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Sandpit

February 24th, 2014

A new sandpit for long side discussions, idees fixes and so on.

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  1. Ikonoclast
    February 24th, 2014 at 17:17 | #1

    Fuel Crisis Warning for Australia.

    “The NRMA has warned the nation’s reliance on imported petrol leaves our entire transport network vulnerable to a global oil supply crunch. The NRMA is calling for governments to cap liquefied natural gas exports. The group says Australia needs to be more self-sufficient if it is to survive a fuel crisis.” – ABC Business Report.

    The report indicates;

    1. Australia now imports about 90% of its crude oil and petrol compared to 60% 14 years ago.
    (This statistic seems to be exaggerated or misqouted. See my Note 1.)
    2. Australia now has only 5 operating refineries and may be down to 4 soon.
    3. These changes make Australia vulnerable to sudden and drastic changes in global supply.
    4. Australia is the only member of the International Energy Agency to meet the required 90 day stock holding.
    5. Last year the country held 60 days of oil in reserve on average.

    Commentators are saying “the reliance on imported fuel could have serious consequences for Australia’s economy”. It is also a trade balance and inflation risk.

    What the commentators haven’t said yet (to my knowledge) is that inimical foreign powers could bring our country to its knees in 2 months by simply cutting our oil and fuel supply line. This leaves us extremely vulnerable strategically speaking.

    And what have Labor and the LNP done about this? Nothing! There is no plan to deal with our emerging total reliance on imported oil. Australia’s “wonderful” economy could rapidly turn into an imploding basket case. There is complete lack of thinking here about sustainability, resilience and strategic economic planning. We are drifting rapidly into disaster.

    Note 1: “Given recent trends, the country’s self-sufficiency in crude oil and refined petroleum products is likely to drop from 48% in 2011 to approximately 20% by 2020.” – Vlado Vivoda, Griffith Uni.

    So it appears the 90% claim is wrong. Possibly it ignores outgoing exports of our oil which may be refined in Singapore and re-imported. However, the claim the we net import about 60% of our oil and liquid fuel needs right now would be about right. This is still a parlous situation when combined with our propensity to hold reserves below the recommended level.

  2. Ikonoclast
    February 24th, 2014 at 19:53 | #2

    Clarification?

    I think I have realised the explanation for my above confusion.

    1. Australia imports about 90.5% refined product (gasoline, diesel etc.) from overseas refineries.
    2. We produced 368,000 barrels per day of crude oil in 2012.
    3. In 2011 we “consumed” 1,023,000 barrels of crude oil per day (according to Index Mundi).

    The amount of total crude consumption must be imputed (I assume) from a total of local crude production and the imputed barrels of crude represented by imported refined product. Can anyone more knowledgeable comment on this assumption?

    Even so, the figures paint a picture of high dependence on refined product. They also paint a picture of lack of self-reliance in relation to liquid but non-gaseous hydrocarbon fuel needs. So, despite the fact that we export energy mainly as coal and LNG, we have this high reliance (over 90%) on importing liquid fuels like petrol, diesel and avgas.

    The official and business argument is that supplies are reliable and will continue to be reliable in future. Gee, I wish my crystal ball was as good as theirs apparantly is. But somehow, I don’t feel confident that the next 70 years will be as relatively stable for the West or the globe as the last 70 years since WW2.

  3. James
    February 25th, 2014 at 07:47 | #3

    The Ukraine situation played out this week as grand political drama has been woefully short of analysis in not only the main stream media, but the more informed media in general. The usual line has been that this is a political stoush between two rivals driven by ethnic and cultural alliances that looked respectively east and west.
    For a country that voted overwhelming for independence in 1991 this rationale for the subsequent meltdown is highly implausible. There has to have been a catalyst, an underlying wound that ran so deep it prevented people from hoping in a better future, and effectively left them no options.
    One doesn’t have to dig far to find this wound. The Ukraine was neo-liberalised in the aftermath of the socialist meltdown, and the oligarchs made off with the loot. This is not an economics paper, so if the reader needs the evidence feel free to do the research (as I have found it safer to stick to Prof Q’s link free commenting). The broad outcome of this has been falling living standards, increased economic uncertainty and rising inequality. The weak democratic institutions were effectively captured by the oligarchs until the last strongman came along. And he was into autocracy, a return to the old socialist command and control paradigm without the underlying social structures that at least made the old system equally unfair.
    Even the Guardian has been remarkably silent on this issue, but last week an excellent piece titled “Not Just Geopolitics: The Institutional Background to Ukraine’s Problems” by Antoaneta Dimitrov was posted at Crooked Timber. At last it appeared that the facts were starting to be collated into some semblance of order. I don’t want to comment on the piece, except to recommend it to those who are interested. It is one of the comments that really struck interest. Bruce Wilder (33), commenting on the rise of right wing militancy, makes the point

    …that mass movements are arising in rebellion against an unresponsive and corrupt governing class, trying to find leaders, who will solve their problems and govern in their interests.
    It dovetails with another hypothesis: that neoliberal policies and institutional reforms are corrupting elites, and, also, disabling elite governance, leaving even well-intended elite governors without good options. …there doesn’t seem to be a plan. That seems like it could be a significant indicator of the nature of the problem, and why the anger takes a form that looks like fascism.

    This issue, as I see it, with neo-liberalism is that it takes the form of an institutional economics that on the surface is merely competing for how well it defines real world economics, but has in-fact so imbued the academic, business and political class with its internal logic (some may even call it a beauty) that it effectively prevents real solutions to real problems.
    And that at some point, the average non-economic citizen is going to come to that conclusion… not through understanding the economics, but by realising that things ‘aren’t right’. And in not understanding the economic issues, will see the political class not as constrained by their own internal paradigms, but as weak and ineffective in the face of real problems. This process has started, in both the US and Europe, and I would presume is set to play out itself out in Australia.
    China, on the other hand, may implode or may not, not because it is beholden to the shadow-shackles of neo-liberalism, but because there is no evidence that pragmatism can win out over oligarchy.

  4. Megan
    February 25th, 2014 at 10:32 | #4

    @James

    Have you heard the recording of the phone conversation between U.S. Assistant Secretary of State Victoria Nuland and U.S. Ambassador to Ukraine Geoffrey Pyatt? They were more or less planning the armed overthrow of a democratically elected (although said to be corrupt and incompetent) government.

    The role of the US in creating and directing the situation is an important consideration. From what I understand US goals re Russia, and a subtext of rivalry between US and Germany, are much more responsible than local social/political unrest.

