By Chris Nelder
Posting in Energy
SmartPlanet's resident energy futurist Chris Nelder explains why economist Adam Smith was a peakist, and how energy will force the economy to contract.
The contemporary debate over the future of natural resources features two competing theories of economics.
The view that dominates all economic policy and theory today is rooted in the work of Adam Smith, published from 1759 to 1776. It holds that self-interest, if unimpeded by regulation, can be harnessed and trusted to produce socially desirable outcomes. His argument was that free trade maximizes the utility of producers to ration the demand of scarce resources and allocate them via an “invisible hand” to consumers with the highest marginal demand more efficiently than allocation by dictate could. History proved him right: the world’s supply of energy has continued to increase steadily ever since.
Smith wrote his seminal book, The Wealth of Nations, after becoming enamored of the Physiocracy theory emerging in France. It viewed the entire economy as being built upon agricultural output, which it mostly was. In Smith’s time, the world was primarily powered by our most ancient energy sources: plants, wind and water. The exploitation of coal had only just begun, and the steam engine had only just been invented. The age of oil wouldn’t even begin for another 140 years.
The competing view holds that the world is approaching “peak everything.” Peak oil, peak coal, peak gas, peak food, peak water, and ultimately, peak population. At some point the supply of these critical resources can no longer be increased; they will peak, and then decline, taking economic productivity down with them. Or in economic terms, the price at which new supply can be offered to the market will be a price that the market can’t support.
Being of a scientific mind, I prefer data over faith, which puts me in the latter camp.
When oil got to $120 per barrel in 2008 it cut into real productivity, and forced the world’s most developed economies to shrink. At $147, it wreaked serious damage. The subsequent economic crash took oil prices all the way down to $33 a barrel within six months. U.S. petroleum demand declined by nearly two million barrels per day (mbpd) from 2007 through 2009, of which 85 percent was lost in the commercial and industrial sector.
Every dollar of gross domestic product up until 2005 was generated on the back of cheap and easy oil. Without energy, there can be no economic activity. When global conventional crude oil production hit its peak-plateau in 2005, ending its 150-year-long trajectory of growth, it appears that global GDP per capita did too. Further, the last three major recessions in the U.S. all occurred after petroleum expenditures rose to more than 5.5 percent of GDP. (For additional studies on the relationship between energy expenditures as a fraction of GDP and recessions, see here and here.) At more than nine percent of GDP, we are well above that threshold again today.
But under modern laissez-faire economic theory, perpetual economic growth is axiomatic and mandatory. It is built into all our assumptions and our generally accepted accounting practices. It is presumed by the issuance of sovereign debt and the printing of money, both of which are essentially claims on future productivity. Growth must be maintained, at all costs. This presumption justified the creation of financial instruments like mortgage-backed securities based on no-money-down loans, to juice up a housing sector that would have gone flat if only truly creditworthy borrowers could buy a house. It justified trillions of dollars worth of Keynesian stimulus since 2007, and many economists argue that trillions more are needed still.
In short, when the gas tank on the engine of economic growth ran low, we turned to inflating monetary bubbles, and stuffed those in the tank. It created the temporary illusion of a bit more economic growth, but it came at the cost of several future generations’ worth of debt.
Despite these obvious facts, the entire world still assumes that growth will continue. Everyone thinks the world will get to nine billion people by 2050, when seven billion today are already encountering fierce competition for food and fuel. Every economic model offered by government agencies projects at least a 1.5 percent annual growth rate for another two decades.
Just as a fish has no concept of water, the faith that technology will somehow produce enough food and fuel to feed those nine billion is so embedded into our thoughts, so intrinsic to the economic theories we have been taught, that it isn’t even questioned. There is no need to worry about the declining energy content of our fuels, and the declining supply of basic agricultural nutrients like phosphorus. We needn’t bother with the fact that the net energy (the energy left over after subtracting the energy expended in production; also known as energy return on investment, or EROI) of all our major fuels is in long-term decline. The invisible hand will provide! Always!
I maintain that all of these beliefs are wrong. They are based on faith, not current realities, and they misconstrue what Adam Smith actually believed. They are as bankrupt intellectually as our economy is financially.
