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

Gregor Macdonald has posted this chart at The Oil Drum which neatly shows the headwinds facing the U.S. “economy”.

It’s not going to get any prettier in the future. We’re going to have to figure out what prosperity could look like in an environment where energy is going to become an ever more precious commodity.

Last year governments world-wide provided $43 – $46 billion of support to renewable energy through subsidies such as tax credits, guaranteed electricity prices known as feed-in tariffs, and alternative energy credits.

Sounds pretty good, right?

But not so fast. In 2008, governments provided $557 billion in subsidies to fossil fuels.

An analysis by Bloomberg New Energy Finance shows that the global direct subsidy for fossil fuels is at least ten times the subsidy for renewables.

Rural life is extremely energy intense, especially in terms of oil. Exurban living – people living “consumer lives with prettier views” – depends on very long supply lines. Alex Stefan at Worldchanging explains why the exurban lifestyle is not only not “green”, it is at risk in an environment where energy prices can go nowhere but up.

[W]e know that big, dense cities are greener; that the energy used in shipping food is a small portion of its overall impact, that transit is more energy efficient than driving (and indeed, that cars are the largest contributor to climate change), and that the benefits of urban living in compact, walkable, wired communities can extend far beyond living in smaller homes, served by more efficient infrastructure and not owning a car, to include a dramatic overall drop in one’s environmental impact. What’s more, we know why these things are so[.]

Unfortunately for people living in rural areas, we know a lot more about how to live a prosperous-yet-low-impact urban life than we do about how to live a rural life of equal prosperity with a small ecological footprint. Rural areas are poorer than urban areas, and offer fewer opportunities. Envisioning how people rural areas  will be able to prosper and live decent lives  in an environment bereft of cheap and abundant energy is a challenge that has yet to be faced.

Here’s a sobering graph from The Oil Drum: Europe showing that oil exports – oil available for trade on international markets – have been declining since 2005 and that the decline is projected to not only continue, but accelerate.

This decline in oil exports is consistent with the Export Land Model. Consumption within oil producing countries continues to increase even as production lags or falls, leaving less available for export to oil consuming nations.

Luis de Souza writes this situation bodes ill for Europe.

It is hard to envision how Europe will fare in this race for the dwindling international oil market. One thing is for certain: Europe, with its heavy foreign dependence and its now very small internal production, is the Economic block with the most to lose.

But it’s hard to see how the U.S. will fare any better.  At least Europe has an infrastructure of cities and villages that mostly developed prior to the automobile age. Population centers have some semblance of a relationship to the surrounding countryside, a relationship that could conceivably be renewed and strengthened without too much disruption. And Europeans have long been used to high transportation fuel prices. High population densities and high fuel prices are two factors contributing to the survival of viable transportation alternatives in Europe. The U.S. has kept fuel prices low and subsidized sprawl since the end of WWII.  As a result, much of the built environment in the U.S. will prove to be  “stranded investment”, infrastructure whose fate is to be abandoned.

Souza warns that energy scarcities mean the end of  an economics we erroneously believe is the natural order of things.

An unsustainable economic paradigm is coming to an end. If economic recession is the only way for Europe and the OECD to reduce its reliance on fossil fuels, then economic recession is what it will be.

He’s writing of Europe, but what he says applies more generally to the post-WWII enshrinement of growth and free markets. After causing untold damage to human societies and to Earth itself, the wheels are finally coming off and that age is grinding to an end. Walt Whitman Rostow and The Stages of Economic Growth, RIP.

Nobody “official” – no country, no established economic research institute, no international organization (such as the IMF) – appears willing to entertain any notion or to publicly discuss scenarios that don’t plan for a return to stable economic (GDP) growth.

But then there’s the non-establishment Institute for Integrated Economic Research – which is unafraid to think the unthinkable.

The IIER suspects the odds of business-as-usual coming to an end are pretty high.

Nate Hagens at The Oil Drum: Campfire suggests it might be entertaining and perhaps even enlightening to begin asking our politicians, what will you do if growth is over?

You know peak oil has gone mainstream when insurance companies are saying the environmental and economic costs of fossil fuels are simply too high to justify on-going investments. But that’s a consequence of the disaster in the Gulf.

Jeff Rubin has recently pointed out the real legacy of Three Mile Island wasn’t the event itself, which happened back in 1979, but rather what happened (or more precisely didn’t happen) over the course of the next 40 years in the United States. Literally overnight, the near-meltdown of the reactor core changed public acceptance of nuclear power plants. No company in the U.S. has built a new one since.