  5. Ikonoclast
    February 25th, 2014 at 12:10 | #5

    The complex problems of the Ukraine come from a great variety of causes. Here is an attempt to list a couple of relevant factors;

    1. The history of civilization can be viewed as the history of empires. Centralized power arising from city-states, then “nation” states and finally “empire” states works broadly as follows. There is the core empire. This is surrounded by vassal and tributary states. Beyond these vassal/tributary states is a contested zone. This contested zone is contested by other empires and/or by disorganized “barbarians”. It is beyond the scope of this small note to say fully why it works like that but essentially it does work like that. Vassal and tributary states provide resources, revenue, military conscripts and a buffer zone for the Empire. The contested zone is a secondary buffer and also a zone of potential expansion.

    Ukraine was a vassal and tributary state of Russia when Russia was incorporated as the Soviet Union. The Soviets, apart from Russia itself, were essentially vassal and tributary states. The collapse of Russian power circa 1991, ostensibly moved Ukraine from vassal state to independent state status. The reality was a bit more complex. The east and south of the Ukraine retained a somewhat vassal aspect to Russia. The west Ukraine did too but more quickly moved (economically and culturally) out of Russia’s orbit. Ukraine is now transitioning from being a vassal state of Russia to being a contested zone between two empires, Russia and the EU.

    In the modern world, contested zones can be contested militarily as in Iraq, Afghanistan and Syria. Or they can be contested economically and politically. Ukraine is still in the phase of being contested economically and politically. Many, many factors will come into play in determining whether the Ukraine becomes contested militarily (most likely by civil war and proxy way).

    2. Ukraine is a basket case. Both economically and in terms of the health of the populace, Ukraine is a basket case. It would take too long here to go into the reasons why. Suffice it to say that economic and health “basket case status” has a high correlation with unrest, revolution, reaction and civil war. When people are desperately poor and hungry they get mad as hell, come together in masses and look for targets and redress.

    To sum up, Ukraine has become a contested zone between two Empires clashing almost directly (EU and Russia) and also between the US and Russia. The US continues to act as a global hegemon (whether or not it has the power to always back up the act). Contested zones are for containment. If contested zones can be pushed close to the enemy Empire or its vassals/tributaries this assists containment. You have the opposing empire constricted and focused close to home trying to break out of that constriction or containment. In this way of thinking, it is always better to fight wars, proxy wars and feed civil wars in the enemy’s back yard and not your own.

    I don’t advocate this setup. I am just saying this is what happens. It is Realpolitik revealed by the empirical evidence of history. Empires always compete. The entire history of civilization, at the macro level, is best understood as the competition of empires. Empires don’t always compete via open war. There are many other levels: economic wars, trade wars, diplomatic wars, proxy wars, cyber wars and so on and so forth.

  6. James
    February 25th, 2014 at 12:54 | #6

    @Megan, I don’t deny that there has been opportunistic intervention from both east and west in the events of the last few weeks. The EU offer of a bailout came with the usual conditions of their preferred neo-liberal orthodoxy, the implementation of an austerity program winding back social services and the public sector with further sell offs of public assets to the oligarchs and their western financial facilitators. The Russian offer appears to have had fewer financial constraints but required acquiescence to a hegemony that also entrenched the power structure of the oligarchs. This leaves ordinary Ukrainians between a rock and a very hard place.

    My interest in the matter is that economic failure is not addressed as such and that this appears to be the case for several reasons.

    Firstly there is the concept of a dominant discourse reflecting the ideology and interests of the elites (and in Ukraine’s case, from both within and outside the country) deflecting attention from causes that may undermine the interests of various elites.

    The second is that economic literacy in the general population would have to be considered very low, with no apparent way of overcoming the impermeable barrier of an orthodoxy that speaks with certainty but offers increasingly dystopian outcomes as opposed to a heterodoxy that is both divided and unproven. That is, there is little room for common cause.

    The third is that a retreat to certainty normally outworks as an appeal to conservative and illiberal elements in the public discourse; a return to xenophobia, to an us and them dichotomy, the irrational blaming of identifiable groups (immigrants, boat-people, dole bludgers, unionists, public servants, drug-dealers, paedophiles and bikies) while concomitantly elevating the role of existing institutions and elites that in many cases are implicated in the original economic malaise.

    The above list is not comprehensive, but in all it gives the appearance of a move to the right, of the nascent rise of ‘proto-fascist’ parties into the ordinary discourse. To an outsider, the irrationality of the US Tea Party, the rise of Golden Dawn in Greece, the role of the neo-fascists in Ukraine, the conservative Muslim Brotherhood in Egypt, or the subjugation of the Irish to an ill-founded bank-bailout are all cut from the same stone, hewn from the same economic cliff.

    The best that can be hoped for is that the people of Ukraine (and elsewhere) can return to a subdued and lethargic morass, buoyed by dodgy measures of renewed economic growth, free from the direct intervention and machinations of the surrounding vultures. True freedom, the freedom that comes when ordinary citizens have real choices, and the capacity to act on those choices, does not even appear to be on the horizon.

  7. alfred venison
    February 25th, 2014 at 21:16 | #7

    well they have gotten off to a good start in kiev, heaving a heavy legislative workload last weekend, that included repealing the “bill on the principles of the state language policy” passed in august 2012 & which had allowed for languages spoken by at least 10% of an oblast’s population to be elevated to the status of ‘regional language’, whilst leaving ukrainian unaffected as the official language of the country. this affects like a slap in face everyone in the eastern oblasts & crimea & sevastopol where the majority speak russian and which have the highest income levels in the country.

    in the 2010 election 8% of voters in kiev put their mark in the box “against all”. politicians of all parties are held in low regard in ukraine at present. -a.v.

  8. Will
    February 25th, 2014 at 23:24 | #8

    The Ukraine was neo-liberalised in the aftermath of the socialist meltdown, and the oligarchs made off with the loot. This is not an economics paper, so if the reader needs the evidence feel free to do the research (as I have found it safer to stick to Prof Q’s link free commenting). The broad outcome of this has been falling living standards, increased economic uncertainty and rising inequality. The weak democratic institutions were effectively captured by the oligarchs until the last strongman came along. And he was into autocracy, a return to the old socialist command and control paradigm without the underlying social structures that at least made the old system equally unfair.

    As an unrepetant leftie (and insomniac, so hope this is legible), this passage appeals to my narrative. However, like all good scientists one mustn’t allow the emotionality behind any idea to interfere with the facts from the real world. From 1990 Russia recorded cumulative economic growth well above the rest of the world (more than doubling per capita incomes) and suffered during the GFC worse than the US but better than the Eurozone as a whole. Would love to find stats on income distribution/Gini/something better but given that it is a developing country with a large black market(inc. tax evasion + money laundering) and massive capital outflows it would probably be impossible to get a realistic measure of income distribution to see the degree or otherwise of concentration of wealth as compared to both developed nations and it’s developing peers. Interesting area for research though.

