53 thoughts on “Monday Message Board

  1. Is the GFC (Global Financial Crisis) over? I think not. The U.S. is stagnating with high unemployment and high debt. The U.S. is likely to decline further in the near future. Europe has trouble with Ireland, Greece, UK and probably Spain and Portugal. Contractionary policies in the UK and Ireland will send them back into deep recession. China is overheated with assets inflation and a mis-valued currency. When China sneezes the World catches the Asian flu.

    Over all this, hangs the pall of peak oil. It’s already peaked according to knowledgeable people like T. Boone Pickins and Matthew Simmons. (One an oil man and one an engineer.)
    We are in fact close to Peak Everything in terms of resource extraction and agricultural and industrial production. Limits to Growth theory will be thoroughly vindicated. Unfortunately, it’s a phyrric intellectual victory to be correct about such an outcome.

    The combination of Peak Debt plus Peak Resources will be devastating to our economy.

  2. This amusing comment appeared on the Link list (an IT and comms mail group I participate in). The news that

    Mr Rudd appears to be in agreement with former prime minister John Howard, who earlier today said Mr Assange had not done anything wrong by publishing cables that contained “frank commentary”.

    …brought this reply:

    Gobsmacked! Rudd, Howard, my dad and me in alignment. How often does that happen?

  3. There may be enough resources left for one more recovery although I doubt it. There are certainly not enough resources for the 3rd world to attain anything like 1st world status. Going by chapter headings I could not see any recognition at all of resource depletion. Nine tenths of the surviving human world will slip to 3rd world status by 2050.

  4. If Peak Everything theory turns out correct I think it will be fair to ask why economic commentators didn’t see it coming. I suspect most think in some sense we will all be better off in 2015 than in 2010. Cheaper computers, more cures for cancer but more unmet aspirations perhaps. A commentator on The Oil Drum website said that in hindsight 2007 will be recognised as the best year for the whole 21st century in real terms.

    The implications are a challenge to the onwards-and-upwards mindset. Half the world’s population that regard themselves as middle class may find themselves facing a major lifestyle downgrade. The bottom billion in both China and India may never make it to the middle class. We will burn less coal either because it is too expensive or the global economy is moribund. When and if things start to pan out this way I bet we quickly drop GDP as a measure of wellbeing.

  5. @Hermit

    Peak Everything theory is correct. The same commentators (virtually all orthodox economists) who failed to see the GFC coming also failed and still fail l to see PE coming. This is because their economic theory fails to take proper account of the real physical world of matter/energy. It’s astonishing, but these people actually have no idea (or act like they have no idea) that the economy is ultimately contingent upon the physical world. They think the law of supply and demand is the ultimate law which controls the economy and resource availability. Supply and demand is only the penultimate law. The ultimate law (set) is that of thermodynamics.

    Peak Everything will bite us harder and sooner than Climate Change. By about 2015 the evidence will be undeniable. The implications mean nothing less than the end of “endless growth” capitalism.

    Yes, I suspect peak oil has just passed in about 2007/8 and peak food is about now. Peak potable fresh water is also about now.

    Some peaks are well past. For example, peak wild fish catch was in the 1980s.

    Dr. Pauly, Director of the Fisheries Centre at the University of British Columbia in Vancouver, Canada says, “We don’t need more science. This is a message that’s different from many of my colleagues. Of course we need to learn more about fish. But research is often publicly funded on the grounds that this is an alternative to other political action. We know enough to act to prevent the continued decimation of global fisheries.” […]

    Among its most notable findings, the research has revealed that the world passed “peak fish” – a peak in the biomass, or weight, of fish caught from the world’s oceans – in the late 1980s. Since then, while there have been regional variations, the global fish haul has gradually sunk.

    “There’s no doubt about this,” says Dr. Pauly whose findings have been published in the world’s leading peer-reviewed journals, including Science and Nature. “We’re in a phase where increasing fishing effort produces less catch.”

    Strangely, a lot of people have trouble realising non-renwable resources are finite and will run out. They also have trouble realising that renewables have to be managed sustainably and then can only give a sustainable yield plateau.