BP’s Deepwater Horizon event may prove to have similar consequences. A major new report from insurance giant Lloyd’s and UK think tank Chatham House argues that a rapid shift towards low carbon energy sources represents the only way of tackling the energy industry’s soaring risk profile.

Commenting on the report, titled Sustainable Energy Security: Strategic Risks and Opportunities for Business, Lloyd’s chief executive Richard Ward, said that the environmental and economic costs of fossil fuels are simply too high to justify on-going investments.

The current generation of business leaders need to rethink their approach to energy risks or be left behind as energy becomes less reliable and more expensive. We need a long-term plan to reduce consumption and diversify our energy sources.

“Peakers” have toiled towards for decades now toiled to raise awareness of the precariousness of our predicament, working towards the moment when the rest of the world would finally realize that you can’t extract an infinite amount of oil from a finite planet. The moment will inevitably lead to another, when the implications of that realization begin to sink in.  As seers such as John Michael Greer and James Kunstler have been saying repeatedly, the implications are that the technological, economic, and social arrangements predicated on endless supplies of cheap oil might be “a good deal less clever than they seemed”.

It beginning to look like the first moment has finally arrived. The second moment can’t be far behind.

Andrew Rivken at the New York Times asks, is last year’s drop in U.S. CO2 emissions a blip or a trend?

According to the EIA report U.S. Carbon Dioxide Emissions in 2009: A Retrospective Review, U.S. energy-related carbon dioxide emissions fell by 7.0% last year. The downturn of the economy was responsible for only 2.4% of that reduction.

Population, per capita GDP, energy intensity of the economy, and carbon intensity of the energy supply all contribute to emissions. The only factor that increased in 2009 was population, by 0.9%. The remaining three factors – GDP, energy intensity, and carbon intensity – combined in roughly equal proportions to cause emissions to fall by 7.0%

The financial crisis hit the industrial sector of the economy the hardest, and energy usage by industry correspondingly fell the most – by 9.9%. Output from energy-intensive industries such as primary metals (-33.9%) and nonmetallic minerals (-17.4%) fell much faster than total industrial production, reflecting the fact that we’re outsourcing such production at the same time the service sector has been growing relative to the industrial sector of the U.S. economy. Also, carbon intensity fell due to fuel switching as the price of coal rose 6.8% from 2008 to 2009 while the comparable price of natural gas fell 48% on a per Btu basis.

But where CO₂ emissions occur doesn’t matter to the climate system. The fact that U.S. emissions (or those of other developed nations) are falling doesn’t matter much if those emissions are merely being “exported” elsewhere, primarily to China. And we’re exporting more than industrial production – we’re exporting energy and carbon intensity, as well. The result? China has now overtaken the U.S. to become the world’s biggest emitter of greenhouse gases – and shows no sign of easing off. Coal is the basis of the Chinese economy, fueling over 80% of electricity generation. China’s already-enormous coal consumption – now three times U.S. consumption – is still growing, for example at an astonishing rate 28.1% from first quarter 2009 to first quarter 2010.

Even if falling U.S. emissions are a trend and not just a recession-related blip, falling U.S. emissions mean nothing if global emissions continue to rise.

As Gail the Actuary points out at The Oil Drum, what can’t happen, won’t:

Combine unprecedented consumption levels with furious growth rates and you quickly arrive at absurdities and impossibilities. As in, it won’t happen. The wheels will fall off the wagon first.

Reducing emissions will require reducing the production of “stuff” – and not only in the U.S., but also around the world. Global economic shrinkage is the only way out of our climate predicament, and our current focus on economic growth will have to be replaced by concern with economic justice.

Limited supplies of fossil fuels mean that “economic growth” as we know it will come to an end, sooner or later, whether we like it or not. The question that remains to be answered is, before the wheels do come off, will we have already set the world on a path to unstoppable warming? Or will we accept the inevitable and act in time to save the ecosystem that sustains us?

The April 2010 edition of Oilwatch Monthly reports March 2010 conventional crude production was around 73.7 million b/d, and suggests there is a high chance that the standing record for monthly crude oil production – 74.73 million b/d, reached in July 2008 – may be broken within the next six months.

There’s also a chance that the yearly record for highest conventional crude production – 73.72 million b/d in 2005 – may be broken in 2010.

