed above, these are far from being assured.
  • A rapid, successful conversion to alternative energy sources. Again, as mentioned above, this is a long shot at best.
  • Averting of international conflicts that might go nuclear. So far, so good….
  • Averting of grid breakdowns due to natural disasters, etc., or rapid recovery from such problems. Society has been able to do this for decades: even in the cases of hurricanes, earthquakes, and wars, recovery was usually rapid. But increasingly crises are becoming synergetic.

The breakdown of electricity supply systems is not just a matter of theory. In about 100 nations around the globe, supplies of power are already problematic. Consider just one example: the nuclear-armed nation of Pakistan. Here is a quote from an article posted earlier this year on the website All Things Pakistan:

While rolling blackouts or load shedding as its locally known has always been a staple of daily life in Pakistan, the problem has become acute in the last couple of years. In the second half of December, the situation got so bad that WAPDA & KESC (power generation entities in Pakistan) resorted to draconian levels of load shedding. The power cuts during this time amounted to 20-22 hours a day in most small cities and even cities like Karachi were seeing 18+ hours of load shedding.

Pakistan is a poor, politically unstable country; surely nothing like this could ever happen in a wealthy industrial nation! Yet consider the situation in Britain: a recent article in the Telegraph was headlined, “Britain Heading Back to the Dark Ages: The UK is facing a tipping point over the next few years in its ability to generate enough power to satisfy an ever-increasing demand.” The article notes: “Over the next 10 years, one third of Britain’s power-generating capacity needs to be replaced with cleaner fuels, as a result of European laws on pollution. By 2025 the situation is expected to worsen….” Another article, this one from the BBC, is titled, “Britain Could Face Blackouts by 2016”; it quotes David MacKay, a researcher at Cambridge University and soon-to-be government energy advisor, as saying, “The scale of building required [to avert blackouts] is absolutely enormous.”

Generating electricity is not all that difficult in principle; people have been doing it since the 19th century. But generating power in large amounts, reliably, without both cheap energy inputs and secure availability of spare parts and investment capital for maintenance, poses an increasing challenge.

To be sure, here in the U.S. the lights are unlikely to go out all at once, and permanently, any time soon. The most likely scenario would see a gradual increase in rolling blackouts and other forms of power rationing, beginning in a few years, with some regions better off than others. After a while, unless governments and utilities could muster the needed effort, electricity might increasingly be seen as a luxury, even a curiosity. Reliable, ubiquitous, 24/7 power would become just a dim memory. If the challenges noted above are not addressed, many nations, including the U.S., could be in such straits by the third decade of the century. In the best instance, nations would transition as much as possible to renewable power, maintaining a functioning national grid or network of local distribution systems, but supplying rationed power in smaller amounts than is the currently the case. Digitized data would still be retrievable part of the time, by some people.

In the worst instance, economic and social crises, wars, fuel shortages, and engineering problems would rebound upon one another, creating a snowballing pattern of systemic failures leading to permanent, total blackout.

It may seem inconceivable that it would ever come to that. After all, electrical power means so much to us that we assume that officials in charge will do whatever is necessary to keep the electrons flowing. But, as Jared Diamond documents in his book Collapse, elites don’t always do the sensible thing even when the alternative to rational action is universal calamity.

Altogether, the assumption that long-term loss of power is unthinkable just doesn’t stand up to scrutiny. A permanent blackout scenario should exist as a contingency in our collective planning process.

Remember Websites?

Over the short term, if the power were to go out, loss of cultural knowledge would not be at the top of most people’s lists of concerns. They would worry about more mundane necessities like refrigeration, light, heat, and banking. It takes only a few moments of reflection (or an experience of living through a natural disaster) to appreciate how many of life’s daily necessities and niceties would be suddenly absent.

Of course, everyone did live without power until only a few generations ago, and hundreds of millions of people worldwide still manage in its absence. So it is certainly possible to carry on the essential aspects of human life sans functioning wall outlets. One could argue that, post-blackout, there would be a period of adaptation, during which people would reformulate society and simply get on with their business—living perhaps in a manner similar to their 19th century ancestors or the contemporary Amish.

The problem with that reassuring picture is that we have come to rely on electricity for so many things—and have so completely let go of knowledge, skills, and machinery that could enable us to live without electrical power—that the adaptive process might not go well. For the survivors, a 19th century way of life might not be attainable without decades or centuries spent re-acquiring knowledge and skills, and re-inventing machinery.

Imagine the scene, perhaps two decades from now. After years of gradually lengthening brownouts and blackouts, your town’s power has been down for days, and no one knows if or when it can be restored. No one is even sure if the blackout is statewide or nation-wide, because radio broadcasts have become more sporadic. The able members of your community band together to solve the mounting practical problems threatening your collective existence. You hold a meeting.

Someone brings up the problems of water delivery and wastewater treatment: the municipal facilities require power to supply these essential services. A woman in the back of the room speaks: “I once read about how you can purify water with a ceramic pot, some sand, and charcoal. It’s on a website….” Her voice trails off. There are no more websites.

The conversation turns to food. Now that the supermarkets are closed (no functioning lights or cash registers) and emptied by looters, it’s obviously a good idea to encourage backyard and community gardening. But where should townspeople get their seeds? A middle-aged gentleman pipes up: “There’s this great mail-order seed company—just go online….” He suddenly looks confused and sits down. “Online” is a world that no longer exists.

Is There Something We Should Be Doing?

There is a message here for leaders at all levels of government and business—obviously so for emergency response organizations. But I’ve singled out librarians in this essay because they may bear the gravest responsibility of all in preparing for the possible end of electric civilization.

Without widely available practical information, recovery from a final blackout would be difficult in the extreme. Therefore it is important that the kinds of information that people would need are identified, and that the information is preserved in such a way that it will be accessible under extreme circumstances, and to folks in widely scattered places.

Of course, librarians can never bear sole responsibility for cultural preservation; it takes a village, as Hillary Clinton once proclaimed in another context. Books are clearly essential to cultural survival, but they are just inert objects in the absence of people who can read them; we also need skills-based education to keep alive both the practical and the performing arts. What good is a set of parts to the late Beethoven string quartets—arguably the greatest music our species has ever produced—if there’s no one around who can play the violin, viola, or cello well enough to make sense of them? And what good would a written description of horse-plowing do to a post-industrial farmer without the opportunity to learn hands-on from someone with experience?

Nevertheless, for librarians the message could not be clearer: Don’t let books die. It’s understandable that librarians spend much effort trying to keep up with the digital revolution in information storage and retrieval: their main duty is to serve their community as it is, not a community that existed decades ago or one that may exist decades hence. Yet the thought that they may be making the materials they are trying to preserve ever more vulnerable to loss should be cause for pause.

There is a task that needs doing: the conservation of essential cultural knowledge in non-digital form. This task will require the sorting and evaluation of information for its usefulness to cultural survival—triage, if you will—as well as its preservation. It may be unrealistic to expect librarians to take on this responsibility, given their existing mandate and lack of resources—but who else will do it? Librarians catalog, preserve, and make available accumulated cultural materials, especially those in written form. That’s their job. What profession is better suited to accept this charge?

* * *

The contemplation of electric civilization’s collapse can’t help but provoke philosophical musings. Perhaps cultural death is a necessary component of evolution—as is the death of individual organisms. In any case, no one can prevent culture from changing, and many aspects of our present culture arguably deserve to disappear (we each probably carry our own list around in our head of what kinds of music, advertising messages, and television shows we think the world could do without). Assuming that humans survive the current century—by no means a sure thing—another culture will arise sooner or later to replace our current electric civilization. Its co-creators will inevitably use whatever skills and notions are at hand to cobble it together (just as the inhabitants of Europe in the Middle Ages and the Renaissance drew upon cultural flotsam from the Roman Empire as well as influences from the Arab world), and it will gradually assume a life of its own. Still, we must ask: What cultural ingredients might we want to pass along to our descendants? What cultural achievements would we want to be remembered by?

Civilization has come at a price. Since the age of Sumer cities have been terrible for the environment, leading to deforestation, loss of topsoil, and reduced biodiversity. There have been human costs as well, in the forms of economic inequality (which hardly existed in pre-state societies) and loss of personal autonomy. These costs have grown to unprecedented levels with the advent of industrialism—civilization on crack—and have been borne not by civilization’s beneficiaries, but primarily by other species and people in poor nations and cultures. But nearly all of us who are aware of these costs like to think of this bargain-with-the-devil as having some purpose greater than a temporary increase in creature comforts, safety, and security for a minority within society. The full-time division of labor that is the hallmark of civilization has made possible science—with its enlightening revelations about everything from human origins to the composition of the cosmos. The arts and philosophy have developed to degrees of sophistication and sublimity that escape the descriptive capacity of words.

Yet so much of what we have accomplished, especially in the last few decades, currently requires for its survival the perpetuation and growth of energy production and consumption infrastructure—which exact a continued, escalating environmental and human toll. At some point, this all has to stop, or at least wind down to some more sustainable scale of pillage.

But if it does, and in the process we lose the best of what we have achieved, will it all have been for nothing?

2. Is the Global Oil Tank Half-Full, Is It Half-Empty
 …or Are We Running on Fumes?

In his article in the New York Times September 24, “Oil Industry Sets a Brisk Pace of New Discoveries”, staff reporter Jad Mouawad cites oil discoveries totaling ten billion barrels for the first half of 2009. The Tupi field in the Gulf of Mexico alone accounts for four billion barrels of crude that may eventually find its way into the world oil system. Indeed, this year has seen discovery results that could end up being the best since 2000. But, the article notes, the new oil was expensive to find, it will be expensive to extract, and both exploration and production are only possible because of high levels of investment and sophisticated, expensive new technologies.

To justify the needed level of effort, the oil industry requires prices in excess of $60 per barrel, according to Mouawad; otherwise, the new projects will turn out to be money-losers. Some analysts believe the magic break-even number is closer to $70. In any case, the figure is much higher than was required only a few years ago, and still-higher prices may be necessary to make exploration and production profitable for future projects—prices perhaps close to $80.

According to Mouawad, “While recent years have featured speculation about a coming peak and subsequent decline in oil production, people in the industry say there is still plenty of oil in the ground, especially beneath the ocean floor, even if finding and extracting it is becoming harder.” So the new discoveries presumably indicate that peak oil has been delayed, and that our concerns about the event have been misplaced.

Yet this would be a strange conclusion to draw from the facts cited, for two reasons.

First: The ten billion barrels of new discoveries reported so far do initially sound encouraging: if the second half of 2009 is as productive, that means a total of 20 billion barrels of new oil will eventually be available to consumers as a result of discoveries this year. But how much oil does the world use annually? In recent years, that amount has hovered within the range of 29-31 billion barrels. Therefore (assuming continued good results throughout 2009), in its most successful recent year of exploration efforts, the oil industry will have found only two-thirds of the amount it extracted from previously discovered oilfields.

When the “ten billion barrels” figure is framed this way, its “gee whiz” shimmer quickly fades. (Yes, the article discusses the phenomenon of “reserve growth,” which is supposed to render the pace of new discoveries less important—but that red herring has been exposed plenty of times, including here.) The Times article hints that 2009’s high discovery rate may be the beginning of a new trend, so that we may see even better rates in future years; but remember, that hypothetical outcome hinges on a crucial factor—increasing investment in exploration and production—which leads us to a second critical thought.

The staggering levels of investment that enabled drilling in miles of ocean water, so as to achieve the 2009 finds, were occasioned by historic petroleum price run-ups from 2004 to 2008—with prices eventually spiking high enough to cripple the auto industry, the airlines, and global trade. As petroleum prices climbed ever higher, oil companies saw sense in drilling test wells in risky, inhospitable places. But in recent decades oil price spikes have repeatedly triggered recessions. And clearly, as we all discovered rather forcibly last year, the global economy cannot sustain an oil price of $147 a barrel: as the economy crashed in the latter months of 2008, so did oil demand and oil prices (which hit a low in December-January near $30).

So, what is a sustainable price? A review of recent economic history yields the observation that when petroleum sells above about $80 a barrel (in inflation-adjusted terms) the economy begins to stall. Oil industry wags have begun to speak of a “Goldilocks” price range of $60 to $80 a barrel (not too high, not too low—just right!) as the prerequisite for economic recovery (For OPEC, Current Oil Price Is Just Right). If prices are higher, the economy sputters, reducing oil demand and subsequently seriously undermining prices; if they drift lower, not enough investment will go toward exploration and production, so that oil shortages and price spikes will become inevitable a few years hence (indeed, since the oil price crash of late 2008 over $150 billion of investments in new oil projects have been cancelled). If the market can keep prices reliably within that charmed $60 to $80 range, all will be well. Too bad that petroleum prices have grown extremely volatile in recent years: we must hope and pray that trend is over (though there’s no apparent reason to assume that it is).

Let me summarize: the industry needs oil prices that are both stable and near economy-killing levels in order to justify investments necessary to possibly replace depleting reserves and overcome declining production in existing oilfields (I say “possibly” because we have insufficient evidence as yet to conclusively show that new discoveries enabled by expensive new exploration and production technologies can offset declines in the world’s aging giant oilfields).

Should this picture lead the viewer to come away with reassured thoughts of “No worries, happy motoring?” Or does this look more like a portrait of peak oil?

Several commentators (including analysts with financial services company Raymond James Associates and Macquarie, the Australian-headquartered investment bank) have concluded from recent petroleum statistics that global oil production peaked in 2008. Macquarie is saying that world production capacity is peaking this year, which is a nuanced way of saying the same thing, since currently production is constrained more by depressed demand than by immediate shortfalls in supply; in effect both organizations assert that the world will never see higher rates of extraction than the so-far record level of July 2008.

I see nothing in the recent discovery data that should call that conclusion into doubt.

September MuseLetter

Due to unforeseen licensing issues I am not able to publish the Museletter which I had ready for September. I hope to be able to return to normal service in October. In the meantime my latest commentary has been published here on postcarbon.org.

-Richard

#208: Temporary Recession or the End of Growth?

MuseLetter 208 / August 2009 by Richard Heinberg
Download printable PDF version here (PDF, 127 KB)

richardheinberg.com

Everyone agrees: our economy is sick. The inescapable symptoms include declines in consumer spending and consumer confidence, together with a contraction of international trade and available credit. Add a collapse in real estate values and carnage in the automotive and airline industries and the picture looks grim indeed.

But why are both the U.S. economy and the larger global economy ailing? Among the mainstream media, world leaders, and America’s economists-in-chief (Treasury Secretary Geithner and Federal Reserve Chairman Bernanke) there is near-unanimity of opinion: these recent troubles are primarily due to a combination of bad real estate loans and poor regulation of financial derivatives.

This is the Conventional Diagnosis. If it is correct, then the treatment for our economic malady might logically include heavy doses of bailout money for beleaguered financial institutions, mortgage lenders, and car companies; better regulation of derivatives and futures markets; and stimulus programs to jumpstart consumer spending.

But what if this diagnosis is fundamentally flawed? The metaphor needs no belaboring: we all know that tragedy can result from a doctor’s misreading of symptoms, mistaking one disease for another.

Something similar holds for our national and global economic infirmity. If we don’t understand why the world’s industrial and financial metabolism is seizing up, we are unlikely to apply the right medicine and could end up making matters much worse than they would otherwise be.

To be sure: the Conventional Diagnosis is clearly at least partly right. The causal connections between subprime mortgage loans and the crises at Fannie Mae, Freddie Mac, and Lehman Brothers have been thoroughly explored and are well known. Clearly, over the past few years, speculative bubbles in real estate and the financial industry were blown up to colossal dimensions, and their bursting was inevitable. It is hard to disagree with the words of Australian Prime Minister Kevin Rudd, in his July 25 essay in the Sydney Morning Herald: “The roots of the crisis lie in the preceding decade of excess. In it the world enjoyed an extraordinary boom…However, as we later learnt, the global boom was built in large part…on a house of cards. First, in many Western countries the boom was created on a pile of debt held by consumers, corporations and some governments. As the global financier George Soros put it: ‘For 25 years [the West] has been consuming more than we have been producing…living beyond our means.'” (1)

But is this as far as we need look to get to the root of the continuing global economic meltdown?

A case can be made that dire events having to do with real estate, the derivatives markets, and the auto and airline industries were themselves merely symptoms of an even deeper, systemic dysfunction that spells the end of economic growth as we have known it.

In short, I am suggesting an Alternative Diagnosis. This explanation for the economic crisis is not for the faint of heart because, if correct, it implies that the patient is far sicker than even the most pessimistic economists are telling us. But if it is correct, then by ignoring it we risk even greater peril.

Economic Growth, The Financial Crisis, and Peak Oil

For several years, a swelling subculture of commentators (which includes the present author) has been forecasting a financial crash, basing this prognosis on the assessment that global oil production was about to peak. (2) Our reasoning went like this:

Continual increases in population and consumption cannot continue forever on a finite planet. This is an axiomatic observation with which everyone familiar with the mathematics of compounded arithmetic growth must agree, even if they hedge their agreement with vague references to “substitutability” and “demographic transitions.” (3)

This axiomatic limit to growth means that the rapid expansion in both population and per-capita consumption of resources that has occurred over the past century or two must cease at some particular time. But when is this likely to occur?

The unfairly maligned Limits to Growth studies, published first in 1972 with periodic updates since, have attempted to answer the question with analysis of resource availability and depletion, and multiple scenarios for future population growth and consumption rates. The most pessimistic scenario in 1972 suggested an end of world economic growth around 2015. (4)

But there may be a simpler way of forecasting growth’s demise.

Energy is the ultimate enabler of growth (again, this is axiomatic: physics and biology both tell us that without energy nothing happens). Industrial expansion throughout the past two centuries has in every instance been based on increased energy consumption.(5) More specifically, industrialism has been inextricably tied to the availability and consumption of cheap energy from coal and oil (and more recently, natural gas). However, fossil fuels are by their very nature depleting, non-renewable resources. Therefore (according to the Peak Oil thesis), the eventual inability to continue increasing supplies of cheap fossil energy will likely lead to a cessation of economic growth in general, unless alternative energy sources and efficiency of energy use can be deployed rapidly and to a sufficient degree. (6)

Of the three conventional fossil fuels, oil is arguably the most economically vital, since it supplies 95 percent of all transport energy. Further, petroleum is the fuel with which we are likely to encounter supply problems soonest, because global petroleum discoveries have been declining for decades, and most oil producing countries are already seeing production declines. (7)

So, by this logic, the end of economic growth (as conventionally defined) is inevitable, and Peak Oil is the likely trigger.

