ONE TOWN SQUARE: at the intersection of peak oil, climate change, and land use

Compared to any other human activity, land use and agriculture are the greatest emitters of greenhouse gasses.

You heard that right. More than the emissions from all the world’s passenger cars, trucks, trains and planes, or the emissions from all electricity generation or manufacturing. Of the three most important man-made greenhouse gasses — carbon dioxide emissions from deforestation, methane emissions from animals and rice fields, and nitrous oxide emissions from heavily fertilized fields  — account for 30% of the total.

Jonathan Foley points out at Yale Environment 360 that since the last ice age, nothing has been more disruptive to the planet’s ecosystems than agriculture. Continued population growth is pushing global agricultural systems to their very limits. He asks:

Already, we have cleared or converted more than 35 percent of the earth’s ice-free land surface for agriculture, whether for croplands, pastures or rangelands. . . What will happen to our remaining ecosystems, including tropical rainforests, if we need to double or triple world agricultural production, while simultaneously coping with climate change?

We’re already exploiting Earth’s water resources in an unsustainable manner, drawing on fossil aquifers and draining rivers before they reach the sea. The use of industrial fertilizers and other chemicals has more than doubled the flows of nitrogen and phosphorus compounds in the environment and fundamentally upset the chemistry of the entire planet. How can Earth cope with future demands from increasing population and agricultural consumption?

Unfortunately, Foley’s answer is pretty feeble. First, acknowledge we have a problem. Then, “find ways to simultaneously increase production of our agricultural systems while greatly reducing their environmental impacts” – what he calls a “greener agricultural revolution.”

What Foley can’t admit is, we don’t have a “problem” that can be solved with yet another technofix. We’re in a predicament, from which there’s no solution, no easy way out. The best we can hope for is to face our predicament squarely, with as much courage and grace as we can muster.

Those in the peak oil community – including this blog – have long been predicting that peak oil implies the end of economic growth as we have come to know it.

Global oil production has been on a plateau since late 2004 and – at least for the moment – appears to have peaked as of July 2008. As Sadad al Husseini has said, the economics of oil have broken down:

It’s not a matter of you throw a little money and you get a lot of oil; it’s now you throw a lot of money and you get a little oil.

In a speech at the 2009 ASOP International Conference in Denver, Richard Heinberg reiterates the economic consequences and points out they were predicted by the peakists:

As we all know, the global economy began contracting last year—though that’s just a nice, abstract way to put it. Industrial production fell. Corporations downsized or disappeared. Fifty trillion dollars in global capital vaporized in stock market crashes, bankruptcies, foreclosures, and defaults. Millions of people lost employment and housing. Globalization went into reverse.

Also, in 2008 the oil price spiked 50 percent higher, in inflation-adjusted terms, than at any point in previous history. It would be an enormous oversimplification to say that the oil price spike “caused” the world recession, but the fact that the price spike and the economic crisis occurred at the same time is hardly meaningless coincidence.

In effect, we are seeing a vindication of what many of us have been predicting for a long time.

Fossil fuel depletion is not the only physical barrier that we’re bumping up against.  The climate change impacts that are beginning to be felt and a score of other indices of environmental decline show that energy limitations are only one of a number of limits to growth. As Dan Allen would put in Obama’s mouth:

We cannot have infinite wants on a finite planet. These were childish wishes.

Even after the crash, nobody is questioning the reality of our previous prosperity. The crisis was  not sufficient to shake the current system; if anything, the grip has been tightened. We all seem to still be hoping that everything can return to the way it was. The dominance of the finance sector on the economy and our politics has not changed. We have poured trillions into propping up a growth-dependent financial system, when we desperately needed to instead begin building a social, political, and economic system that would allow to live as gracefully as possible while the human economy shrinks as a subset of the ecology.

Peak oil theory in its broadest formulation predicts that resource depletion means that growth is no longer possible.  Global warming (and other “sink” impacts) mean that continued growth isn’t even desirable, as it would lead to catastrophic ecological collapse. We’re in the middle of a real-time test of both theories.