Conventional crude oil – the cheapest and easiest to process of liquid fuels – has been on a production plateau of between roughly 72 and 74 million barrels per day since late 2004. Production dropped to a low of 71.47 million b/d in May 2009 as demand fell several million barrels per day due to the economic crisis.

In March 2010 world production of all liquid fuels fell to 86.59 million b/d, down by 220,000 barrels per day from February, according to the International Energy Agency (IEA). Liquids production for February 2010 was revised upwards in the IEA Oil Market Report of April from 86.59 to 86.8 million b/d. Average global liquid fuels production in 2009 was 84.94 versus 86.6 and 85.32 million b/d in 2008 and 2007.

Governments have, for the moment, returned the global economy to a fragile growth track by bailing out the global financial system and assuming huge chunks of bank and corporate debt. But the debt problem hasn’t gone away – the IMF in its latest report warns of growing sovereign debt risk to the global financial system and of pressing need to continue repairing the financial sector in advanced and the hardest-hit emerging economies.

A recent paper by Bassam Fattouh of the Oxford Institute for Energy Studies titled Oil Market Dynamics through the Lens of the 2002-2009 Price Cycle argues that oil prices over the past year (2009) have been driven by a loss in faith that rising prices will result in increased supplies – in other words, by the looming reality of peak oil. Oil supplies stubbornly are refusing to increase in response to rising prices.

During the 1980s and the 1990s, expectations about short-term oil price behaviour rested on the assumption that changes in oil prices would induce supply, demand or policy feedbacks – or a combination of them – which would prevent prices from rising above a certain ceiling or from falling below a certain floor. These perceptions of strong feedbacks stabilised long-term expectations about oil prices. However, as oil prices rose sharply during the boom years, uncertainty about the existence of and the timing of feedbacks from prices to oil supply and demand markedly increased. The perception of strong feedbacks in the oil market was replaced by the perception of limited feedbacks.* * *

It is possible to dissect the 2008-2009 price cycle into three distinct phases:

• Phase 1: In the first half of 2008, doubts about the existence and timing of feedbacks from prices to oil supply and demand became pervasive. This destabilised short-term expectations and created a wide band within which the oil price could oscillate. . . .
• Phase 2: The sharp reversal in oil prices from July 2008 to February 2009 came in two distinct phases. The first was a cooling off in prices from their peaks, brought on primarily by the combination of a supply side response from the key marginal producers, following the Jeddah meeting in June, and by mounting evidence in the rear-view mirror that OECD demand had weakened far more than initial expectations and provisional data flows had suggested. The second phase was more directly associated with the intensification of the global financial crisis, and the consequent rapid fall in consensus expectations for global economic growth. Until expectations about the global economy began to stabilise, there was, and probably could not have been, any recovery in oil prices.
• Phase 3: In the second quarter of 2009, the powerful shocks that affected global oil demand were counteracted by perceptions of global recovery and the perception of tight future market fundamentals — fuelled by increasing concern that the credit crunch and the low price environment would limit investment flows in the oil sector and in alternative energy.

Fattouh notes that some economists think there is an “inverse relationship between oil price changes and economic growth” – in other words, that increasingly strained supplies could bring an end to economic growth.  But being a two-handed economist, he also notes there’s an opposing school, which believes that oil price shocks are not special and can be offset by appropriate policy responses – although he cautions that this view “undermines a key element in the conventional wisdom on the relationship between GDP growth and oil prices”.

Fattouh’s observation above is a startling one: to believe that economic growth can continue in an environment of increasing constraints on oil supplies and consequent rising prices is inconsistent with economics as we have come to know it.

Back in December I wrote a post about our poultry shed project. The predator-proof poultry shed is now complete (except for painting, a project awaiting warmer and drier weather).

And the ducks have arrived, special delivery by U.S. mail, 19 day-old ducklings squashed together for warmth in a 12 x 10 x 6 cardboard box. Here they are – seven Pekins, six Rouens,  and six Khaki Cambells – in their new quarters in the brooder room of the poultry shed.

In addition to the ducklings, you can see the heat lamp for warmth, the automatic feeder, and the plumbing for the automatic waterer (hidden behind Zooey the duckshund). We’ll have six Muscovys arriving in late May or early June.