  9. Paul Norton
    February 26th, 2014 at 11:39 | #9

    A topic for counterfactual history buffs.

    Let’s imagine that Richard Nixon wasn’t brought down by Watergate.

    In that scenario it is quite likely that Ronald Reagan would have won the 1976 Republican nomination and gone on to win that year’s Presidential election.

    How would a world in which the Reagan Presidency began in 1976 differ from the actual world in which it began in 1980?

  10. Fran Barlow
    February 26th, 2014 at 14:05 | #10

    @PN

    In that scenario it is quite likely that Ronald Reagan would have won the 1976 Republican nomination and gone on to win that year’s Presidential election.

    As a matter of practice, I doubt this. Nixon was set to “lose” Vietnam, and would have. That would have seriously tainted his successor. Also, there would still have been the oil price shock of 1973.

    How would a world in which the Reagan Presidency began in 1976 differ from the actual world in which it began in 1980?

    If somehow Reagan had won, he would then have run into the Iranian and Sandinista revolutions, which piled atop the defeat in Vietnam would have hurt the repugs in their strong suit irreparably. The US in 1976 had nothing left for new military adventures (and it’s worth noting that those Reagan became involved in later were mixed. Yes, he rolled Grenada, but Lebanon was a bad blow. Israel would have fared about the same. There would still have been the same dealings with pakistan and Afghanistan. Oliver North’s contragate would still have happened.

    It’s likely a Democrat — but probably not Carter — would have won in 1980 — possibly Mondale. There would probably have been a fiscally tighter US during the 1980s. I doubt Middle East policy would have changed that much, and policy towards Europe would have been similar. There might have been a more positive attitude towards action on climate change.

  11. Paul Norton
    February 26th, 2014 at 14:58 | #11

    As a matter of practice, I doubt this. Nixon was set to “lose” Vietnam, and would have. That would have seriously tainted his successor. Also, there would still have been the oil price shock of 1973.

    Well, let’s not forget that Gerald Ford ran Jimmy Carter surprising close (50/48 on the popular vote and 297/240 on the Electoral College), even with the combined ballast of Vietnam, the oil shock and Watergate. Without Watergate, Ford would not have become President and would probably not have been able to win the Republican nomination against Reagan. In the counterfactual, we need to ask whether Reagan’s superior communication skills and not being encumbered by Watergate would have let him do better than Ford who had the advantages compared to Reagan of being (a) more moderate and (b) the incumbent.

  12. February 26th, 2014 at 15:51 | #12

    @Paul Norton

    Other factors to consider would come from what you mean by:

    imagine that Richard Nixon wasn’t brought down by Watergate

    If that means Watergate didn’t happen: ie. Nixon wasn’t a ‘crook’.

    Or it happened, but they completely got away with what they were doing and the public never found out: ie. Nixon was a crook but the public never knew.

    Or it happened, the got caught and the public found out but Nixon lasted to the end of his term.

    I don’t know, but my guess is we’d probably be much where we are now anyway. Rumsfeld, Cheney and the rest would still have engineered things they did anyway.

  13. Paul Norton
    February 26th, 2014 at 16:39 | #13

    Megan, good point. Given the nature of the Nixon administration a scenario in which Watergate didn’t happen was never likely, and Woodward & Bernstein were too good at their jobs for the public not to find out.

    I suppose the following are the main issues, out of many, that exercise my mind about a “Reagan in 76” scenario:

    * how attempting to run neoliberal policies during a period of sustained recession in the US would have turned out;

    * how Reagan as President would have attempted to deal with the Iranian Revolution (in particular) as well as other foreign policy reverses for the US in 1977-81;

    * what sort of synergy there would have been between Reagan in 1977-81 and Brezhnev in the same period, and what this then would have meant in terms of subsequent likely combinations of US and Soviet leaders.

  14. February 26th, 2014 at 22:42 | #14

    @Ikonoclast

    Didn’t comment on your comment at #1 because I didn’t have anything to add.

    But if you haven’t seen it, Automatic Earth has a good post with plenty of graphs making the point that UK is also in deep brown stuff:

    .theautomaticearth.com/debt-rattle-feb-25-2014-bombshell/

    you have to stick the “W’s” in front etc… etc…, but I’m sure people can work it out.

  15. February 27th, 2014 at 08:57 | #15

    Solar update: On Sunday rooftop solar was supplying about 25% of electricity use at around noon in South Australia. Or I thought it was. But it seems that more rooftop solar has been installed than I thought and capacity has increased by about 50% from the start of last year:

    http://cleantechnica.com/2014/02/26/rootop-solar-use-south-australia-surges-2nd-half-2013/#comment-1261437803

    This means rooftop solar was supplying about 29% of total electricity use. There is a little bit of high altitude cloud around today, but if that goes away I’ll give an estimate of what portion of electricity SA is getting today from solar at around noon.

  16. Ikonoclast
    February 27th, 2014 at 10:24 | #16

    @Ronald Brak

    The overall stats for yearly power supply in Sth. Aust. are be very interesting. Sth. Aust. gets a significant proportion of power from its wind turbines. From the 2012-13 SA Electricity Report.

    Sth. Aust. Electricity generated in 2012–13 by energy source;

    Gas 52%
    Wind 27%
    Coal 17%
    Roof PV 4%
    Other <1%

    This is a good progress. Upcoming (next 10 years) power projects will see 60.7% of investment go to wind and 11.1% go to geothermal. Rooftop PV systems generated a total of 497 GWh in 2012–13, approximately 3.7% of South Australia’s annual energy. This overall 3.7% might not seem a lot but it is very handy on hot days when, as Ronal Brak indicated, it can provide up to 29% of power use at some points in time.

    "Under the moderate uptake scenario, annual energy generated by rooftop PV is expected to reach 1,119 GWh by 2022–23, equivalent to 8.9% of South Australia’s annual energy. This is an average annual growth of approximately 7.5% over the 10-year period." – from the Report.

  17. February 27th, 2014 at 10:43 | #17

    If South Australia added no more solar capacity it would produce about 800 gigawatt-hours from solar this year. If we continue to increase solar capacity by the same amount as last year we will exceed 1,119 gigawatt-hours generated by solar in South Australia in 2015. And that’s with no increase in the rate of solar installations. I think we are in a rapid uptake of solar scenario.

  18. Hermit
    February 27th, 2014 at 10:46 | #18

    You should worry about the 50% of SA electricity derived from burning gas. My guess is that 15% or so of SA retail fuel bills goes to gas fuel cost. See the map in the Paddy Manning article in Crikey or Climate Spectator. Note the extent of depletion in the Otway and Cooper Basins, the current sources of SA gas. If Santos can make double the money exporting Cooper gas as LNG via Gladstone Qld then SA will have to match that price. SA power bills will then go up another 15% at least.