Dave Cohen at the Energy Bulletin observes that the 21st century will surely usher in a peak and decline in both expansion and growth for human population and economies. He then takes on what he calls “friedmanism” – a syndrome certainly not particular to Thomas Friedman, but he serves as exemplar: the “Awful Truth” is too much for him to handle.

Cohen observes Friedman has to be a cheerleading, “blue skies” kind of guy if he wants to be a mover and shaker, and a fixture at the New York Times. That’s true, not only at the New York Times. Joseph Romm, for all his invaluable work is another example. As Cohen says, realism will get you fired in a heart beat. Why do you think we have a cheerleader as President (now that’s two in a row!). Realism won’t get you elected.

We’re in the middle of Earth’s sixth great extinction event – this one caused by human activities. This loss of species will pose a major threat to human existence in the next century. Yet we press on as usual, mining fossil fuels and burning oil, gas, and coal as if nothing’s wrong. It’s keep the economy growing at all costs – even at the cost of the collapse of Earth’s ecological systems that sustain us.

Pundits like Roger Pielke Jr. warns that we can’t aspire to the impossible – that is, to actually doing something to mitigate global warming before it’s too late. That would be “magical thinking.” Pielke says setting unattainable emissions targets such  is not a policy – it’s an act of wishful thinking. Nature doesn’t give a damn about what’s politically possible or not. Believing that reality can be placated by half-measures is magical thinking, in my book.

Question: why is a supposedly reputable journal like Yale Environment 360 publishing bilge by Roger Pielke Jr.?

Realistic thinking would be to admit that the days of economic growth are over and to begin planning for a measured descent; to admit that global warming is a crisis and to take whatever steps necessary to avert catastrophe; to admit that the end of the fossil fuel age is upon us and to begin to transition to living well on far less. To optimistically believe that these problems will solve themselves without effort and without drastically changing our ways is magical thinking.

Realistic thinking would recognize that the American Empire is unsustainable and needs to be dismantled. We spend hundreds of billions each year on so-called  “defense” to sustain a network of 865 military facilities stretched around the world. As Chalmers Johnson writes at TomDispatch:

However ambitious President Barack Obama’s domestic plans, one unacknowledged issue has the potential to destroy any reform efforts he might launch. Think of it as the 800-pound gorilla in the American living room: our longstanding reliance on imperialism and militarism in our relations with other countries and the vast, potentially ruinous global empire of bases that goes with it. The failure to begin to deal with our bloated military establishment and the profligate use of it in missions for which it is hopelessly inappropriate will, sooner rather than later, condemn the United States to a devastating trio of consequences: imperial overstretch, perpetual war, and insolvency, leading to a likely collapse similar to that of the former Soviet Union.

But I suppose it is magical thinking, to think that anything will be done to avert disaster, either here in the U.S. or globally. Humans are what they are. Things will unfold as they will unfold.

Cohen ends his piece by citing David Quammen:

I can’t top David Quammen. As he says, in some millions of years the planet will fill up with life again-that’s the good news.

Eco-economist Herman Daly in a recent speech at a United States Society for Ecological Economics conference laid out ten specific policy proposals for moving to a steady-state economy at a level of physical wealth that the biosphere can sustain. Too bad Daly isn’t at the helm of U.S. economic policy rather than Summers, Geithner, and Bernanke – for whom the economy revolves around Wall Street rather than being embedded in the real, physical world.

Daly’s ten policy prescriptions are summarized below – but be sure to read the entirety of his speech at The Oil Drum to catch the flavor and nuance of his argument.

1. Cap-auction-trade systems for basic resources. Caps limit biophysical scale by imposing quotas on depletion or pollution, whichever is more limiting. Auctioning the quotas captures scarcity rents for equitable redistribution. Trade allows efficient allocation to highest uses.

2. Ecological tax reform—shift tax base from value added (labor and capital) and on to “that to which value is added”, namely the entropic throughput of resources extracted from nature (depletion), and returned to nature (pollution).

