Sunday, May 03, 2015

'An Ecomodernist Manifesto': Truth and confusion in the same breath

I really do want to applaud the Breakthrough Institute's recently released paper called "An Ecomodernist Manifesto." It speaks with candor about the possible catastrophic consequences of unchecked climate change. It recognizes the large footprint of humankind in the biosphere. It wants to address both, and it wants to do so in a way that offers a positive vision for the human future that will attract support and, above all, action.

But, I can't applaud it because of its underlying assumption: that humans are in one category and nature in another. The key paragraph starts with the key sentence:

Humans will always materially depend on nature to some degree. Even if a fully synthetic world were possible, many of us might still choose to continue to live more coupled with nature than human sustenance and technologies require. What decoupling offers is the possibility that humanity’s material dependence upon nature might be less destructive.

"Humans will always materially depend on nature to some degree." This statement seems reasonable only if humans and nature are in different categories. But, they aren't--a concept that is distressingly NOT clear to most everyone who styles himself or herself as an environmentalist. Humans and their creations are as much a part of nature as everything else. Humans don't "materially depend on nature to some degree." Humans are entirely and completely dependent on nature (of which they are a part) for EVERYTHING. Even every synthetic substance uses feedstocks and energy from the natural world.

It may seem to other readers of this manifesto that it acknowledges these facts in some of its statements such as "humans are completely dependent on the living biosphere." That's where the confusion comes in. Because, while there appears to be such an acknowledgement, the authors' conclusions belie such an understanding.

The distinction I am making is not merely a semantic one. Here's how I know that the authors of "An Ecomodernist Manifesto" will agree. The following is from the introduction:

In this, we affirm one long-standing environmental ideal, that humanity must shrink its impacts on the environment to make more room for nature, while we reject another, that human societies must harmonize with nature to avoid economic and ecological collapse.

Humans actually cannot avoid harmonizing with nature. All our insights about how to extract an ever-increasing material prosperity from the biosphere and the crust of the Earth DEPEND on us harmonizing our thinking with the laws of nature. We exploit our understanding to increase our access to energy and other resources in order to obtain higher levels of what we regard as security and well-being.

The key question is HOW we will harmonize our thinking and actions with the nature that we are a part of. The authors call for "decoupling human development from environmental impacts." By this they mean that we should find ways to do less damage to the environment while seeking the well-being we crave. And, few who are devoted to creating a more sustainable world would argue with this. But it is when we get into the details that confusion arises.

Let us return to the fragment I quoted above concerning our dependence on the living biosphere and provide the complete context:

Given that humans are completely dependent on the living biosphere, how is it possible that people are doing so much damage to natural systems without doing more harm to themselves?
The role that technology plays in reducing humanity’s dependence on nature explains this paradox. Human technologies, from those that first enabled agriculture to replace hunting and gathering, to those that drive today’s globalized economy, have made humans less reliant upon the many ecosystems that once provided their only sustenance, even as those same ecosystems have often been left deeply damaged.

So much confusion here. Let's try to sort it out: Humans are completely dependent on the biosphere--yes, of course. They damage natural systems--yes with an important qualification; the word "damage" should be replaced with "alter." Humans alter natural systems without much harm to themselves--possibly in the short run, but obviously not in the long run since humans are completely dependent on the biosphere. Technology reduces humanity's dependence on nature--completely wrong. It only enables us to exploit nature more efficiently by applying our understanding of nature's recurring patterns.

Everything from agriculture to the global economy has made humans less reliant on many ecosystems--almost completely wrong. We are as dependent on the world's ecosystems as we ever were except perhaps for fuel--which we now extract mostly from deep underground in the form of fossil fuels, the burning of which threatens us with catastrophic climate change--hardly a great tradeoff. But, wait a minute! That very fuel comes from ancient ecosystems, growth from which had been buried and "cooked" under intense pressure to give us carbon fuels. And, we are not free of the hunting and gathering method. That's how we get fossil fuels and mineral resources. But I digress.

Those ecosystems (that we supposedly "formerly" depended on so much) have been deeply damaged--yes with the important qualification noted above, the word "damaged" should be replaced with "altered." So the "damage" which is really "alteration" is really the shifting of entropy upon those ecosystems away from human settlements. Again, wait a minute! There is no "away" because as our ecomodernist authors tell us "humans are completely dependent on the living biosphere."