    I’d say that confers Buckley’s chance for SA getting alternative manufacturing to replace Holden. Those industries will go to places that have lovely uncarbontaxed coal power. Of course if they find a way of storing gigawatt-hours of solar electricity at a cheap price (California targets 4c per kwh) that could change everything. Live in hope.

  19. Ikonoclast
    February 27th, 2014 at 10:50 | #19

    Megan,

    It’s worth looking at Steve Kopits presentation. What he is basically saying is that at current world crude oil prices (about $110 a barrel) it is not worth prospecting for new oil. This is in new, difficult fields and all new fields are difficult (deep water etc.). The oil majors have made massive capex (capital expenditures) spends in the last ten years to see conventional oil production decline and unconventional production struggle up slowly. These capex spends are so great and the returns so poor that their business models are falling in a heap. So now they are cancelling projects and selling unproductive assets. New major projects will not be viable until crude prices go to the $125 to $150 range per barrel.

    The next part of Kopits’ argument is that with regard to oil, the world economy is not demand constrained it is supply constrained. Oil supply is insufficient and this is weaking and slowing the world economy. Weak economic growth since the GFC is due to a shortage of oil at cheap enough prices. We could get more oil (for a while) but it will cost us up to $150 a barrel.

    An argument made by Gail the Actuary is that now a greater proportion of the economy’s investment capital must go into getting energy. This means this capital is now not available to fund other kinds of production. Bare GDP numbers will hide this change but behind the scenes we will (for example) spend more (finance capital and real fixed assets) to get energy and less using that energy to make other things. Thus real production must eventually decline.

    The collapse has begun. Why do people think Europe and MENA have fallen in a hole? It is not just bad economic policy (though it is that too). It is fundamentally because resource shortages are now constraining the global economy. First this constaint slows its growth, then it stalls it and then it sends it into permanent recession, depression and then collapse. Collapse theorists are now being proven correct.

    http://energypolicy.columbia.edu/events-calendar/global-oil-market-forecasting-main-approaches-key-drivers

  20. February 27th, 2014 at 11:55 | #20

    Hermit, why would would I worry about the 50% or so of South Australia’s electricity that comes from gas? Expanding wind and solar capacity are decreasing SA’s gas use. The 270 megawatt Snowtown II wind farm is under construction and probably already supplying some electricity and, as mentioned, the rate of rooftop solar installations has rapidly increased. If gas prices go up then more wind and solar capacity will be built. Now I have heard a rumour that some idiots want to get rid of the carbon price to encourage more coal to be burned, but I’m sure no one would be stupid enough to such a thing as it puts human lives at risk as well as the natural environment, and it would obviously would have to be reversed later, and would blow a hole in the budget for no good reason. So I wouldn’t worry about it, as no one could possibly be that stupid.

    And Hermit, if you look at South Australia’s wholesale electricity prices you’ll see that for large industry electricity is as cheap or cheaper than in places that use coal power, with or without a carbon price. Electricity prices for industry are quite competitive by world standards. Obviously it would be useful to industry to have more wind and solar capacity in South Australia to push down wholesale electricity prices further.

  21. February 27th, 2014 at 12:06 | #21

    Solar Update 12:40 pm SA time: There is still a little bit of cloud around here in Adelaide at the moment and that’s going to have some effect on solar output, but not much. Unfortunately I have no real way to estimate its effect so I’ll just ignore it for now. If it was cloudless than rooftop solar would currently be producing about 25% of South Australia’s total electricity use. The clouds might make that a point or two lower.

  22. Hermit
    February 27th, 2014 at 12:12 | #22

    If a global slowdown is inevitable due to physical factors then the resolve of the G20 to increase growth by 2% is in vain. On oil I wonder if the price may be bounded by shrinking demand. Thus petrol may get to $2 a litre but never $3 in real terms because people won’t be driving themselves or buying stuff that needs moving by truck. Mindful of that prospect future G20 meetings could be held by video conference not via kerosene burners.

    While the Climate Change Authority’s call for a 19% emissions cut 2000-2020 is laudable their prescribed course of action is not. Australia should not buy foreign offsets because they may be physically illusory. Physicist Richard Feynman said we can fool ourselves but not Nature. Carbon sinks like reforestation may be unreliable as to amounts and permanence and ‘clean development’ offsets are misconceived in the view of many. A good offset should be globally new, demonstrably long lasting and represent an absolute cut, not a reduced increase. I think Bernie Fraser fails to gauge public opinion by suggesting spending many millions on questionable offsets. Aren’t our dodgy offsets good enough?

  23. Tim Macknay
    February 27th, 2014 at 13:10 | #23

    @Ikonoclast

    First this constraint slows its growth, then it stalls it and then it sends it into permanent recession, depression and then collapse. Collapse theorists are now being proven correct.

    That’s not what Kopits says, though, is it. He says that “a long term GDP growth rate in the 1-2% range [is] entirely plausible, and indeed, likely”. Just sayin’. 🙂

  24. Ikonoclast
    February 27th, 2014 at 13:44 | #24

    @Tim Macknay

    Perhaps. I would have to listen to his video again.

    However, it is clear in my post that my 2nd last paragraph referred to Gail the Actuary’s opinions and the last paragraph referred to my own opinions.

    With reference to the statement “a long term GDP growth rate in the 1-2% range [is] entirely plausible, and indeed, likely..” Well, that may be… for a time. Clearly it is not possible for the world’s economy to grow at 2% to 1% doubling every 36 to 72 years approx. indefinitely. Some time growth MUST stop. This is axiomatic. All the data and analyses I have checked have convinced me that growth stops about 2030 plus or minus about 10 years.

    All that “growth-ists” want to do, for purely selfish reasons, is put off the end of growth (and the almost guaranteed collapse) as long as possible. The more they (we) stretch this out, the more people will suffer and the more the biosphere will be damaged. Spinning out the end via BAU is not a good decision. We need to end growth by our own decisions and begin a controlled descent. We need to cut our consumption and reduce our population globally in a controlled way.

    The nations that still have a chance to do this (controlled descent) are Russia, Canada, (possibly) USA, Brazil and Australia plus a few isolated minors like New Zealand. Basically, the rest of the globe is doomed for collapse already.

  25. Tim Macknay
    February 27th, 2014 at 13:51 | #25

    @Ikonoclast

    However, it is clear in my post that my 2nd last paragraph referred to Gail the Actuary’s opinions and the last paragraph referred to my own opinions.

    Fair enough.