3. Limit the range of inequality in income distribution—a minimum income and a maximum income. Without aggregate growth poverty reduction requires redistribution. Set fair limits to the range of inequality.

4. Free up the length of the working day, week, and year—allow greater option for part-time or personal work so as to maximize enjoyment of life.

5. Re-regulate international commerce—move away from free trade, free capital mobility and globalization, adopt compensating tariffs to protect efficient national policies of cost internalization from standards-lowering competition. Trade and capital mobility must be balanced and fair, not deregulated or “free”.

6. Downgrade the IMF-WB-WTO to something like Keynes’ original plan for a multilateral payments clearing union, charging penalty rates on surplus as well as deficit balances—seek balance on current account, and thereby avoid large foreign debts and capital account transfers.

7. Move away from fractional reserve banking toward a system of 100% reserve requirements. This would put control of the money supply and seigniorage in hands of the government rather than private banks, which would no longer be able to create money out of nothing and lend it at interest.

8. Stop treating the scarce as if it were non-scarce, but also stop treating the non-scarce as if it were scarce. Enclose the remaining commons of rival natural capital (e.g. atmosphere, electromagnetic spectrum, public lands) in public trusts, and price it by a cap-auction–trade system, or by taxes, while freeing from private enclosure and prices the non-rival commonwealth of knowledge and information.

9. Stabilize population. As a start contraception should be made available for voluntary use everywhere.

10. Reform national accounts—separate GDP into a cost account and a benefits account.

This passage on the Peak Oil News site conveys the powerful message that the myth of growth has proven a failure:

Every society clings to a myth by which it lives. Ours is the myth of economic growth. For the last five decades the pursuit of growth has been the single most important policy goal across the world. The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate the economy will be 80 times that size by the year 2100.

This extraordinary ramping up of global economic activity has no historical precedent. It’s totally at odds with our scientific knowledge of the finite resource base and the fragile ecology on which we depend for survival. And it has already been accompanied by the degradation of an estimated 60% of the world’s ecosystems.

For the most part, we avoid the stark reality of these numbers. The default assumption is that – financial crises aside – growth will continue indefinitely. Not just for the poorest countries, where a better quality of life is undeniably needed, but even for the richest nations where the cornucopia of material wealth adds little to happiness and is beginning to threaten the foundations of our well-being.

The reasons for this collective blindness are easy enough to find. The modern economy is structurally reliant on economic growth for its stability. When growth falters – as it has done recently – politicians panic. Businesses struggle to survive. People lose their jobs and sometimes their homes. A spiral of recession looms. Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries.

But question it we must. The myth of growth has failed us. It has failed the two billion people who still live on less than $2 a day. It has failed the fragile ecological systems on which we depend for survival. It has failed, spectacularly, in its own terms, to provide economic stability and secure people’s livelihoods.

This passage is attributed to the report Prosperity Without Growth, recently released by the U.K. Sustainable Development Commission – the government’s “independent watchdog on sustainable development.” The mystery is, I can’t find anything like it anywhere – in the report itself, in the summary, in any press releases, in any interviews with the report’s author. WTF?

Oops – there it is, right in the Forward.

In an earlier post I observed that the G20 summit ended without tackling the world’s underlying problems. Others whom I respect greatly are now starting to weigh in with similar observations.

Kjell Aleklett writes, there’s Not enough oil for the G20 package. If the stimulus package that the G20 group decided on is to achieve its stated objective and return us to the growth path we’ve come to expect, then we will need an increase of 8 to 9 million barrels per day during the next 5 years. Such an increase is not possible. He says what the G20 group should be discussing is the investments required to transform the energy system to renewables.

George Monbiot writes the G20 forgot the environment. Climate breakdown, peak oil and resource depletion all dwarf the financial crisis in financial and humanitarian terms.