Our ecomodernists also tell us that any limits to our growth as a species are not in evidence:

Despite frequent assertions starting in the 1970s of fundamental “limits to growth,” there is still
remarkably little evidence that human population and economic expansion will outstrip the capacity
to grow food or procure critical material resources in the foreseeable future.
To the degree to which there are fixed physical boundaries to human consumption, they are so
theoretical as to be functionally irrelevant.

Their reference to the landmark study "Limits to Growth" first published in 1972 and then updated twice, most recently in 2004, betrays a surprising misunderstanding of the premise. What limits growth according to "Limits to Growth" is not resources, but adequate capital. Capital must be spent on maintaining the existing and exponentially expanding productive infrastructure and on mitigating ever-growing pollution of air, water and land (and now the effects of climate change) in order to maintain a livable society. At some point this capital expenditure becomes so large THAT THERE IS NO CAPITAL LEFT OVER TO INVEST IN GROWTH.

The ecomodernist authors view cities in one place as follows:

Cities occupy just one to three percent of the Earth’s surface and yet are home to nearly four billion people. As such, cities both drive and symbolize the decoupling of humanity from nature, performing far better than rural economies in providing efficiently for material needs while reducing environmental impacts.

In another excerpt they recognize that cities are a vast drain on ecosystems:

It is also true that large, increasingly affluent urban populations have placed greater demands upon
ecosystems in distant places — the extraction of natural resources has been globalized. But those same technologies have also made it possible for people to secure food, shelter, heat, light, and mobility through means that are vastly more resource- and land-efficient than at any previous time in human history.

The authors don't actually forget that it is absolute impacts and not per-capita impacts that matter. They say so elsewhere, just not here. But there seems to be only a dim awareness that the entropy created by cities is felt not only in distant ecosystems, but also in rural human-dominated ecosystems which are not "less efficient" than cities, only exploited by them as Howard Odum explains so eloquently in his writings. Cities do not pay the full value of raw materials from rural communities, only the cost of extraction and transport. The value that nature provides for free in trees, plants and minerals is only realized to any extent by those who process them for resale, typically those in the city. This is partly why city dwellers appear to be more efficient and end up more prosperous.

The manifesto adopts the triumphalist rhetoric of the rise of humankind over the centuries. It reminds me of Professor Pangloss who informs young Candide that "all is for the best in the best of all possible worlds." But, there is an environmental twist, of course.

I confess that any narrative about a way forward that does not project an optimistic vision of the future and a path to prosperity for all is probably doomed from the start--at least, doomed not to attract very many supporters. And, we desperately need a narrative that will attract wide support to speed up a transition to carbon-free energy and to help reduce impacts on the biosphere dramatically.

What the ecomodernist narrative misses is that we are dealing with complex systems that support our very existence and that we don't really understand those systems well. When dealing with things that are so complex that they are beyond our comprehension and control--especially if we are entirely dependent on those things--the first rule is not to perturb them. They will react in unpredictable and possibly ruinous ways.

The ecomodernists of the Breakthrough Institute mean well. But their vision lacks the humility which nature demands if it is going to sustain us. They have a vision which has some laudable elements, but they still view humans as the ultimate arbiters of the planet. We are simply not going to "harmonize" ourselves with nature, they say defiantly. And, yet there is no escape.

A friend of mine put it aptly when he said, "We think we are great ships sailing on the sea of the biosphere, able to withstand its storms while drawing whatever sustenance we need from it as we travel. Instead, we are really corks on the ocean bobbing up and down with every wave and only imagining that we are great ships."

The biosphere is our home. We are inhabitants along with countless other species. We humans are limited creatures--clever, yes, but limited, and every one of us as much a part of nature as all other species on the planet. A positive vision of the future which takes this into account is more likely to succeed at extending the life of homo sapiens than one that still considers us as separate from nature, a view that in many ways is the cause of the very environmental challenges we are seeking to address.

Conforming human activities to the dictates of "An Ecomodernist Manifesto" will at best lead to a much more efficient version of business-as-usual. If we are really going to address the problems that threaten the survival of human culture, we're going to have to do better than that.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, April 26, 2015

Chinese energy figures suggest much slower growth than advertised

Last year China reported the slowest economic growth in 24 years, about 7.4 percent. But the true figure may actually be much lower, and the evidence is buried in electricity figures which show just 3.8 percent growth in electricity consumption.