  26. Hermit
    February 27th, 2014 at 13:55 | #26

    @Ronald Brak
    To use the Craig Thomson defence it must all be a misunderstanding that SA has high retail electricity prices. Manufacturers come on down to SA. The fact that end user power prices include a ~$30 per Mwh LGC subsidy erases the seemingly competitive wholesale price.

    Next question; could capacity of intermittents such as wind and solar get bigger than gas? The idea being the year round average mix lowers the gas fraction, say 60% windpower 20% gas. We know there must be enough dispatchable power on standby to cover all events such as wind lulls at night. Germany is doing this experiment for us with the result that their power prices and emissions are increasing (check this yourself) with recurring episodes of grid instability. The sweet spot for year round average penetration by wind and solar appears to be no greater than 20%. If this empirical result can be applied to SA then their 1.2 GW of wind power out of 4 GW total generating capacity is more than enough.

    Only the RET and the $30-$40 subsidy will make them build more wind farms. The acid test will be if new heavy industry moves to SA without Holden or shipbuilding type subsidies.

  27. February 27th, 2014 at 14:30 | #27

    Hermit, do you think you are arguing with me? If so, what proposition are you arguing in support of, and what do you think my proposition is?

  28. Tim Macknay
    February 27th, 2014 at 15:00 | #28

    Meanwhile, the IEA now reckons solar/wind penetration can go up to 45% with minimal additional cost or inconvenience.

  29. Tim Macknay
    February 27th, 2014 at 15:21 | #29

    Germany is doing this experiment for us with the result that their power prices and emissions are increasing (check this yourself) with recurring episodes of grid instability. The sweet spot for year round average penetration by wind and solar appears to be no greater than 20%. If this empirical result can be applied to SA then their 1.2 GW of wind power out of 4 GW total generating capacity is more than enough.

    Based on Ikonoclast’s figures above, SA’s renewable energy generation is already higher than Germany’s as a proportion of total generation, and already significant higher than 20% (in fact, it is approaching Germany’s projected 2020 target of 35%). Yet SA doesn’t seem to be experiencing significant grid instability problems. It appears Germany isn’t a good comparison.

  30. February 27th, 2014 at 16:05 | #30

    Tim, the difference between the effects of the 2009 and the 2014 heatwaves certainly provides strong evidence that grid stability has increased in South Australia and also in other states thanks to increased solar penetration.

  31. Ikonoclast
    February 27th, 2014 at 16:58 | #31

    Hermit is arguing from a pre-conceived position. He is an out and out nuclear energy proponent. Like all nuclear energy proponents he ignores a number of basic facts about fission energy.

    1. Peak uranium production is past.
    2. Only the use of weapon core fissil material is disguising the above fact.
    3. Fission is not safe. (Three Mile Island, Windscale, Chernobyl, Fukishima).
    4. Fission is horrendously expensive if you count all costs including insurance, accident clean-ups and decommisioning.
    5. The challanges of grid balancing and energy storage are less than the challenges of fission.
    6. Breeder reactors are not solved technically and not safe.
    7. Breeder reactors would take 40 years to make safe and ramp up, at least.
    9. Renewables are here now and working.
    10. In the long run renewable will be all we have so we MUST implement them. There is no other choice.*

    * Maybe, just maybe, safe operable fusion is an option in about say 100 years time at the current rate of progress.

  32. Hermit
    February 27th, 2014 at 16:58 | #32

    @Tim Macknay
    That’s a fair comment that SA grid stability appears better than Germany. I suggest the reason could be the flexibility of gas backup compared to coal. The Germans appear to have consciously shunned gas imports. If Santos want double the price for Cooper Basin gas as I’ve said upthread I’d expect retail power prices to go up some 15% in Adelaide. Note it is planned to build a new transmission line to Victoria to export SA wind power (if the national RET continues) and import Victorian brown coal power. Presumably Ikonoclast’s figure of 17% for coal includes some interstate electricity imports. That may increase as gas gets expensive and proxy emissions will increase.

  33. Tim Macknay
    February 27th, 2014 at 17:13 | #33

    @Hermit
    You may well be correct. It seems likely that as eastern seaboard gas prices increase there will be some substitution back to coal, and a consequent increase in the emissions intensity of the SA grid.

  34. jrkrideau
    February 28th, 2014 at 01:39 | #34

    @Ikonoclast
    The official and business argument is that supplies are reliable and will continue to be reliable in future.

    Of course it wils be. Remember that a) there could be no more big wars as the world economy was too interdependent (circa 1900 AD) , the war will be over in 6 weeks (circa August 1914) and the one I liked was the Economist pointing out that oil prices at ~$US 20 / barrel was going to be remarkably stable (just before the first oil crisis. What me worry?

  35. February 28th, 2014 at 12:08 | #35

    Solar Update: It is now around noon in South Australia on a Friday, grid demand is near the bottom of the daytime V, and rooftop solar is supplying about 27% of total electricity use.

  36. Tim Macknay
    February 28th, 2014 at 13:52 | #36

    In related news, Telsa corp is building an enormous, renewables-powered EV battery factory in an effort to drive down the cost of EVs.

  37. Hermit
    February 28th, 2014 at 15:35 | #37

    From what I can work out Tesla batteries currently cost about $150 per kwh. Another commenter here whose name I forget said lithium ion batteries were good for 500 deep discharge cycles. Using those numbers the additional cost would be 30c per kwh. However from experience I know light duty lead-acid batteries can last a decade.

    The household solar connection is that the homeowner could run appliances at night on stored PV electricity. For medium density housing that would require the battery to be cool temperature and wall mounted. When the battery is fritzed some people in a van call around and provide a replacement at moderate cost. While it would be good telling the electricity retailer to get lost the problem is managing the battery (e.g. Sunday night roast dinner cooked in an electric oven) and having multiple spare $000s when the batteries need replacement.

    My hunch is that compact affordable batteries won’t improve that much. We won’t see the roads crammed with electric cars there will just be fewer cars on the road.

  38. Tim Macknay
    February 28th, 2014 at 15:58 | #38

    Another commenter here whose name I forget said lithium ion batteries were good for 500 deep discharge cycles.

    I vaguely recall that as well. It seems like a remarkably low estimate, given that most of the available information suggests they’re good for around 2000 cycles at deep discharge. Although it could be that Lifepo or lithium polymer batteries have a much longer lifespan than lithium ion.