Why would Peak Oil lead not just to problems for the transport industry, but a more general economic and financial crisis? During the past century growth has become institutionalized in the very sinews of our economic system. Every city and business wants to grow. This is understandable merely in terms of human nature: nearly everyone wants a competitive advantage over someone else, and growth provides the opportunity to achieve it. But there is also a financial survival motive at work: without growth, businesses and governments are unable to service their debt. And debt has become endemic to the industrial system. During the past couple of decades, the financial services industry has grown faster than any other sector of the American economy, even outpacing the rise in health care expenditures, accounting for a third of all growth in the U.S. economy. From 1990 to the present, the ratio of debt-to-GDP expanded from 165 percent to over 350 percent. In essence, the present welfare of the economy rests on debt, and the collateral for that debt consists of a wager that next year’s levels of production and consumption will be higher than this year’s.

Given that growth cannot continue on a finite planet, this wager, and its embodiment in the institutions of finance, can be said to constitute history’s greatest Ponzi scheme. We have justified present borrowing with the irrational belief that perpetual growth is possible, necessary, and inevitable. In effect we have borrowed from future generations so that we could gamble away their capital today.

Until recently, the Peak Oil argument has been framed as a forecast: the inevitable decline in world petroleum production, whenever it occurs, will kill growth. But here is where forecast becomes diagnosis: during the period from 2005 to 2008, energy stopped growing and oil prices rose to record levels. By July of 2008, the price of a barrel of oil was nudging close to $150—half again higher than any previous petroleum price in inflation-adjusted terms—and the global economy was beginning to topple. The auto and airline industries shuddered; ordinary consumers had trouble buying gasoline for their commute to work while still paying their mortgages. Consumer spending began to decline. By September the economic crisis was also a financial crisis, as banks trembled and imploded. (8)

Given how much is at stake, it is important to evaluate the two diagnoses on the basis of facts, not preconceptions.

It is unnecessary to examine evidence supporting or refuting the Conventional Diagnosis, because its validity is not in doubt—as a partial explanation for what is occurring. The question is whether it is a sufficient explanation, and hence an adequate basis for designing a successful response.

What’s the evidence favoring the Alternative? A good place to begin is with a recent paper by economist James Hamilton of the University of California, San Diego, titled “Causes and Consequences of the Oil Shock of 2007-08,” which discusses oil prices and economic impacts with clarity, logic, and numbers, explaining how and why the economic crash is related to the oil price shock of 2008. (9)

Hamilton starts by citing previous studies showing a tight correlation between oil price spikes and recessions. On the basis of this correlation, every attentive economist should have forecast a steep recession for 2008. “Indeed,” writes Hamilton, “the relation could account for the entire downturn of 2007-08…If one could have known in advance what happened to oil prices during 2007-08, and if one had used the historically estimated relation [between price rise and economic impact]…one would have been able to predict the level of real GDP for both of 2008:Q3 and 2008:Q4 quite accurately.”

Again, this is not to ignore the role of the financial and real estate sectors in the ongoing global economic meltdown. But in the Alternative Diagnosis the collapse of the housing and derivatives markets is seen as amplifying a signal ultimately emanating from a failure to increase the rate of supply of depleting resources. Hamilton again: “At a minimum it is clear that something other than housing deteriorated to turn slow growth into a recession. That something, in my mind, includes the collapse in automobile purchases, slowdown in overall consumption spending, and deteriorating consumer sentiment, in which the oil shock was indisputably a contributing factor.”

Moreover, Hamilton notes that there was “an interaction effect between the oil shock and the problems in housing.” That is, in many metropolitan areas, house prices in 2007 were still rising in the zip codes closest to urban centers but already falling fast in zip codes where commutes were long. (10)

Why Did the Oil Price Spike?

Those who espouse the Conventional Diagnosis for our ongoing economic collapse might agree that there was some element of causal correlation between the oil price spike and the recession, but they would deny that the price spike itself had anything to do with resource limits, because (they say) it was caused mostly by speculation in the oil futures market, and had little to do with fundamentals of supply and demand.

In this, the Conventional Diagnosis once again has some basis in reality. Speculation in oil futures during the period in question almost certainly helped drive oil prices higher than was justified by fundamentals. But why were investors buying oil futures? Was the mania for oil contracts just another bubble, like the dot.com stock frenzy of the late ’90s or the real estate boom of 2003 to 2006?

During the period from 2005 to mid-2008, demand for oil was growing, especially in China (which went from being self-sufficient in oil in 1995 to being the world’s second-foremost importer, after the U.S., by 2006). But the global supply of oil was essentially stagnant: monthly production figures for crude oil bounced around within a fairly narrow band between 72 and 75 million barrels per day. As prices rose, production figures barely budged in response. There was every indication that all oil producers were pumping flat-out: even the Saudis appeared to be rushing to capitalize on the price bonanza.

Thus a good argument can be made that speculation in oil futures was merely magnifying price moves that were inevitable on the basis of the fundamentals of supply and demand. James Hamilton (in his publication previously cited) puts it this way: “With hindsight, it is hard to deny that the price rose too high in July 2008, and that this miscalculation was influenced in part by the flow of investment dollars into commodity futures contracts. It is worth emphasizing, however, that the two key ingredients needed to make such a story coherent—a low price elasticity of demand, and the failure of physical production to increase—are the same key elements of a fundamentals-based explanation of the same phenomenon. I therefore conclude that these two factors, rather than speculation per se, should be construed as the primary cause of the oil shock of 2007-08.”

Aftermath of the Peak

There is also controversy over to what degree troubles in the automobile, trucking, and airline industries should be attributed to the oil price spike or the economic crash. Of course, if the Alternative Diagnosis is correct, the latter two events are causally related in any case. However, it may be helpful to review the situation.

Everyone knows that GM and Chrysler went bankrupt this year because U.S. car sales cratered. The current forecast is for sales of about 10.3 million vehicles in the U.S. for 2009, down from last year’s 13.2 million and 16.1 million in 2007. U.S. car sales have not been this low since the 1970s. Sales of light trucks, the most profitable vehicles, took the biggest hit during 2008, as fuel prices soared and car buyers avoided gas-guzzlers. It was at this point that the auto companies really began feeling the pain.

The airline industry’s ills are summarized in a recent GAO document: “After 2 years of profits, the U.S. passenger airline industry lost $4.3 billion in the first 3 quarters of 2008 [as jet fuel prices climbed]. Collectively, U.S. airlines reduced domestic capacity, as measured by the number of seats flown, by about 9 percent from the fourth quarter of 2007 to the fourth quarter of 2008…To reduce capacity, airlines reduced the overall number of active aircraft in their fleets by 18 percent…Airlines also collectively reduced their workforces by about 28,000, or nearly 7 percent, from the end of 2007 to the end of 2008…The contraction of the U.S. airline industry in 2008 reduced airport revenues, passengers’ access to the national aviation system, and revenues for the Trust Fund.”(11)

For the trucking industry, fuel accounts for nearly 40 percent of total operational costs. In 2007, as diesel prices rose, carriers began losing money and added fuel price surcharges; meanwhile the volume of freight began falling. After July 2008, as oil prices crashed, tonnage continued to decline. Overall, the cumulative decrease in loads for flatbed, tanker, and dry vans ranged between 15 percent and 20 percent just in the period from June to December 2008. (12)

This last set of statistics raises a couple of questions crucial to understanding the Alternative Diagnosis: Why, if global oil production had just peaked, did petroleum prices fall in the last five months of 2008? And, if oil prices were a major factor in the economic crisis, why didn’t the economy begin to turn around after the prices softened?

Why Did Oil Prices Fall?

And Why Didn’t Lower Oil Prices Lead to a Quick Recovery?

The Peak Oil thesis predicts that, as world oil production reaches its maximum level and begins to decline, the price of oil will rise dramatically. But it also forecasts a dramatic increase in the volatility of prices.

The argument goes as follows. As oil becomes scarce, its price will rise until it begins to undermine economic activity in general. Economic contraction will then result in substantially reduced demand for oil, which will in turn cause its price to fall temporarily. Then one of two things will happen: either (a) the economy will begin to recover, stoking renewed oil demand, leading again to high prices which will again undermine economic activity; or (b), if the economy does not quickly recover, petroleum production will gradually fall due to depletion until spare production capacity (created by lower demand) is wiped out, leading again to higher prices and even more economic contraction. In both cases, oil prices remain volatile and the economy contracts.

This scenario corresponds very closely with the reality that is unfolding, though it remains to be seen whether situation (a) or (b) will ensue.

Over the past three years, oil prices rose and fell more dramatically than would have been the case if it had not been for widespread speculation in oil futures. Nevertheless, the general direction of prices—way up, then way down, then part-way back up—is entirely consistent with the Peak Oil thesis and the Alternative Diagnosis.

Why has the economy not quickly recovered, given that oil prices are now only half what they were in July 2008? Again, Peak Oil is not the only cause of the current economic crisis. Enormous bubbles in the real estate and finance sectors constituted accidents waiting to happen, and the implosion of those bubbles has created a serious credit crisis (as well as solvency and looming currency crises) that will likely take several years to resolve even if energy supplies don’t pose a problem.

But now the potential for renewed high oil prices acts as a ceiling for economic recovery. Whenever the economy does appear to show renewed signs of life (as has happened in May-July this year, with stock values rebounding and the general pace of economic contraction slowing somewhat), oil prices will take off again as oil speculators anticipate a recovery of demand. Indeed, oil prices have rebounded from $30 in January to nearly $70 currently, provoking widespread concern that high energy prices could nip recovery in the bud.(14)

A barrel of oil from newly developed sources costs in the neighborhood of $60 to produce, now that all of the cheaper prospects have been exploited: finding new oilfields today usually means drilling under miles of ocean water, or in politically unstable nations where equipment and personnel are at high risk. (15) So as soon as consumers demand more oil, the price will have to stay noticeably above that figure in order to provide the incentive for producers to drill.

Volatile oil prices hurt on the upside, but they also hurt on the downside. The oil price collapse of August-December 2008, plus the worsening credit crisis, caused a dramatic contraction in oil industry investment, leading to the cancellation of about $150 billion worth of new oil production projects—whose potential productive capacity will be required to offset declines in existing oilfields if world oil production is to remain stable. (16) This means that even if demand remains low, production capacity will almost certainly decline to meet those demand levels, causing oil prices to rise again in real terms at some point, perhaps two or three years from now. Volatile petroleum prices also hurt the development of alternative energy, as was shown during the past few months when falling oil prices led to financial troubles for ethanol manufacturers. (17)

One way or another, growth will be highly problematic if not unachievable.

Big Picture Diagnosis: Continuing the Trail of Logic

At this point in the discussion many readers will be wondering why alternative energy sources and efficiency measures cannot be deployed to solve the Peak Oil crisis. After all, as petroleum becomes more expensive, ethanol, biodiesel, and electric cars all start to look more attractive both to producers and consumers. Won’t the magic of the market intervene to render oil shortages irrelevant to future growth?

It is impossible in the context of this discussion to provide a detailed explanation of why the market probably cannot solve the Peak Oil problem. Such an explanation requires a discussion of energy evaluation criteria, and an analysis of many individual energy alternatives on the basis of those criteria. I have offered brief overviews of this subject previously and a much longer one is in press. (18)

My summary conclusions in this regard are as follows.

About 85 percent of our current energy is derived from three primary sources—oil, natural gas, and coal—that are non-renewable, whose price is likely to trend sharply higher over the next years and decades leading to severe shortages, and whose environmental impacts are unacceptable. While these sources historically have had very high economic value, we cannot rely on them in the future; indeed, the longer the transition to alternative energy sources is delayed, the more difficult that transition will be unless some practical mix of alternative energy systems can be identified that will have superior economic and environmental characteristics.

But identifying such a mix is harder than one might initially think. Each energy source has highly specific characteristics. In fact, it has been the characteristics of our present energy sources (principally oil, coal, and natural gas) that have enabled the building of an urbanized society with high mobility, large population, and high economic growth rates. Surveying the available alternative energy sources for criteria such as energy density, environmental impacts, reliance on depleting raw materials, intermittency versus constancy of supply, and the percentage of energy returned on the energy invested in energy production, none currently appears capable of perpetuating this kind of society.

Moreover, national energy systems are expensive and slow to develop. Energy efficiency likewise requires investment, and further incremental investments in efficiency tend to yield diminishing returns over time, since it is impossible to perform work with zero energy input. Where is there the will or ability to muster sufficient investment capital for deployment of alternative energy sources and efficiency measures on the scale needed?

While there are many successful alternative energy production installations around the world (ranging from small home-scale photovoltaic systems to large “farms” of three-megawatt wind turbines), there are very few modern industrial nations that now get the bulk of their energy from sources other than oil, coal, and natural gas. One example is Sweden, which obtains most of its energy from nuclear and hydropower. Another is Iceland, which benefits from unusually large domestic geothermal resources not found in most other countries. Even for these two nations, the situation is complex: the construction of the infrastructure for their power plants mostly relied on fossil fuels for the mining of the ores and raw materials, for materials processing, for transportation, for the manufacturing of components, for the mining of uranium, for construction energy, and so on. Thus a meaningful energy transition away from fossil fuels is still a matter of theory and wishful thinking, not reality.

My conclusion from a careful survey of energy alternatives, then, is that there is little likelihood that either conventional fossil fuels or alternative energy sources can be counted on to provide the amount and quality of energy that will be needed to sustain economic growth—or even current levels of economic activity—during the remainder of this century. (19)

But the problem extends beyond oil and other fossil fuels: the world’s fresh water resources are strained to the point that billions of people may soon find themselves with only precarious access to water for drinking and irrigation. Biodiversity is declining rapidly. We are losing 24 billion tons of topsoil each year to erosion. And many economically significant minerals—from antimony to zinc—are depleting quickly, requiring the mining of ever lower-grade ores in ever more remote locations. Thus the Peak Oil crisis is really just the leading edge of a broader Peak Everything dilemma.

In essence, humanity faces an entirely predictable peril: our population has been growing dramatically for the past 200 years (expanding from under one billion to nearly seven billion), while our per-capita consumption of resources has also grown. For any species, this is virtually the definition of biological success. And yet all of this has taken place in the context of a finite planet with fixed stores of non-renewable resources (fossil fuels and minerals), a limited ability to regenerate renewable resources (forests, fish, fresh water, and topsoil), and a limited ability to absorb industrial wastes (including carbon dioxide). If we step back and look at the industrial period from a broad historical perspective that is informed by an appreciation of ecological limits, it is hard to avoid the conclusion that we are today living at the end of a relatively brief pulse—a 200-year rapid expansionary phase enabled by a temporary energy subsidy (in the form of cheap fossil fuels) that will inevitably be followed by an even more rapid and dramatic contraction as those fuels deplete.

The winding down of this historic growth-contraction pulse doesn’t necessarily mean the end of the world, but it does mean the end of a certain kind of economy. One way or another, humanity must return to a more normal pattern of existence characterized by reliance on immediate solar income (via crops, wind, or the direct conversion of sunlight to electricity) rather than stored ancient sunlight.

This is not to say that the remainder of the 21st century must consist of a collapse of industrialism, a die-off of most of the human population, and a return by the survivors to a way of life essentially identical to that of 16th century peasants or indigenous hunter-gatherers. It is possible instead to imagine acceptable and even inviting ways in which humanity could adapt to ecological limits while further developing cultural richness, scientific understanding, and quality of life (more of this below).

But however it is negotiated, the transition will spell an end to economic growth in the conventional sense. And that transition appears to have begun.

How Do We Know Which Diagnosis Is Correct?

If the patient is an individual human and the cause of distress is uncertain, more diagnostic tests can be prescribed. But to what sorts of blood tests, x-rays, and CAT scans can we subject the national or global economy?

In a sense, the tests have already been done. During the past few decades thousands of scientific surveys of natural resources, biodiversity, and ecosystems have showed increasing rates of depletion and decline. (20) The continuing increase in human population, pollution, and consumption are likewise well documented. This information formed the basis for the Limits to Growth studies, previously mentioned, which use computer modeling to show how current trends are likely play out—and most resulting scenarios show them leading to an end of economic growth and a collapse of industrial output some time in the early 21st century.

Why are the results of such diagnostic tests not universally accepted as a challenge to expectations of continued growth? Primarily because their conclusion runs counter to the beliefs and proclamations of most economists, who maintain that there are no practical limits to growth. They deny that resource constraints provide an eventual cap on production and consumption. And so their diagnostic efforts tend to ignore environmental factors in favor of easily measured internal features of the human economy such as money supply, consumer confidence, interest rates, and price indices.

Ecologist Charles Hall, among many others, has argued that the discipline of economics, as currently practiced, does not constitute a science, since it proceeds primarily on the basis of correlative logic rather than through the building of knowledge by a continuous, rigorous process of proposing and testing hypotheses. (21) While economics uses complex terminology and mathematics, as science does, its basic assertions about the world—such as the principle of infinite substitutability, which holds that for any resource that becomes scarce, the market will find a substitute—are not subjected to careful experimental examination. (It is worth noting that Hall and others have made the effort to lay the conceptual foundations for a new economics based on scientific principles and methods, which they call “biophysical economics.” (22)

Moreover, mainstream economists failed on the whole to foresee the current crash. There was no consistent or concerted effort on the part of Secretaries of the Treasury, Federal Reserve Chairmen, or “Nobel” prize-winning economists to warn policy makers or the general public that, sometime in the early 21st century, the global economy would begin to come apart at the seams. (23) One might think that this predictive failure—the inability to foresee so historically significant an event as the rapid contraction of nearly the entire global economy, entailing the failure of some of the world’s largest banks and manufacturing companies—would cause mainstream economists to stop and re-examine their fundamental premises. But there is little evidence to suggest that this is occurring.

At the risk of repetition: physical scientists from several disciplines have indeed foreseen an end to economic growth in the early 21st century, and have warned policy makers and the general public on many occasions.

Whom should we believe?

The specifics of the Alternative Diagnosis are falsifiable. If economic activity were to rebound above 2007 levels, or if oil production were to rise above the July 2008 high-water mark, then the attribution of the current economic crisis to resource-tied limits to growth may be considered at least partly disproven. However, even if these things were to occur, the underlying reasoning behind the Alternative Diagnosis might still be correct. If the world oil production peak is delayed until, let us say, 2015 or 2020, and if another—this time bottomless—global economic crash results then, the ultimate outcome will be essentially the same. But if, meanwhile, the Alternative Diagnosis were to be taken seriously and acted upon, the consequences of doing so would be beneficial: a decade would have been spent preparing for the event.

Could the Alternative Diagnosis be altogether wrong? That is, might conventional economists be right in thinking that growth can continue forever? It is often said that anything is possible, but some things are clearly much more possible than others. The perpetual growth of human population and consumption within the confines of a finite planet seems like a very long shot indeed, especially since warning signs are everywhere apparent that ecological limits are already being reached and surpassed. (24)

What Not to Do: Prescribe Punishingly Expensive Placebos

If the physical scientists who warn about limits to growth are right, confronting the global economic meltdown implies far more than merely getting the banks and mortgage lenders back on their feet. Indeed, in that case we face a fundamental change in our economy as significant as the advent of the industrial revolution. We are at a historic inflection point—the ending of decades of expansion and the beginning of an inevitable period of contraction that will continue until humanity is once again living within the limits of Earth’s regenerative systems.