Monbiot sums up the G20 communiqué:

We, the Leaders of the Group of Twenty, will use every cent we don’t possess to rescue corporate capitalism from its contradictions and set the world economy back onto the path of unsustainable growth. We have already spent trillions of dollars of your money on bailing out the banks, so that they can be returned to their proper functions of fleecing the poor and wrecking the Earth’s living systems. Now we’re going to spend another $1.1 trillion. As an exemplary punishment for their long record of promoting crises, we will give the IMF and the World Bank even more of your money. These actions constitute the greatest mobilisation of resources to support global financial flows in modern times.

Oh – and we nearly forgot. We must do something about the environment. We don’t have any definite plans as yet, but we’ll think of something in due course.

Monbiot accuses the G20 of engaging in “magical thinking”, believing that getting the economy back to where it was – infinite growth on a finite planet – can somehow be reconciled with the pledge “to address the threat of irreversible climate change”.

Friends of the Earth’s executive director Andy Atkins laments:

“Once again world leaders have short-changed people and the planet. The economic system and the global environment are on a devastating collision course – but despite pledging to build an inclusive, green and sustainable recovery little has been done to change direction.

Greenpeace executive director John Sauven said:

Tacking climate change on to the end of the communiqué as an after thought does not demonstrate anything like the seriousness we needed to see. Hundreds of billions were found for the IMF and World Bank, but for making the transition to a green economy there is no money on the table, just vague aspirations, talks about talks and agreements to agree.”

And here’s David Norman, World Wildlife Fund campaigns director:

Any argument that climate change should be moved down the political agenda until the current economic crisis is addressed is incredibly shortsighted. Finance and the climate are inextricably linked, and if we don’t address climate change now, we will certainly pay later.

David Cohen at ASPO-USA (also The Energy Bulletin) makes obvious something that I hadn’t realized before: Energy Secretary Chu’s (and by extension President Obama’s) energy policy, in relying on 4th generation biofuels, puts its faith in a radical form of geoengineering.

Cohen thinks the odds of pulling off that gamble at all, much less without unforeseen and unintended consequences, are slim.

Chu wants nothing less than to alter the Earth’s primary productivity – the proportion of the sun’s energy available to and assimilated by plants – to achieve greater efficiency in the conversion of sunlight to chemical energy than Nature has after 3.5 billion years of evolution.

After the costs of respiration, plant net primary production is about 0.05% of the solar constant. Note that this is the “average” efficiency, and in land plants this value can reach ~2-3% and in aquatic systems this value can reach ~1%. This relatively low efficiency of conversion of solar energy into energy in carbon compounds sets the overall amount of energy available to heterotrophs at all other trophic levels. Chu’s objective is to design microbes and plants which have been genetically altered to speed up or enhance photosynthesis. Chu describes his strategy for developing 4th generation biofuels as a “portfolio” approach.  This is from a news report on his confirmation hearings:

Such a multi-pronged approach looks to optimize all phases of biofuels production with no preconceived idea of which area is likely to offer the biggest payoff. And that, Chu said, “is why I’m so optimistic some real progress can be made.”

Cohen rechristens it as “scattershot” approach – randomly fire a lot of bullets in some general direction and hope you hit something – and points out it really means we don’t have a clue which ideas might work:

“No preconceived idea” means “I have no idea.”

Even if the research efforts should bear fruit, putting 4th generation biofuels to work will require the creation of artificial ecosystems, i.e. systems which have been human-designed and -engineered for specific purposes. Cohen cautions the mere fact that evolution has placed upper bounds on the efficiency of primary productivity in plants suggests that there are very deep reasons why this is so and that tampering with plant productivity may be a grave mistake or impossible.

Large-scale production of 4th generation biofuels is a form of geoengineering. We will plant energy crops on a land area of unknown size—this depends on the efficiency of the solar energy collection. (If no or only minor efficiency gains are achieved, there won’t be enough land.) Then we will harvest those crops and transport them to biorefineries, where biomass will be converted to fuels as shown in Figure 1. It is unknown how much energy the entire pathway itself would require, so we don’t know what the net energy will be. * * *

The lack of humility before Nature displayed here is nothing short of astonishing.