  6. I tend to agree with you on peak everything Ikonoclast. Fishing is a compelling example of this. I was a Club of Rome boy in my teen years when Limits to Growth was released, and like you I’ve also identified the disconnection between politics and reality – this can be attributed to the psychology of politicians I think – ie the primacy of social relations in the structuring of their world. In an Australian context Labor are worse that the Libs in this regard – although they are both so divorced from reality it doesn’t really matter.

  7. Well, a few exceptions to Peak Everything have been identified already such as health care and computers/communications. We can add in education and lots of other services that don’t depend to any significant extent on exhaustible resources. Then there’s wind and solar energy, both in their infancy. And technological improvements mean the potential for steadily increased leisure.

  8. Yes, I remember the union campaigns in the 1970s for the 38hr week and we all knew then with absolute certainty that technological improvements would inevitably and rapidly lead to even shorter working hours than that in the very near future. We were so worried, what we do with all that leisure time?

  9. @Ikonclast

    Peak nat gas looks a fair way off. According to this 2010 EIA report, nat gas reserves are steadily rising and the ratio of reserves to yearly consumption remains constant at 60.

    There is, I fear, more than enough stuff left to burn to destroy the climate.

  10. Ian Milliss, JQ said” And technological improvements mean the ‘potential’ for increased leisure time.
    We have had that potential but Affluenza meant we didn’t avail ourselves of it. Peak nearly everything will make it more than likely that we could avail ourselves of it.

    Depends also what one defines as ‘leisure’. In the near future that could be defined as tending the vegetables and chooks, preserving, knitting or making furniture.

    Maybe I’m just being silly too.

  11. @jquiggin
    We were so worried in the 1970s about all that increased leisure time due to technological improvements etc – except its more like increased unemployment for some – now we worry we have too much leisure time and not enough work, whilst some are working around the clock and want more leisure time. An equitable distribution of all this extra leisure time has not arrived and it seems it needs regulation – as working conditions always have and always will.

  12. If everyone wants to get really worried about the direction we are heading – suggest reading “griftwork” by Matt Tabibi – then we might just understand that things arent what they seem at all, governments arent sho they say they are, there is no honour, there is plenty of grift and everything is for sale.


    These grifters are as scary as zombie economists! They work together too.

  13. @Ikonclast
    “Peak Everything theory is correct. The same commentators (virtually all orthodox economists) who failed to see the GFC coming also failed and still fail l to see PE coming. This is because their economic theory fails to take proper account of the real physical world of matter/energy. It’s astonishing, but these people actually have no idea (or act like they have no idea) that the economy is ultimately contingent upon the physical world. They think the law of supply and demand is the ultimate law which controls the economy and resource availability. Supply and demand is only the penultimate law. The ultimate law (set) is that of thermodynamics.”

    It seems to me, Ikonoclast, you are talking about ‘othrodox’ macro-economists because in ‘orthodox’ general equilibrium theory (Walras (around 1900), Wald (1930s), Arrow-Debreu (1950s) …. ) the primitives in ‘the economy’ are finite physical resources and people, characterised by preferences and endowments of physical resources.

    The ‘peak something’ idea is interesting in relation to debt and incomplete markets.

  14. Wayne Swan’s package today on banking seems to put the taxpayer more firmly on the hook-1. $4b for RMBS- government funding of bigger houses is crackers after F&F blew up 2. Covered bonds reduce the assets available to government in a bank bankruptcy to pay depositors who are now permanently explicitly guaranteed by government. We are mugs.

  15. Salient Green :
    Depends also what one defines as ‘leisure’. In the near future that could be defined as tending the vegetables and chooks, preserving, knitting or making furniture.

    Cela est bien dit, répondit Candide, mais il faut cultiver notre jardin. As I do. I didn’t mean to sound quite as nasty to JQ as it sounded, I simply meant to point out that in a play off between employees working less and buying the same or working more and buying more, all the forces of capitalist mind control will be concentrated on convincing us to work more and buy more. As you suggest, leisure will only arrive in the form of unemployment and when it suits capital to discard large numbers of workers. The underlying principle is that neither the desires nor the welfare of employees has ever been of great concern to capital except in their other capacity as consumers.