David Fridley, a staff scientist in the China Energy Group at the Lawrence Berkeley National Laboratory, has been a longtime collaborator with the Chinese on energy management, efficiency and policy. Fridley, who has held Chinese energy-related jobs for 35 years, believes that electricity consumption in China is a better indicator of its economic growth.

Historically, electricity consumption and economic growth in China have been very closely linked. "From 2005 to 2013, the average elasticity of electricity demand was 1.09, meaning electricity demand was up about 1.09 percent for every percent rise in GDP," Fridley wrote in an email. "In 2014, that number fell to 0.51, the lowest in this 10-year period. During the economic crisis of 2008, it did fall below the average, to 0.60, but quickly rebounded to above 1."

That tells Fridley that something is up. He's not the only one who thinks the government growth numbers aren't reliable. China's premier, Li Keqiang, has said China's GDP figures are "for reference only." Bloomberg reported that in a declassified U.S. diplomatic cable from 2007 then-U.S. ambassador Clark Randt related a dinner conversation with Li, secretary general of Liaoning Province at the time, in which Li revealed his preferred indicators of Chinese economic activity: rail cargo volume, loan disbursements and--wait for it--electricity consumption. China's leaders don't believe their own government growth numbers.

Fridley notes that electricity consumption figures are considered quite reliable and have suffered only minor revisions over the years. Preliminary numbers for the first quarter of 2015 suggest further slowing of the economy as year-over-year electricity consumption growth decelerated to just 0.8 percent. February data showed a 6.3 percent decline in electricity consumption from the previous month. March saw another decline of 2.2 percent.

Fridley also notes that residential electricity growth registered an extraordinary fall: "From 1980 to 2013, residential electricity grew on average 13.5 percent a year—and last year it fell to 2.2 percent. From 2005 to 2013, elasticity of residential energy demand was 1.11, and fell to 0.30 in 2014. This is unprecedented."

But it wasn't just electricity consumption that seemed out of step with China's reported growth rate. Fridley wrote that diesel and natural gas demand also indicated slowing economic growth:

Diesel demand in 2014 fell slightly, also for the first time, and the growth rate for natural gas was the first time it had been below double digits this century. Diesel demand growth is primarily driven by trucks hauling freight, and although the 2014 numbers for freight by mode aren’t out yet, the 2013 freight numbers went flat after growing by 3 to 4 billion tonnes per year since 2000. Trucking freight actually fell by over a billion tonnes. Rail freight was flat.

Does all of this prove that China's reported economic growth rate was inflated in 2014? Fridley again:

At this point, the data point to an economy that is weaker than what official GDP would say, but there’s not enough complete data available for 2014 to really understand everything that is going on. Others do provide their speculations, and perhaps some of it is spot on, but I just follow the data.

Economist Michael Pettis has been forecasting much lower growth in China for the rest of this decade as China rebalances its economy away from high investment and toward consumption. He says this has happened to every high-growth economy in the past and will almost surely happen to China.

He explains that it will come in one of two ways:

In the best-case orderly adjustment, growth rates will drop every year, more or less smoothly, as credit growth is constrained and investment growth drops with it. As the reforms proposed during the Third Plenum are implemented, ordinary Chinese households will benefit from direct or indirect transfers from the state sector, so that total household wealth will continue to rise more or less in line with the growth in household income during the past decade. In that case, consumption growth will remain in the 5 to 8 percent range.

The second way will not be so pleasant:

A disorderly adjustment will have a different dynamic. It is likely to occur after another two to three years of relatively high (7 to 8 percent) GDP growth rates followed by a very ugly contraction once debt capacity is exhausted--which will occur when new loans cannot grow fast enough both to roll over existing bad loans (by which I mean loans that funded projects whose returns were insufficient to liquidate the loans) and to generate economic activity. Average growth rates in the case of a disorderly adjustment will be well under 3 to 4 percent but the adjustment will be highly discontinuous.

You might have to read Pettis's words twice to get the full import of them. But he's explaining why China will grow more slowly in the future one way or another.