Not only are we finding it painfully expensive and difficult to produce new resources, the so-called free market no longer provides socially beneficial results. It now produces crashing global fish populations, depleted and vanishing topsoil, water in the Gulf of Mexico contaminated by blown-out oil wells and the runoff of agricultural fertilizers, hundreds of square miles of landscapes rendered lifeless in the pursuit of coal and tar sands, totally unsupportable and dysfunctional topographies of cars and roads and suburbs, and air so filthy that last week Milan banned all vehicles from its streets and Beijing’s air is rated as “hazardous” or worse nearly every day. It now produces social unrest via a chain of geopolitical causality so long, most people can’t even follow it. And it externalizes the true costs of energy in the form of environmental destruction.
Modern economic theory has no plan to address these very real problems. Indeed, it is utterly blind to them. It does not attempt to achieve fairness, only efficiency. It has no ambition to achieve a sustainable result. It does not capture the time value of use; it only serves to bring supply to market as quickly as demand warrants, which is particularly unfortunate when our most rational strategy now would be to make the last half of our oil endowment last as long as possible, not to use it as quickly as possible.
The reason we like laissez-faire capitalism is not because it’s intrinsically correct and comprehensive, but because it only asks us to do what we want to do, and confers a mantle of legitimacy upon self-interest. Or, in Milton Friedman’s more modern formulation of Smith’s theory, it offers “the possibility of cooperation without coercion.” But if you look closely at the data on fossil fuels, agricultural inputs, arable land, water, and all the rest of the resources necessary for human life and economic growth, it’s clear that the situation has changed. We have reached the end of growth, no matter how much faith we have to the contrary.
The Great Contraction
The question we now must ask is: What comes after the end of growth? The answer should be obvious.
While crude remains on its current production plateau, OECD economies may expect growthless stagnation. Oil has become a zero-sum market, where the OECD’s loss in demand owing to high prices, staggering debt, and anemic growth will be the gain of emerging economies as they work their way up the economic ladder. When crude begins its inevitable, terminal decline somewhere around 2014 or 2015, depriving the world of about two percent of its primary energy supply every year, it will slowly strangle economic output, under a scenario I call the Real Great Contraction. Milton Friedman used The Great Contraction as the title of his book on the Great Depression, and economist Kenneth Rogoff borrowed it to describe his view of the 2008 financial crisis, but even Rogoff has not incorporated the concept of peak oil, which will greatly exacerbate the effects of his scenario.
After oil begins its decline, gas and coal will too. By roughly 2030, 78 percent of our current global primary energy supply will be in decline. There is no way that renewables can make up that loss in time to prevent economic decline. When I run the calculations, I find that the world would need to build the equivalent of all existing renewable energy capacity every year just to make up for the decline of oil, let alone coal and gas. Since that is unlikely, the only remaining option is to reduce demand through efficiency gains. Given that the world is nowhere near on a trajectory to make enough efficiency gains to maintain even a flat economy, it must contract.
The modern interpretation of Smith’s invisible hand -- that the market can always call forth adequate resources at an acceptable price -- is self-evidently not true. It is merely a misreading of Smith’s theory, an artifact of developing economic theory in an age of energy surplus. Take that surplus away, and it doesn’t work anymore. High prices can still ration demand, but they cannot call forth adequate supply. But most economists fail to recognize this simple truth. No one remembers the last time humanity failed to find a substitute for a declining incumbent fuel, so we don’t think it can ever happen again. Two hundred and fifty years of recency bias is a bitch.
The connection between abundant, cheap energy and economic growth, and the phase transition from an age of surplus to an age of less, continues to confound and elude mainstream economists. They can’t see it, even as the farsighted wealthy convert their assets denominated in fiat money, like stocks and bonds, to hard assets, like gold and farmland. The 50X rise of gold from $35 to over $1,800 an ounce over the last 40 years is but an aberration within the narrow perspective their free market blinders affords, rather than a gradual deterioration of faith (credere, in Latin, the root of the word credit) in fiat. Even economist Nouriel Roubini, who famously staked out a contrarian position by anticipating the crash of the U.S. housing market and the financial system in 2008, still hates gold and derides it as a “barbarous relic.” Now the global financial regime teeters on the edge of failure, as European banks struggle to maintain their illusion of surplus wealth for just a few moments longer.