But there are few signs that policy makers understand any of this. Their thinking appears to be shaped primarily by mainstream economists’ assurances that growth can and must continue into the indefinite future, and that the economic contraction the world is currently experiencing is only temporary–a problem that can and must be solved.

Still, the problem is not a minor one in the eyes of economists and policy makers. Consider the gargantuan size of the Treasury and Federal Reserve bailouts and stimulus packages that have been deployed in the possibly futile attempt to end contraction and restart growth. According to the special inspector general of the U.S. government’s Troubled Asset Relief Program (TARP), in remarks submitted to the House Committee on Oversight and Government Reform on July 21, $23.7 trillion have been committed in “total potential federal government support.” This is expensive medicine indeed. It takes a moment to even begin to comprehend the enormity of the figure. It represents about half of annual world GDP, and is over three times the total amount spent by the U.S. government, in inflation-adjusted dollars, on all wars combined, from 1776 to the present. It is nearly fifty times the cost of the New Deal.

Other nations, including Britain, China, and Germany have committed to paying for stimulus packages and bailouts that, while much smaller in absolute terms, represent an impressive (or should we say frightful?) share of national GDP.

If the Alternative Diagnosis is valid, none of this will work in the end, because existing financial institutions—with their basis in debt and interest and their requirements for constant expansion—cannot be made to function in a context where energy and resource constraints impose effective caps on manufacturing and transport.

Are the bailouts and stimulus packages working? Much evidence suggests that they are not, except in limited ways. In the U.S., unemployment continues to increase, while real estate values continue to fall. And most of the reputed “green shoots” in the economy so far sighted amount merely to an arguably temporary decline in the rate of contraction. For example, the home price index released July 28 of this year showed that in May, seasonally adjusted prices fell just 0.16 percent from the previous month. That represents an annual rate of decline of a little under 2 percent, which is a substantial improvement over the annualized rate of more than 20 percent that prevailed from September 2008 through March of 2009. Many commentators seized upon this news as a sign of an imminent turnaround. Nevertheless, new home sales are down from 1.4 million per year in 2005 to 350,000 per year today, and house prices are down 50 percent from the bubble peak and still declining in most places. Moreover, manufacturing is still shrinking, small businesses are in trouble, there are still significant danger signs on the horizon, including a new round of mortgage resets, a likely dive in commercial real estate values, and the looming reality that toxic assets at the center of the banking crisis have yet to be dealt with. (25)

President Obama has made the argument that bailouts are justified to stabilize the system long enough so that leaders can make fundamental changes to institutions and regulations, enabling the economy to then go forward healthier and more immune to similar crises in the future. But there is little to suggest that the kinds of systemic changes that are actually needed (ones that would enable the economy to function during a prolonged period of contraction) are under way or even contemplated. Meanwhile, as growth-based institutions are temporarily propped up, the ultimate scale of the damage is likely only to increase: when the inevitable collapse of those institutions does come, the consequences will likely be even worse because so much capital will have been squandered in attempting to salvage them.

In using up non-renewable resources like metals, minerals, and fossil fuels, we have stolen from future generations. Now in effect we are stealing from those generations the financial wherewithal that could have been used to build a bridge to a sustainable economy. The construction of a renewable energy infrastructure (including not only generating capacity, but distribution and storage infrastructure, as well as post-petroleum transport and agriculture systems) will require enormous investments and decades of work. Where will the investment capital come from if governments are already buried in debt? If we have committed nearly $24 trillion to propping up an old economy with no real survival prospects, what’s left with which to finance the new one?

If the current prescription for our economic malady is wrong-headed, the same is true of many proposed cures for our energy problems. According to the Conventional Diagnosis, today’s high oil prices are due to speculation; the cure must therefore lie in the tighter regulation of oil futures trading (which may be a good idea, though it doesn’t get to the heart of the problem), while providing more opportunities to oil companies to explore for domestic oil (even though the likely production rates from currently off-limits reserves would be relatively paltry, and would have a negligible effect on oil prices). In fact, though, investing further in fossil fuel energy systems (including “clean coal” technology) will yield declining returns, given that the highest quality resources have already been used up; meanwhile, doing so takes investment capital away from the development of renewable energy, which we will have to rely on increasingly as fossil fuels deplete. (26)

What is required but is still utterly lacking is a fundamental recognition that circumstances have changed: what worked decades ago will not work now.

What To Do: Adapt to the New Reality

If the Alternative Diagnosis is correct, there will be no easy fix for the current economic breakdown. Some illnesses are not curable; they require that we simply adapt and make the best of our new situation.

If humanity has indeed embarked upon the contraction phase of the industrial pulse, we should assume that ahead of us lie much lower average income levels (for nearly everyone in the wealthy nations, and for high wage earners in poorer nations); different employment opportunities (fewer jobs in sales, marketing, and finance; more in basic production); and more costly energy, transport, and food. Further, we should assume that key aspects of our economic system that are inextricably tied to the need for future growth will cease to work in this new context.

Rather than attempting to prop up banks and insurance companies with trillions in bailouts, it would probably be better simply to let them fail, however nasty the short-term consequences, since they will fail anyway sooner or later. The sooner they are replaced with institutions that serve essential functions within a contracting economy, the better off we will all be.

Meanwhile the thought-leaders in society, especially the President, must begin breaking the news—in understandable and measured ways—that growth isn’t returning and that the world has entered a new and unprecedented economic phase, but that we can all survive and thrive in this challenging transitional period if we apply ourselves and work together. At the heart of this general re-education must be a public and institutional acknowledgment of three basic rules of sustainability: growth in population cannot be sustained; the ongoing extraction of non-renewable resources cannot be sustained; and the use of renewable resources is sustainable only if it proceeds at rates below those of natural replenishment.

Without cheap energy, global trade cannot increase. This doesn’t mean that trade will disappear, only that economic incentives will inexorably shift as transport costs rise, favoring local production for local consumption. But this may be a nice way of putting it: if and when fuel shortages arise, fragile globe-spanning systems of provisioning could be disrupted, with dire effects for consumers cut off from sources of necessary products. Thus a high priority must be placed on the building of community resilience through the preferential local sourcing of necessities and the maintenance of larger regional inventories—especially of food and fuel. (28)

It currently takes an average of 8.5 calories of energy from oil and natural gas to produce each calorie of food energy. Without cheap fuel for agriculture, farm production will plummet and farmers will go bankrupt—unless proactive efforts are undertaken to reform agriculture to reduce its reliance on fossil fuels. (29)

Obviously, alternative energy sources and energy efficiency strategies must be high priorities, and must be subjects of intensive research using a carefully chosen spectrum of criteria. The best candidates will have to be funded robustly even while fossil fuels are still relatively cheap: the build-out time for the renewable energy infrastructure will inevitably be measured in decades and so we must begin the process now rather than waiting for market forces to lead the way.

In the face of credit and (potential) currency crises, new ways of financing such projects will be needed. Given that our current monetary and financial systems are founded on the need for growth, we will require new ways of creating money and new ways of issuing credit. Considerable thought has gone into finding solutions to this problem, and some communities are already experimenting with local capital co-ops, alternative currencies, and no-interest banks. (30)

With oil becoming increasingly expensive in real terms, we will need more efficient ways of getting people and goods around. Our first priority in this regard must be to reduce the need for transport with better urban planning and re-localized production systems. But where transport is needed, rail and light rail will probably be preferable to cars and trucks. (31)

We will also need a revolution in the built environment to minimize the need for heating, cooling, and artificial lighting in all our homes and public buildings. This revolution is already under way, but is currently moving far too slowly due to the inertia of established interests in the construction industry. (32)

These projects will need more than local credit and money; they will also require skilled workers. There will be a call not just for installers of solar panels and home insulation: millions of new food producers and builders of low-energy infrastructure will be needed as well. A broad range of new opportunities could open up to replace vanishing jobs in marketing and finance—if there is cheap training available at local community colleges.

It is worth noting that the $23.7 trillion recently committed for U.S. bailouts and loan guarantees represents about $80,000 for each man, woman, and child in America. A level of investment even a substantial fraction that size could pay for all needed job training while ensuring universal provision of basic necessities during the transition. What would we be getting for our money? A collective sense that, in a time of crisis, no one is being left behind. Without the feeling of cooperative buy-in that such a safety net would help engender, similar to what was achieved with the New Deal but on an even larger scale, economic contraction could devolve into a horrific fight over the scraps of the waning industrial period.

However contentious, the population question must be addressed. All problems that have to do with resources are harder to solve when there are more people needing those resources. The U.S. must encourage smaller families and must establish an immigration policy consistent with a no-growth population target. This has foreign policy implications: we must help other nations succeed with their own economic transitions so that their citizens do not need to emigrate to survive. (33)

If economic growth ceases to be an achievable goal, society will have to find better ways of measuring success. Economists must shift from assessing well-being with the blunt instrument of GDP, and begin paying more attention to indices of human and social capital in areas such as education, health, and cultural achievements. This redefinition of growth and progress has already begun in some quarters, but for the most part has yet to be taken up by governments. (34)

A case can be made that after all this is done the end result will be a more satisfying way of life for the vast majority of citizens—offering more of a sense of community, more of a connection with the natural world, more satisfying work, and a healthier environment. Studies have repeatedly shown that higher levels of consumption do not translate to elevated levels of satisfaction with life. (35) This means that if “progress” can be thought of in terms of happiness, rather than a constantly accelerating process of extracting raw materials and turning them into products that themselves quickly become waste, then progress can certainly continue. In any case, “selling” this enormous and unprecedented project to the general public will require emphasizing its benefits. Several organizations are already exploring the messaging and public relations aspects of the transition. (36) But those in charge need to understand that looking on the bright side doesn’t mean promising what can’t be delivered—such as a return to the days of growth and thoughtless consumption.

Can We? Will We?

It is important to state the implications of all this as plainly as possible. If the Alternative Diagnosis is correct, there will be no full economic “recovery”—not this year, or the next, or five or ten years from now. There may be temporary rebounds that take us back to some fraction of peak economic activity, but these will be only brief respites.

We have entered a new economic era in which the former rules no longer apply. Low interest rates and government spending no longer translate to incentives for borrowing and job production. Cheap energy won’t appear just because there is demand for it. Substitutes for essential resources will in most cases not be found. Over all, the economy will continue to shrink in fits and starts until it can be maintained by the energy and material resources that Earth can supply on ongoing basis.

This is of course very difficult news. It is analogous to being told by your physician that you have contracted a systemic, potentially fatal disease that cannot be cured, but only managed; and managing it means you must make profound lifestyle changes.

Some readers may note that climate change has not figured prominently in this discussion. It is clearly, after all, the worst environmental catastrophe in human history. Indeed, its consequences could be far worse than the mere destruction of national economies: hundreds of millions of people and millions of other species could be imperiled. The reason for the relatively limited discussion of climate here is that (assuming the Alternative Diagnosis is correct) it is not climate change that has proven to be the most immediate limit to economic growth, but resource depletion. However, while there is not as yet general agreement on the point, climate change itself and the needed steps to minimize it both constitute limits to growth, just as resource depletion does. Moreover, if we fail to successfully manage the inevitable process of economic contraction that will characterize the coming decades, there will be no hope of mounting an organized and coherent response to climate change—a response consisting of efforts both to reduce climate impacts and to adapt to them. It is important to note, though, that the measures advocated here (including the development of renewable energy sources and energy efficiency, a rapid reduction of reliance on fossil fuels in transport and agriculture, and the stabilization of population levels) are among the steps that will help most to reduce carbon emissions.

Is this essay likely to change the thinking and actions of policy makers? Unfortunately, that is unlikely. Their belief in the possibility and necessity of continued growth is pervasive, and the notion that growth may no longer be possible is unthinkable. But the Alternative Diagnosis must be a matter of record. This essay, composed by a mere journalist, in many ways represents the thinking of thousands of physical scientists working over the past several decades on issues having to do with population, resources, pollution, and biodiversity. Ignoring the diagnosis itself—whether as articulated here or as implied in tens of thousands of scientific papers—may waste our last chance to avert a complete collapse, not just of the economy, but of civility and organized human existence. It may risk a historic discontinuity with qualitative antecedents in the fall of the Roman and Mayan civilizations. (37) But there is no true precedent for what may be in store, because those earlier examples of collapse affected geographically bounded societies whose influence on their environments was also bounded. Today’s civilization is global, and its fate, Earth’s fate, and humanity’s fate are inextricably tied.

But even if policy makers continue to ignore warnings such as this, individuals and communities can take heed and begin the process of building resilience, and of detaching themselves from reliance on fossil fuels and institutions that are inextricably tied to the perpetual growth machine. We cannot sit passively by as world leaders squander opportunites to awaken and adapt to growth limits. We can make changes in our own lives, and we can join with our neighbors. And we can let policy makers know we disapprove of their allegiance to the status quo, but that there are other options.

Is it too late to begin a managed transition to a post-fossil fuel society? Perhaps. But we will not know unless we try. And if we are to make that effort, we must begin by acknowledging one simple, stark reality: growth as we have known it can no longer be our goal.

Notes

1. “Pain on the Road to Recovery”. (http://www.smh.com.au/national/pain-on-the-road-to-recovery-20090724-dw6q.html?page=-1).

2. Here, for example, are a few relevant excerpts from the present author’s book The Party’s Over: Oil, War and the Fate of Industrial Societies (Gabriola Island, BC: New Society, 2003): “Our current financial system was designed during a period of consistent growth in available energy, with its designers operating under the assumption that continued economic growth was both inevitable and desirable. This ideology of growth has become embodied in systemic financial structures requiring growth…Until now, this loose linkage between a financial system predicated upon the perpetual growth of the money supply, and an economy growing year by year because of an increasing availability of energy and other resources, has worked reasonably well—with a few notable exceptions, such as the Great Depression… However, [when global oil production peaks] the financial system may not respond so rationally…This might predictably trigger a financial crisis…”

3. See Albert Bartlett, “Arithmetic, Population and Energy” (lecture transcript). (http//www.globalpublicmedia.com/transcripts/645).

4. Donella H. Meadows, Dennis L. Meadows, Jorgen Randers, and William W. Behrens III, Limits to Growth (New York: Universe Books, 1972); Donella H. Meadows, Dennis L. Meadows, and Jorgen Randers, Beyond the Limits (Post Mills, VT: Chelsea Green, 1992); Donella H. Meadows, Dennis L. Meadows, and Jorgen Randers, Limits to Growth: The 30 Year Update (White River Junction, VT: Chelsea Green, 2003). See also the recent CSIRO study, “A Comparison of the Limits to Growth with Thirty Years of Reality” (2009) (http://www.csiro.au/files/files/plje.pdf).

5. See, for example, Robert U. Ayers and Benjamin Warr, The Economic Growth Engine: How Energy and Work Drive Material Prosperity (Cambridge, UK: Edward Elgar Publishing, 2005); and Robert Barro and Xavier Sala-i-Martin, Economic Growth (Cambridge, MA: MIT Press, 2003) (http://www.bookrags.com/research/economic-growth-and-energy-consumpt-mee-01/).

6. See Richard Heinberg, The Party’s Over: Oil, War and the Fate of Industrial Societies (2003, 2005); Powerdown: Options and Actions for a PostCarbon World (2004); and The Oil Depletion Protocol: A Plan to Avert Oil Wars, Terrorism, and Economic Collapse (2006); as well as books by Kenneth Deffeyes, Colin Campbell, and Matthew Simmons; and websites www.theoildrum.com and www.energybulletin.net. The Association for the Study of Peak Oil organizes international conferences to study issues related to oil and gas depletion (www.peakoil.net and www.aspo-usa.com), and the U.S. chapter of ASPO publishes a weekly survey of relevant news, “Peak Oil Review,” compiled by former CIA analyst Tom Whipple. At the annual Association for the Study of Peak Oil conference in Cork, Ireland, in September 2007, former U.S. Energy Secretary, James Schlesinger, said: “Conceptually the battle is over. The peakists have won. We’re all peakists now.” See also Steve Connor, “Warning: Oil supplies are running out fast,” The Independent, August 3, 2009 (http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html).

7. The declining rate of discovery of new oilfields, and the list of past-peak oil producing countries, are widely documented; e.g.: Roger D. Blanchard, The Future of Global Oil Production: Facts, Figures, Trends and Projections by Region (Jefferson, NC: McFarlane and Co., 2005).

8. A May 4, 2009 report from Raymond James Associates (“Stat of the Week”) argued that world oil production peaked in July 2008 (http://blogs.wsj.com/environmentalcapital/2009/05/04/peak-oil-global-oil-productions-peaked-analyst-says/). In a subsequent interview, Marshall Adkins, author of the report, suggested that most knowledgeable players within the petroleum industry now accept the Peak Oil thesis in some form, whether or not they acknowledge it publicly (http://www.aspousa.org/index.php/2009/07/interview-with-marshall-adkins/).

9. Brookings Papers on Economic Activity, March 2009 (http://eepurl.com/cSPu).

10. See Joe Cortright, “Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs,” Discussion paper, CEOs for Cities, 2008 (http://www.ceosforcities.org/).

11. U.S. Government Accountability Office, “Commercial Aviation: Airline Industry Contraction Due to Volatile Fuel Prices and Falling Demand Affects Airports, Passengers, and Federal Government Revenues,” April 21, 2009 (http://www.gao.gov/products/GAO-09-393). For a detailed discussion of the likely future impacts of high oil prices and oil shortages on the airline industry, see Charles Schlumberger, “The Oil Price Spike of 2008: The Result of Speculation or an Early Indicator of a Major and Growing Future Challenge to the Airline Industry?” Annals of Air and Space Law, Vol. XXXIV, [2009], McGill University (http://www.globalpublicmedia.com/the_oil_price_spike_of_2008).

12. American Trucking Association (http://www.truckline.com/Pages/Home.aspx).

13. This scenario is implied in Robert L. Hirsch, Roger Bezdek, and Robert Wendling, “Peaking of World Oil Production: Impacts, Mitigation and Risk Management” (U.S. Department of Energy: 2005): “As peaking is approached, liquid fuel prices and price volatility will increase dramatically…” (http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf).

14. See, for example, “Troubling Signs That Oil Prices Could Hamper Recovery,” Wall Street 24/7, May 8, 2009 (http://247wallst.com/2009/05/08/troubling-signs-that-oil-prices-could-hamper-recovery/)

15. See, for example, James Herron, “Low Oil Prices, Credit Woes Could Spell Trouble for UK North Sea,” Rigzone, November 14, 2008 (http://www.rigzone.com/news/article.asp?a_id=69507).

16. Jad Mouawad, “Big Oil Projects Put in Jeopardy by Fall in Prices,” New York Times, December 15, 2008 (http://www.nytimes.com/2008/12/16/business/16oil.html).

17. See David R. Baker, “Low oil prices take wind out of renewable fuels,” San Francisco Chronicle, October 27, 2008 (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/26/MNSK13NNK4.DTL).