So, the question is: Has China entered this slow-growth phase which Pettis believes it must? Or will the adjustment to slower growth be delayed once again? No one knows for sure. But energy consumption statistics hint that China may have already begun its decent into slower growth and that that growth will be much slower than almost anyone except Pettis has forecast.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, April 19, 2015

Taking a short break--no post this week

I'm taking a short break this week and expect to post again on Sunday, April 26.

Sunday, April 12, 2015

How the climate change debate got hijacked by the wrong standard of proof

Everyone loves a courtroom drama--especially one that pits a feisty, but a determined criminal defense attorney against the awesome power of a prosecutor who has the resources of the state behind him or her. We see such David and Goliath stories every week on television.

We cheer as the defense attorney pokes one hole after another in the case of the prosecutor, raising what the audience now perceives as reasonable doubt. But will the jury see it that way? We'll return after these messages....

This is just the sort of metaphorical setting into which the climate change denial lobby is trying to place the debate over climate change without the public or even most policymakers realizing it. The deniers in the fossil fuel industry and elsewhere are attempting by sleight-of-hand to get both the public and policymakers to abandon the preponderance of evidence standard used primarily in civil trials--and which is similar to evidence-based public policymaking--in favor of another judicial standard designed for criminal trials, namely, beyond a reasonable doubt.

So long as the deniers get to claim the role of defense attorney in this public fight, their task will be much easier. The reason that the deniers want to change the standard of proof, of course, is because climate scientists have already shown through an overwhelming preponderance of evidence that human activities are a major cause of climate change. The deniers have no hope of winning the intellectual argument if this standard of proof is used.

Drawing from tactics permitted to defense attorneys in criminal proceedings, the deniers are freed from the need for consistency, clarity or comprehensiveness. Instead, they pursue several lines of contradictory rebuttal in hopes that one or more will stick since they believe they need only to poke holes in climate science to win. The deniers as defendants are not called upon to offer their own coherent theory of climate change. That's why they simultaneously claim that there is no global warming, that global warming is caused by nonhuman forces, and that global warming is good even if it is caused by human activities.

Some people wrongly treat the fossil fuel industry and carbon dioxide itself as if they are both somehow involved in a quasi-criminal proceeding. They think any one piece of evidence--even in isolation--that might suggest, however tenuously, that neither is implicated in climate change leads to reasonable doubt and a verdict of not guilty.

But, this kind of criminal trial thinking is not relevant to public policy deliberations. It is based on longstanding jurisprudence as expressed by the great English jurist William Blackstone who said: "It is better that ten guilty persons escape than that one innocent suffer." The principle at stake is that the freedom of the innocent is so precious that society should make every effort to ensure that no one is wrongly deprived of his or her personal liberty--even if it means that the courts are skewed toward letting some guilty defendants go free. But neither fossil fuel corporations nor carbon dioxide are actual living individuals, and so no one is going to be deprived of his or her personal liberty--that is, be imprisoned--by greenhouse gas emission regulations.

Probably the single most important question one can ask about this move by the deniers is whether they would accept the role of the prosecution. That would oblige them to offer an internally consistent theory of climate change supported by bona fide scientific evidence which somehow explains away all the evidence for human involvement in climate change.

As defendants in this hypothetical turnabout, climate scientists would only need to poke one or two holes in such a theory to prevail and win the case for the regulation of greenhouse gases. (This would roughly be the equivalent of the precautionary principle in action.) You can be assured the deniers only want to play the role of the defense in this faux courtroom drama. This is because they simply cannot marshal a winning prosecutorial case with the meager evidence they have and a story that is all over the map and riddled with holes.

There are only a tiny number of bona fide climate scientists who still say that the evidence is inconclusive concerning human contributions to climate change. There are none--so far as I know zero--who say that climate science PROVES that humans are NOT causing climate change--which would imply that these skeptics have a comprehensive, evidence-based theory of climate change which does not merely suggest nonhuman causes (which are already accepted by climate science), but which successfully refutes the enormous and growing evidence for human activities as a major cause.

Climate change deniers would like the public to believe that regulating greenhouse gas emissions should only be undertaken when we are 100 percent certain of their role in global warming. But anyone familiar with public policy knows that such regulatory policies are never undertaken with anything approaching 100 percent certainty--though the role of greenhouse gases in causing climate change comes closer to a 100 percent certainty than perhaps any previous scientific finding used to justify public policy action.