Rather than admitting that the fiction of wealth (money) is overextended far past its basis in real wealth (hard assets), we demand that our economic oracles perform rituals to appease the gods, dropping paper money from helicopters like some sort of cargo cult.
The Physiocrats of the late 18th century believed mankind would eventually overshoot its resources, since land is finite. (The emerging contemporary field of biophysical economics follows in that tradition.) That they could not have imagined the wealth of fossil fuels yet to be exploited does not disprove their thesis; it merely delayed it, and ensured that when human demands finally do overwhelm the capacity of a finite planet to satisfy them, the overshoot and crash will be spectacular.
Adam Smith believed that government would have to take action to prevent the tragedy of the commons as a necessity of civilized society. His notion of the invisible hand was simply a way of explaining how the appetites of the rich would unintentionally benefit the poor; it was not a proclamation that only self-interest should guide economic policy.
By modern standards, Adam Smith was a peakist. He would have been aghast to see the economic edifice built in his name, and would be demanding intervention to stop our headlong rush to overshoot.
Lacking energy alternatives that can be scaled and substituted for fossil fuels within two or three decades, true believers in free market theory must now hang their hopes on science fiction saviors like fusion reactors, colonization of space, fundamental breakthroughs in materials science, and aliens bestowing us with antigravity technology. In my view, none of these things are likely. If we do not muster the political will and the mechanisms needed to execute a rapid deployment of efficiency gains and a massive transition to renewables while we still have fossil fuels with which to do it, this century will see humanity slide back down the ladder of energy consumption and credit expansion in a long and volatile reversion to the mean of human history, to a much lower equilibrium of complexity and consumption. The Real Great Contraction is here.
The remaining question is: What sort of economic theory can maximize social cohesion and non-coerced trade during the Age of Less? And if we had such a theory, would we have the will to employ it?
Photo: “At the Time of the Louisville Flood,” Kentucky 1937, by Margaret Bourke-White (Cea/Flickr)
Oct 11, 2011
The answer is as usual a simple one. Go back to the Gold Standard !!!!! We need the financial discipline You cannot expect elected officials to know what to do . They are very ignorant and short sighted. and let's also mention dishonest by their very nature. A GOLD STANDARD IS THE ONLY WAY OUT Gold maintains it's scarcity It cannot be faked OR PRINTED. If gold is so big and so heavy. That is what it is
You are assuming that phosphorous can only be recovered from apatite rock and a few rare high concentration deposits. That is just not true. It is currently economic to 'mine' phosphorous from the water of the Dead Sea. It can also be done for a profit in Utah using the waters of the Great Salt Lake. It takes more energy, but the same processes will work to mine phosphorous from sea water in habitually dry areas. The desert coasts of Mexico and Peru could be good sites for this kind of activity, as could large portions of Australia, and the Kalahari coasts of Africa. Since the phosphates used in Agriculture end up either in the plants, then in the animals, or are washed into the sea, this kind of recycling is a sensible way to get to a steady state in intensive agriculture.
Relax everyone. It's just a typical extreme left wing piece, full of pessimism and bile. Yet there is one good sound point: it is absolutely true that if we don't find more cheap energy, the world is indeed moving towards a tough crunch point 50 or 100 years down the line. This is where some strategic thinking comes in. Fortunately, nuclear power (particularly with the limitless opportunity for using thorium fuel) is without doubt the way forward. You can always test the sincerity of a leftie by their negative reaction to this simple 'get out of jail' solution. They hate it precisely because they actually want the world to collapse. That is their problem not ours. Nuclear will prevail and all these 'new millennium' fearmongers will look very foolish to the next generations.
Capitalism died in 1913. 1913 was the year when the Federal Reserve was put up, income taxation was introduced, and Fitch Rating agency was established. Communism as we know it have already ended in China and Russia. Only romantic notions have survived using these ideas. There are still communist struggles all over the world despite their abandonment. Without the declaration of death of the 'isms' their failed notions will continue to be discovered. First, therefore, is to declare Karl Marx and Adam Smith as both obsolete and we can begin bringing in new ideas to address our present day problems. Without new revolutionary ideas, we cannot begin to solve these new problems.