18. See The Party’s Over, Chapter 4; Powerdown, Chapter 4; The Oil Depletion Protocol, pages 23-31. A longer treatment of the subject, tentatively titled Energy Limits to Growth, will be published by International Forum on Globalization and Post Carbon Institute in September.

19. This conclusion is echoed in, for example, Ted Trainer, Renewable Energy Cannot Sustain a Consumer Society (Dordrecht, The Netherlands: Springer, 2007); and (with some reservations), David J. C. McKay, Sustainable Energy Without the Hot Air (Cambridge, UK: UIK Cambridge, 2008), (www.withouthotair.com).

20. Just one example, from a press release April 20, 1998 describing the results of a poll commissioned by the American Museum of Natural History: “The American Museum of Natural History announced today results of a nationwide survey titled Biodiversity in the Next Millennium, developed by the Museum in conjunction with Louis Harris and Associates, Inc. The survey reveals that seven out of ten biologists believe that we are in the midst of a mass extinction of living things, and that this loss of species will pose a major threat to human existence in the next century.”

21. Charles A. S. Hall and Kent A. Klitgaard, International Journal of Transdisciplinary Research, Vol. 1, No. 1 (2006) (http://www.peakoil.net/files/the%20need%20for%20a%20new%20biophysical-based%20paradigm%20in%20economics%20….pdf) “The Need for a New, Biophysical-Based Paradigm in Economics for the Second Half of the Age of Oil,”, Charles A. S. Hall, D. Lindenberger, R. Kummell, T. Kroeger and W. Eichorn, “The Need to Reintegrate the Natural Sciences with Economics.” Bioscience 51:663-673, 2001 (http://web.mac.com/biophysicalecon/iWeb/Site/Downloads_files/Hall_2001_NeedtoReintegrate.pdf).

22. Cutler J. Cleveland, “Biophysical Economics, The Encyclopedia of Earth (http://www.eoearth.org/article/Biophysical_economics). See also the related field of Ecological Economics, especially the books of Herman Daly, including Toward a Steady State Economy (New York: Freeman, 1973); and, with Joshua Farley, Ecological Economics: Principles and Applications (Washington: Island Press, 2004).

23. The quotation marks around the Nobel name are justified because the Nobel family has never acknowledged economics as a science: the so-called “Nobel prize in economics” is awarded by a Swedish Bank.

24. See The Millennium Ecosystem Assessment (http://www.millenniumassessment.org/en/index.aspx).

25. See, for example, J. S. Kim, “Irrational Exuberance of the Green Shoots,” July 24, 2009 (http://seekingalpha.com/article/151101-irrational-exuberance-of-the-green-shoots).

26. See Richard Heinberg, Blackout: Coal, Climate and the Last Energy Crisis (Gabriola Island, BC: New Society, 2009), pages 137-143, 145-168.

27. The opinion that banks and insurance companies should be allowed to fail rather than being bailed out was voiced by many knowledgeable observers throughout late 2008 and early 2009. See for example Ambrose Evans-Pritchard, “Let banks fail, says Nobel economist Joseph Stiglitz,” London Daily Telegraph, Feb. 2, 2009 (http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4424418/Let-banks-fail-says-Nobel-economist-Joseph-Stiglitz.html).

28. See Jeff Rubin, Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization. (New York: Random
House, 2009).

29. See Richard Heinberg and Michael Bomford, “The Food and Farming Transition” (Sebastopol, CA: Post Carbon Institute, 2009) (http://postcarbon.org/food).

30. See Bernard Lietaer, “White Paper on All the Options for Managing a Systemic Bank Crisis” (http://www.lietaer.com/images/White_Paper_on_Systemic_Banking_Crises_final.pdf). JAK in Sweden is a cooperative, member-owned bank that operates without interest (http://en.wikipedia.org/wiki/JAK_members_bank).

31. See Richard Gilbert and Anthony Perl, Transport Revolutions: Moving People and Freight Without Oil (Gabriola Island, BC: New Society, 2009).

32. The Passivhaus Institute pioneers construction methods that reduce energy input to buildings in many cases to zero. Roughly 20,000 Passivhauses have been built in Europe, only about 12 in the U.S. (http://www.passivehouse.us/)

33. See websites of Population Media Center (http://www.populationmedia.org/issues/), and SUSPS (http://www.susps.org/overview/immigration.html).

34. The organization Redefining Progress has developed a Genuine Progress Indicator (GPI) that incorporates many such indices (http://www.rprogress.org/sustainability_indicators/genuine_progress_indicator.htm).

35. See, for example, “Understanding Human Happiness and Well-Being,” The Sustainable Scale Project (http://www.sustainablescale.org/AttractiveSolutions/UnderstandingHumanHappinessandWellBeing.aspx).

36. The burgeoning Transition Town movement (www.transitiontowns.org/) proceeds from the premise that “life can be better without fossil fuels.” YES! Magazine (www.yesmagazine.org) is a publication of the Positive Futures Network and highlights examples of low-impact ways of living that bring personal and social benefits. And the Simple Living Network (www.simpleliving.net/) provides “resources, tools, examples and contacts for conscious, simple, healthy and restorative living.”

37. See Jared Diamond, Collapse How Societies Choose to Fail or Succeed (New York: Viking, 2005); Joseph Tainter, The Collapse of Complex Societies (Cambridge, UK: Cambridge University Press, 1988); and John Michael Greer, The Long Descent (Gabriola Island, BC: New Society, 2008).

Richard Heinberg is a Senior Fellow of the Post Carbon Institute and author of five books on resource depletion and societal responses to the energy problem. www.richardheinberg.com, www.postcarbon.org.

#207: Peak Oil Day

MuseLetter 207 / July 2009 by Richard Heinberg
Download printable PDF version here (PDF, 91 KB)

On July 11, 2008, the price of a barrel of oil hit a record $147.27 in daily trading. That same month, world crude oil production achieved a record 74.8 million barrels per day.

For years prior to this, a growing legion of analysts had been arguing that world oil production would max out around the year 2010 and begin to decline for reasons having to do with geology (we have found and picked the world’s “low-hanging fruit” in terms of giant oilfields), as well as lack of drilling rigs and trained exploration geologists and engineers. “Peak Oil,” they insisted, would mark the end of the growth phase of industrial civilization, because economic expansion requires increasing amounts of high-quality energy.

During the period from 2005 to 2008, as oil’s price steadily rose, production remained stagnant. Though new sources of oil were coming on line, they barely made up for production declines in existing fields due to depletion. By mid-2008, as oil prices wafted to the stratosphere, every petroleum producer responded to the obvious incentive to pump every possible barrel. Production rates nudged upward for a couple of months, but then both prices and production fell as demand for oil collapsed.

Since then, with oil prices much lower, and with credit tight to unavailable, up to $150 billion of investments in the development of future petroleum production capacity have evaporated. This means that if a new record production level is to be achieved, further declines in production from existing fields have to be overcome, meaning that all of those canceled production projects, and many more in addition, will have to be quickly brought on-stream. It may not be physically possible to turn the tide at this point, given the fact that the new “plays” are technically demanding and therefore expensive to develop, and have limited productive potential.

On May 4 of this year, Raymond James Associates, a prominent brokerage specializing in energy investments, issued a report stating, “With OPEC oil production apparently having peaked in 1Q08, and non-OPEC even earlier in 2007, peak oil on a worldwide basis seems to have taken place in early 2008.” This conclusion is being echoed by a cadre of other analysts.

Maybe it’s a stretch to say that the production peak occurred at one identifiable moment, but attributing it to the day oil prices reached their high-water mark may be a useful way of fixing the event in our minds. So I suggest that we remember July 11, 2008 as Peak Oil Day.

We are now approaching the first-year anniversary of Peak Oil Day. Where are we now? The global economy is in tatters, yet oil prices have recovered somewhat (they’re now about half what they were in July 2008). World energy consumption is down, world trade is down, the airline industry is shrinking, and most of the world’s automakers are on life support.

It is too late to prepare for Peak Oil–a year too late, in fact. Now the name of the game is adaptation. We are in an entirely new economic environment, in which old assumptions about the inevitability of perpetual growth, and the usefulness of leveraging investments based on expectations of future growth, are crashing in flames. Even if economic activity picks up somewhat, this will occur in the context of an economy significantly smaller than the one that existed in July 2008, and energy scarcity will quickly cause most green shoots to wither.

It is impossible to say what will happen in the future with regard to oil prices. Clearly, very high prices kill demand by undercutting economic activity. Thus it is possible that the barrel price of petroleum may never break last year’s record. On the other hand, if the value of the dollar were to collapse, then the sky’s the limit for prices in dollars per barrel.

It is easier to forecast the oil supply trend: though we’ll see level-to-rising production temporarily from time to time, in general it’s down, down, downhill from now on.

Even though Peak Oil is now in the past, its annual commemoration on Peak Oil Day may serve an important purpose by reminding us why our economy is shrinking, and by focusing our thoughts on ways to facilitate the transition to a post-petroleum world.

What are some appropriate ways to commemorate <ahttp://www.thepetitionsite.com/1/peak-oil-dayPeak Oil Day? I'd suggest spending time in nature, engaging in a 24-hour oil fast, or organizing a neighborhood bicycle parade and solar-cooker bakeoff.

Mark your calendar. What will you be doing on July 11?

Help us “celebrate” Peak Oil Day by signing our petition.

2. Interview with Hervé Duval (www.voltairenet.org)

HD: We were told by most media that the origin of the financial crisis is to be found within the financial system. Is that satisfactory to you or, as you hinted with foresight in The Party’s Over, could the lack of confidence in future growth due to cheap oil production peaking also be a major factor?

RH: In 2008 we saw the biggest energy price spike ever. Historically, energy price spikes have always led to recessions. Therefore it would have been reasonable to expect a serious recession beginning around the first quarter of 2008. In fact, the recession began somewhat earlier and has proven to be deeper and more persistent than any other in recent decades. This is because a financial collapse had also become more or less inevitable due to the existence of multiple bubbles in the housing and finance sectors.

The impacts on the airline, trucking, and automotive industries are largely from energy prices; the fall in real estate values and rise in foreclosures is not so directly related to oil.

However, at the deepest level, our societal expectation of perpetual economic growth is based on the assumption that we will always have increasing amounts of cheap energy with which to power the engines of production and distribution. This expectation of growth became institutionalized in ever-increasing levels of debt and in increased financial leveraging. Thus when the amount of energy available started to level off or decline, the entire financial house of cards came tumbling down.

Unfortunately, world leaders have largely misunderstood the crisis. They assume it to be entirely financial in origin, and they also assume it to be transient; they believe that if we can prop up the banks sufficiently, the economy will begin to grow again and all will be well. In fact, our current financial system cannot be made to function in an era of declining energy supplies. We need an economy that can supply basic human needs without increasing the rate at which we consume resources. That will require the creation of monetary systems and financial institutions that are not based on debt, interest, and leveraging.

HD: Do you think speculation on energy markets is going to gather pace again in spite of last year’s episode? If so, according to you what is the best solution for the snake to stop eating its own tail?

RH: Speculation in energy futures is not helpful in our collective process of adjusting to the winding down of the era of cheap fuel. Without some controls on the futures market, we are likely to see more big swings in fossil fuel prices, as we witnessed over the past 18 months. When fuel prices skyrocket, the economy takes an enormous hit–again, as we have just seen. When the price collapses, that discourages investment in future energy production.

OPEC has actually helped somewhat to moderate these price swings by increasing or decreasing production to keep the oil price steadier than it would otherwise be. But OPEC is losing its already limited ability to do this, because most member nations are seeing declining production and have little or no spare production capacity. Saudi Arabia is the only major swing producer left, and one nation really cannot balance production rates for the whole world much longer.

The only real solution is some sort of international agreement to ration production and consumption, as I suggest in my book The Oil Depletion Protocol.

HD: What do you think of the growing number of scientists casting doubt on the human origin of climate change? Within the peak oil movement, people like Jean Laherrère are also very skeptical…

RH: I’m not aware that the number of scientists casting doubt on the human origin of current climate change is growing; my perception is the opposite. Yes, I know that Jean Laherrère, whom I respect enormously, has raised questions on this score. As a geologist, he is accustomed to thinking in terms of millions of years, and the Earth’s climate is indeed quite variable on such long time-scales. And so I can understand why he might wonder whether what we are seeing now is due to climate processes involving changes in solar radiation, eccentricities in the Earth’s orbit–the well-known Milankovitch effect–and changes in ocean circulation patterns. However, climate scientists have thoroughly investigated the likely role of factors other than carbon emissions and found that they are insufficient to explain the warming that is currently occurring.

Essentially, I concur with the conclusion of most climate scientists: that we humans are taking an inherently unstable system–the atmosphere and climate–and forcing it to its breaking point by adding enormous quantities of greenhouse gases.

HD: What do you think about this hypothesis: the international carbon trade project is but a way for the financial elite to keep afloat and for the financially rich/resource poor countries to obtain the right to burn the last fossil fuel reserves in exchange for money and thus deprive financially poor/resource rich countries of the right to develop? To put it another way, the heart of the matter is not really “Are we going to burn the last fossil fuel reserves?” (we surely are, lest we give up on economical growth), but “Who is going to burn them?”.

RH: I am skeptical of international carbon trading schemes for many reasons, including the fact that they will result in the creation of an enormous derivatives market that will require tight regulation if huge financial bubbles and crashes are to be avoided. Carbon caps are necessary, but there are probably better ways of enforcing those caps than the creation of a new class of derivatives; for example, a rationing system that engages the entire citizenry, such as Tradeable Energy Quotas (TEQs), could work.

In the end, fossil fuels will be used by those who can pay for them. Sometimes this occurs indirectly: China burns coal on behalf of North America and Europe so that it can produce cheap goods for export.

In any case, however, development based on consumption of fossil fuels is no longer a path to wealth and security, as it was in the early 20th century. Today it is a trap. It merely creates dependence upon energy sources that are becoming more scarce and expensive. Poor nations will now be much better off avoiding that trap altogether.

I realize that this is much easier for a mere a journalist to say than for a leader of some nation whose people have been denied the benefits of the modern era. However, this is one of the stark realities of this still-new century.

HD: What should be the priority in terms of public decision-making? Preparing for the energy crisis or climate change?

RH: In many respects, the solutions to both problems are similar: reduce fossil fuel dependency, and increase renewable energy production.

However some proposed solutions to the climate crisis make no sense in light of fossil fuel supply limits. An example is the capture and storage of carbon from coal-fired power plants. This is a project that will require enormous investment and decades for deployment; but meanwhile, coal prices will be escalating, and this fact is seldom included in the cost estimates for “clean coal.” The peak of world coal production is probably less than two decades away, as I discuss in my new book Blackout: Coal, Climate and the Last Energy Crisis. It therefore makes more sense to use scarce investment capital to build renewable energy production capacity rather than to build a vast, costly infrastructure to support continued use of a depleting, increasingly expensive, carbon-intensive fuel.

HD: Do you see an increasing trend toward resource conflicts? If so, how do you explain it?

RH: This is to be expected. Humans have always fought over essential resources. Now that the energy resources that fuel modern society are poised to become more scarce and valuable, it is foreseeable that conflict over control of those resources will increase. Given this, it is incumbent upon policy makers at the national level to anticipate where such conflicts are likely to erupt, and to seek to prevent them. Ultimately the only way to do so is to reduce competition for those resources by reducing dependence upon them where possible (some resources, such as water, we simply cannot do without), and by forging agreements to limit production and consumption of fossil fuels via depletion protocols.

But of course this will require an enormous shift in attitude on the part of world leaders. Currently their thinking revolves entirely around gaining competitive advantage–in essence, they are more interested in knowing how to win resource conflicts than in how to avoid them. And that is an increasingly dangerous way of thinking as the world becomes more populous and resource-constrained.

HD: According to you, how big is the part played by the increase in fuel/fertilizer/pesticides costs in the developing food crisis?

RH: There are some aspects of the food crisis that do not immediately seem to be related to fossil fuel dependency. For example, there are increasing shortages of fresh water for irrigation–but many times this is due to climate change, which is in turn due to carbon emissions from the burning of fossil fuels. Then there is soil erosion–but this is often caused by modern industrial production methods involving the use of tractors and other fuel-fed farm machinery. Another factor is the genetic uniformity of modern crops, which makes them more susceptible to evolving pests, and hence requires the use of more petroleum-based pesticides. As one follows out the causal chains leading to these disparate threats to our food system, nearly all of them tend to lead back to one source.

Altogether, our modern fuel-based food system is critically vulnerable on many levels, and most of that vulnerability is traceable to our reliance on fossil fuels. The inevitable reduction in the supply of tractor fuel will hurt farmers, and agricultural chemicals will become increasingly unaffordable. High petroleum prices will make the long-distance distribution of food more costly. Climate change and drought will shrink crop yields.

We face a global food crisis that is entirely foreseeable, and whose causes are obvious. The needed policies are also obvious: we must reform our entire food system so as to reduce its reliance on fuel.

HD: Can you tell us briefly about the goals and impact so far of the work you are doing with your colleagues at Post Carbon Institute?

RH: Currently we are assembling a stellar group of Fellows who share a similar understanding of the global crisis, and who are interested in collaborating with regard to public education. We see this as a critical historical moment for rethinking our culture’s basic assumptions about economic growth, energy consumption, food systems, climate change, and population–issues that are closely intertwined, but rarely addressed systemically by policy makers.

At the same time, Post Carbon Institute is working closely with the Transition Initiatives, which is a grass-roots network of communities seeking to promote a post-fossil fuel economy. Unless needed policy changes are being adopted, modeled, experimented with, and promoted by individuals and communities, national leaders will continue to drag their feet.

We see the current economic crisis as a fundamental and historic turning point. The global economy has reached non-negotiable limits to growth. Now everything depends upon our willingness to cooperatively adapt to those limits.

We believe that life can in fact be better without fossil fuels, and without continual growth in population and consumption. But the transition from our current fuel-fed growth paradigm to a steady-state, renewable-energy future will likely be very difficult. Humanity will get there one way or another: resource limits ensure that. We simply want to make the transition easier, fairer, and more survivable for all concerned.

# 206: Look on the Bright Side

MuseLetter 206 / June 2009 by Richard Heinberg

This month’s MuseLetter brings together two pieces that share a connecting theme — is humanity capable of making the necessary changes to save the planet and so itself? The first article Look on the Bright Side discusses this from the viewpoint of the huge shifts that are already occuring as a result of economic decline. Somebody’s Gotta Do It explores the job of trying to lead change and the challenges faced by all who attempt so to do.