  39. February 28th, 2014 at 16:11 | #39

    Hermit, I’m not arguing with you. Rather I am giving you information you obviously don’t have. The Nissan Leaf’s battery pack has a warranty of 8 years or 160,000 kilometers. The 160,000 kilometer figure represents about 1,200 full charges and after that point the battery can still be used for stationary energy storage, or by someone who doesn’t mind the reduced range. For the Tesla the warranty on their 60 kilowatt-hour battery is 8 years or 201,000 kilometers and the warranty on the 85 kilowatt-hour battery is 8 years with unlimited kilometers. However, despite the unlimited kilometer warranty sounding good, the Tesla battery is probably less durable than the Leaf’s but its much large size allows them to offer a better warranty because the battery packs are so much larger than the Leaf’s it makes it much harder to drive enough kilometers in eight years to wear them out.

  40. Tim Macknay
    February 28th, 2014 at 16:23 | #40

    @Ronald Brak
    If Tesla can get the battery price down as intended, the sticker prices for EVs could start to become competitive with ICE vehicles. If that price reduction coincides with another oil price rise, EV sales would be likely to rise as well.

  41. February 28th, 2014 at 22:30 | #41

    Tim, as an electric motor is much cheaper than a petrol engine and as electric cars can do without things such as an oil pumps, water radiators, 12 volt car batteries, mufflers, catalytic converters, gear boxes, transmission fluid, and so on, once they are produced and sold en masse they should cost thousands of dollars less to build than conventional cars before the cost of the battery pack is included. So if a Leaf sized battery pack costs $9,000 it might only raise the price of an electric car by $6,000 to $7,000 dollars above a comparable internal combustion engine car. And the fact that an electric car is much simpler massively reduces maintenance costs. There’s not a lot that needs to be done to keep it running for decades if need be. Electric buses that are being trialed in various places around the world appear to leave diesel for dead mainly because of the reduced maintenance costs despite the need to eventually replace batteries. And one neat thing about electric vehicles is we don’t need huge numbers of them to significantly reduce our oil use. The vehicles that do the most kilometers such as buses, taxis, and delivery vans are likely to go electric first. Just as it didn’t take long for virtually evey taxi in Australia to first go LPG and then either be LPG or a Prius, once electric vehicles have a cost advantage the change over will probably be rather quick .

  42. Ikonoclast
    March 1st, 2014 at 09:00 | #42

    Yes, we do need to move to the all-electric economy as fast as possible. It will be much more efficient and much cleaner. All trains includijng interstates need to be electric. We need to bring back electric trams and trolley buses. And also we need electric vehicles.

    I can’t wait until I can afford an electric car. I will also be moving to electric mowers, blowers, chainsaws and even an electric ride-on mower with my next purchases. I hate IC engines. They are filthy, noisy, polluting unreliable garbage. Down with IC engines!

  43. Hermit
    March 1st, 2014 at 09:16 | #43

    There’s the slight problem of the occasional need to drive interstate carrying heavy luggage. There’s also people who live way out of the CBD with unreliable public transport who need to get to their 20 hour a week casual job at odd hours. Their maximum car purchase budget is probably $5k. It looks like in the next year or two we can also add some 10,000 people with no job.

    While PV panels achieved an 80% cost reduction (mainly thanks to China) I’m not sure traction batteries can repeat that feat. Hydrogen fuel cell cars combine the advantages of an electric drive train with long range which could be why GM and Toyota are sharing information to solve the cost problem. Again maybe there are physical reasons why the price can’t come down that much. Twenty years from now the people with cars will be football players, TV celebrities and plastic surgeons while the rest of us take the bus.

  44. Ikonoclast
    March 1st, 2014 at 10:03 | #44

    Hermit,

    Leaving aside major economic collapse (which I fear but economists like John Quiggin regard as highly unlikely) the situation will in the middle of your scenarios.

    Interstate travel can be handled by long distance electric trains. We will need to ramp up this infrastructure. Long range electric vehicles will also exist soon albeit for the better off. You refer to “People who live way out of the CBD with unreliable public transport who need to get to their 20 hour a week casual job at odd hours.” A variety of changes will occur over time. Some will get better public transport as that is ramped up. Some will get small electric cars. Some will move to be closer to work.

    You say 20 years from now most of us will take the bus. Yes, that is correct. And more will cycle and more will walk to local shops and pull a personal shopping trolley home. And everyone will be healthier for it. So where’s the problem?

    Actually, the problem will be whether we can make the transition. With wise policies, Australia could certainly make the transition. What are our chances of getting wise policies? They are low unless we can get rid of governments like Liberal and Labor (both are neocon and anti-environment).

  45. Hermit
    March 1st, 2014 at 10:52 | #45

    I live 40km from a full sized supermarket in hilly terrain with unsealed roads and my knees are on the way out. The bicycle towed shopping trolley doesn’t appeal. I see vehicles emblazoned with the words ‘community transport’. Maybe that’s the future for those who don’t want to move into town. If Cuba is a snapshot of the future for the urban population then the non-sprightly might have to take a ‘camel’ bus to get groceries.

    I suggest many who dwell on these issues lapse into ‘Micawberism’ after the Dickens character Mr Micawber who said something always turns up. Maybe there will never be a cheap long range EV or FCV. The likelihood is reduced personal mobility for most people. Politicians could lead by example by flying less to conserve fuel and emissions. We should all start thinking about grocery shopping by bus.

  46. March 1st, 2014 at 11:07 | #46

    Will the average Australian who wants a private car find them less affordable in the future than they are now? No, almost certainly not. Two reasons, the first of which is: Since the start of the industrial revolution there has been a long term trend of using improved technology based on scientific understanding to lower the relative cost of manufactured goods. This process isn’t about to suddenly stop. Maybe it will one day but it’s not something that is just around the corner. Hybrid cars are manufactured goods, electric cars are manufactured goods, battery packs are manufactured goods, solar panels are manufactured goods, and photovoltaic car body panels may soon be manufactured goods. Over time they will decrease in cost. This doesn’t mean there won’t be temporary setbacks in the trend. Supply disruptions could double the cost of oil tomorrow and that would certainly raise the average cost of private vehicle transport but this would only be a temporary setback. People would start producing cars that either require much less oil or don’t require oil at all. Improving technology will continue to make people richer and sooner or later these new types of transportation will be more affordable in the sense of requiring fewer hours of work or the transfer of a smaller portion of the world’s capital to purchase than current conventional internal combustion engine cars.

    Second reason: People like cars and will continue to purchase them in the future. I don’t think they like them as much as they used to, but they still like them plenty and so demand for them isn’t about to disappear and they are unlikely to be outlawed any time soon.

    I can’t guarrantee that private cars will be more affordable in the future. Maybe space faring dinosaurs will return to earth and eliminate the monkey scum that have made a right mess of the planet. Maybe rather than just killing people and slowing economic growth climate change will destroy wealth faster than we can grow it. Maybe the richest 1% will push down wages for everyone else to $2 a day and use their wealth to play demolition derby with aircraft carriers in the Indian ocean. Maybe there will be a bone revolution and our skeletons will all revolt. So I can’t be certain that private transport will be more affordable in the future, but I am very confident that it will be.