Cohen objects we shouldn’t be betting the farm on the unknown outcome of all these science experiments, and asks:

Why is geoengineering preferable to implementing sensible policies that promote liquid fuels frugality? Are these people crazy?

Here’s a synopsis of Cohen’s apologia for what would objectively seem to be insanity:

Human beings are very resistant to change. Societal behavioral changes are always gradual unless shocks occur that put large behavioral changes in motion. In the absence of such shocks, solutions to problems requiring rapid and deep behavioral change are politically impossible. Even politicians promising “change” quickly get with the program, which essentially amounts to doing nothing (doing nothing is a choice: it allows events take their natural course.) The promise offered by the magical technological solution to any problem is almost irresistible. If a problem is serious, as with energy, the more time a technological solution requires, the more popular it will be with politicians for whom gradual solutions are always good and shocks are always bad.

But his question remains:

Are these people crazy?

Ecological economists at the University of Vermont think the most obvious fact about ecological economics is this: ecology comes before economics.

Joshua Farley offers an example:

Without healthy ecosystems to regulate climate and rainfall and provide habitat for pollinators, agriculture would collapse.

Which would make it tough to sell cars, or anything else.

We need economic production to survive, but we also need healthy ecosystems and the service they provide.

No bees, no food, no trip to the grocery store.

In a paper published in the February 24 edition of PNAS, Rachael Beddoe and her co-authors argue that efforts to increase material growth have become a roadblock to quality of life rather than a road to increased happiness. While in the “empty” world at the beginning of the Industrial Revolution it may have made sense to expand our consumption of natural resources and ignore the abundant services — like clean air and water — provided by ecosystems, in today’s “full” world continued material growth decreases the ability of ecosystems to provide the life support that makes monetary wealth meaningful.

A finite planet can’t sustain endless growth. The result of efforts to do so is not increased happiness, it’s accelerating climate change, soil depletion, declining energy resources, and loss of species that threaten the underpinnings of civilization.

Says Beddoe :

It’s a crazy, maladapted system – but we’re so used to it, it seems sensible.

A U.S. Geological Survey ecologist says the park’s glaciers will be gone by 2020 – about ten years ahead of schedule.

A 2003 USGS study, using 1992 temperature predictions by the UN’s Intergovernmental Panel on Climate Change (IPCC), had estimated that the park’s glaciers would disappear by 2030. But the temperature rise in the area has been twice as great as assumed in the 1992 model.

Nonpolar ice is disappearing all over the globe. Major glaciers have entirely disappeared from the Andes, and the Himalayas have lost a third of their snow.

The glaciers of Glacier National Park have shrunk by 67% in the past hundred years.

A lot of sensitive and rare plants are associated with the edges of glaciers. Reduced water is expected to cause drying and die-offs, especially for aquatic species.

President Obama met with business leaders this morning at the White House. His published statement released following the meeting leaves no doubt that it’s not “change” when it comes to the economy. As Obama’s selections of Timothy Geithner for Treasury Secretary, Larry Summers as head of the National Economic Council, and Christina Romer as head of his Council of Economic Advisors foretold, Obama’s policies aim to get us back to business as usual. Here’s the money quote:

All we can do, those of us in Washington, is help create a favorable climate in which workers can prosper, businesses can thrive, and our economy can grow. And that is exactly what the recovery plan I’ve proposed is intended to do.

We’d better start taking Obama at his word.

As Jason Bradford astutely observes at The Oil Drum, our current economic system requires growth – or the financial system collapses. But given the novel situation we find ourselves in, where our economic system has overshoot the carrying capacity of the ecological system within which it nests, the resumption of growth would worsen our predicament. Rather than try to get our old economic system back on its growth track, we need to create a financial system that doesn’t require perpetual growth.

Bradford asks the right question: why isn’t Herman Daly one of Obama’s key economic advisers?

The answer is disturbingly obvious: because Obama doesn’t have a clue.