  16. “An equitable distribution of all this extra leisure time has not arrived and it seems it needs regulation”

    The ‘lump of work’ fallacy.

  17. @Jarrah
    Jarrah – I dont mean to suggest any “lump of work fallacy” – I was referring to the lump of unemployment and underemployment reality LOL

  18. @Jarrah
    Jarrah from your own link – ‘the lump of work’ fallacy’ fallacy Ian refers to

    This common argument against the use of restricted working hours to reduce unemployment has recently been questioned, with one scholar arguing that “substituting a dubious fallacy claim for an authentic economic theory may have obstructed fruitful dialogue about working time and the appropriate policies for regulating it”.[3] Walker argues that the idea that the lump of labour is a fallacy often goes unsubstantiated, and that the reduction of working hours can have similar labour-saving impacts as the introduction of technology into the production process.[4]

    Hear hear!

  19. Ian M, I’m not suggesting that there is anything easy about extracting more leisure from the current labour market system, merely that, if we want to enjoy further improvements in living standards, it can and should be done by increasing leisure.

    That said, the situation isn’t as hopeless as we often think. The process of work intensification, as measured by average hours for full-time workers peaked in the 1990s and most of the 1990s increase has now been reversed


    I blogged on this turnaround quite early on


  20. @Jarrah
    Jarrah – I am surprised you even accept this so called work lump fallacy as a fallacy but then wouldnt you be more inclined to accept it because you disagree with most forms of regulation ie ideologically anti regulation? Thats real bias.

  21. “if we want to enjoy further improvements in living standards, it can and should be done by increasing leisure.”
    You might be right JQ, certainly that has been predicted for many years.
    My impression though is that senior managers and professionals – probably including university teachers – get much satisfaction from their jobs and for much of their careers are happy to work long hours. Many others seem to want the chance to earn as much overtime as they can get. Hours worked will fluctuate with the economy but I doubt they will trend down very much.
    What is happening is that people are taking earlier retirement and so are pushing the leisure time into later life.
    From an economic point of view, I believe this is probably a better solution.
    Though as the population ages and labour becomes scarcer, those wanting to continue to work will be offered strong bribes to do that.

  22. To JQ in particular. Please read the lot. 🙂 Point 1 is brief and Point 2 is a long reply to you. I don’t mean to be rude, just to debate vigorously.

    There are so many issues I need to reply to in relation to “Peak Everything” theory.

    1. Ernestine Gross is right about the “orthodox economists” tag. I guess I should have said “orthodox neocon macro economists” (or something like that) who have been the ruling orthodoxy since about the early 1980s. They have ruled public, political and business discourse and policy since that time. Academia has remained more diverse and has fostered dissenting opinions. As Ernestine said, the genuine classical orthodox economists did not ignore the physical world.

    2. JQ ridiculed the catchy but imprecise “Peak Everything” tag and is right in one sense and wrong in another. He is right that services and knowledge don’t yet appear anywhere near peak. He is wrong overall as follows. Peak Everything is meant primarily to indicate quantifiable matter and energy resources though it will eventually affect services, knowledge and information.

    All quantifiable matter and energy resources on earth have or will have a peak. For non-renewables the peak is the peak of the production bell curve (approximate shape) and the resource will then dwindle to nothing (or unrecoverable trace remnants to be precise). Non-renewables are a once only stock that is drawn down and finished forever. Renewables are a flow not a stock. For renewables the issue is peak sustainable flow be it a flow of materials or of energy. Peak flow also exists as a theoretic reality for all flows on earth.

    Earth is essentially a closed system with two major exceptions. The first major exception is the incoming solar radiation and outgoing black body and albedo radiation. The second major exception is the gravitational tidal effect of the moon. Minor exceptions (in overall matter-energy terms) are incoming meteors and outgoing gas molecules which may escape the upper atmosphere into space.