  47. Ikonoclast
    March 1st, 2014 at 11:26 | #47

    Hermit,

    Don’t you already have a solution? I seem to recall you posting that you have a diesel vehicle converted to used vegetable oil? That’s not a solution I would advocate but aren’t you being disingenuous to imply you have no solutions? You could buy a hybrid vehicle now and much reduce your petrol costs. You could buy an electric car or an electric car with small IC engine backup (the Volt). You could sell up and move closer to civilization especially as your knees (personal mobility) are going. All these options would be viable.

    At a personal level, most retired middle-class Australians still have all the options. I still have all the options and I am sure you do. The collapse (which I predict and others discount) has not happened yet. It might not happen in Australia in the next 50 years. We are not out of options yet. I could be wrong about overall collapse. I hope I am wrong.

  48. Hermit
    March 1st, 2014 at 12:06 | #48

    @Ikonoclast
    I make biodiesel using veg oil that has the glycerin catalytically removed. It can still turn to snot in frosty weather. However personal and community solutions are intertwined. If people can’t afford to go for Sunday drives then they won’t buy Chiko rolls at the roadhouse then there won’t be used veg oil to turn into biodiesel.

    While my knees are dodgy they still function. A couple of months ago I helped some 80 y.o. pensioner/farmers stack hay bales . They simply weren’t able to do it yet they refuse to move closer into town. The cops ordered them to get out as a fire approached but they said ‘we’ll die here if necessary’. Correct answer since I don’t think there will be enough aged residential care in the future.

    I wonder if all the laid off airline and car assembly workers could be mobilised into home care support such as meals-on-wheels. It’s a massive industry of the future not sure where the money will come from. The PM’s green army of listless youth could help rural aged by reducing fire hazards and similar tasks. Within a decade it should be clear the basic economic model must change. Still some don’t get it, the G20 for starters.

  49. March 1st, 2014 at 12:30 | #49

    Solar Update: Once again it is around noon in Adelaide on a pleasent Saturday. Rooftop solar is currently supplying about 31% of total electricity use in South Australia.

  50. Megan
    March 1st, 2014 at 22:41 | #50

    This is strangely funny/terrifying.

    From an ABC story about Ukraine just in:

    “We do not give in to provocative actions, we do not use force and we demand that Russia stop its provocative actions and return the troops to base.”

    Ukraine’s defence chief accused Russia of sending 6,000 troops and 30 armoured personnel carriers into Crimea as the restive peninsula tries to gain broader independence from new pro-EU leaders in Kiev.

    The US ambassador to the United Nations, Samantha Power, says Ukraine’s new government has to be allowed to do its work.

    “The United States would condemn any move to undermine Ukraine’s sovereignty or territorial integrity which we expect all states to respect,” she said.

    “The best way for the people of Crimea to achieve their goals is to work peacefully within the established political system.

    “To this end the United States calls for an urgent international mediation mission to the Crimea to begin to de-escalate the situation.”

    When hypocrisy gets this unstable it must be time to be just a little worried about what the crazies in the US will do next.

  51. March 2nd, 2014 at 10:20 | #51

    Not sure what is wrong with AUS media-academia complex which is still grappling with its OCD over gay marriage and refugees. No one seems to be interested in the escalating crisis in the Ukraine, which looks likes its been lifted straight off a Hollywood script for the triggering of WW III.

    The Ukraine’s democratically elected government was just overthrown in a violent street coup staged by a gang of soccer hooligans who go by the name of “Right Sector”. They have put up a mesmerizing promotional clip on You Tube, shot with hostage video values – wobbly hand-held camera, menacing metal machine music background track and stock footage of the Mad Max evoking siege of Maidan Square: [youtube https://www.youtube.com/watch?v=-Inu_-0dcSU&w=640&h=390%5D.

    I am quite sympathetic to elements of Right Sector’s political program, which is basically populist nationalism. They want to retrieve their country from foreigners (Bankers, oligarchs, Russians) who have mercilessly ripped it off in the post-Cold War carpet-bagging era. Globalism is highly over-rated as a panacea for the peoples problems. Its usually a code-word that your country is about to be swindled by con-artists, hucksters and other undesirables.

    But Ukraine nationalism is a dangerous potion to add to the toxic brew that is currently simmering in the Caucasus region. The Russian CIS wants to dominate this region due to its high ratio of ethnic Russians, wealth of natural resources and strategic location (headquarters of Russia’s Black Sea fleet). It has has seized control of the Sevastapol navy base with Russian Marines and is resorting to traditional rhetoric about foreign powers “meddling in Russia’s affairs”.

    The EU and the US are both vying with each other in the race to make more indignant noises. John Kerry does not exactly look on top of his brief, he was completely out-maneuvered by the Russian foreign minister in the chemical weapons round of the Syrian crisis.

    The media-academia complex is uncharacteristically toungue-tied as this conflict does not have any obvious Good Guys. Its is your typical post-Cold War contest between Bad Guys of varying ethnic backgrounds and dubious ideological predilections. Obviously Russia is the new Evil Empire, not because it is oligarchic and despotic but because it is mildly anti-gay. Except that Right Sector, Russia’s most potent enemies on the Ukraine street, don’t exactly look gay-friendly.

    Most likely this will just be an exercise in sabre-rattling. But you never know with Slavic people who are prone to world-historic changing spasms of violence, echoes of Sarajevo. Stay tuned

  52. March 2nd, 2014 at 10:21 | #52
  53. Ikonoclast
    March 2nd, 2014 at 12:28 | #53

    @jack strocchi

    It’s how empires behave. I wrote about this earlier, in this thread I think. The history of civilization, at the macro level, is the history of empires. This is the Realpolitik of it. The main empires today are the US, China and the EU. Peoples or lands on the border of two empires historically have become tributary or vassal states of one empire or the other; or else they become contested zones, torn in two by war, proxy war, civil war or any combination of those.

    Ukraine is now being contested. Does it become a vassal or tributary state of the EU or of Russia? This has been the common fate of nations along the Baltic-Polish-Ukraininian line for something like about 800 years now. Just think of the history of Poland. There has been the odd interregnum in this pattern. The Polish-Lithuanian Commonwealth 1569–1795 marked a break in this pattern for Poland at least. And now Poland is again relatively free and prosperous as a vassal or tributary state of the EU. Though peripheral states of the EU tend to be plundered for the Franco-German centre.