Look on the Bright Side

Recently I’ve begun compiling a list of things to be cheerful about. Here are some items that should bring a smile to any environmentalist’s lips:

World energy consumption is declining. That’s right: oil consumption is down, coal consumption is down, and the IEA is projecting world electricity consumption to decline by 3.5 percent this year. I’m sure it’s possible to find a few countries where energy use is still growing, but for the US, China, and most of the European countries that is no longer the case. A small army of writers and activists, including me, has been arguing for years now that the world should voluntarily reduce its energy consumption, because current rates of use are unsustainable for various reasons including the fact that fossil fuels are depleting. Yes, we should build renewable energy capacity, but replacing the energy from fossil fuels will be an enormous job, and we can make that job less daunting by reducing our overall energy appetite. Done.
CO2 emissions are falling. This follows from the previous point. I’m still waiting for confirmation from direct NOAA measurements of CO2 in the atmosphere, but it stands to reason that if world oil and coal consumption is declining, then carbon emissions must be doing so as well. The economic crisis has accomplished what the Kyoto Protocol couldn’t. Hooray!
Consumption of goods is falling. Every environmentalist I know spends a good deal of her time railing both publicly and privately against consumerism. We in the industrialized countries use way too much stuff — because that stuff is made from depleting natural resources (both renewable and non-renewable) and the Earth is running out of fresh water, topsoil, lithium, indium, zinc, antimony…the list is long. Books have been written trying to convince people to simplify their lives and use less, films have been produced and shown on PBS, and support groups have formed to help families kick the habit, but still the consumer juggernaut has continued — until now. This particular dragon may not be slain, but it’s cowering in its den.
Globalization is in reverse (global trade is shrinking). Back in the early 1990s, when globalization was a new word, an organization of brilliant activists formed the International Forum on Globalization (IFG) to educate the public about the costs and dangers of this accelerating trend. Corporations were off-shoring their production and pollution, ruining manufacturing communities in formerly industrial rich nations while ruthlessly exploiting cheap labor in less-industrialized poor countries. IFG was able to change the public discourse about globalization enough to stall the expansion of the World Trade Organization, but still world trade continued to mushroom. Not any more. China’s and Japan’s exports are way down, as is the US trade deficit.
The number of vehicle miles traveled (VMT) is falling. For decades the number of total miles traveled by all cars and trucks on US roads has relentlessly increased. This was a powerful argument for building more roads. People bought more cars and drove them further; trucks restocked factories and stores at an ever-growing pace; and delivery vans brought more packages to consumers who shopped from home. All of this driving entailed more tires, pavement, and fuel — and more environmental damage. Over the past few months the VMT number has declined substantially and continually, to a greater extent than has been the case since records started being kept. That’s welcome news.
There are fewer cars on the road. People are junking old cars faster than new ones are being purchased. In the US, where there are now more cars on the road than there are licensed drivers, this represents an extraordinary shift in a very long-standing trend. In her wonderful book Divorce Your Car, Katie Alvord detailed the extraordinary environmental costs of widespread automobile use. Evidently her book didn’t stem the tide: it was published in the year 2000, and millions of new cars hit the pavement in the following years. But now the world’s auto manufacturers are desperately trying to steer clear of looming bankruptcy, simply because people aren’t buying. In fact, in the first four months of 2009, more bicycles were sold in the US than cars and trucks put together (over 2.55 million bicycles were purchased, compared to fewer than 2.4 million cars and trucks). How utterly cool.
The world’s over-leveraged, debt-based financial system is failing. Growth in consumption is killing the planet, but arguing against economic growth is made difficult by the fact that most of the world’s currencies are essentially loaned into existence, and those loans must be repaid with interest. Thus if the economy isn’t growing, and therefore if more loans aren’t being made, thus causing more money to be created, the result will be a cascading series of defaults and foreclosures that will ruin the entire system. It’s not a sustainable system given the fact that the world’s resources (the ultimate basis for all economic activity) are finite; and, as the proponents of Ecological and Biophysical Economics have been saying for years, it’s a system that needs to be replaced with one that can still function in a condition of steady or contracting consumption rates. While that sustainable alternative is not yet being discussed by government leaders, at least they are being forced to consider (if not yet publicly) the possibility that the existing system has serious problems and that it may need a thorough overhaul. That’s a good thing.
Gardening is going gonzo. According to the New York Times (“College Interns Getting Back to Land,” May 25) thousands of college students are doing summer internships on farms this year. Meanwhile seed companies are having a hard time keeping up with demand, as home gardeners put in an unusually high number of veggie gardens. Urban farmer Will Allen predicts that there will be 8 million new gardeners this year, and the number of new gardens is expected to increase 20 to 40 percent this season. Since world oil production has peaked, there is going to be less oil available in the future to fuel industrial agriculture, so we are going to need more gardens, more small farms, and more farmers. Never mind the motives of all these students and home gardeners — few of them have ever heard of Peak Oil, and many of the gardeners are probably just worried whether they can afford to keep the pantry full next winter; nevertheless, they’re doing the right thing. And that’s something to applaud.

But wait, before our cheering becomes an uncontrollable frenzy, we should stop to remember that most of these developments are due to an economic crisis that is taking a huge toll. With the possible exception of the last item on the list (and maybe some of those bicycle purchases), we’re not talking about voluntary behavior that’s evidence of forethought and collective intelligence. Whatever gains in sustainability these trends signify have come at an enormous cost in terms of unemployment, homelessness, and lost retirement savings.

Take all this to its tragic extreme. What if a billion humans died over the course of, say, the next ten years from starvation or swine flu? That would take a lot of pressure off natural systems. There would be more space for other species to flourish, and consumption of natural resources (oil, coal, water, and so on) would decline dramatically, improving the economic prospects of the survivors. So from a certain perspective this unimaginable nightmare might be seen as a good thing — though hardly anyone who actually experienced it would likely see it that way.

Parenthetically, it’s worth noting that this whole line of thought may be dangerous. Some free-market PR hack from the Cato Institute is likely reading along right now just as you are, trying out headlines for a press release. “Environmentalist delights in economic collapse!” might be a good one, or “Environmentalist wants billions of humans to die!” One way to avert that kind of backlash is to keep mum about the fact that economic contraction actually does have benefits, and so far most other environmental writers have been playing it safe in that regard. I’ve crossed the line here, so watch out. I might get us all in trouble.

Now back to our theme. At its core, the dilemma is this: We humans have overshot Earth’s carrying capacity through overpopulation and over-consumption, and have created all sorts of other problems in doing so (such as climate change). But nature will take care of all these difficulties. Overpopulation will eventually be solved by starvation and disease. Over-consumption will be reined in by resource depletion and scarcity. Climate change will take longer to fix, maybe thousands or millions of years — assuming we don’t turn Earth into Venus.

But nature’s ways of solving our problems are not going to be pleasant. And so the enormous, overriding question confronting our species during the remainder of this century will be, Are we humans capable of getting out ahead of nature’s checks so as to proactively rein in our population and consumption in ways we can live with?

Boil down all the environmental literature of the past century, and that’s the essence of most of it. So far, that literature has not had its desired effect: our species has continued to expand both in numbers and in per-capita impact.

But the items outlined above suggest that we’ve turned a corner. It’s no longer a matter of nature “eventually” providing checks on humanity’s boisterous expansionism. That’s starting to happen. And it’s not yet due to climate change: yes, we are indeed seeing potentially catastrophic impacts in terms of melting glaciers and so on, but those by themselves have not tempered the economic juggernaut. Instead, it is resource depletion that has begun to slow the freight train of industrialism. Over the past two or three years, high energy prices burst the bubble of unsupportable property prices and pulled the rug out from beneath the teetering financial derivatives market.

That’s what the whole Peak Oil discussion has really been about. It’s an attempt to identify the key resource whose scarcity will tip the global economy from growth to contraction.

But wait: this essay was supposed to help us look on the bright side. The discussion’s getting kind of dark here.

Okay, my point is this: we have reached the inevitable turning point. The growth trance that has gripped the world for the past several decades is in the process of ending. Even if we get short periods of economic growth, that growth will be in the context of a significantly contracted economy and will only be temporary in any case, as Peak Oil and other resource constraints will quickly damper increasing economic activity. Gradually, as “recovery” gets put off for another month, another year, another few years, people may begin to realize that the expansionary phase of the era of cheap energy is finished. There are of course no guarantees that the public and their business and political leaders will indeed finally “get it,” because the urge to hang onto the growth illusion will be very strong indeed. But if the misery persists, there’s at least a chance that understanding will finally dawn in the collective mind of our species — the understanding that we must get out ahead of nature’s checks and deliberately reduce the scale of the human enterprise in ways that maximize the prospects of both present and future generations.

But all won’t automatically come to that conclusion on their own. A fundamental change in our comprehension of the human condition will depend on more and more public intellectuals articulating the message of deliberate adaptation to limits, so that the general populace has the necessary conceptual tools with which to mentally process their new circumstances. We will also need far more people working on practical elements of the transition. Those will be ongoing needs — a growth opportunity, if you will pardon the irony, for smart and articulate young people interested in making a difference. And they’ll be most successful if they find ways of framing needed behavior and attitudinal changes in ways that are attractive and inviting — as the Transition Initiatives so brilliantly do.

So in that sense, when I say “Look on the bright side,” no irony or sarcasm is intended.

Somebody’s Gotta Do It

(First published May 4)

Hi. My job is trying to save the world, and I’d like to tell you a little about my line of work.

First, it’s a job I enjoy. I get to feel good about what I do, and I meet a lot of smart, interesting people. I get to travel to exciting places to attend conferences, and at least some people respect my efforts (though many others think I’m crazy or misguided).

It’s not all a bed of roses. The biggest problems with trying to save the world are: first, that it doesn’t always seem to want to be saved; and second, that those of us trying to save it can’t agree on why it needs saving or how to go about doing so. Let me explain.

When I say “save the world,” I mean preventing human civilization from collapsing in a chaotic, violent way that would entail enormous amounts of suffering and death. I also mean preserving the natural world, so as to minimize species extinctions and the loss of wild habitat. I regard both of these priorities as about equally important, since they are closely interrelated: if civilization collapses chaotically, billions of people will do an enormous amount of damage to remaining ecosystems in their desperate attempts at survival; and if nature goes first, that means civilization will go too, because we rely on ecosystem services for everything we do.

But not everyone who works full-time at saving the world has the same balance of priorities. There are some world-savers who are only (or primarily) concerned about human welfare. Some of these folks are just interested in saving people’s souls by getting them to subscribe to some set of beliefs or other: for them, the world needs “saving” because it is wicked. Others are concerned with human rights or economic justice or international conflict; for them, the biggest threats to our survival are from other people. Then there are those who have concluded that our survival challenge is primarily of an environmental kind: the disappearance of polar bears or honey bees, or the logging of rainforests, or the depletion of resources, or the contamination of the atmosphere or the oceans.

This is a problem. If all of us world-savers can’t get on the same page about what’s wrong, our efforts are likely to lack coherence, or might even cancel one another out. There are no doubt full-time humanitarians who believe that the world needs to be saved from people like me! — from people, that is, who are non-believers and who insist that the size of the human population has to be reduced.

Moreover, if we professional world-savers can’t agree on what the problem is, how do we know there is a problem in the first place? Might the world be better off if we spent our personal energies elsewhere — figuring out how to get rich, or teaching elementary school, or inventing the next generation of social networking software?

Well, I’m obviously personally convinced that the world has some unprecedented challenges on its hands, or I wouldn’t be in this line of work. I could write at great length (as I have elsewhere) about what these challenges are, how they arose, and what we should be doing about them, but there’s no need to repeat myself here. Suffice it to say that I think that we humans, by our very nature, and by the rules of biological existence, will always have problems of fairly predictable kinds, but we have recently gained access to concentrated but depleting non-renewable energy sources that have enabled us to grow our population and appetites for commodities of various sorts to utterly unsustainable levels; and in the process of burning carbon-based fuels we have set in motion a process of climate change that is rapidly spiraling out of control. This is going to be a tough set of problems to solve, because it involves changing people’s lifestyles and expectations, sharing nature’s dwindling bounty of non-renewable resources rather than fighting over the crumbs, and finding ways to reduce population proactively without interfering too much with human rights.

To me, all of this seems obvious, steeped as I am in data showing the limits to various resources, the likely consequences of continued economic and population growth, and the rapidly worsening damage to our environment (and hence to our planet’s ability to support future generations of humans). But I often meet sincere, dedicated people who see things quite differently.

Given that there isn’t a consensus among us, can we world-savers accomplish anything useful?

Well, there is something of a consensus after all. These days most environmentalist world-savers seem to be focused on the problem of climate change resulting from greenhouse gas emissions, almost to the exclusion of any other concern. If you ever happen to attend a meeting of environmental activists, you are likely to hear nearly every discussion turn on carbon dioxide emissions — emissions reduction targets, emissions reduction strategies, future emissions scenarios, and climate sensitivity to various levels of emissions. But even within the increasingly numerous and vocal anti-carbon crowd, there are differences of opinion regarding tactics: some (like Dr. James Hansen of NASA, arguably the nation’s top climate scientist) support carbon taxes, reasoning that cap-and-trade policies will take too long to negotiate and can be gamed in various ways; others (like author Bill McKibben, arguably the nation’s top climate activist) support caps, reasoning that new taxes of any kind are a non-starter for political reasons, at least here in the US (don’t worry: Hansen and McKibben are still friends). Many mainstream environmental organizations back the notion of a carbon market, in which permits to emit CO2 would be auctioned and traded; but Friends of the Earth has come out with a paper titled “Subprime Carbon,” arguing that a market in carbon permits will result in “futures contracts to deliver carbon that carry a relatively high risk of not being fulfilled,” leading to a carbon bubble and an eventual collapse in value. While “world-savers” funded by the big energy conglomerates (I put the term in quotes this time because while these folks act like the genuine article in many respects, their real priority is not to save the human or natural world, but merely some company or industry) want carbon permits to be given away to existing polluters, nearly everyone else thinks the permits should be auctioned. Most existing US congressional cap-and-trade bills (like Waxman-Markey) mandate that proceeds from the auctions should go to government, but many activists (like Peter Barnes, author of Capitalism 3.0) say that the proceeds should be distributed equally to all citizens to help defray the increased energy costs that will result from carbon caps.

US climate policy will soon be decided by Congress, and a global policy will then be hashed out in Copenhagen, so environmentalist world-savers are working overtime these days to get their proposals and perspectives heard.

The fact that so many of us are now focused on one problem is good, especially since it is indeed a survival issue. But I fear that some essential details are being overlooked in the process. Here’s a key example.

Reducing carbon emissions essentially means using less coal, oil, and gas (since carbon capture and sequestration is arguably unrealistic on any substantial scale, other than by reforestation and regenerative agricultural practices). Since “clean” sources of energy probably can’t be scaled up to replace fossil fuels entirely, this means the world will have less energy to go around. (It will no doubt soon have less to go around in any case, because fossil fuels are non-renewable and depleting, and we’ve probably already passed the peak of world oil production — but don’t get me started on that.)

Historically, there has been a very close correlation between energy consumption growth and economic growth, so with less energy available it may not be possible to continue growing the global economy in customary ways. Almost nobody in the climate community wants to talk about that, because the very suggestion that strong, effective climate policies will have a significant economic cost makes such policies far less palatable to folks on Main Street, and certainly to politicians. But I think we should be giving this matter a lot of attention no matter how inconvenient it may be: the fact is, we have an economy that’s designed only to grow; if it stops growing — as has happened over the past six months — the results are perceived as catastrophe. If world energy supplies are set to contract, we need a different kind of economy, one that can still function with a stable or declining throughput of materials and energy. But we’re not even going to start trying to design one until more people start telling the truth about where we’re headed.

This points up one of the dilemmas that go along with trying to save the world: should one just tell the truth fearlessly, or try to frame one’s message so as to make it generally acceptable? The two options aren’t always mutually exclusive, but neither are they exactly the same thing. You see, most people don’t want to be too alarmed, and they don’t want to hear about problems to which there are no ready solutions. So world-savers frequently try to tailor their public statements so that large numbers of people won’t be frightened to the point of despair and paralysis. How many times have I been told, “Keep it positive! Emphasize solutions!” Yet I can’t tell you how often I’ve sat down with an activist whose latest policy paper is all about solutions, and in heart-to-heart conversation they reveal that they don’t really think our species has much of a chance of avoiding major catastrophe, maybe even extinction.

It’s a tough balance. If you tell the truth to a fault, you don’t get invited to policy seminars, and politicians avoid you like swine flu. If you sugar coat the message, you have to live with the knowledge that the vast majority of people on our planet have almost no awareness of what is about to happen to them, and you aren’t telling them. Some of us in the world-saving business naturally gravitate to one side of the spectrum or the other, and I try to be respectful about why people make their choices in this regard. I like to think I’m more toward the “tell the truth regardless” end of the continuum, but in certain situations I find myself hedging in order to get along.

So being a world-saver is partly a matter of politics and public relations. That’s not what drew me to this line of work; but, now that I’m in it, I realize that comes with the territory.

What’s the job like on a day-to-day basis? Well, there’s a lot of time spent at the computer — endless emails, keeping up with relevant news feeds, plus a relentless writing schedule. I’m often on the phone talking to reporters or interviewers, gaining support for programs, trying to build coalitions. Ironically, I find myself on airplanes disturbingly often, traveling to conferences or lectures, emitting tons of carbon as I go. If you were just to watch my actions without being able to understand any of the language I’m employing, you might think I’m doing approximately the same work as a high-powered salesman of some kind. That’s not at all comforting for me to think about. Other world-savers spend their time differently — running demonstration projects of various kinds, doing bio-remediation, or organizing their communities.

How secure is my job? Whenever bad things happen to the environment, people start paying attention to it. The anti-nuke movement could wave a tentative victory banner after Three Mile Island and Chernobyl. The Peak Oil movement got a big boost in 2008 when the price of oil shot up to nearly $150 a barrel. And the climate movement gets attention whenever there’s a severe weather event, or when some new report documents that arctic ice is disappearing. In general, lots of matters we all care about are bound to get a lot worse in the foreseeable future (sorry to say this, folks, but we’re in for one hell of a century), so business for us world-savers could pick up smartly.

On the other hand, I have no retirement package (though who does, these days?). And just about all the non-profit organizations that I know of are hurting badly because of the Great Recession. Indeed, the current economic crisis is a very big problem for the world-saving industry. Just about all of our money comes from philanthropic foundations, and most of those foundations have a lot less money to dole out than they did a year ago. (Granted, a lot of world-savers already work for free, and many who are currently getting paid will continue to do what they can when their budgets run out; but it’s difficult to get much done with no money at all, and everyone has bills to pay.)

Also, the average family is less likely to get excited about an environmental issue when its economic survival is at question; indeed, people’s very ability to look ahead and focus on large, complex issues begins to falter. “Polar bears? Who Cares! Just give me my job back!”

Another strange wrinkle: this financial crisis underscores the unpleasant truth that business-as-usual simply can’t continue. It’s no longer a matter of telling folks to stop consuming so much; they’re now finding they literally can’t afford to buy cars, travel, and do all the other things that entail carbon emissions. Should we environmental world-savers change our message accordingly? I don’t hear much discussion among my colleagues along those lines; instead, speakers at climate conferences seem hardly to have noticed that global trade is down, global employment is down, global energy use is down.