Zooey has never shown much interest in the sheep, but she’s fascinated by the ducks. Her new assignment, when the ducks get old enough to be outside on their own, is going to be to round them up every evening and herd them back into the poultry shed for protection from night time predators. We’ll see how that works out.

You may ask, why bother to raise a few ducks? It’s most certainly not going to provide an income stream worthy of mention.

John Michael Greer has a post this week that helps explain why it’s not only worthwhile, but an enriching endeavor. It’s all about reinvigorating the household economy.

Here’s a chart from Wikipedia, showing how the labor force participation rate changed from 1948 to 2006:

United States’ Labor Force Participation Rate 1948-2006. Source: United States Bureau of Labor Statistics

And this chart from a post at Calculated Risk breaks the labor participation out by gender:

A good part of the gain in per capita GDP over the last 60 years is the result of increased labor force participation, especially by women. Americans have been abandoning the household economy for the money economy. And as Greer describes, people are often worse off as a result of the trade.

What’s all this got to do with ducks? Ducks are hard to find, and expensive. Check out Willamette Local Foods: ducks range in price from ~$30 for a small one to ~$45 for a large one. Duck eggs are expensive, too – $7.20/doz. Ducks and duck eggs are a luxury we could seldom afford, if we had to pay cash. But we can raise them ourselves, and live richly.

Same thing goes for lamb. Leg of lamb goes for ~$8/lb, and lamb loin chops even more. We first raised sheep ourselves because we can’t find good lamb at local supermarkets, and we couldn’t afford it if we could find it. Now we raise a little, sell a little, and live wie Gott im Frankreich.

And then there’s wine. A decent bottle of Pinot Noir fetches ~$15/bottle. We grow our own grapes, make our own great wine (if I do say so myself), and have a bottle on the table every night, plus plenty to share with friends. That adds up to a minimum $5,500/year – way more than we could afford, in after-tax dollars, if we had to buy it from a wine shop.

Plus we don’t have to commute to work, we don’t have to do shit work,  we don’t have to put up with bosses, we don’t have to worry about getting laid off or fired. We get to putter around the farm most of the day, enjoying the sunshine or the rain, the fields and the woods, and the company of each other and our critters.

Now, if we could only raise doctors and nurses . . .

A new report from Metro titled Regional greenhouse gas inventory concludes it’s our consumerism – our making or importing, buying, using, and throwing away of stuff – that’s most responsible for Portland’s greenhouse gas emissions and contributions to global warming (here’s the press release). The report finds 48% of emissions come from consumption, 27% from energy, 25% from transportation.

The graph above is from an article in The Oregonian. The Portland Tribune also has a story about the report.

“Transportation” includes vehicle miles traveled by passenger vehicles and light trucks and operation of public transportation system (TriMet). “Energy” includes natural gas consumption from residents and businesses and fossil fuel consumption from utilities’ imported electricity. “Materials” includes manufacture of products and food (from inside and outside the region) consumed by metro residents and businesses; freight movement of materials, goods and food (heavy truck, rail, air); and waste management and recycling system (collection, landfills).

Excluding the movement of goods and waste from “transportation” and including it instead in “materials” is an interesting Gedankenexperiment that could be extended even further. How much of the “transportation” we engage in is related to buying stuff, either working to make the money to do so or shopping? How much of the stuff we use is related to filling up and maintaining the oversized houses we live in? How many fewer business-related structures could we avoid having to power if we didn’t consume so much stuff?

All that aside, shifting the movement of goods and waste from one category to another doesn’t reduce our reliance on oil as a transportation fuel.

Let’s continue along this line of thought.

According to the EIA, oil is the biggest source of energy consumed in the U.S.

The U.S. Department of Defense, in a new report titled “The JOE 2010” (JOE = Joint Operating Environment) sees an oil shortage of ~10 million barrels a day developing by 2015. This excerpt is from p. 29 (highlighting added):

Energy Summary

To generate the energy required worldwide by the 2030s would require us to find an additional 1.4 MBD every year until then. During the next twenty-five years, coal, oil, and natural gas will remain indispensable to meet energy requirements. The discovery rate for new petroleum and gas fields over the past two decades (with the possible exception of Brazil) provides little reason for optimism that future efforts will find major new fields.

At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity.

By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.