Fish DO have a "concept" of water. But it is probably true that that concept is simply "the right place to be," in contrast to their "concept" of air as "the wrong place to be." But even as the first fish to crawl on land had to confront and adjust its conception of air, we now must confront and adjust our own conception of economics. Our entire society has been co-opted to operate as the underpinning of our accepted ideas of economics. If our economy gets out of whack, our first order of business has been to adjust our society to get it back to what we think is the right track. This is a back-assward concept. We must at least be aware enough to what we want to put our SOCIETY's interests in the driver's seat. We must start thinking in the other direction. If our SOCIETY gets out of whack, we must adjust ALL OTHER FACTORS, in order to get the society back in the groove we require it to stay in (with allowance, of course, for social evolution to take place). This will require that we rethink practically EVERYTHING we think we know, about how things really work. Lauds to this site, BTW, for treating SOCIOLOGY as the SCIENCE that it is, and for showing its CONFLICT with the equally-fuzzy science of economics.
Everyone is refusing to deal with the elephant in the room. Population is the cause and the solution to these problems. Fewer people use fewer resources of all varieties and reduce the chance of resource wars. Reduce the population by 50% and there may not be a problem. Solving real problems involves real answers. We do not live in fantasyland and wishful thinking that solutions will come just because we want them is infantile.
Two possibilities: First, additional fossil fuel reserves will be discovered & deployed, or an alternative energy source not yet seen on the horiozon will be discovered. If so, expansion will continue unabated. Second, we are approaching peak levels of current energy sources. As these become less available, price will increase to the point where alternative energy sources, such as solar and wind, which cannot compete in today's market because of their greater cost, will eventually reach price parity, and perhaps even price superiority, as compared to fossil fuels. Improved technology for these alternative energy sources may hasten this crossover point. In this case, there will be contraction until this point is reached, when "growth" will stabilize or increase. The underlying problem in all scenarios is excess population. It is poor farmers cutting down forests for fuel and/or agricultural use, removing green plants from the CO2 equation, that is IMHO more responsible for greenhouse gas increase than any increased use of fossil fuels. Unfortunately, it is the poor, who have little recreation other than sex, who are increasing in greatest numbers, while the better-off are limiting family size. So the problem will increase until famine, plagues, wars for resources, or other less-than-desirable causes ultimately reduce the population. I really do think that Agent Smith in "The Matrix" hit the nail on the head when he described humanity as a virus!
None of the ideologues/anti-Mathus nonsense commenters herein apparently have a gnats comprehension of mass balance analysis, scientific literacy, or have they tracked peak phosphate (95% of phosphate goes to NPK fertilizers) and what it will do inevitably to global food production. Peak oil and peak phosphate hitting simultaneously are going to skew even the already scary scientific estimates of our phosphate reserves - which showed we had 300 years left in 2008, but in 2011 have dropped the peak to less than 30 years and be depleted in as little as 50 years - and those estimates don't include additional growing demands for NPK fertilizers by China, India, every other developing nation, or the scientific/technical ingenues who think they can produce biofuels at large industrial scales without NPK. We have a serious and human species threatening problem with peak phosphate that technology can only partially offset, through nutrient recovery processes. Unfortunately, unlike peak oil - peak phosphate gets little press. We are being slowly inconvenienced by the depletion of global petroleum reserves as peak petroleum slowly unfolds - admittedly totally different than Hubbert predicted, but happening just the same. We may not drive as much without cheap petroleum. With peak phosphate we are much more likely to have rapid losses of global food production and starvation driven chaos such as resource wars. If you don't have your head buried in some right or left wing political ideology delusions - you might want to read the ref. links below - the first one is an excellent comparison of how and why peak phosphate will play out differently from peak oil. (http://www.energybulletin.net/node/33164) (http://www.ncbi.nlm.nih.gov/pubmed/20933402) (http://www.scientificamerican.com/article.cfm?id=phosphorus-a-looming-crisis) (http://en.wikipedia.org/wiki/Phosphate) (http://en.wikipedia.org/wiki/Peak_phosphorus) (http://www.biocepts.com/BCI/Comment_-_The_Global_Resource_Crisis.html)
...answering each and every point, and this stupid site ate it. So I'll distill it to this: The economic meltdown was made possible by the cheap dollar policy of the fed and government intervention in the mortgage marketplace; two forms of moral hazard that Smith never would have signed off on. What he's describing here is neo-Keynesianism, not laissez-faire economic theory. After that straw man is in place, he trots out the canards of "peak oil", which is a debatable topic on its own. Before 2007, if you plot the world price for oil against the dollar & euro, you'd discover that it was inflation of the dollar via the pretend wealth of housing bubble that caused oil to spike. Even if he's right, and we've past "peak oil", all this means is that over time, oil will become more scarce and more expensive. As it becomes more so, alternative technologies will become more attractive. It won't happen over night, just as petroleum did not replace whale oil overnight as the primary source of lighting and lubrication 120 years ago. What sort of economic theory can maximize social cohesion and non-coerced trade during the Age of Less? And if we had such a theory, would we have the will to employ it? Capitalism? We haven't tried that in quite a while.