    If we survive other catastrophes like AGW climate change or nuclear war, we can posit a future time when many key non-renewable stocks are exhausted. (Materials as abundant as silica cannot conceivably be exhausted.) Exhausted means scattered in unrecoverable quantities or so difficult to recover that the energy costs are prohibitive. For energy sources themselves EROEI (energy returned on energy invested) is the key limiting factor. The EROEI must be greater than 1 or the process represents energy loss not energy gain.

    Once all non-renewable stocks are exhausted then peak flows of matter and energy are the limiting factor. If we transitioned successfully to a massive solar energy economy, the peak practicable flow of energy would be potentially enormous compared to our current energy production. The problem is that peak energy flow would be limited not by total incoming solar radiation but by other material factors. The ability to find raw materials for the energy generation and transmission infrastructure is one example.

    Services, knowledge and information (generation, storage and transmission) require people and energy. Services, knowledge and information represent a decrease in entropy (disorder) and an increase in order which requires work (energy) to achieve. Since there is a theoretic and ultimately real maximum energy flow on earth (in terms of energy which can be harnessed and put to useful work by humans) then there is a theoretical maximum of order which humans can generate. This means an eventual peak even for services, knowledge and information.

    The Peak Everything concept also captures the notion that there are multiple limiting factors which interact in ways which reinforce and lower the limits to growth. Here are the main limiting factors for human population growth and economic growth (be they stocks or flows) which will have come or will come into play and interact sooner or later on planet earth.
    In general terms these are;
    • Physical space (suitable for humans, infrastructure and agricultural needs) – a stock.
    • Energy availability – a flow.
    • Fresh Water – a flow.
    • Soil – a stock on any human timescale.
    • Phosphorous – mined phosphorous is a stock.
    • Number of Extant species and attendant environmental complexity and stability – a stock on any human timescale.

    IMO, Professor JQ appears extraordinarily sanguine about our ability to transition from a stock driven economy on the energy side (oil, gas, coal, uranium) to a flow driven economy (solar, wind, tidal, hydro) given our slow progress to date. We need to transition to flow energy in a timely fashion while there is enough stock energy to achieve this transition without a major economy depressing trough in energy availability.

    JQ also appears extraordinarily sanguine about our ability to survive and grow through other peaks which have occurred are highly likely to occur soon such as;

    • Peak species which is already past (mass extinction event is under way)
    • Peak food
    • Peak groundwater
    • Peak minable metals
    • Peak rare earths (affects electronics)

    I wonder if JQ will seriously address these issues in this blog or persist with slightly glib or at least cryptic and sparse replies? Do such responses indicate a lack of genuine rebuttal arguments or a lack of time to blog on this issue?

  23. Ikonoklast, I’ll try to write something at greater length when I get some free time. To summarise in advance, I’d regard the problems as being in the order you’ve listed them ie
    Species loss – real and potentially catastrophic
    Food, water, fossil fuels – serious but fixable
    Metals and minerals in general – not a problem except for specialists

    As a general point, I don’t think it’s helpful to conflate the theoretical point that there are ultimate limits to everything with the empirical question of whether limits are close to binding in any particular case.

  24. Then there’s wind and solar energy, both in their infancy.

    For something in its infancy, wind-powered generation has been around for a long time.

  25. “As a general point, I don’t think it’s helpful to conflate the theoretical point that there are ultimate limits to everything with the empirical question of whether limits are close to binding in any particular case.”

    An error often made JQ. Of course there are limits to all non renewable resources but saying that does not mean that the world is close to those limits.
    One source of confusion is the inventory effect. It is not worthwhile for mining companies to find and prove reserves that will be needed very far in the future, so estimates need to be made of what might be found in the future. Such estimates are, of course, difficult and for oil in they have for quite a while been under rather than over.
    The person who taught me all this gave the example of washing powder. There are about 20 cartons on the supermarket shelf so a shopper might say “My god, there are only 20 carton of washing powder left – what will we do when they run out?”

  26. KenN, the person who taught you all that seems not to have understood the term non-renewable. Unless someone is secretly manufacturing oil and we havet been told about it.