Where uncertainty remains concerning the possible consequences of climate change, that uncertainty--far from supporting inertia--actually cries out for significant and aggressive action in an effort to avert possible catastrophe. If the future of climate change meant merely that we all risked getting a hangnail, perhaps waiting would be an option. However, the history of climate change shows that we have consistently underestimated its pace and consequences. The changes already apparent and which climate change models forecast suggest that we are risking nothing short of the stability and even survival of modern civilization if we do not act now. To wait would be akin to a cruise line deciding that lifeboats for its vessels will only be ordered when a ship starts sinking.

And, now back to our program (mentioned at the beginning)....We return to the courtroom, but it turns out to be a courtroom of the future. As the planet burns outside, the prosecution is asking for the imprisonment of scores of defendants who denied the dangers of climate change and delayed effective responses to it. These defendants are charged with crimes against humanity.

In this case the proper standard for a guilty verdict is "beyond a reasonable doubt" because the personal liberty of each defendant is at stake. The prosecution tries to prove that the climate change deniers knew they were lying to the public about climate science and understood that the future consequences of climate change might be severe, even catastrophic, but acted with reckless disregard for the safety of humanity.

The jury is not convinced "beyond a reasonable doubt" and frees all of the defendants. As the now freed defendants leave the courtroom, they thank their lucky stars that the court could not invoke the preponderance of evidence standard--a standard that would likely have landed them all in prison.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, April 05, 2015

The hidden reasons behind slow economic growth: Declining EROI, constrained net energy

It should seem obvious that it takes energy to get energy. And, when it takes more energy to get the energy we want, this usually spells higher prices since the energy inputs used cost more. Under such circumstances there is less energy left over for the rest of society to use, that is, for the non-energy gathering parts--the industrial, commercial and residential consumers of energy--than would otherwise be the case.

It shouldn't be surprising then that as fossil fuels, which provide more than 80 percent of the power modern society uses, become more energy intensive to extract and refine, there is a growing drag on economic activity as more and more of the economy's resources are devoted simply to getting the energy we want.

A more formal way of talking about this is Energy Return on Investment or EROI. The "energy return" is the energy we get for a particular "investment" of a unit of energy. The higher the EROI of an energy source, the cheaper it will be in both energy and financial terms--and the more energy that will be left over for the rest of society to use.

But we've seen a persistent decline in the EROI of U.S. oil and natural gas in the past century, a trend that is likely to be reflected elsewhere in the world as well. Here's a summary from the abstract of a 2011 study:

We found two general patterns in the relation of energy gains compared to energy costs: a gradual secular decrease in EROI and an inverse relation to drilling effort. EROI for finding oil and gas decreased exponentially from 1200:1 in 1919 to 5:1 in 2007. The EROI for production of the oil and gas industry was about 20:1 from 1919 to 1972, declined to about 8:1 in 1982 when peak drilling occurred, recovered to about 17:1 from 1986–2002 and declined sharply to about 11:1 in the mid to late 2000s. The slowly declining secular trend has been partly masked by changing effort: the lower the intensity of drilling, the higher the EROI compared to the secular trend. Fuel consumption within the oil and gas industry grew continuously from 1919 through the early 1980s, declined in the mid-1990s, and has increased recently, not surprisingly linked to the increased cost of finding and extracting oil.

We rarely think of the energy it takes to get the energy we need because the processes are hidden from most of us. For example, when we drill for oil, there is energy expended to build the rigs, make the pipes, move and deliver them, drill the well, complete the well and pump the oil. The people involved all require energy in the form of food to live and tools and transportation to do their work. The oil is then transported by pipeline or tanker to refineries which use yet more energy to make the final products such as the diesel and gasoline we use. These products are transported to distributors and finally to retail service stations or large end users. This list is actually cursory, but it illustrates the scope of the activities involved.

A similar series of energy expenditures could be adduced for natural gas, coal, uranium, biofuels, solar power, wind and, in fact, any energy source available to us.