Mr. Nelder falls for the classic anti-capitalist canard, i.e., total available wealth is fixed and all economic activity is a zero sum game. What bunk. Two words, Mr. Nelder: shale gas. And two more: shale oil. We are no where near "peak" hydrocarbons. And if we ever do get there before the next energy source comes along, the market will drive it's development. No doubt your solution to your non-existent problem is a centrally planned economy that allocates resources and distributes wealth at the will of the all-powerful state. We call this socialism. Get lost, sir.
I have developed a business arbitrage model to make the financed payments for the buyer. That means you get financed, and you don't make any monthly payments. If you want to get off your butts, and do something about this, partner with me to bring to fruition. I need a partner to run this venture. Thomas email@example.com
Sorry, Mr. Nelder, capitalism is not about growth. It is about efficient allocation of resources. It's not a matter of faith or any superstition, it's hard science. I don't know how you even got that interpretation. Just because capitalism is not perfect, you think it is worthless. The attitude that we're hitting the end of resources that we know about and must stop growing has been proved wrong throughout history. Two hundred thousand years ago we were a hunter-gatherer society. Under that model the resources of the earth could not sustain more than a few ten millions of humans. Under your world view, at that point we were doomed. There couldn't possibly be anything such as, say, agriculture, that would unlock a great deal more resources. In your world view we should still be huddled in caves. A few hundred years ago, all power was derived from muscles, human or animal. This limited how far society could advance. Over 90% of society had to live on subsistence farms, and no resources could be freed up to advance the standard of living (ironically, this is how some people want us to live today). So there was no point in learning about thermodynamics, and how to harness the abundant fuels around us to improve our lot. Heck, 50 years ago we had absolutely no idea how we were going to feed the 6 billion we would have by the end of the century. Obviously since everybody in the world is starving today, we should have just given up. You just want to give up and cower in a corner. Yeah, we don't know exactly how we are going to make it to the end of the century. What's new about that?
And talking about The Physiocrats... 'That they could not have imagined the wealth of fossil fuels yet to be exploited does not disprove their thesis' That is actaully the problem with views similar to the author's. So many opinion formers today, like the Physiocrats did in their time, do not have the capibility to have the imagination to imagine the wealth of #~#~# (not an expletive - just an attempt to indicate that we don't know what resources will exist in the future), due to being preoccupied with simply extrapolating (modified with dodgy 'peak' theories) rather than understanding that resources do not run out - they get substituted before they run out - driven possibly by the 'invisible hand' or possibly by having a culture of an open eneded view of the future - where unconstrained R&D takes place (not R&D constrained by the preoccupation with carbon counting). Have faith in humanity to solve problems, rather than just see them as lumps of meat to be fed & watered.