Jon Talton at Britannica Blog has a post laying out the myriad ways in which today’s recession is different from those of the 1980s – and the reasoning applies equally as well to earlier recessions, including the Great Depression.

He lists eight factors. The two which I consider most important – peak oil and global warming – recognize that we’re bumping up against real, physical limits to Earth’s sources and sinks. The massive increase in the human population, combined with increased consumption, is severely stressing Earth’s carrying capacity.

The reality is that now, for the first time since the beginning of the fossil fuel age, energy will not only be becoming more expensive. There will be less and less of it. This will inevitably have economic consequences.

A changing climate will also be extracting an ever-increasing toll. We’re already seeing impacts on forests, farms, and fisheries. Those impacts will only worsen as the warming that is already built into Earth’s climate system takes hold.

The other factors that Talton cites are structural and political, at both the national and international levels. We’ve outsourced huge portions of our manufacturing base to China, Mexico, and other countries – there’s little left to rebuild. Our trade with China relies on China accepting debt rather than cash. If that bargain comes unwound, both countries will be in trouble. The housing crash, rather than an ordinary cyclical downturn, resulted from the collapse of a huge, speculative bubble. Banks are no longer small and well-regulated – they’re huge and poorly regulated, and the enormous shadow banking system is not regulated at all. The American middle and working classes have lost both power and wealth – never have Americans been so unequal. The monetary tools we had at our disposal during earlier crises are no longer available or effective.

All of the last set of realities are the result of bad policy decisions. We deliberately did all of these things that have now proved disastrous.

But the two fundamental differences – peak oil and global warming – are the result of a more fundamental error. They are the inevitable consequences of the very idea of progress that underlies an economy that sets exponential growth as its ultimate goal.

Within any finite system – such as Earth – exponential growth cannot long continue. We are now being confronted with that hard reality. That’s what makes today’s economic crisis so different.

In a very funny article, Dmitry Orlov calls proposed solutions to our current economic and other crises boondoggles – solutions to problems that result in more severe problems than those they attempt to solve. But boondoggles may not be so bad:

The combined weight of all these boondoggles is slowly but surely pushing us all down. If it pushes us down far enough, then economic collapse, when it arrives, will be like falling out of a ground-floor window.

Orlov cites the automobile industry as a classic example:

Let us work through a sample problem: there is no longer enough gasoline to go around. A simple but effective solution is to ban the sale of new cars, with the exception of certain fleet vehicles used by public services. First, older cars are overall more energy-efficient than new cars, because the massive amount of energy that went into manufacturing them is more highly amortized. Second, large energy savings accrue from the shutdown of an entire industry devoted to designing, building, marketing and financing new cars. Third, older cars require more maintenance, reinvigorating the local economy at the expense of mainly foreign car manufacturers, and helping reduce the trade deficit. Fourth, this will create a shortage of cars, translating automatically into fewer, shorter car trips, a higher passenger occupancy per trip and more bicycling and use of public transportation, saving even more energy. Lastly, this would allow the car to be made obsolete on about the same time line as the oil industry that made it possible.

Rather than object to boondoggles, we should gaily join in:

With a bit of practice, you should be able to come up with some excellent boondoggles of your own in your own field of endeavor. If your boondoggle works, it will create more problems for you to solve in the next round, as long as there is time for one more round. And if there is not, then you will be where you want to be: at a ground-floor window, staring into an abyss of only a couple of feet. Although by then it may feel unnatural, at that point you must resist the temptation to create yet another boondoggle by jumping down head-first.

President-elect Obama in his economic speech today identified two objectives for his economic recovery plan: job creation and long-term growth. When will some brave politician find the courage to tell the American people that growth is the root not only of our economic problems but of the far more serious problems that threaten human civilization itself, along with stability of Earth’s ecosystems?

The attempts to resolve the financial crisis have so far failed because the problem is seen as a liquidity crisis rather than the solvency crisis that it really is. Attempts to fix our economic crisis will similarly fail because the solutions – including those proposed by Obama in his speech – attack the wrong problem.