The methods for assessing energy consumed in obtaining energy are not universally consistent. But no matter what methods are used, they point to one fact, fossil fuel EROI including coal has been declining. This is entirely consistent with the observation that we have extracted the easy-to-get resources first and are now going after oil and natural gas deposits that are progressively more difficult to extract--in deep shale deposits requiring extensive hydraulic fracturing or fracking, in deep ocean waters and in the Arctic. For coal this is reflected in the declining heat value per unit of coal that is now being mined.

So, if EROI has generally been declining for decades, why has the economy grown consistently? The answer comes from one more piece of the puzzle: net energy. Net energy is the energy left over for the rest of society after we expend the necessary energy to extract, refine and deliver it. That sounds like EROI, but it is an absolute number, not a ratio.

It turns out that we have greatly expanded the gross amount of energy we are extracting from all sources in the past century. This vast increase in gross extractions of energy has masked falling EROI by giving us consistently more net energy for society.

However, the growth in net energy appears to have slowed while EROI of fossil fuels continues to fall. That has led to greater competition for the available net energy and a general rise in fossil fuel prices from 2000 onward. There have been fluctuations, sometimes violent ones, tied to the so-called Great Recession of 2008 and 2009 and to the softening of the world economy in the past year which led to steep declines in oil prices (something which may be telling us there is another recession in the offing).

If the composition of our energy resources weren't so skewed toward finite fossil fuels which supply more than 80 percent of all energy to human society, then the question of net energy might be less important. The vast amount of solar energy available on the Earth's surface might be available to us with a relatively low EROI, but the gross amount available is orders of magnitude greater than the amount we are using today. As solar becomes a larger and larger part of world energy production and as the technology becomes more efficient at converting sunlight to useable energy, we may see the EROI of our total energy mix turn up.

But it's doubtful that solar and other renewable alternatives can make up for the vast energy contribution of fossil fuels anytime soon. This means that we may be facing a secular slowdown in net energy growth or even stagnation or decline in the net energy available to society. As our major energy sources, fossil fuels, continue their downward EROI trajectory, it is getting harder and harder for gross extractions to compensate.

This suggests that the net energy available to society might actually peak and decline even as gross energy extractions continue rising. No doubt many experts will cite the rising trend as reason not to be concerned about energy supplies--even though, on a net basis, energy available to society might actually be shrinking.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, March 29, 2015

The puzzling flattening of carbon emissions and the problem of global growth

Last week we learned that maybe, just maybe, global carbon emissions were flat in 2014 even though the global economy supposedly grew by 3 percent. As Brad Plumer of Vox (whose work I greatly respect) points out, carbon emissions have moved up almost in lockstep with economic growth for the entire industrial age except during recessions and one year of growth 40 years ago.

This is why I use "supposedly" when referring to the global economic growth number. It's because there is another obvious and plausible explanation for the flat carbon emissions, namely, that the global economy did not grow by the stated percentage, that it may have grown only a fraction of that amount or not at all.

Economic measures are constantly being revised, and I think it is very likely that the global economic growth number for 2014 will be revised downward. Probably not to zero, but downward nonetheless. It's also possible that estimates of carbon emissions are too low. Plumer cites "notoriously unreliable" Chinese emission numbers as one reason to be skeptical.

But, even if 2014 turns out to be a year of growth without rising emissions, we shouldn't get particularly exercised. Nor should we be particularly excited if it continues for a time. This is because the only trend that will actually address climate change is a RAPID DECLINE in worldwide emissions (as Plumer rightly points out).

Plumer makes one very telling statement in this regard:

If we ever hope to stop global warming, we'll have to sever that relationship [of economic growth to emissions] — and figure out how to have economic growth while reducing emissions. (Alternatively, we could halt economic growth, but no one wants that.)

"Alternatively, we could halt economic growth, but no one wants that." Two questions arise from this observation: Is it true that "no one wants that"? Who specifically wants economic growth to continue and why?

The answer to the first question is no; there is, in fact, a small minority of people advocating an end to growth. Herman Daly, former World Bank senior economist, is the acknowledged dean of the steady-state economy movement. In a September 2005 Scientific American piece, "Economics in A Full World," he outlined his case for why there is little room for economic growth and why growth in recent decades has been uneconomic, that is, the cost of such growth has outweighed the benefits.

There are also the deep ecologists who value other species on the planet as much as our own, a view which implies not only an end to economic growth but a serious rollback of industrial civilization. Perhaps Derrick Jensen is the best known of the deep ecologists whose views about how to achieve the proper role for humans on planet Earth varies greatly.