Wind, in the US, apparently hit 3% of all electricity generation this year. It produced 2.5% last year. We're now going to build transmission from windy Wyoming to the Pacific Coast and there's a massive offshore wind farm starting up off the Atlantic Coast. The price of solar has plummeted in the last two year and prices are expected to continue to fall. Solar gets installed very quickly. Solar is on track to furnish 1% of our total electricity by 2015 and to double every three years afterwards for a number of years. Geothermal is growing rapidly with several new projects recently initiated. Geo seems to fly under everyone's radar. Add to that the fact that Canada has discovered that it has enormous geothermal which could be tapped and the power sent south into the US.
"Lacking energy alternatives that can be scaled and substituted for fossil fuels within two or three decades" 1) We do not have to replace all fossil fuels immediately. We have to scale back use to match supply. Doing so will keep prices from soaring. 2) We can move a considerable portion of our transportation, both personal and public, to electricity starting yesterday. We're already underway on this substitution. Driving using electricity is considerably cheaper than using oil. 3) We can produce a large portion of our electricity without fossil fuels and we can do it for less money than we are now spending for power. Do not forget the hidden costs of coal. While we pay small money at the meter for coal-electricity we pay many times more in health and environmental costs. As we move to cheap wind and soon-to-be cheap solar we cut back on our expenditure for coal. Our electricity becomes cheaper. We're replacing our old energy source with cheaper sources. The Real Great Contraction is dead. Long live the new age of clean, cheap power. --- Chris - give this a read. 100% of all our power for electricity, transportation and heating from renewables in 20 years. Twenty years, we probably won't work that hard at it but we might get it done in 30 years. At the minimum we can move as fast as fossil fuel supplies tighten. http://www.scientificamerican.com/article.cfm?id=a-path-to-sustainable-energy-by-2030
"Reduce the population by 50% and there may not be a problem." The developed nations of the west have been fed a guilt trip for decades to feed the poor of Africa. While most developed western nations have seen population loses, when you subtract immigration, Africa has seen a massive population boom over the past 40 years. Should the developed nations stop feeding this unsustainable population expolsion? Are you ready to blockade a shipment of food?
Sure. Do we flip coins to see which of us die? You are correct, were population size to be cut in half our problems would be a lot more manageable. But we aren't going to make an active decision to slaughter half the people in the world just because fossil fuels are getting more expensive. We've got a big problem to solve. We have adequate technology right now to replace fossil fuels. We can make all the electricity we need with wind/solar/hydro/geothermal/tidal/wave/biomass generation. We can switch most of our travel to EVs/PHEVs/electric rail. All we have to do is to speed the implementation which we are already doing. As we build/install we will improve. This isn't nearly as scary as smallpox and polio. With those diseases we had no prevention and we had no cure. This time we've got the answers, we just need to do the work.
The peak phosphorus argument assumes we mine phosphorus, use it, and then it gets lost to the environment. The truth is that we can recycle it, just as we do iron or metals that have become scarcer and thus more expensive. Surely you have heard of guano. No doubt just like the rest of us you've produced your share of it. This was once a major source of phosphorous and there's no reason it can't be recaptured and recycled instead of flushed down the drain. If phosphorous still is too rare, it will become economical to grow plants in hydroponic or other enclosed environments. That, plus reusing our waste products will greatly reduce the need for new phosphorus to be introduced into our agricultural production.
"That means you get financed, and you don't make any monthly payments." Are you crazy? Who would possibly finance a scheme where the borrower doesn't make any payments? The FIRST thing you need to work on is your concept, but then you need to find a cogent, convincing case for it. The concept you speak of may indeed work, but you need a way to convince us of that, beyond language that makes it sound as though you are posting from the Common Room of a State Hospital for the Insane.
... or else it has no meaning to say that there is "no limit" on the aspirations of those who want to increase their wealth. Only be instituting some limit on those aspirations, either governmentally, socially, or individually, can we avoid the specter of pyrimidization of the economy. And saying we have no hit our limit without SHOWING us a direction toward our "new" resources is irresponsible. I understand, that you are standing on tradition, here. But tradition fails, when it has nowhere to go; no future. Where are the new resources that will be required, if as you say, we can keep growing indefinitely? We NEED TO KNOW this. Where?