Our economic woes are seen as stemming from the slowing down of economic activity, a liquidity problem. The solution then is to stimulate economic activity, to dump huge sums of borrowed money into the system to get people spending and consuming again. Stimulate enough and we can return to business as usual – economic growth. The danger lies in being too conservative, in not spending enough.

But what if the problem is insolvency – inadequate capital resources – rather than illiquidity? The remedy of even more debt and more spending would then make the situation worse rather than better.

Since at least the beginning of the industrial age, what we call economic growth has gone hand-in-hand with increased energy usage. What happens to growth when energy sources can no longer be expanded? If the correlation holds true, economic activity will shrink along with energy consumption. As energy supplies plateau and then begin to fall, the economy as we presently measure it is bound to contract as well.

U.S. oil supplies peaked in 1971. Perhaps not entirely coincidentally, the U.S. abandoned the gold standard in the same year. For a time, the deal we cut with Saudi Arabia and other Middle East oil producers to maintain dollar hegemony enabled the U.S. to maintain its global dominance. But under the mounting pressure from ever-declining U.S. oil production and ever-increasing oil imports, that deal began to become unglued. The U.S. trade balance, which had for years been pretty stable, wavered for a few years then finally began a precipitous decline.

Economists argue that the U.S. economy has become more energy-efficient over the last decades because we get more GDP bang for each unit of energy input. But the reality is that we’ve simply shipped the energy-intensive bits of our economy overseas. That, along with increasing energy imports, is now devastating our balance of trade.

At the beginning of the Great Depression, the U.S. was the world’s largest creditor nation. We had enormous reserves of oil, virtually untapped. The dollar was backed by gold. The Depression was a liquidity problem. What was needed was to lubricate the wheels of commerce to get things moving again.

Today, as the current economic crisis unfolds, we’re the world’s largest debtor nation and import two-thirds of the oil we consume. The dollar is a fiat currency, its value dependent entirely on the confidence of its holders. We’re in far worse shape now than we were then, with depleted energy and other resources, a hollowed-out industrial infrastructure, and deep in debt.

The U.S. is not alone in its energy dilemma. Global oil production appears to have peaked in 2008. Other fossil fuels will follow, natural gas first, coal a bit later, both probably within a couple of decades. The world’s nations all face a future of struggling to maintain energy supplies, with exporting states consuming ever more of their own resources leaving less and less for export to consuming nations.

In a growth environment debt is not too troublesome, as it can readily be repaid out of ever-increasing income. If the economic problem we’re facing is a liquidity problem – the lack of lubrication in the engine of growth – borrowing to get beyond the hiccup is a smart and prudent thing to do.

But if the problem is that the economic engine has run out of fuel, investing in lubricating the engine won’t do any good. And repaying the additional debt out of a shrinking income will become an overwhelming burden, leaving us with few resources to create a different kind of economic system.

It would be understandable and even laudable if Obama gets the big picture but has chosen to use conventional language and messaging to begin to take the citizenry to a place he feels they’re not yet ready to go. But I’m not getting a good feeling.  There’s too much talk of “confidence,” of “stabilization and repair” – and then there’s the reiterated emphasis on “long-term economic growth.”

Jobs is the wrong goal. “Jobs” is a crude and indirect measure of what we really care about, which is that everyone has a vocation – an honored place in society that offers the opportunity to do socially worthwhile and satisfying work while living a decent and rewarding life. Over the last decades we have wasted far too much labor doing destructive things, while the distribution of wealth has never been more skewed.

Growth is also the wrong goal. The truth is we are running up against multiple limits to growth. Our goal should instead be prosperity. We need to figure out how to live well while shrinking our economy’s share of global ecosystem.

Many of the pieces of the plan Obama outlined could be applied towards the goals of vocation and prosperity in a world exorcised of the demon of growth. There’s nothing we need more than investment in alternative energy supplies and a radically upgraded electric grid. But instead of exorcising the demon, Obama’s speech, tragically, continues to invoke him.