Given that there are people who want to halt or even reverse economic growth, we must now ask the second question: Who wants growth and why?

If we follow Herman Daly's logic, we have long since passed the point of economic growth and now have "uneconomic growth," growth that imposes costs greater than the growth is worth: social costs in terms of inequality and environmental costs that undermine the long-term sustainability of human society.

So, who benefits from such growth? We now have a name for this group, the one percent. Those with the highest incomes and greatest financial wealth continue to benefit from such growth since they can both reap disproportionate rewards from it and insulate themselves from the costs associated with it--leaving others to bear them.

When Plumer says that no one wants economic growth to end, what he is unwittingly saying is that the power elite in the world does not want to face the grand implication of a steady-state economy--namely, that lower-income groups cannot be assured of a better material existence through economic growth and so such betterment would, of necessity, have to come from the redistribution of wealth.

As long as the chimera of perpetual growth can be sold to the masses, no one will have to deal with the thorny issue of redistribution as the primary method for the economic betterment of the middle and lower classes.

And yet, growth ended for many people around the globe in 2008. According to the International Labour Organization (ILO), if you earn the median wage in Kenya, your real income has declined 26 percent from 2008 through 2013. For Greece, the decline has been 24 percent. For prosperous Singapore and Japan the number is minus 1 percent. Egyptian real median income declined 10 percent; the United Kingdom declined 7 percent; Iceland and Italy, 6 percent; Taiwan, 5 percent; Spain and the Netherlands, 3 percent; Ireland, 2 percent; Austria, Luxembourg and the Philippines, all hovered around zero percent growth.

Of course, some prospered. Median wages in Romania, Panama, Paraguay, Norway, Jordan, Poland, Vietnam and Morocco all rose more than 10 percent from 2008 onward. There were standouts: The Brazilian median wage grew by 21 percent; Thailand by 26 percent; China by 74 percent; Mongolia by 75 percent. Ukrainian workers enjoyed a media wage increase of 43 percent through 2013 though it is likely that much of that has since been wiped out by the war and currency crisis there. In the United States, the median wage registered a one percent increase according to the ILO, though homegrown analysis suggests a decline.

The metaphorical tide of economic growth that is supposed to lift all boats is lifting far fewer people much more selectively than before.

On the other hand, if you possess substantial financial assets, you have prospered quite nicely as financial markets post daily records in the face of ever more precarious economic growth numbers around the world. But, only a small portion of the world's people have any financial assets at all. The fate of a large number of the others has been stagnant or falling incomes or unemployment in an increasingly uncertain world.

Whether economic growth for all the world's people will return is an open question. The system by which we've governed the world economy, a system dependent on central banking, central government spending, the build-up of huge and unsustainable debt, and the ever more rapid depletion of fossil fuels and other resources is showing its decrepitude.

Six years of pedal-to-the-metal monetary policy and government deficit spending have barely nudged world growth forward while levitating financial markets to unsustainable levels (and thereby exacerbating inequality). Such policies in the past would have had the world economy quickly overheating with central bankers responding by hoisting interest rates sky high to rein in inflation and financial excesses.

Instead, the economy remains so weak that the U.S. Federal Reserve had to reassure the world that despite language in its recent public statement that would indicate an imminent increase in interest rates for the first time in 10 years (that's not a typo), the central bank really wouldn't be raising them anytime soon after all.

So, maybe flat carbon emissions are actually telling us something "no one" wants to hear: that economic growth has faltered or even halted for a large portion of the world's people and that we are going to have to deal with the consequences of that until we design a new system that can either grow for the benefit of everyone--a difficult proposition--or that can sustainably, equitably and successfully manage a steady-state economy--an even more difficult proposition.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Thursday, March 26, 2015

Recent radio interview on Israeli National Radio

I was recently interviewed by Doug Goldstein on his personal finance show, "Goldstein on Gelt," which plays on Israeli National Radio, the English-language radio network in Israel. Goldstein saw a piece of mine and asked me on the show to discuss the recent sharp decline in oil prices. A podcast of the interview is now available. Goldstein is a good interviewer with an eclectic mind and brought out the best in me with his conversational approach. The interview starts at about 2:30. Click here to go to the page containing the podcast.