CO2 is the waste that's most in the news, of course, and simply slacking off on Carbon use will no longer suffice to deal with it. It's gone too far, thanks to our perennially head-in-the-sand stance on ANY big problem. But also, we have waste in the form of nuclear, chemical, and now climate-change drying out and desertification. How do you deal with those?
You missed the part about peak phosphate. Peak oil is inconvenience - peak phosphate is what's for dinner - or not.
I agree that transitioning transportation to renewably-powered electricity is a potential solution, and I have agitated for it for years. I have also studied the 2030 scenario you mentioned. However, I do not see us even coming close to executing that plan as of yet. First, we're not deploying nearly enough renewable generating capacity. Solar, wind and geothermal put together still account for less than 2% of our energy supply, and if you look at the trends in the data, no actual substitution is evident. Over the last 20 years, our consumption of coal, natural gas and nuclear power has either stayed flat or increased. Second, the fleet of electric vehicles is so tiny, and growing so slowly, that they don't even amount to a drop in the bucket yet. It would require a full-bore effort over 20 years to fulfill that 2030 scenario, and we haven't even gotten started. The policy incentives that would be needed to make it happen are nowhere to be seen. The authors of that scenario are describing a theoretical possibility; they have not sorted out how we'd actually get there. Further, I don't think it's reasonable or desirable to try to transition 240 million cars and light trucks to electricity. Instead we should be aiming to remove most of them from the road permanently and transition that traffic to rail. So I agree that the potential is there. But the fail is that we haven't begun to try to realize it.
...and progressivism may solve in a most unsavory fashion. The "problem" was caused by capitalism's fantastic ability to raise our standard of living so high up the Maslow curve that we were able to literally give away food and technologies to societies that were not developed, which caused their populations to swell. The unfortunate "solution" is that Progressive economic policy will see to it that we will slide back down the Maslow curve and will no longer have the surpluses we have enjoyed for the last 100+ years. Once there is only productivity enough to feed ourselves, there will be little left to feed anyone else. It won't be pretty.
Clearly recapture of nutrients is helpful and we will have to. However, based on studies that look to use of wastes for biofuels - only 3% of the country's wastes (remember that 38% of the country's sewage ends up in backyard septic tanks) are available to biofuel production because of spatial, logistical, climatic, and economic limitations (that's why the vast majority of biofuel production would be NPK dependent). The same will be true for phosphorus recapture - inability to access and utilize wastes cost efficiently. It's really hard to grasp the necessary scales we are talking about to support the current and coming population additions. While it's true that population birth rates are slowing, our population is estimated to double in the next 30-50 years and that is probably conservative because it doesn't take into account a lot of developing nation factors and rapidly increasing longevity world wide. There is no way we will be able on an economic basis remotely resembling our current living standards to be able to recapture or sequester that much phosphorus for the necessary food population of 15 B people. One way or another the human population is going back to 2 billion or less eventually and inevitably - it's up to us right now to determine how painful and unplanned the process will be. I think most of the readers herein missed the biggest species threat here - and it's not directly peak resources. It's peak economics. No one on the planet has a clue how you have comfortable - much less prospering national economies with no, or declining population growth. We have never even had to consider it. Capitalism works fine with growing populations. What happens when there is no space and resources to sustain growth? How many company's have you seen that survived when their markets that shrunk by 5-7 times. In the few examples we have seen in resource crashed human societies like Easter Island - cannibalism was the result and then near extinction of the survivors. Same happens in over population experiments with rats and other animals. The end results of unplanned resource depletion are really pretty well documented. None of our leaders are addressing these issues effectively, or are they likely to come forward with solutions in the technical window of opportunity time limits we have. That's the scariest problem of all. Durwood M. Dugger, Pres. www.biocepts.com
You must think it is crazy, and have to be convinced to buy One product, and get another free. Who would offer that?
The problem is we aren't seeing the necessary national leadership coming forward to address these technically complex problems and especially in the absence of pandering special interests. If current peak phosphate estimates are close to correct and our national and global leadership keeps selling out to the highest special interests bidders, our technical window of opportunity to resolve our energy, food production and management of a population of the 9-15 B people expected in 30-50 years, is probably impossible. While we may not disappear as a species, our first Dark Ages is going to look absolutely brilliant by comparison to what's coming if we continue on as we are.