    Jarrah, “lump of work fallacy” is usually dropped in to close down any discussion that is getting too uncomfortable for vested interests and when there is even a remote possibility that more detailed analysis could be even more discomforting. That’s why it smells of being a fallacy itself.

    JQ, interesting old post and stats but why has that happened? Is it just GFC? Given that downsizing is an essential tool in dealing with Peak Everything then how can those forces be harnessed to move the process further along? Is there any evidence that downsizing is really occurring or is it simply being projected onto statistics that have another cause?

  27. IM You misunderstand – the point is that there oil that has not been discovered yet and oil from existing discoveries that will turn out to be recoverable. That oil will almost certainly be more expensive to extract than current supplies so there is little incentive to search for it and prove it up.
    Now, I don’t know how much there is but I know that all estimates have turned out to be too conservative.
    Peak oil – the idea that the peak is close – might be true but peak everything as a near term likelihood is impossible to believe.

  28. Chris O’Neill :

    Then there’s wind and solar energy, both in their infancy.

    For something in its infancy, wind-powered generation has been around for a long time.

    Acording to Wikipedia, wind-powered generation, in the modern sense of the term, only began in 1979, making it pretty much the newest of the electricity sources. (Granted there were small wind-powered generators in rural areas early in C20, but that’s like calling a diesel-generator an oil-fired power station.)

    Regardless of snarky quibbles, the growth in wind generation over the last decade, to become, along with gas, the main source of expansion in generation capacity, has been spectacular.

  29. @Ian Milliss

    The decline in average full-time hours reflects successful resistance to work intensification. Paid parental leave is another win, small in its aggregate impact, but important for those affected.

  30. @jquiggin

    JQ, I agree with your pithy and well worded statement;

    “As a general point, I don’t think it’s helpful to conflate the theoretical point that there are ultimate limits to everything with the empirical question of whether limits are close to binding in any particular case.”

    I guess I put a nod in that direction by mentioning the super-abundance of silica and the super-abundance of incoming solar energy.

    Where we differ, I think, is in our percepetion of the number of potential bottlenecks caused by significant “close limits” (and their compounding effects) which will impede continuing growth and any chance of an eventual high population soft landing in a sunstainable state.

    Sorry for that long and awkward sentence but you will get my drift.

    I await your longer reply with interest. Honestly, I would be happy to be convinced that I am bit too pessimistic. It’s no fun living in an extreme pessimism zone but while it satisfies rigorous intellectual honesty (to the best of my own research and understanding) it’s an existential duty to live there.

  31. Of interest are the rare earth minerals, especially those for touch screens, TVs, computers, etc. These are likely to be quite price sensitive as supply goes south and demand goes north. Some are substitutable by lesser minerals but others are not. That means that a replacement technology needs development to eliminate the rare earth mineral(s) as a constraint. And so the wheel turns…

    Bad day for pain and sleep, so snooze time it is 😦

  32. As regards rare earths, my preferred source is occasional commentator Tim Worstall whose day job involves cornering the market in scandium ;-). He had an interesting piece in Foreign Policy

    Money quote “Two important facts about rare earths … They’re not earths, and they’re not rare.”

    Perhaps one day the cost of touch screens will go up because some lanthanide gets scarcer. I can’t say that this seems like something for me to lose sleep over.

  33. @ken n
    re washing powder Ken n – s smart shopper might say “there are twenty brands of washing powder – they are all ridiculously expensive” – and Unilever and Proctor and Gamble own most of them.
    Choice?. The manufacturers can pretty up and brand washing powder anyway they like. The smart shopper knows real choice is dwindling along with the carton size.

  34. @jqiggin

    “The decline in average full time hours reflects resistance to work intensification”. This has the ring to me of that neo-classical inanity that unemployment is, in the final analysis, voluntary, and that the great depression was caused not by the financial shenanigans of the in banking and finance sector but by the sudden withdrawal of labour at the going rate.

    The fact that leisure has not increased may be partly explained by the relentless capture of increasing GDP by the profit sector as opposed to wages and incomes, and that the need to feed ROI drives this unearned appropriation ever upward. The second partial explanation is the highly successful financialisation of our economy where an increasing percentage of disposable income has been effectively been captured by the FIRE sector as interest payments; a form of privatised taxation.