But hang on: if world energy use has been declining for the past few months, that should mean that carbon emissions are declining, too. (Note: According to NOAA, the CO2 concentration in the atmosphere is still rising — is there a time lag, or is there some other explanation for this discrepancy between declining energy use and rising CO2 concentrations?) Let’s assume that measurements later this year indeed show atmospheric CO2 levels to be rising slower than before. Trying to explain why something that’s very good for the environment should be correlated with something that’s very bad and painful for ordinary people is understandably awkward, so the possibility that emissions are now declining is hardly being mentioned. But if emissions are truly falling and continue to do so — not because of climate policies, but because of global economic contraction — sooner or later we’ll have to start addressing the fact. And we’d better have a good story. In my view, the fact that the climate movement is being blindsided by this turn of events only underscores the need for a bit more truth-telling about the linkages between energy and the economy.

Are we succeeding? Is the world better off because we’re trying to save it? Well, maybe my opinion is inherently biased, given what I do for a living. As disappointed as I sometimes get about the near-futility of trying to wake my fellow citizens up to the fact that we’re collectively driving straight toward history’s biggest cliff, I don’t see anything better to do with my time. Nor do I see any better hope for humanity than the efforts of the tiny number of our species who understand at least some aspect of our predicament enough to explain it to their fellows and formulate some strategic responses to it.

Would I recommend this line of work to others — to students looking for a career? You bet. There are certainly many other worthwhile things to do with one’s life, but at a time like this we need all the help we can get.

#205: Spring Cleaning

MuseLetter 205 / May 2009
by Richard Heinberg

This month I have been putting the finishing touches on Blackout: Coal, Climate and the Last Energy Crisis, which will be published in June by New Society Publishers; and Energy Limits to Growth, which will be released at about the same time by International Forum on Globalization and Post Carbon Institute. In addition, I have given several lectures and attended various conferences and meetings. It’s spring in the northern hemisphere, and time to compost what’s left of the over-wintered annual crops and plant for the next season.

This month’s issue of MuseLetter consists of three recent writings:

  • a short essay, “A Beguiling Veneer of Normalcy”;
  • “World Energy in Crisis,” an invited contribution to the upcoming revised edition of the award-winning book Earth from Above by French photographer, environmentalist, documentary filmmaker, and television journalist Yann Arthus-Bertrand;
  • and an interview for the Italian magazine Consapevole.

A Beguiling Veneer of Normalcy

Recent travels have taken me to Las Vegas, New Orleans, and of course my home city, Santa Rosa, California. The economies of these places are faring quite differently. House prices in Las Vegas have nosedived, and the urban landscape that stretches away from casino theme parks on the strip is starting to look desperate, with empty storefronts everywhere in evidence. In Santa Rosa, the one huge, recently remodeled retail space sitting vacant while a neighboring giant department store sells off the last of its inventory before shuttering for good. Housing prices in Santa Rosa are way down and still dropping fast—now about half what they were three years ago. Meanwhile in New Orleans, an upscale shopping mall I visited had no vacancies (though the shoppers appeared alarmingly few), and house prices are holding up fairly well. Unsurprisingly, folks I spoke to in Louisiana were less worried than ones in California and Nevada.

Differences in perspective are easy to find also within each community. Talk to a person who still has a job and didn’t have much invested in the stock market and you’ll hear a mostly upbeat view of the economy’s prospects; but talk to another person who was recently laid off, or whose retirement savings have shrunk by half or more, and their outlook is decidedly darker.

Are we at the beginning of an epic Depression, or at the bottom of a nasty recession with brighter days only months away? It would seem to be a matter of perspective. Recent bank earnings reports and stock market activity have led many analysts to claim that the economy has indeed reached the bottom of the trough, and that while the recession is not over the worst has passed. Statements emanating from the White House, the Treasury, and the Fed are ambiguous but generally upbeat: president Obama says dark days still await us, but foresees a return to growth; and secretary Geithner and chairman Bernanke are careful not to talk the market down.

The indicators to which I pay attention lead me to a different conclusion. We are indeed seeing a let-up in the frighteningly rapid financial collapse that began to unfold late last summer. That’s to be expected: all the trillions that are being spent on bailouts and stimulus packages must have some effect—though ultimately it will only be to provide a brief interlude before the storm returns in far greater force.

Why such a bleak forecast?

Real estate prices, and especially prices for commercial real estate, have much further to fall. And that means that mortgage-backed derivatives have further to unwind. The toxic assets that caused so much grief to bankers and investors during the last six months have not really been dealt with, and therefore comprise a time bomb that’s still ticking.

As a result, the banks are still not lending. TARP bailout funds are merely being used to clean up balance sheets while the credit crunch continues unabated. And until the toxic assets are fully and finally dealt with, many of the biggest banks remain functionally insolvent even if they happen to be posting quarterly (bailout-based) profits.

But these reasons for concern pale in importance before the deeper, more profound and systemic problems of our time.

Looming first among the latter is of course the global energy picture. World oil production has hit its ceiling, and though demand and prices are now down, further economic growth will push against energy limits that will constrict further with every passing year. But energy is just one of a spate of limits to growth—a list that includes renewable resources (fish, forests, fresh water) as well as non-renewable ones (phosphorus, zinc, indium). And there are crucial limits not only to sources, but also to environmental sinks (including the atmosphere and oceans) that must absorb the waste outputs of industrial society—most notably, the CO2 emitted by our burning of fossil fuels.

At the same time, the economic crisis is contributing to a fundamental realignment of global finances and power on a scale greater than anything seen since World War II. The neoconservative imperial over-reach of the past eight years created a nexus of problems that cannot be sorted out and solved one by one; at best, a few of the nastiest (having to do with Iraq, Afghanistan, Iran, and Pakistan) can be kept at bay while the world watches the curtain-closing finale of US hegemony. It would be nice to think that all of this can happen in an orderly, gradual way, but with China’s exports down by over a quarter and domestic unrest welling up within that nation and scores of others around the globe, there is no reason to assume that it will.

In short, while surface appearances could lead one to think that not much has changed from the status quo ante, in fact the beams, rafters, and studs that hold up the facade of normal everyday existence in modern industrial society are rotting and crumbling. In essence, we are witnessing the shift from a century of unprecedented growth to a century of contraction. Cheap, abundant energy led to an expansion of population, consumption, and financial leveraging based on a belief in the inevitability of further growth (Colin Campbell puts this so well: “Banks lent more than they had on deposit, confident that Tomorrow’s Expansion was collateral for Today’s Debt” read more). Fossil fuels represent 85 percent of world energy, and the total amount of energy annually supplied by fossil fuels has almost certainly rounded its inevitable summit and begun its terminal slide.

The down-slope will be long and rough: even though momentous episodic events are no doubt in store, it is probably better to think of this as a “Long Descent” (John Michael Greer) or a “Long Emergency” (James Howard Kunstler) than as complete and sudden dissolution.

I’m tempted to use downhill skiing as a metaphor here in order to convey some morsel of advice as to what we should do to avoid hitting symbolic trees or otherwise coming to unnecessary grief. But in skiing, the downhill bit is the easy and fun part of the experience; getting up the hill takes time and effort (or a powered ski lift). Ironically, for modern society to get to the point of maximum population and consumption was as easy as rolling down a grassy slope. But finding our way peacefully to a lower, sustainable level of population and consumption will be a rocky, uphill march.

If we want to accomplish that march successfully, we need to put ourselves in the proper frame of mind.

We all want some “good” news from time to time. But what’s “good” news and what’s “bad”? Obviously, losing one’s job or home is painful. The media and the government understandably see the preservation of the status quo as good, and anything threatening it as bad. But if we adopt that outlook, we condemn ourselves to a future of endless bad news. In order to make our way through the decades of transition ahead, it’s important that we adopt a longer view, and devote much less effort to preserving a beguiling veneer of normalcy. The more of us who have a long view, the better. Without it, people (including world leaders) will get scared or unrealistically, giddily optimistic and do foolish things.

That’s why it’s important to keep educating one and all about what’s really happening and why. Ultimately we can indeed live perfectly satisfying lives if there are fewer of us, each using much less energy and less stuff. That’s how our species has spent nearly all of its existence on this planet. That’s the true “normal.” If that is our goal, we can chart a course and certainly arrive back in that condition in due time, much the wiser for our high-energy industrial interlude.

The danger comes when those who are making decisions on our behalf don’t realize what is normal, don’t see that as a necessary goal, and try instead to restart the sputtering engine of growth.

World Energy in Crisis

In 2008 the International Energy Agency announced that, “Current trends in energy supply and consumption are patently unsustainable—environmentally, economically, and socially.” This statement represents a wide and growing public consensus reflecting concerns about climate impacts from the burning of fossil fuels, as well as questions regarding the security of future supplies of those fuels.

However, replacing the oil, coal, and natural gas energy infrastructure of modern industrial societies will be challenging. Significant changes in the processes by which energy is supplied to, and consumed by, modern societies will require massive influxes of capital across multiple industrial sectors at considerable financial risk. Decades have been spent building this infrastructure, with trillions of dollars invested. If the transition from current energy sources to alternatives is mismanaged, consequences could be severe, as there is an undeniable connection between per-capita levels of energy consumption and economic well-being.

The problem is perhaps best understood by quickly surveying the principal energy sources currently available.

Oil is the world’s current primary energy source, fueling nearly all motorized transportation—cars, planes, trains, and ships—and providing about 36 percent of total world energy. Oil is also non-renewable, and many of the world’s largest oilfields are already significantly depleted. Most oil-producing nations are seeing declining rates of extraction, and future sources of the fuel are increasingly concentrated in just a few countries—principally, the members of OPEC. Competition for access to those reserves has already triggered geopolitical conflict on several occasions. Some analysts are of the opinion that total world oil production has entered its inevitable decline phase, and that production will never again achieve levels seen in the period from 2005 through 2008. Oil is a hydrocarbon fuel, so burning it releases carbon dioxide (70 kilograms of CO2 per gigajoule of energy produced), which contributes to climate change.

Coal has been the fastest growing energy source (by quantity) in recent years due to prodigious consumption growth in China, and now accounts for 27 percent of total world energy. It has the worst environmental impacts of the conventional fossil fuels, both in the process of obtaining the fuel (mining) and in that of burning it to release energy. Because coal is the most carbon-intensive of the conventional fossil fuels (94 kg CO2 per GJ), it is the primary source of greenhouse gas emissions that lead to climate change, even though it contributes less energy to the world economy than petroleum does. New carbon capture and storage technologies could reduce this climate impact, but at a significant economic and energy cost (by one estimate, about 40 percent of the energy from coal would go toward mitigating climate impact, with the other 60 percent being available for economically useful work). Coal is non-renewable, and some nations (UK and Germany) have already used up most of their original coal reserves. Even the US, the “Saudi Arabia of coal,” is seeing declining production from its highest-quality deposits. While official reserves figures imply that world coal supplies will be sufficient for a century or more, recent studies suggest that supply problems may appear much sooner.

Natural gas is the least carbon-intensive of the fossil fuels (58 kg of CO2 per GJ); of the world’s total energy, natural gas supplies 23.5 percent. It is easily transported through systems of pipelines and pumps, though it cannot be carried by ship as conveniently as oil, as this typically requires pressurization. Like oil, natural gas is non-renewable and depleting. Recent disputes between Russia, Ukraine, and Europe over Russian natural gas supplies underscore the increasing geopolitical competition for access to this valuable resource.

Biomass, principally in the form of wood used for cooking and home heating, accounts annually for 13 percent of the world’s total energy consumption and is used by up to 3 billion people. Biomass can also be converted into liquid fuel, used to generate electricity, or burned to co-generate heat and electricity. Biomass is distributed widely; this suits it for use in small-scale, region-appropriate applications. In Europe there has been steady growth in biomass CHP (combined heat and power) plants in which scrap materials from wood processing or agriculture are burned, while in developing countries CHP’s often run on coconut or rice husks. In California, dairy farms are using methane from cow manure to run their dairy operations. Biogas is used extensively in China for industry, and 25 million households worldwide use biogas for cooking and lighting. Biomass and biogas are considered to be carbon-neutral fuels, since they operate within the biospheric carbon cycle. While biomass is a renewable resource it is not a particularly expandable one. Often available biomass is a waste product of other human activities: crop residues from agriculture, wood chips and sawdust from wood products industries, and solid waste from municipal trash and sewage. In a less energy-intensive future agricultural system, crop residues may be needed to replenish soil fertility and won’t be available for power generation. There may also be more competition for waste products as manufacturing from recycled materials increases. Liquid fuels made from biomass (biofuels—principally, ethanol and biodiesel) can substitute for gasoline or petroleum diesel, but doubts have recently been raised about the environmental impacts of biofuels production, competition between crop production for biofuels and for food, and limits to the scalability of this energy source.

Hydropower produces 6 percent of the world’s energy and 19 percent of all electricity. The carbon emissions from hydropower are site-specific and substantially lower than those from fossil fuel sources. Much debate about this energy source centers around its effects on society and whether or not a constant supply of water for power, irrigation, or drinking justifies the relocation of millions of people for dam and reservoir construction. The International Hydropower Association estimates that about one-third of the realistic potential of world hydropower has already been developed.

Nuclear power produces 5 percent of world energy (15 percent of electricity) from 435 commercial power-generating reactors operating worldwide. Uranium, the fuel for the nuclear cycle, is a non-renewable resource. The peak of production of high-grade ores is likely to occur between 2040 and 2050, which means that nuclear fuel is likely to become more scarce and expensive over the next few decades. The average grade of uranium is already declining as the best reserves are depleted. Recycling of fuel and the employment of alternative nuclear fuels are both possible, but these technologies have not been adequately developed. The construction of nuclear power plants is slow and expensive, and there is widespread controversy about health and environmental risks from radiation accidents, problems of waste storage, and security threats from black-market distribution of nuclear materials.

Wind power is one of the world’s fastest-growing energy sources, expanding more than five-fold between 2000 and 2007. However, it still accounts for less than one percent of the world’s electricity generation, and less than one-half percent of total energy. Wind power is a renewable source of energy, and there is enormous capacity for growth: it has been estimated that developing 20 percent of the world’s wind-rich sites would produce seven times the current world electricity demand. The cost of electricity from wind power, already relatively low, has been declining in recent years to a level comparable to the cost of electricity from fossil sources. However, the uncontrolled, intermittent nature of wind reduces its value as compared to operator-controlled energy sources such as coal, gas, or nuclear power. The primary way for utility operators to guard against loss of power to the grid during times when winds are calm is to build extra generation capacity from other energy sources. Therefore adding new wind generating capacity often does not substantially decrease the need for coal, gas, or nuclear power plants; it merely enables conventional power plants to be used less while the wind is blowing.

Solar energy encompasses several distinct technologies—several kinds of photovoltaic (PV) cells that generate electricity directly from sunlight; active solar thermal, which makes electricity by concentrating the sun’s heat; and solar thermal water or space heating. Less than one percent of world electricity (less than one-half of one percent of world energy) currently comes from these technologies. Solar power is renewable and could be expanded dramatically, though PV solar cells are still relatively expensive. PV has recently been the fastest growing energy technology in the world, increasing up to 50 percent annually. However, despite the enormous growth of PV energy, in recent years the annual increase in oil, gas, or coal production has usually exceeded total existing photovoltaic energy production. Therefore if PV is to become a primary energy source the rate of increase in capacity will need to be much greater than is currently the case. Like wind, solar power is intermittent.

Other sources of energy, including geothermal, tidal, and wave power, together produce much less than one percent of current world energy.

The inescapable conclusions from even a brief survey such as this are that fossil fuels will likely yield less energy annually in the future than they do currently, while burning them will entail unacceptable environmental costs. Yet society is profoundly dependent on these fuels: together, they provide about 80 percent of world energy. Alternative energy sources exist, but each is subject to limits of one kind or another, and there is no clear scenario in which the energy from fossil fuels can be replaced with energy from alternative sources without (1) enormous investment, (2) significant time for build-out, and (3) significant sacrifices in terms of energy quality and reliability.

The problem of how to continue supplying energy in a world where resources and environmental waste sinks are limited becomes much easier to solve if we find ways to proactively reduce demand for energy. And that project in turn becomes easier if there are fewer of us wanting to use energy (that is, if population shrinks rather than continuing to increase).

How far will energy supplies fall, and how fast? Taking into account likely depletion-led declines in oil and natural gas production, a leveling off of energy from coal, and the recent shrinkage of investment in the energy sector due to the global economic crisis, it may be reasonable to expect a contraction in world energy availability of up to 25 percent during the next 25 years. Factoring in expected population growth, this implies a substantial per-capita reduction in available energy. The decline is unlikely to be evenly distributed among nations, with oil and gas importers being hardest hit.

Thus the question the world faces is not whether to reduce energy consumption, but how. Policy makers could choose to manage energy unintelligently by maintaining fossil fuel dependency as long as possible while making both poor choices of alternatives and insufficient investments in them, in which case the consequences will be catastrophic. Transport systems will wither, global trade will contract dramatically, and energy-dependent food systems will falter, leading to very high long-term unemployment and famine perhaps even in industrial nations.

However, if policy makers manage the energy downturn intelligently, an acceptable quality of life could be maintained in both highly industrialized and less-industrialized nations; at the same time, greenhouse gas emissions could be reduced dramatically and quickly. This would require:

  • Direction of significant public and private investment toward renewable energy research and deployment;
  • Re-localization of much economic activity (especially the production and distribution of low-value, bulky items and materials) in order to lessen the need for transport energy;
  • Construction of highly efficient rail-based transit systems and the redesign of cities to reduce the need for car ownership;
  • Retrofit of building stock for maximum energy efficiency (energy demand for space heating can be dramatically reduced through super-insulation of structures and by designing to maximize solar gain);
  • Redesign of food systems reduce energy inputs and the need for food transport; and
  • Reduction of the need for energy in water pumping and processing through intensive water conservation programs (7 percent of world energy is currently used in moving water).

Improvements in efficiency, the introduction of new technologies, and the shifting of emphasis from basic production to provision of services can enable economic growth to occur without an increase in energy consumption, but such growth trends have inherent limits. Over the long run, static or falling energy supplies must be reflected in economic stasis or contraction. Nevertheless, with proper planning, there is no reason why, under such circumstances, an acceptable quality of life could not be maintained. For the world as a whole, this might entail partial redistribution of energy consumption, with highly industrial nations reducing consumption substantially, and less-industrial nations increasing their consumption somewhat in order to make basic necessities available to all.

However, societal adaptation to energy limits inevitably raises the question of population. When population grows but the economy remains the same size, there are fewer economic goods available per person. If energy constraints effectively impose a limit to economic growth, then the only way to avert continuing declines in per-capita access to economic goods is to limit population by (for example) providing economic incentives for smaller families, access to birth control, and support for poor women to obtain higher levels of education. Policy makers must begin to see population shrinkage as a goal, rather than an impediment to economic growth.