(I'm having to chop this up due to the character limit.) So, can we transition off of oil and coal fast enough to keep supply restrictions from killing our economy? I think that is very doable. The rising price of oil and coal will make renewables and electrics more attractive. And prices of renewables and electrics will fall, tipping the scales more in their favor and increasing their rate of implementation. And we've left climate change out of the discussion to date. 71% of Americans (55% of Republicans) want the EPA to do something about emissions, even if it costs them money. A couple more years of weird weather is likely to create some sort of price added to carbon. That will drive the transition faster. A third force. Henry Ford introduced the Model T in 1908. By the 1930s horses were largely gone from US city streets. Things move faster these days. So what do I think will happen? I think we'll greatly expand our installation of renewables and in doing so we'll create a lot of economic activity. I think we'll start a serious move to EVs (I'm betting on price drops and range increases) by 2015. Because battery/vehicle manufacturing is now so automated Asia does not have the sort of advantage it had from cheap labor. Look for a large portion of battery/vehicle manufacturing to be done closer to the point of sales (avoiding shipping costs) and that will mean a lot more economic activity. And think how stopping the $1 billion per day cash flow overseas to purchase oil will help the economy. Add in the almost billion we spend each day on oil wars and there's even more help. I think we stand a very good chance of having The Real Great Expansion in our near future.
We probably won't do a 100% switch in 20 years. We don't (yet) have the political will to make that happen. But economics will drive renewables and EVs/PHEVs without large political inputs. EV battery prices are set to start falling as several new battery plants come on line over the next few months. As soon as EV prices drop to about a $6,000 premium over a comparable ICEV they become cheaper during the loan payoff years and them become considerably cheaper to drive. We're only a year or so into the EV transition and so far sales have been kept low by supply. Nissan has a one year waiting for its coming output. Volt is selling very well. Other companies will enter the market. We probably won't do a 100% switch in 20 years. We don't (yet) have the political will to make that happen. But economics will drive renewables and EVs/PHEVs without large political inputs. EV battery prices are set to start falling as several new battery plants come on line over the next few months. As soon as EV prices drop to about a $6,000 premium over a comparable ICEV they become cheaper during the loan payoff years and them become considerably cheaper to drive. We're only a year or so into the EV transition and so far sales have been kept low by supply. Nissan has a one year waiting for its coming output. Volt is selling very well. Other companies will enter the market. One thing to consider is that about 50% of all US driving is done with five year old or less vehicles. Moving a significant portion of our sales to EVs/PHEVs will make a large impact on fuel consumption.
Donate at: http://coupmedia.org/occupywallstreet/donate-to-occupy-wall-street-2109 If our so-called "leaders" cannot lead us where we need to go, then we need new leaders. Ergo Sum.
We must also deal with wastes. In this case CO2 buildup, which means we must not only get ourselves OFF of oil, but we must accelerate that egress BEYOND the strict economic necessity that drives it. We must create a WHOLE NEW energy regime, that basically DOES NOT USE ANY CARBON SOURCES. That will require MAJOR adjustments, to say the least. I'm NOT so sure that it IS "doable" at this point, without major strife worldwide.
Again, I point us to "Entropy," by Jeremy Rifkin. Order it. Read it. There is more than an energy threshold coming due here. An energy threshold is a point at which energy becomes more and more expensive as the source of it becomes more expensive to exploit, and as it's wastes become more and more expensive to deal with. Dealing with the wastes is a major factor, because the MEANS of dealing with those wastes is ALWAYS powered by the core energy source (here, oil) and as the energy becomes more expensive, so does dealing with the wastes. And since they both come to a head together (through the balancing effects of economics), the wastes become intolerable AT THE SAME TIME that the energy becomes most expensive. So part of the economics factor is also the wastes inherent in the energy system. Everything happens at once. Pollution. Climate Change. Scarcity. Social imbalance. Currency imbalance. All of it is premised on the health of the economic system. As that system fails, is becomes more and more unable to provide the answers to any of those problems. We need a NEW energy/energy use paradigm; NOT just one more extension of the old one.