    I think that while strong arguments can certainly be made for improved health and longevity through medical advances, and improved educational opportunities due to the exponential growth in knowledge, most other aspects of contemporary life remain a tedious and fragile grind for the vast majority of people.

    And then there is peak oil. The 2010 IEA World Energy Outlook 2010 Key Graph title “World oil production by type in the New Policies Scenario” shows an ever increasing portion of world oil from 2015 coming from the special reserve category “fields yet to be found”. In conjunction with the “Incremental primary energy demand by fuel & region in the New Policies Scenario, 2008-2035” graph that shows world energy consumption stable because the growing east is balanced by an equivalent decline in OECD consumption, one has to wonder exactly what they have been sniffing.

    I am an optimist, but I think the new paradigm will forged in fire brought about by the forced change from our current destructive path.

  35. @Purp Traitor

    Yes, the graph “World oil production by type in the New Policies Scenario” is very revealing.

    1. In terms of actual oil production it shows we are past peak! An astonishing admission from the orstriches at the IEA.

    2. Production projected from “fields yet to be developed” is a significant leap of faith.

    3. Production from “fields yet to be found” is a total fudge factor. The two together turn the oil peak back into a long plateau. This smacks of working backwards from the answer they wanted. They want a plateau so how can they get one? They conjure two highly dubious categories of production out of thin air. The decline in discoveries indicate few significant new oil fields will ever be found now. Fields yet to be expolited are so becuase they are diffcult to exploit and will yield low returns on finance and energy invested. We safely turn both of these graph colours in to narrow slivers becuase that’s all they will be.

    4. Natural gas production, even by the IEA’s standard optimisitic assessment, shows very modest growth.

    5. Production from unconventional oil sources (like tar sands), is highly polluting and provides very poor returns in terms of net energy gained.

    We need a scientifically run International Panel on Resource Depletion urgently!

  36. At least for my Google search, the top hit for “Plateau Oil” is <a href="this blog “. Conclusion

    Plateaus are not very exciting as landscapes, and the Plateau Oil hypothesis is not very exciting in its implications. Given increasing demand from China and elsewhere, Plateau Oil means that consumption will have to decline somewhat in developed countries. To make this happen, prices will have to stay high, and rise gradually over time (the standard economic model has the rate of price increase equal to the discount rate of oil producers). But it’s quite possible that the biggest jump in market prices is already behind us, and that the next (probably more modest) step increase will come about when fuel taxes are increased to take account of CO2 emissions.

    Of course, prediction is risky, especially about the future. It may be that we’ll see some big new fields brought on line or that new sources like tar sands will expand rapidly. Still, my best bet for the future is that global oil output will never rise much above its current level, and that a definite decline will be evident within a decade or so.

    I don’t see any major reason to change what I wrote three years ago. The crude oil price has actually fallen since that was written, as a result of the GFC (and because the 2007 peak was in part a speculative bubble). But the price is still well above the level prevailing during the 1990s, and there has been no apparent supply response.

  37. @Ian Milliss
    No, it’s not. My identification of Alice’s fallacious reasoning can be simply summed up by identifying the well-known error. There’s no need to repeat common knowledge. Your response, however, is devoid of content or reason.

  38. @Jarrah
    Jarrah – Ian Milliss is thinking sensibly. You accuse me of bas because I pointed out things you are uncomfortable with, in your own bias (regulation bad, no regulation good).
    Please dont unsult me Jarrah. The “lump of work fallacy” is a fallacy. Its a fallacy intended to reduce regulation of the labour market. Like regulating reduced working hours and giving more people a chance at employment, instead of employees wipping their existing workers for as many hours as they can get out of them unpaid, and skimping everywhere else with casuals who arent getting enough work.

    Im tired of the kneecapped unions. Im also tired of unions that act in the best interests of permanently employment workers whilst their permanent employees are haemorraghing into the ranks of casuals (who unions dont work for).

