The End of Growth- Preparing for a new normalPresentation Transcript
the economic crisis changes everything after crisis before crisis
some perspective:how we got here
99.9% of our history = renewable energy
winning the energy lottery
Horsepower in the US economy horsepower in the US economy
world GDP per capita, 1-2000 CE
world population
Meanwhile, we were developing economic institutions and theories
With continual growth in energy, population, and consumption, it was assumed that economic growth could continue forever
With compound interest, fractional reserve banking, and debt leverage, growth became necessary to the monetary health of nations
all money loaned into existence
perpetual growth a requirement
tomorrow’s growth is collateral
The Limits to Growth
the hydrocarbon age 1500 CE 2000 2500
End of Growth: factors internal to the financial-monetary system
manufacturing employment as % of total employment
real wages declining since 1973
US household debt & debt payments as % of disposable income
financialization
US total debt, 1979-2010 Trillions
inverted pyramid of debt derivatives mortgage-backed securities subprime, no-doc loans house prices
US home price index, 1970-2010
US foreclosure rate, 1970-2010 Percent
“The value of global financial assets . . . fell by more than $50 Trillionin 2008, equivalent to a yearof world GDP.” (Asian Development Bank)
visualizing money: $100
$10,000
$1 million
$100 million
$1 billion
$1 trillion
post-WWII recessions, job losses
cost of the Wall St. bailout
no stimulus, no growth Billions Trillions
End of Growth: factors external to the monetary-financial system
Marion King Hubbert Geophysicist at Shell lab in Houston, taught at MIT, UCLA Forecast peak year of US oil production
Hubbert’s Peak
US oil production & discoveries Production Mb Discovery Mb
world oil discoveries
world crude oil production Million barrels/day
the oil price trap Oil price needed for development of new oil production capacity: $70 Oil price likely to trigger economic recession: $100
past recessions & oil spikes
Peak Oil means the end of cheap air travel peak oil means the end of affordable air travel
does peak oil mean peak food?
food & oil prices, 2000-2010 Dollars/barrel UN FAO Food Index
evaluating energy options Energy return on investment
net energy
evaluating energy options Energy return on investment Size of resource
evaluating energy options Energy return on investment Size of resource Infrastructure requirement
evaluating energy options Energy return on investment Size of resource Infrastructure requirement Convenience of use
evaluating energy options Energy return on investment Size of resource Infrastructure requirement Convenience of use Environmental impact
evaluating energy options Energy return on investment Size of resource Infrastructure requirement Convenience of use Environmental impact Renewability
evaluating energy options Energy return on investment Size of resource Infrastructure requirement Convenience of use Environmental impact Renewability Scalability
evaluating energy options Energy return on investment Size of resource Infrastructure requirement Convenience of use Environmental impact Renewability Scalability Location of resource
There is no credible scenario in which alternative energy sources can make up for fossil fuels once declines begin.
depleting materials Antimony China Thermoelectric/paraelectric materials Barium China Thermoelectric/paraelectric materials Bismuth China, Mexico Thermoelectric/paraelectric materials Cobalt Kinshasa, Australia Photovoltaics GalliumChina Photovoltaics Germanium Belgium, Canada Photovoltaics Indium China, Canada Photovoltaics, thermo/paraelectric mat’ls Manganese Gabon, S. Africa Photovoltaics Nickel Canada Fuel cells Platinum S. Africa Fuel cells, para/thermoelectric materials Rare Earths China Fuel cells, para/thermoelectric materials Tellurium Belgium, Germany Solar cells, semiconductors Titanium Australia, S. Africa Solar cells Zinc Canada, Mexico Photovoltaics, fuel cells
30% of amphibians, 21% of mammals, 12% of birds face extinction
We’re performing a giant science experiment with the Earth’s atmosphere
but, but . . . what about . . . China?
but, but . . . what about . . . China? efficiency?
but, but . . . what about . . . China? efficiency? substitution?
but, but . . . what about . . . China? efficiency? substitution? innovation?
but, but . . . what about . . . China? efficiency? substitution? innovation? division of labor?
but, but . . . what about . . . China? efficiency? substitution? innovation? division of labor? globalization?
facing the wall
When growth ceases, growth-based economies enter survival crisis mode
“We’re in the midst of a once-in-a-lifetime set of economic conditions. The perspective I would bring is not one of recession. (Steve Ballmer Chairman, Microsoft)
Rather, the economy is resetting to a lower level of business and consumer spending based largely on the reduced leverage in the economy.” (Steve Ballmer Chairman, Microsoft)
what to expect Unemployment Homelessness Bank failures Hunger Crime Political instability International conflict
what to do?
money reform Non-debt based
money reform Non-debt based Direct credit clearing
money reform Non-debt based Direct credit clearing Unit of account?
money reform Non-debt based Direct credit clearing Unit of account? Nested systems
community currencies Crucial in times of monetary crisis Over 2500 local currencies in countries around the world
free money or haircuts for all?
beyond the wall
The sustainability revolution will be driven by crisis
reforming economics The economy is a subset of the environment
reforming economics The economy is a subset of the environment growth in population and consumption levels is not sustainable
reforming economics The economy is a subset of the environment growth in population and consumption levels is not sustainable Renewable resources must be harvested at less than the rate of natural replenishment
reforming economics The economy is a subset of the environment growth in population and consumption levels is not sustainable Renewable resources must be harvested at less than the rate of natural replenishment Non-renewable resources must be recycled, use must decline
reforming economics The economy is a subset of the environment growth in population and consumption levels is not sustainable Renewable resources must be harvested at less than the rate of natural replenishment Non-renewable resources must be recycled, use must decline Wastes must be food
ecological economics Cap-and-dividend system for extraction rights for basic natural resources
ecological economics Cap-and-dividend system for extraction rights for basic natural resources Shift from taxing income toward taxing resource depletion and environmental pollutants
ecological economics Cap-and-dividend system for extraction rights for basic natural resources Shift from taxing income toward taxing resource depletion and environmental pollutants Limits on income inequality
ecological economics Cap-and-dividend system for extraction rights for basic natural resources Shift from taxing income toward taxing resource depletion and environmental pollutants Limits on income inequality Tariffs to allow countries with sustainable policies to remain competitive with countries without them
ecological economics Reduce externalities Tax on financial transactions Corporations vs. co-ops
ecological economics Reduce externalities Tax on financial transactions Corporations vs. co-ops Indicators that make sense
reduce fossil fuels & develop renewables
food systems, transport systems, efficient buildings, and more Building resilient communities
Only a crisis—actual or perceived—produces real change. When the crisis occurs, the actions that are taken depend upon the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.—Milton Friedman
meanwhile, time to prepare
resilience: the ability to absorb shocks and continue to function Resilience
Transition Towns A bottom-up community organizing model that puts together all of these strategies and more “Life can be better without fossil fuels…”
emphasize what’s not at peak Community Satisfaction from honest work well done Intergenerational solidarity Cooperation Free time Happiness Artistry Beauty of the built environment
great transitions Fire
great transitions Fire Language
great transitions Fire Language Agriculture
great transitions Fire Language Agriculture Industrial (fossil fuel) revolution
great transitions Fire Language Agriculture Industrialism Sustainability
crisis = opportunity This is the biggest opportunity of our lifetimes. Who will seize it?
Imagine life after growth, a world without fossil fuels,the best case scenario
Imagine life after growth, a world without fossil fuels,the best case scenario now imagine a path from here to there, and start to build it
www.postcarbon.org
Community Economic Laboratories One-stop shop, central location Car-share, ride-share Food co-op Credit union Job center Free clinic Etc.
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