    I won’t go so far as to predict what will happen. There are too many uncertainties. But I suspect a tortured phase of history for Ukraine as a contested zone. I will surprised if Russia totally capitulates. Russia could for example turn off the gas and oil to the EU and sell it to China. The EU is particularly vulnerable to this.

    If the Shanghai Cooperation Organisation coalesced as a full counter to NATO, the West would look to be out of options for pressuring Russia. In the mid to long term, the resource, economic and military power of the Shanghai Cooperation Organisation will considerably outweigh the power of the West. I think the West is being blind-sided by the SCO and does not realise how important it is. Then again, there is not much the West can do about this. The wheel of history is turning.

  54. Ikonoclast
    March 2nd, 2014 at 12:35 | #54

    “An article in The Washington Post in early 2008 reported that President Vladimir Putin stated that Russia could aim nuclear missiles at Ukraine if Russia’s neighbour and former fraternal republic in the Soviet Union joins the NATO alliance and hosts elements of a U.S. missile defence system. “It is horrible to say and even horrible to think that, in response to the deployment of such facilities in Ukrainian territory, which cannot theoretically be ruled out, Russia could target its missile systems at Ukraine”, Putin said at a joint news conference with Ukrainian President Viktor Yushchenko, who was visiting the Kremlin. “Imagine this just for a second” – Wikipedia.

  55. March 2nd, 2014 at 13:28 | #55

    The Russian CIS under Putin has become heartily sick of being disrespected by the usual suspects of EU bureaucrats and US neo-cons like Victoria Nuland (US Assistant Secretary of State for the EU). The humiliation suffered by Russia in the last Balkans war still rankles among the pan-Slavic minded peoples.

    Th EU-US axis have been trying to drive a wedge between Russia and the various satellites and client states that ring its western and southern borders. Basically to carve up the mineral resources that the Kremlin would like to monopolise as well as to create new customers for surplus NATO military ordinance. Hopefully they keep their noses out of this and let the locals sort it out.

    The 2008 farce in Georgia (a “mouse that roared war”, mendaciously described as a “Russian invasion”) seems to have set the template for “meddling in Russia’s internal affairs”. Obviously the best way for foreigners to do this is to stir up national ethnic separatist movements, following the classic “divide and rule” technique. Then send in the carpet-baggers, nowadays called “suitcase economists”.

    I dont have any strong feelings about taking sides in this conflict one way or another, apart from a vague woolly feeling that Slavic people should get together and be nice to each other. I hope that it does not degenerate into a proper shooting war because I like Slavic people and dont like seeing them killing each other. Also, as Pr Q has convincingly argued, war tends to make both sides losers as well as producing a generational legacy of bitterness.

    People have long race memories in the regions around the Black Sea (Balkans-Ukraine-Caucasus), which have had a tendency to spiral into world-historical bloodbaths. Moreover the cultures have not wholly lapsed into the degenerate state of post-modern liberalism (Right Sector calls this “totalitarian liberalism”) where nothing matters but urban property values and the latest Manhattan fad. Folk here still know how to fight and have access to heavy weapons.

    We are talking about the Bloodlands. Conflict in WW I started as an ethnic separatist movement in the Balkans and ended as a German annexation of the Russian half of the Ukraine (Brest-Litovsk). Later on this area was the major scene of two acts of genocide, the Holomodor and the Holocaust. Let us hope that sound heads prevail or else we shall see a return of History, with a vengeance.

  56. March 2nd, 2014 at 13:49 | #56

    From the Russian pov most of the past generation (from Reykjavik through to Kosovo) was one long series of defeats, depression and dispossession. Now it sees the EU and US trying to muscle its way into the traditional Russian sphere of influence (Georgia, Ukraine), which is made up of territories with a high ratio of Russian ethnics.

    Somehow this is portrayed as the Russian bear throwing its weight around (oh, did I mention that Putin does not care much for gays?). In fact Russia is simply trying to hold onto what it has got or at least had a reasonable claim to.

    Whereas over the past generation the EU and US have been sticking their noses into other peoples business like there is no tomorrow: the EU with its constant lust to access new states and insist on common standards and the US with its constant need to establish military bases and dabble in regime change.

    Can I suggest that these imperialistic interventions take a breather for a while and let the nations concerned sort their own problems out?

  57. James
    March 3rd, 2014 at 22:22 | #57

    @Will, sorry about the slow response on this but have been sifting through the entrails of world bank documents and other statistical detritus trying to get a handle on the Ukrainian economy. Lots of commentators say it is a basket case, and many talk about a factional war between billionaires, but there is very little hard evidence for this. The most surprising number is World Bank’s Gini index for 2010 at .26, an unbelievably low number compared to Australia’s ~.35 and the USA at ~.42.

    On the other hand there are some really bad numbers, the first of which is the fall of GDP since independence in 1991, which hit a low of 40% of 1991 value by 1999 (CIA World Fact Book) before recovering through to 2008 and then crashing again. Event with respectable recent growth that is (understandably) now going back into recession at this point of time, the economy is still only around 75% of 1991 total. That is a disaster. The second issue is the loss of population. Ukraine Economy Watch notes that it is both declining naturally with a very low birth rate of 1.3, and also, and more dramatically, declining due to 14.4% of the population emigrating. The net result is a population down from ~52million to just over ~45million, along with all the maladjustments that come from such a rapid decline.

    These two indicators point to a very sick economy.

    @Ikonoclast’s assessment that Ukraine is a contested zone between two empires is true, with the US as a Johnny-come-lately proxy for the Europeans. I think this Realpolitick is now going to drive the conflict, as in Malcolm Fraser’s take in the Guardian that in encircling a bear, and in this case a sick bear, one may end up with all sorts of unwanted emergent outcomes (as per @jack strocchi).

    But my interest is still in my original contention, that economic collapse was the catalyst for what looks now like a run-away train, and hopefully not a train wreck, and that western neo-liberalism as the dominant economic discourse joined with local criminal usurpation of the economy to prevent not only the transition from socialist to western social democracy, but any possibility that that may have been the outcome. That lead to despair, and despair took people outside their comfort zone and onto the street.

    And so to my second observation, that this type of uprising, or reaction to instability has a tendency to ‘look’ more right wing than left wing due to an inherent conservative bias in seeking certainty.

  58. James
    March 3rd, 2014 at 22:31 | #58

    I also think we do the same here in Australia, but on a far less dramatic level, not looking to empires east or west, but in voting Labor out and Liberal in then Liberal out and Labor in, looking for a workable solution where none is on offer, yet ever hopeful of getting a different result.

  59. JKUU
    March 4th, 2014 at 00:57 | #59

    @James
    Sounds like Einstein’s reported definition of insanity: “repeating the same thing over and over again, and expecting a different result.”

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