A point discussed on the blog recently is whether Limits to Growth actually predicted rapid exhaustion of critical natural resources, or whether this was a misrepresentation by much later critics. The text itself isn’t definitive, since it contains some projections showing rapid exhaustion and others (in which discoveries boost stocks by a factor of five) in which exhaustion takes place over a century or so, and also because the projections were revised in later editions. However, my memory is that both supporters and critics focused on the more extreme projections.
I have a couple of pieces of evidence to support this claim. First, I’ve put over the fold a piece by Matthew Simmons defending the Club of Rome and saying
Nowhere in the book was there any mention about running out of anything by 2000. Instead the book’s concern was entirely focused on what the world might look like 100 years later.
But Simmons’ case is undermined by the dust jacket at the beginning of his article which sells the book as ‘The headline-making report on the imminent global disaster facing humanity’. I think most readers buying a book that was sold like this would focus on the worst-case scenarios.
To support this interpretation, here’s a para from a 1979 book, Economics, environmental policy and the quality of life, by Baumol and Oates who begin their Chapter 7 with a reference to Limits to Growth
Certain recent studies have raised the spectre of complete exhaustion of some of the worlds critical resources. they tell us that in the absence of drastic countermeasures, within a matter of decades mankind is likely to run out of petroleum, natural gas and other vital fuels, to deplete virtually all the sources of various minerals such as mercury, copper and silver and to have cultivated essentially all remaining and still usable land. In brief, the world economy will be brought to the brink of catastrophe by hte exhaustion of natural resources.
Baumol and Oates also present in Chapter 9 a “Standard Run” from the World Model showing catastrophic collapse a little over halfway between 1900 and 2100, that is, right about now. Baumol and Oates, like most economists, are critical of Limits to Growth, but they aren’t rightwing anti-environmentalists by any stretch of the imagination. I think it’s fair to say that most readers at the time, whether they agreed with the Club of Rome or not, focused on predictions of imminent resource exhaustion, and not on what might happen in 2070
Of course, this doesn’t resolve the question of whether an analysis like that of Limits to Growth is going to be applicable in forthcoming decades. My view for which, I’ve given some of the reasons in the past (though I’ll obviously have to write more on this in the future.), is that exhaustion of mineral resources like oil is not going to be a serious problem. The real risk, exemplified by climate change, is that we will exhaust the assimilative capacity of the natural environment. This was a theme in Limits to Growth but not one that got a lot of attention at the time.
John Quiggin 
Kerosene is indispensable for aviation, there is no alternative, see Aviation and Oil Depletion. Can someone explain how fuel hedging works? The price of oil has been going up and up for the last three(?) years but someone is still selling oil to Qantas for $70 a barrel! How does this work?
On the Club of Rome issue, I think that the opponents rejected it for the usual reasons (the market will take care of it, it’s a long way away..) and so took the findings out of context so they could declare the study wrong and the proponents took the extreme view because they believed that 50 to 70 years wasn’t very long to change human society so we should start now. Forty years on you’d have to say the proponents had a point.
Joe neatly ends the thread with the correct explanation for the original question.
The Club of Rome pointed out that this planet is not so large that we can take it out of our economic equations. They were dead right.
This planet is actually pretty damn titchy. (And that turns out to be some disappointment.)
We don’t have enough oil, coal, gas ,uranium or food for the 7 billion here now. We never did have. And we don’t have enough atmosphere even for the 3 billion who do control/produce enough of the above.
Peak oil can be legitimately considered as a separate issue to climate change as it has serious consequences for human welfare in terms of its serious geopolitical consequences.
But yes, it is second order to Climate Change. And that’s very bad news.
1) Fuel hedging: buy a contract for future delivery of oil at a certain price, i.e., it’s a mechanism for pricing risk like many others. SouthWest Airlines is reputed to be especially good at it.
I recommend Peter Bernstein’s “Against the Gods: The Remarkable Story of Risk” in paperpback these days.
2) John clearly wants conversation to move, so one last comment. There are still clearly different worldviews: in CA, especially places like Stanford, there is a strong belief that environment and energy [hence, Peak Oil+Gas, Coal, etc] are inextricably intertangled, which is why they have things like GCEP – Global Climate and Energy Program which says:
“Supplying the energy required by both well-established and developing societies while at the same time reducing greenhouse emissions will be one of the grand challenges that we humans must face in this century. “
One final comment on the peak oil vs climate change debate:
Climate change depresses me, peak oil terrifies me.
We will absolutely, definitely be forced into doing something about peak oil, and soon. Any action on climate change will be entirely voluntary.
(A preview button! Thank You! Thank You! Thank You!)
Can I suggest, If John Q will allow me, that anyone wishing to continue discussing this very important issue of Limits to Growth join our Running on Empty Yahoo forum at:
http://groups.yahoo.com/group/roeoz/
You too can join JQ!
Mike Stasse
Owner/Moderator roeoz
JA in Comment 48: I use SWA share price and oil futures as an example of nagatively correlated financial assets in my MBS course – it was about the strongest negative correlation that I could find (from an admittedly brief search). So their hedging is not working too well…
An aside – I’m in the UK at the moment, literally looking out over my monitor to an East Sussex shingle beach and the English Channel beyond. It’s a mild early summer day after a week of warm weather. Petrol here is about $2.28/l, but it hasn’t stopped the water-skiers, jet-skiers, and power boats zipping back and forth, or kept the tourists from flocking to the beach. One wonders how high the price has to go before these behaviours are confined to the domain of the truly wealthy, and the famous English middle class can only look on – in envy, or anger?
Anyone wanting to find out more about how much coal is REALLY left, I suggest you read this…
http://globalpublicmedia.com/richard_heinbergs_museletter_193_its_happening#whatcar
Perhaps John Q should also read this interesting paper which concludes that Peak Oil could also mean Peak CO2….
Click to access DiscussionPaper18.pdf
Since Peak CO2 is what we’re aiming to achieve as soon as possible, if Peak Oil will bring it about, that would be great.
In reality, as I’ve said, while Peak Oil will probably be helpful, it won’t be sufficient. Peak CO2 will only happen when the price of emitting the stuff gets high enough.
insufficient, for sure.
In #40, I pointed out the Kharecha+Hansen paper on this which analyzes the problem.
CO2, CH4, etc molecules are what they are, regardless of whether they come from:
– Oil {Peak now or soon]
– Gas [Peak +10/20 (?) years]
– Coal [No peak any time soon, unfortunately]
– anything else
One might wish for peak Oil & Gas to happen quickly, as that’s less CO2, and might focus the world on efficiency/renewables faster, i.e., via usual price signals.
But, thoughtful people also worry that if the slide downPeak happens without the right preparation, the temptation to do:
– CTL for synfuel to replace oil
– burning more coal to replace the gas
– *before* sequestration works (if it ever does)
will be overpowering, and that’s scary.