Altogether, the energy transition of the 21st century marks a historic shift as significant as the Agricultural Revolution or the Industrial Revolution. In retrospect, the two recent centuries of rapid fossil-fueled expansion in economic activity and in human population levels will likely be seen as a historic anomaly, one that entailed a profound alteration of the global climate through the rapid digging up and burning of carbon-based fuels that had been produced and slowly transformed by geological processes over tens of millions of years. It is unclear how this anomalous and perilous interlude in human history will end and what will follow. The only realistic future scenarios appear to be environmental and economic collapse on one hand, or a managed process of economic contraction and conversion on the other.

Interview for the Italian magazine “Consapevole

Q: Why hasn’t peak oil entered the political agenda yet? Is it because of the opposition of the oil industry, or simply because it is an unspeakable truth?

A: The oil industry has played a role in preventing discussion of peak oil by understating the challenges of maintaining production growth given the decline in discovery of new oilfields, as well as the declining rates of production in existing giant oilfields. However, it is also the case that new issues require time to be understood by the media, policy makers, and the general public. It is only within the past five years that general discussion of peak oil has emerged. By comparison, climate change has been a significant topic for well over a decade.

Q: Do you have hopes that President Obama will face this serious challenge?

A: Our new President inspires many hopes, but in reality he must answer to entrenched economic and political interests. Thus, even if he fully understands the challenge of peak oil—and I am not entirely sure that he does—it may be impossible for him to speak openly about it. He is pursuing the development of renewable energy, energy efficiency, and public transportation, and these will all help mitigate the worst impacts of oil depletion. I am concerned, though, that the efforts along these lines that are politically feasible may be too little, too late.

Q: The Post Carbon Institute, of which you are a Senior Fellow, wrote The Real New Deal to address it to the new administration of the United States of America. Can you sum up the content?

A: This is a document we wrote to inform the Obama Administration about the problem of energy resource depletion and potential strategies to mitigate that problem. It is important to understand that fossil fuel depletion will impact the food system, home heating, electricity generation, and public health as well as transportation. It is also essential to know that alternative energy sources, while essential, will likely be unable to substitute for fossil fuels entirely, and that therefore society must change how it uses energy and find ways to use much less. Other organizations have written energy briefing papers for the new Administration, but we believe that ours frames the problem and its potential strategic responses in a more realistic, integrated way than any of the others that I have seen have done.

Q: In your latest book, Peak Everything, you bring to the table a variety of peaks: most are negative (i.e. population, grain production, fresh water availability), but some are positive (greenhouse gas emissions, environmental destruction). Are you somehow confident that the positive ones may eventually overcome the negative ones?

A: Hopeful, yes; confident, no.

Q: The economy is walking on a very thin line. Is it reasonable to think that this recession will eventually turn into a collapse once the prices of oil shoot back up over 100$ p/b?

Also, would you say this could “help” the world to address the challenges of peak oil and climate change without wasting any more time?

A: Economic collapse could occur in any case, even without a run-up in the oil price, simply because of fundamental errors on the part of the world’s banking and investment class. However, the most likely scenario would include a partial economic recovery that would be cut short by rising energy prices. The economic crisis will “help” only if we take this brief opportunity to implement drastic energy conservation measures and invest substantial sums in new renewable energy infrastructure. This is what we advise in “The Real New Deal.”

Q: What do you believe should be our individual goals for improving the situation and which are the goals to be approached on a governmental level?

A: The goal of both government and individuals should be to maintain coherent social structure during the economic contraction. If social cohesion fails, then we have lost our chance for survival, except perhaps as scattered bands of pitiful and violent creatures. The problem is that government tends to confuse the maintenance of social cohesion with its continuing support for various institutions that are in fact causing the collapse to occur—institutions such as the modern banking and finance system, or the military-industrial complex here in the US. We must abandon some of these institutions and substantially redesign others (such as our industrial food system and our transport system) while keeping the basic fabric of society intact. That will obviously require courage and intelligence at the governmental level, but also initiative and sacrifice on the part of the population as a whole. As individuals, we should be thinking about what will give our communities and families more resilience. That usually means cooperating more with neighbors, growing gardens, reducing debt, and bartering, among many other things.

Q: Most people wait for the “experts” to save us (and the planet), usually through technology. What is your position towards technology in this sense?

A: Technology can empower us, but it can also disempower us. We can become dependent upon complex technologies that we barely understand, so that we feel helpless to question the status quo or to imagine life without our cars, computers, or televisions—even though everyone lived without these things only a century ago. The experts are perhaps even more frightened to think of a world without complex technology, because they spend all of their time in front of computers, gathering information and following trends. Without their computers their way of life would come to an end! But we must begin to think of simpler ways to satisfy basic human needs, because the cheap fossil fuels that power most of our current technology will soon become more scarce and expensive.

Q: You write that it is reasonable to estimate that we might see a 25 to 40% decline in energy available over the next 20-30 years. How did you figure that number out, and what consequences do you foresee worldwide as a result of this lack of energy?

A: Part of this is fairly simple arithmetic. Assume a 3% annual decline in energy from oil beginning in 2010, a 3% annual decline in natural gas beginning in 2020, and a plateau of energy from coal beginning in 2015 with a 2% annual decline starting in 2025. Those decline rates will gradually increase, and are based on forecasts from Energy Watch Group of Germany. But then for the countries that import fuel there is the problem that available exports will decline much faster, because exporting countries will provide for their own domestic needs before they sell their surplus internationally. Then we must factor in the percentage of total energy coming from oil, gas, or coal—about 40 percent, 23 percent, and 25 percent respectively. We can hope for some of the loss in energy from fossil fuels to be made up by new energy production from wind or solar, but probably no more than 25% of the current quantity of energy being consumed will come from those sources in any but a very few nations by 2030. The result: for a fuel importing nation, it would be prudent to expect at least a 25% decline in total energy by that date.

The consequences will, of course, be significant. It is difficult to see how the world economy could grow under such circumstances; indeed, widespread disruption in transport systems and a decline in food production are just two of the more important consequences we can logically expect to see.

Q: In your opinion when will the collapse strike and what countries will it strike first?

A: This is a more difficult question to answer today than it might have been just months ago. Global oil production is peaking now and declines will commence within two or three years, and the countries that import the most oil will be impacted first and hardest. However, in recent months we have seen a global economic collapse that has cause demand for oil to fall substantially. Because demand is still disappearing, the price of oil has also fallen, and there is now surplus oil production capacity worldwide. Depletion of oilfields continues, and the erosion of production capacity has actually accelerated, because low oil prices are discouraging investment in exploration, drilling, and production. Therefore when demand begins to increase again, or when production capacity falls sufficiently to meet existing depressed demand, severe problems will appear. But because we cannot know now how deeply the economic crisis will constrain demand, it is impossible to say when the oil supply crisis will come. It could come later this year, or it may come in three or four years.

Q: Why aren’t people able to see the problems of peak oil and climate change? Is it a psychological block? Is it denial? If so, is it caused by fear of change?

A: Sometimes people do not see things they don’t want to see.

Q: Why does the media talk more about climate change than peak oil?

A: It is understandable that more attention is given to climate change. Far more research has been done on this subject, and for a longer time. Moreover, climate change will have more far-reaching and longer-lasting consequences. However, unless society dramatically and quickly reduces its reliance on oil, it is likely that oil depletion and resulting scarcity will produce more dramatic and immediate economic and political impacts than those from climate change. If we do not address peak oil, society may find itself incapable of mobilizing a coordinated effort to mitigate climate change.

Q: What is the importance of the media in informing people and promoting change?

A: If people do not know what is happening, there is no hope that they will make sensible decisions. They may choose to act irresponsibly even if they know the facts, but without accurate, freely available information there is simply no possibility of a coordinated, successful response to the threats of climate change and fossil fuel depletion.

Q: Would you be able to identify which consequences of climate change are closest to us in time? When do you predict major problems will come about with climate change?

A: The first impact of climate change to affect humans substantially will be changes in weather patterns that make agriculture less productive. This is already beginning, and may result in lower crop yields over the next few years, with worsening impacts following that. Coupled with the impending fuel shortages, this creates the possibility of widespread famines. These may be only years away.

Q: Carbon emissions were 275 ppm at the beginning of the industrial era. They are currently 387 ppm where the safest level is considered to be 350 ppm max. Is there a projection for the next, say, 20 years?

A: That of course depends on how close we remain to a “business as usual” consumption scenario. As a result of the economic crisis and peak oil, I think that it is now virtually impossible for society to continue growth in consumption of fossil fuels according to most of the projections of the IPCC. However, for society to reduce the atmospheric concentration of greenhouse gases to 350 ppm or below, we will need strong, coherent climate policy. Depletion and economic depression by themselves will not achieve that goal.

Q: The position of most environmentalists is that everything that can aid in cutting the emissions should be pursued (this implies a technological approach). Do you agree with this perspective or would it be wiser to address the problem from a more holistic approach (for example, promoting a simpler lifestyle in order to reduce, not only emissions, but also resources consumption and so on)?

A: We must understand that humanity does not face just one crisis or two, but many. We are depleting a long list of resources, destroying habitat for other species, polluting the oceans, and so on. Even if we managed to solve the problem of climate change through some technology that captured and stored atmospheric CO2, we would still face several other dilemmas, each of which could cause the collapse of organized society. This will continue to be true as long as our population and our consumption of resources continue to grow. The only way to address all of these challenges is to reduce our population and reduce our consumption, so that we are living within Earth’s long-term carrying capacity.

Q: It would obviously be better to leave untouched whatever fossil fuels are still underground. What do you think are the chances of this happening?

A: It depends. That could happen if the economy completely disintegrates, so that social cohesion disappears. Drilling for oil or mining coal in large quantities from deeply buried seams requires social organization; without social coherence, we might burn up the world’s remaining forests but we wouldn’t be able to get at the fossil fuels.

On the other hand, we could get serious about climate change and institute some form of effective cap-and-trade scheme that would get us off of fossil fuels entirely by 2035 or so. If I were laying odds, I think the former would be more likely than the latter; but since the latter is a far more desirable outcome, it still deserves every ounce of effort.

Q: We should reduce the current generation of CO2 by 3/4 within the next 2-3 decades. You stated that we may have 25 to 40% less available of energy within 25 years. Would this lead to a roughly 50% cut in emissions?

A: Not necessarily. On the basis of depletion alone, world oil production will begin to decline around 2010, and coal production around 2025 or 2030. Since coal will peak later, that means that a greater proportion of our energy will be coming from coal than from oil. Therefore emissions may not decline so much or so fast as total energy—unless we implement emissions reduction agreements.

Q: The collapse of the economy will affect mainly the industrialized countries, which are also the ones that generate more carbon emissions. This would be an additional help to bring the emissions down, wouldn’t it?

A: Yes, as long as we handle the economic collapse rationally. My fear is that when people find themselves unable to heat their homes they will burn anything they can get their hands on to avoid freezing. This could be just as true in the northern parts of the US or Europe as in China. If this happens, the result could be deforestation and a temporary increase in carbon emissions.

Q: A huge problem, potentially much more threatening than the melting of the north polar ice cap, is the melting of tundra and permafrost. If that happens the stored methane will be released. Can you update us with this situation? Also, methane generates more CO2 than fossil fuels. What is the ratio?

A: The latest information is frightening: scientific observers are seeing the emergence of methane plumes in Siberia from the melting of permafrost. Methane is 20 times as powerful a greenhouse gas as carbon dioxide. The methane hydrates in arctic tundra and under the ocean floors contain enough methane to plunge the world’s climate system into an entirely new regime, so that we would not be speaking of two or three degrees of warming, but rather six, ten, or twenty degrees. The survival of the human species would be highly questionable under such circumstances.

Q: According to scientists the increase of the temperature will be between 2 degrees and 6 degrees Celsius by the end of the century. What are the consequences with the two extremes?

A: With only one degree of warming we are already seeing the disappearance of the north polar icecap and the melting of most glaciers. Civilization may not be able to persist with 2 degrees of warming, and our species may not be able to survive if the planet heats by 6 degrees.

Q: I believe that pulling ourselves out of this situation will require a cultural shift, and ultimately our capacity to envision a better future. Do you agree?

A: Of course. It is useful to explore the process of cultural change to see how it occurs, because we will need a cultural shift of unprecedented scale and speed. Fortunately we have communications technologies that are capable of changing the thinking of the masses quickly; unfortunately, those communications media are mostly in the control of people who benefit from keeping people thinking along current lines.

Q: The recession is causing loss of jobs, investments, trade, etc. In a way, you could say that we are already moving towards downsizing, which is probably the best and easiest thing we could reduce our impact on the planet. What is your position in this regard?

A: Yes, from the viewpoint of the environment this may be a good thing. But it will only be a good thing for humanity if we are able to maintain societal coherence during the contraction. Again, this will require some intelligence and willingness to share and do without. Much depends on whether our political and cultural leaders can understand what is called for and avoid the temptation to try merely to return the economy to a condition of perpetual growth—which of course is an impossibility—rather than make the difficult choice to build a very different, sustainable economic infrastructure.

Q: How would you address the problem of cutting down emissions in different sectors such as food production, transportation, heating, industry in general and service based industry?

A: That question requires a very long answer—but fortunately it is mostly addressed in our “Real New Deal” document.

Q: Reading your books I have the feeling that you want to inspire people to take action for a better and promising future. What can everybody do in order to accomplish this challenging task? What is your message to your Italian readers?

A: I believe that life can be better without fossil fuels and without economic growth in the forms we are familiar with. Instead of increasing our population and our consumption of resources, we could be increasing our quality of life—better public health, environmental quality, and greater cultural richness. It is simply a matter of what we aim for and how we measure “progress.” It is the transition from one direction to the other that is crucial. We cannot continue with our current direction of favoring conventional growth—the economic collapse ensures that. But finding a direction that leads us to cultural richness and environmental stability will require some care and creativity. Fortunately, creativity is one of our great gifts as a species.

#204: Timing and the Post Carbon Manifesto

MuseLetter #204 / April 2009
by Richard Heinberg

This month’s issue is a compilation of two pieces. The piece “Timing” is a commentary on the timing of global economic collapse and the fraught nature of accurately predicting when this will occur. This is followed by the new Post Carbon Manifesto which is being released this week. The manifesto sets out the new direction of Post Carbon Institute and its role in helping individuals, families, businesses, communities, and governments understand, prepare for, and manage the transition to a post-carbon world.

Timing

The general picture is clear enough. A combination of peak oil, climate change, and the bursting of the mother of all economic bubbles will result in a collapse of the global economy, perhaps of civilization itself. If we are still to avert the worst of a crisis that could eventuate in untold death, destruction, and tragedy, we need to restructure the world’s energy systems and money systems immediately.

This message (in one form or another) is issuing from scores of independent writers, environmental organizations, and economic analysts. Indeed, even before anyone had ever heard of a Credit Default Swap, going all the way back to the early 1970s if not earlier, similar warnings were periodically heard.

But forecasting global catastrophe can be a tricky business, because everyone wants to know just when it will happen. And there’s the rub. As a card-carrying member of the Cassandra Club, I’ve found this a perennial briarpatch. There have been so many variables at play that about all one could say with absolute confidence is that industrial civilization will run out of rope “sometime in the first two or three decades of the 21st century.” But most people consider that too vague, and institutional leaders have shown repeatedly that they are likely to respond only to definite warnings about fairly imminent catastrophe.

This puts an unfair onus on those in the business of waking the world up to the impending crunch. Jump the gun and you wind up sounding silly; make a conservative forecast for some bland-sounding disruption sometime in the distant future and you fail to motivate anyone to change course.

Some recent readings have highlighted these pitfalls in fascinatingly different ways, leading me to draw a fairly striking conclusion (which we’ll get to in a moment) regarding the current global economic crash.

One of these readings is Paul Ehrlich’s 1968 The Population Bomb. There is still much to admire in this book, over 40 years since its publication. Here is mention of the greenhouse effect, along with good analysis of ecosystem degradation, pollution, and the fragility of industrial agriculture. However, the author famously forecast events that didn’t happen within the timeframe he thought they would (I say “famously,” because pro-growth PR trolls have made a cottage industry out of bashing Ehrlich ever since). Granted, these “forecasts” were presented only as likely scenarios, but many readers came away anticipating enormous famines in the 1970s—which, of course, never occurred (or were they merely postponed?).

Another wonderful book from decades past (in this case, 1978) by Warren Johnson, titled Muddling Toward Frugality: A Blueprint for Survival in the 1980s, is a reminder of lost opportunities.

Muddling is one of the classics of a genre that also includes William Catton’s Overshoot. Johnson begins the book with “An Ecological View of History” that manages, in 25 pages, to tell the story of our species about as concisely and clearly as anyone has managed to do (I have a particular fondness for encapsulated cultural-ecological histories—and offered my own version in the first chapter of The Party’s Over—so I know a good one when I see it). He goes on to explain the inevitability of the coming ecological-economic-demographic crisis, again with lucidity. The remainder of the book is a discussion of how we can “muddle through” the tough times ahead toward a way of life that is more localized and less consumptive of energy and resources.

The book is suffused with the aura of its time. In 1978 the world was reeling from soaring energy prices and was in economic turmoil. Johnson assumed that those high prices would continue, and that gradually society would adjust. It would all be rather painful, but we would eventually figure out, through trial and error, how to accommodate ourselves to scarcity, giving up on economic growth and learning to live within limits. Reading this in 2009, it’s pleasing to learn about the relatively shock-free future we can look backward to.

Johnson does note that a few potholes could get in the way of successful muddling. For example, if climate change accelerates, if the economy collapses, if there is geopolitical conflict over remaining resources, or if (as a result of any of these problems) political institutions become destabilized, then muddling just won’t cut it.

Tellingly, most of these scary developments have come to pass.

One possibility Johnson didn’t discuss: What if energy prices fall? Well, in that case there would be no pressure to adapt, and society would go back to its old bad habits of growing and consuming. Then the crunch, when it finally did arrive, would be much worse, making muddling impossible.

That, of course, is exactly what has occurred in the interim. Oil prices plummeted in the mid-1980s, stayed low through the ’90s, the SUV was born, and here we are.

Another recent read: Australian politician and foreign correspondent Colin Mason’s The 2030 Spike: Countdown to Global Catastrophe, published in 2003. The book’s thesis was recently supplemented by Jonathan Porritt’s essay, “Avoiding the Ultimate Recession”: both writings hinge on essentially the same forecast for a giant economic-environmental crunch in about twenty years as a result of converging circumstances that include oil depletion, overpopulation, climate change, food and water shortages, and (in Mason’s analysis) a breakdown of international law.

Mason paints a dire picture of life two decades hence, and then in the rest of his book helpfully details 100 priorities for immediate action to avert the new Dark Age. It’s all great stuff. But the question that leapt to my mind the moment I saw the book’s title was: Do we really have until 2030?