    Go ask a certain VC at a Sudney uni who sacked thirty permanent academics just before Xmas. “Apply as a casual” “apply on a (short term) fixed contract”

    BUT (and Jill Rush will criticise me for this instead of NTEU – the NTEU doesnt have a clue because it wont fight for casuals – the NTEU doesnt have a clue because there is a cut in one wrist and its bleeding more permananet academics into the casual ranks every day – the NTEU doesnt even have a clue its being kneecapped.

    All I can say to those permanent academics is – welcome to the club? Who is looking after you now?

    Not the universities who have become completely addicted to casual acaedmics (ie tutors and lecturers lucky to last a semester).

    No wonder our phd rankings have gone down. Certain Business managers are selling the Australian university system down the nearest sewer system and the NTEU is useless. They dont get it. They need casuals and permanants as one force. Good luck with that one.

    Maybe when a few of the old …… have gone.

  39. @Alice
    Ian hasn’t shown any evidence of thinking on the topic at all. Now you’ve joined in with evidence-free assertions as well. And I accused you of confirmation bias because you exhibited it, not because I’m “uncomfortable” with it (LOL).

    NB – JQ, I would put this in the Sandpit, but there isn’t one.

  40. Thanks for that jq, and I tend to concur with your prognosis, and your conclusion that to we peak dwellers the immediate view appears plateau like, and that no, we’re not about to fall off the edge. But the thing about peak oil is its sheer inevitability and the profound impact this will have on our civilisation, particularly on such things as food production and urban sustainability.

    Here again it appears to me that the art of economics is not able to effectively curtail market failure, and the business as usual paradigm not only devalues but actively works against any attempt to recognise and account for coming changes and the need to move to a more sustainable footing.

    My experience is with sugar production, where yields both here and around the world have been declining for fifty years. At first this was thought to be due to some form of genetic shift (for which there is now no evidence), then some form of ratoon stunting disease, but now has been recognised to be ‘clearly associated’ with soil degradation. (1) Any amateur bio dynamic farmer would have a ‘duh’ moment with this, and yet this year I heard a senior industry player assert that the issue was not well understood, and that he was pursuing as a matter of urgency the investigation of GM cane to arrest the decline.

    It is this dogmatic intransigence by otherwise intelligent people when dealing with environmental and social constraints that most intrigues me, and I see the evidence of this failing across all political parties, industry groups and social classes. From my perspective, the least culpable are the least capable; ordinary Australians dealing with the demands of sustenance and continuity, and often the first to be fingered by the elites.

    That is why I think the changes coming with peak oil will be forced and not anticipated.

  41. “Here again it appears to me that the art of economics is not able to effectively curtail market failure, and the business as usual paradigm not only devalues but actively works against any attempt to recognise and account for coming changes and the need to move to a more sustainable footing.”

    Peak anything isn’t a market failure, first of all. Second, why don’t we try imagining what happens as we slide down the slope on the other side of Peak Oil:

    Price of oil rises gradually as demand outstrips supply. This simultaneously brings previously uneconomic oil reserves into play AND generates greater interest in reducing usage and increasing substitution, alleviating somewhat the forces of supply and demand, reducing the angle of the slope and giving us more time to adapt.

    Oil price continues to rise over many years, being continually replaced as an energy source at the margins. It also puts pressure on industrial agriculture (through fertiliser price rises) in developed and developing countries, leading to changed practices (such as greater ‘organic’ and permaculture adoption). This hurts agribusiness as monoculture has its economies of scale reduced. Residents of cities built for cars start buying hybrids and e-vehicles. Pressure grows on governments to build more public transport running on the grid.

    So far, it doesn’t look so scary, does it? Some of it looks very positive, in fact. The economics (and tech) of Peak Anything aren’t really a problem. What worries me is the misguided protection of the affected and the wider geopolitical issues. Governments could try to resist market forces in an attempt to shield favoured interest groups through subsidising oil and its fractions, for example. More seriously, trade imbalances between oil exporters and importers could lead to more instability than otherwise, and countries might even resort to military means to ensure supply.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s