Porritt, to be fair, says all of this could happen as soon as 2020. But still, the essential notion both authors share is that we have one bounce left before the splat, a period of business-as-usual that we must use wisely as a time for rapid proactive re-engineering of society to avert catastrophic climate change, environmental collapse, and resource depletion.

Mason and Porritt understandably don’t want to make Ehrlich’s or Johnson’s mistakes. Porritt tellingly titles his essay “Avoiding the Ultimate Recession.” He’s saying (paraphrasing now): “Hey folks, what we’re seeing currently may be bad, but we’ll get over it. What happens in a decade or two when climate change kicks in will constitute a Depression from which there is no recovery. So let’s get ourselves in gear to make sure that doesn’t happen.”

But the enormity of the current economic meltdown raises the question: Is this really just a hiccup, or is it the beginning of the end (not of the world, perhaps, but certainly of life as we have known it for the past decades)?

It’s still a judgment call, at this point.

Maybe Geithner and Bernanke can pull off a miracle and stabilize the economy. In that case, with energy demand having fallen so far below its level of just a year ago, it might take as long as five years from no—who knows, maybe even seven—for depletion and decline to cause oil prices to spike again, giving the economy the coup de grace. At that point, there can indeed be no recovery, only adaptation. That’s the best-case scenario I can imagine (in terms of preserving the status quo).

But I have a hard time picturing that. A much more likely scenario, in my view: We will see a few months of fairly gradual economic deterioration (slowed by the mighty efforts of the Bailout Brigade), followed by a truly ugly global economic meltdown. The result will be a general level of economic activity much lower than the world is accustomed to. Efforts to right the ship will include protectionist legislation (that will provoke international confrontations), the convening of world leaders to create a new global currency and financial system (which probably won’t succeed, at least not the first time around), and various populist uprisings that will lead to political instability around the globe. Energy demand will remain low, but energy production will fall dramatically due to lack of investment. Carbon emissions will therefore fall too, so the world’s attention will be diverted from tackling the greenhouse gas issue, even though climate impacts from previous carbon emissions will continue to worsen.

But here’s the crux of the matter: unlike the situation the world faced in the 1970s, there is no prospect for another cheap-energy bounce this time. It’s too late to muddle. We have run out the clock on proactive adaptation. From now on, collective survival will hinge on the strategies we adopt for emergency response. Some strategies will make matters worse, while others will lay the groundwork for better times to come. This is what it has come to. One doesn’t wish to sound shrill, but there it is.

The closer we have gotten to the crunch, the smaller the margin of error in predicting it. There really isn’t that much difference between Porritt’s most pessimistic date for catastrophe (2020) and my most wide-eyed optimistic one (2016). But perhaps the closer we get to the event horizon, the less discussions over timing really matter, because the whole conversation makes sense only as a way of motivating coordinated action prior to the crunch. Once the unwinding has begun, no more preparation is possible. Our strategy must change from crisis prevention to crisis management.

That’s where we are right now, in my view.

So what we desperately need to be talking about are ways to manage crisis that will minimize human suffering while preserving the environment and laying the groundwork for a sustainable way of life for future generations.

It’s a new conversation, so it will take a while to re-orient ourselves to it. But let’s not take too long. One thing we can say about the timing that I think just about everyone would agree with: it’s speeding up.


Post Carbon Institute Manifesto:

The Time For Change Has Come

Spring 2009

Download the PDF (500k)

Contents

Introduction

gas stationThe United States is in the beginning stages of an historic economic collapse. As of early 2009, five million Americans have already been pushed into the unemployment line, while an average of more than 600,000 join them each month. The Federal government has thrown more than a trillion dollars at the financial crisis, but the symptoms only worsen.

Meanwhile, an even more profound crisis has been silently gathering for decades and is now reaching a point of no return. This crisis manifests as the twin challenges of global fossil fuel depletion and environmental collapse.

The world almost certainly experienced peak oil production last summer, and peaks in natural gas and coal production are not far off1. But renewable energy sources are nowhere near ready to substitute in the quantities and applications we currently require. The best known, and potentially most severe, of environmental challenges is global climate change. Yet we are also now facing a series of natural resource limits—fresh water supplies, fish stocks, topsoil, and biodiversity—that threaten our very existence.

Our 21st century dependence on 20th century hydrocarbon energy (fossil fuels) is the root of all the economic and environmental threats we face. Individually, each of these challenges would test us. Their combined force will reshape our planet and society in unimaginable ways.

All of the debts for society’s century-long industrial fiesta are coming due at the same time. We have no choice but to transition to a world no longer dependent on fossil fuels, a world made up of communities and economies that function within ecological bounds. Thus the most important question of our time: How do we manage the transition to a post-carbon world?

Post Carbon Institute is dedicated to helping individuals, families, businesses, communities, and governments understand and manage the transition to a post-carbon world. Our aim is to bring together the best thinking and models in such a way that the challenges we face can be easily understood, and the best solutions can be identified and replicated as quickly, sustainably, and equitably as possible.

These are unprecedented times that will test our courage, resourcefulness, and commitment. Many communities have already begun their post-carbon journey. We hope you join us.

The Limits

In 1972, the Limits to Growth report2 explored the consequences of exponential growth in population, industrialization, pollution, food production, and resource depletion for Earth’s ecosystems. The book came under immediate fire and has remained controversial ever since, but its underlying premise is irrefutable: At some point in time, humanity’s ever-increasing resource consumption will meet the very real limits of a planet with finite natural resources. We believe that time has now come.

An explosion in population and consumption—fed by cheap, abundant energy—has brought previously unimaginable advances in health, wealth, transport, and communications. But this growth has come at an equally unimaginable cost. The world is at, nearing, or past a number of critical limits:

  • Global oil, natural gas, and coal production
  • Climate stability
  • Fresh water and fish stocks
  • Food production
  • Biodiversity and habitats

Some of these limits are now well understood; some remain controversial or unknown to the general populace. The full scope of the damage to the biosphere and the depletion of natural resources would take volumes to describe in detail, 3 but the general picture is inescapable: we face looming scarcity.

It is no coincidence that so many resource peaks are occurring together. All are causally related by way of the historic reality that, for the past 200 years, cheap and abundant energy from fossil fuels has driven technological invention, increases in total and per-capita resource extraction and consumption (including food production), and population growth. We are enmeshed in a classic self-reinforcing feedback loop.

fossil fuel cycle

Our starting point for future planning, then, must be the realization that we are living today at the end of the period of greatest material abundance in human history—an abundance based on temporary sources of cheap energy that made all else possible. Now that the most important of those sources are entering their inevitable sunset phase, we are at the beginning of a period of overall economic contraction.

Challenge & Opportunity

2008 was a year for the history books. Global oil production likely peaked over the summer4 and began its inevitable and terminal decline, leading to great uncertainty and shocks to everything from transportation and manufacturing to food production and healthcare. Climate scientists and activists, impelled by increasing evidence that global warming is happening faster and more severely than even the most dire of prior scenarios had predicted, united behind the call to reduce greenhouse gas emissions to 350 parts per million (we are now at 387ppm and rising).

Also in 2008, a new U.S. President was elected with the promise of “change. ” And of course, the global economy began its plunge towards a new Depression, triggered by the US mortgage crisis, the historic spike in oil prices, and the collapse of the automobile and financial industries.

Together, these events signal that the time for real change is upon us.

The Post-Carbon Transition

Seeing an opportunity to simultaneously address the economic and climate crises, the federal government recently authorized $500 million for “green collar” job training5, with the goal of creating new jobs to retrofit buildings and deploy solar and wind energy technologies. While this is a laudable start, the circumstances demand much more.

The post-carbon transition must not be limited to building wind turbines and solar panels, or weatherizing homes. Alternative energy sources and greater efficiencies are important, but will not suffice for two key reasons:

  • There are no alternative energy sources (renewable or otherwise) capable of supplying energy as cheaply and in such abundance as fossil fuels currently yield, in the brief time that we need them to come online
  • We have designed and built the infrastructure of our transport, electricity, and food systems—as well as our building stock—to suit the unique characteristics of oil, natural gas, and coal. Changing to different energy sources will require the redesign of many aspects of these systems.

The post-carbon transition must entail the thorough redesign of our societal infrastructure, which today is utterly dependent on cheap fossil fuels. Just as the fossil fuel economy of today systemically and comprehensively differs from the agrarian economy of 1800, the post-fossil fuel economy of 2050 will profoundly differ from all that we are familiar with now. This difference will be reflected in urban design, land use patterns, food systems, manufacturing output, distribution networks, the job market, transportation systems, health care, tourism, and more. It will also require a fundamental rethinking of our economic and cultural values.

The New Economy

Quite simply, our growth-based economy has failed us and is failing the planet. It is time to embrace a new economic framework, one that sees the economy as a subset of our global ecosystem, not the other way around. Herman Daly and Josh Farley, in Ecological Economics, contrast the two systems clearly:

“We define growth as an increase in throughput, which is the flow of natural resources from the environment, through the economy, and back to the environment as waste. It is a quantitative increase in the physical dimensions of the economy and/or of the waste stream produced by the economy. This kind of growth, of course, cannot continue indefinitely, as the Earth and its resources are not infinite…

“Where conventional economics espouses growth forever, ecological economics envisions a steady-state economy at optimal scale. Each is logical within its own pre-analytic vision, and each is absurd from the viewpoint of the other. The difference could not be more basic, more elementary, or more irreconcilable.” 6

Recent global events have made it plainly clear which of the two economic frameworks is truly absurd.

Leading the Transition

The winds of social change are upon us. Consumerism as we’ve known it is at death’s door—not because everyone has joined the Sierra Club, but because suddenly nobody can afford to buy much of anything. Our new historical moment requires different thinking and strategies, but it also opens new opportunities to solve some very practical problems. Ideas from the environmentalist community that for decades have been derided by economists and politicians—reducing consumption, re-localizing economic activity, building self-sufficiency—are suddenly being taken seriously, and people want to know more about them.

Quietly, a small but growing movement of engaged citizens, community groups, businesses, and elected officials has begun the transition to a post-carbon world. These early actors have worked to reduce consumption, produce local food and energy, invest in local economies, rebuild skills, and preserve local ecosystems. For some citizens, this effort has merely entailed planting a garden, riding a bike to work, or no longer buying from “big-box” stores. Their motivations are diverse, including halting climate change, environmental preservation, food security, and local economic development. The essence of these efforts, however, is the same: they all recognize that the world is changing, and the old way of doing things, based on the idea that consumption can and should continue to grow indefinitely, no longer works.

Alone, these efforts are not nearly enough. But taken together, they can point the way towards a new economy. This new economy would not be a “free market” but a “real market,” much like the one famed economist Adam Smith originally envisioned; it would be, as author David Korten has said, an economy driven by Main Street and not Wall Street.7

Thus far, most of these efforts have been made voluntarily by exceptional individuals who were quick to understand the crisis we face. But as the collapse unfolds, more and more people will be searching for ways to meet even basic needs. Families reliant on supermarkets with globe-spanning supply chains will need to turn more to local farmers and their own gardens. Many corporations—unable to provide a continuous return on investment or to rely on cheap energy and natural resources to turn a profit—will fail, while local businesses and cooperatives of all kinds will flourish. Local governments facing declining tax revenues will be desperate to find cheap, low-energy ways to support basic public services like water treatment, public transportation, and emergency services.

What we need now are clarity, leadership, coordination, and collaboration. With shared purpose and a clear understanding of both the challenges and the solutions, we can manage the transition to a sustainable, equitable, post-carbon world.

Elements of a transition strategy have been proposed for decades, with few notable results. Usually these have been presented as independent—sometimes even contradictory—solutions to the problems created by fossil fuel dependency and consumerism. Now that business-as-usual is ceasing to be an option for mainstream society, these strategies need to be re-thought and re-articulated coherently, and to become the mainstream. But this will require coordinated effort on the part of those who understand both the problems and the solutions.


The Role of Post Carbon Institute

Post Carbon Institute is dedicated to answering the central question of our times: How do we manage the transition to a post-growth, post-fossil fuel, climate-changed world?

It will be Post Carbon Institute’s role to publicly discuss these issues in accessible ways, and as aspects of a systemic, interdependent web of crises. We will gather and analyze response strategies (whether proven or under experimentation), and disseminate them to the individuals, communities, businesses, and governments who need them. We will develop the framing and messaging of these issues so as to significantly raise the visibility and impact of emerging solutions.

We will constantly monitor both challenges and exciting new developments in a range of fields: energy, climate, food systems, land use, green building construction and retrofits, biodiversity and ecological restoration, water, transportation, and new economic systems. We will highlight green-leader cities and businesses, Transition Town 8 initiatives and ecovillage developments, local energy cooperatives, and innovative NGOs.

Through our close relationships with forward-thinking communities and organizations, Post Carbon Institute is uniquely positioned to both draw from their best practices and provide them with the resources they need to quickly scale up and replicate their work. To our knowledge, there is no other organization taking this important leadership role.

The centerpiece of our effort is the development of a select community of Post Carbon Fellows—leading or emerging experts in the most important issues concerning the transition. Post Carbon Fellows will regularly write and speak about both their specific area of expertise and the transition as a whole. Together, Fellows will publish an annual Roadmap For the Transition, covering each of the principal issue areas—and the latest efforts to address the crisis—in a unified, holistic way.

How is this different from what is already happening? Most if not all of the relevant information we are concerned with already exists, much of it on the Internet. There are magazines devoted to various aspects of the “alternatives” movement, and there are organizations doing good work in these areas. But what’s lacking is a unified vision of both the challenges and solutions that sees all of these fields as interrelated.

This unified vision can be communicated through the work of a think tank composed of thought leaders from key fields who can identify, contextualize, and bring to light the most exciting developments within their areas of expertise, while highlighting the relationships between these fields. No other organization is so well positioned to reach, learn from, and support transition efforts in such a broad array of fields. No other organization has the reputation and background to be able to connect grassroots organizers, policymakers, and the media on these issues.

Appeal

As bad news continues to pour in from climate scientists, petroleum geologists, and economists, there is a growing realization that the decisions we make in the next few years will determine what the world will be like for generations—perhaps millennia—to come. This historic moment of transition is a precious and brief opportunity; we all have some sense of what is at stake and what could happen if society continues down its current path.

But if we are successful in our efforts, the movement to nurture a sustainable post-carbon world will go both viral and local. It will become the mainstream, and the kinds of efforts we are championing will be so commonplace that further work on our part will be unnecessary. In the meantime, we have one chance—and it may be humanity’s very last chance—to turn away from the precipice. We have an enormous challenge, and extraordinary opportunity. Please join us.


Resources

Books

  • Barlow, M., Blue Covenant: The Global Water Crisis and the Coming Battle for the Right to Water. (New York: New Press, 2008).
  • Brown, L., Plan B3.0: Mobilizing to Save Civilization. (New York: Norton, 2008).
  • Daly, H. and Farley, J., Ecological Economics: Principles and Applications. (Washington, D.C.: Island Press, 2004).
  • Diamond, J., Collapse: How Societies Choose to Fail Or Succeed. (New York: Penguin, 2005).
  • Heinberg, R., Blackout: Coal, Climate and the Last Energy Crisis. (Gabriola Island: New Society Publishers, forthcoming 2009).
  • Heinberg, R., Peak Everything: Waking Up to the Century of Declines. (Gabriola Island: New Society Publishers, 2007).
  • Heinberg, R., The Party’s Over: Oil, War and the Fate of Industrial Societies. (Gabriola Island: New Society Publishers, 2003).
  • Homer-Dixon, T., The Upside of Down: Catastrophe, Creativity and the Renewal of Civilization. (Washington, D.C.: Island Press, 2006).
  • Hopkins, R., The Transition Handbook: From Oil Dependency to Local Resilience. (White River Junction: Chelsea Green, 2008).
  • Kolbert, E., Field Notes From a Catastrophe: Man, Nature and Climate Change. (New York: Bloomsbury USA, 2006).
  • Lerch, D., Post Carbon Cities: Planning for Energy and Climate Uncertainty. (Sebastopol: Post Carbon Press, 2007).
  • McKibben, B., Deep Economy: The Wealth of Communities and the Durable Future. (New York: Times Books, 2007).
  • Meadows, D., Randers, J. and Meadows, D., The Limits to Growth: The 30- Year Update. (White River Junction: Chelsea Green, 2004).
  • Murphy, P., Plan C: Community Survival Strategies for Peak Oil and Climate Change. (Gabriola Island: New Society Publishers, 2008).
  • Pollan, M., In Defense of Food: An Eater’s Manifesto. (New York, Penguin, 2008).
  • Roberts, P., The End of Food. (Boston: Houghton Mifflin, 2008).
  • Shuman, M., The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition. (San Francisco: Berrett-Koehler Publishers, 2006).
  • Speth, J., The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability. (New Haven: Yale University Press, 2008).
  • Wilson, E.O., The Future of Life. (New York: Vintage, 2003).

Films

  • A Crude Awakening
    Directed by Ray McCormack, Basil Gelpke, Reto Caduff. Docurama, 2007.
  • An Inconvenient Truth
    Directed by Davis Guggenheim. Paramount Pictures, 2006.
  • Blind Spot
    Directed by Adolfo Doring. Dislexic Films, 2008.
  • End of Suburbia: Oil Depletion and the Collapse of the American Dream
    Directed by Gregory Greene. Microcinema DVD, 2007.
  • Flow: For Love of Water
    Directed by Irena Salina. Oscilloscope, 2008.
  • The 11th Hour
    Directed by Nadia Conners and Leila Conners Petersen. Warner Brothers, 2007.
  • The Corporation
    Directed by Jennifer Abbott and Mark Achbar. Zeitgeist Films, 2005.
  • The Future of Food
    Directed by Deborah Koons Garcia. Arts Alliance America, 2007.
  • Who Killed the Electric Car?
    Directed by Chris Paine. Sony Pictures, 2006.

Websites


Footnotes

1. Heinberg, R., Blackout: Coal, Climate and the Last Energy Crisis. (Gabriola Island: New Society Publishers, forthcoming 2009).

2. Meadows, D., Randers, J., Meadows, D., Limits to Growth, the 30-Year Update. (White River Junction: Chelsea Green Publishing Company, 2004).

3. Fortunately there are many books, films and websites that explore this scope in detail; see the Resources list at the end of this document.

4. See Heinberg, Richard R. (8 Oct 2008) “Say Goodbye to Peak Oil.” Post Carbon Institute. (http://postcarbon.org/say_goodbye_peak_oil).

5. See Biden, J. (27 Feb 2009) “Green Jobs Are a Way to Aid the Middle-Class.” Philadelphia Inquirer. (http://www.philly.com/inquirer/opinion/40409617.html).

6. Daly, H. and Farley, J., Ecological Economics (Washington, D.C.: Island Press, 2004), p. 6, 23.

7. Korten, David, Agenda for a New Economy: From Phantom Wealth to Real Wealth. (San Francisco: Berrett-Koehler, 2009).

8. See http://www.transitiontowns.org.