Energy production and distribution infrastructure must see significant new investment if energy demand is to be satisfied at a cost compatible with economic growth and prosperity. Efficient hybrid, electric, and flex-fuel vehicles will likely dominate light-duty vehicle sales by 2035 and much of the growth in gasoline demand may be met through increases in biofuels production. Renewed interest in nuclear power and green energy sources such as solar power, wind, or geothermal may blunt rising prices for fossil fuels should business interest become actual investment. However, capital costs in some power-generation and distribution sectors are also rising, reflecting global demand for alternative energy sources and hindering their ability to compete effectively with relatively cheap fossil fuels. Fossil fuels will very likely remain the predominant energy source going forward.

An identical prediction of a gap of 10 MBD between supply and demand in 2015 appeared on page 8 in the Department of Energy (DoE) document that Matthieu Auzanneau blogged about recently at Le Monde. And of course the Pentagon is being incredibly optimistic in projecting production levels at 100 million bpd in 2030.

The Pentagon is blunt: cheap fossil fuels are key to “economic growth and prosperity”.

Jeff Rubin is less than sanguine about the odds of maintaining access to cheap oil.

There are no Spindletops waiting to be found anymore, neither in the mid-Atlantic nor in the Gulf of Mexico. There aren’t even Prudhoe Bays or North Seas—just ridiculously expensive stuff found miles below the ocean’s floor, like the recently discovered Tiber field. By the time any oil flows from these newly opened offshore areas, the American economy will have abandoned oil as a transport fuel—a change that will be dictated by a series of oil-induced recessions like the one we’ve just exited.

* * *

So baby, you can drill all you want, but what you’ll find won’t keep you on the road.

In Metro’s formulation, less oil means less “materials”, not just less transportation. What we call “economic growth and prosperity” is precisely the “consumption” that Metro has identified as the major cause of global warming.Then there’s the other big and nasty fossil fuel: coal. Coal is the biggest source of energy produced in the U.S.

And of course, as shown in the chart below, coal is the world’s biggest source of greenhouse gas emissions.

Energy-related carbon dioxide emissions from fossil fuels, 2008 (Million Metric Tons)

¹Includes combustion and flaring of natural gas.

As James Hansen points out, only a rapid phasing out of coal can avert the risk of passing “tipping points”, beyond which catastrophic climate change cannot be avoided.

There are no substitutes for fossil fuels. The EROI of alternatives simply isn’t adequate to maintain our industrial life style. Dave Murphy at The Oil Drum: Net Energy runs a rough calculation and concludes civilization, at a bare minimum, requires a 3:1 “extended EROI” – which includes not just the energy of getting the fuel, but also of transporting and using it – to allow only for energy to run transportation or related systems. This would leave little discretionary surplus for all the things we value about civilization: art, medicine, education and so on – things that use energy but do not contribute directly to getting more energy or other resources. This ratio would increase substantially if the energy cost of supporting labor (generally considered a consumption by economists although definitely part of production here) or compensating for environmental destruction were included. Any fuel with an EROI less than about 10:1 may in fact be subsidized by the general petroleum economy.

So here’s where this thought experiment leaves us. Petroleum, our biggest energy source, will soon be in short supply. That development in itself threatens to derail “economic growth and prosperity” – the whole project of consumerism. Coal is our second biggest source of energy. Averting climate catastrophe requires that we stop burning coal, and soon – yet another blow to “economic growth and prosperity”.

We’re between a rock and a hard place.

It’s past time to begin imagining a different kind of future, a different kind of prosperity, based on something other than “stuff”. We have no other choice.

Developed countries are “outsourcing” more than a third of their carbon emissions associated with products and services to other countries, according to a new study by scientists at the Carnegie Institution for Science. To be meaningful, regional climate policy thus needs to take into account emissions embodied in trade, not just domestic emissions.

This map shows the flow of carbon emissions embodied in trade among the major exporting and importing countries. Net exporting countries are in blue and net importers in red. China is by far the largest exporter of carbon dioxide emissions. Arrows indicate direction and magnitude of flow; numbers are megatonnes. (Steven Davis/Carnegie Institution for Science)

The study finds that, per person, about 2.5 tons of carbon dioxide are consumed in the U.S. but produced somewhere else. The United States is both a major importer and a major exporter of emissions embodied in trade. The net result is that the U.S. outsources about 11% of total consumption-based emissions, primarily to the developing world.

Says co-author Ken Caldeira, a researcher in the Carnegie Institution’s Department of Global Ecology:

Instead of looking at carbon dioxide emissions only in terms of what is released inside our borders, we also looked at the amount of carbon dioxide released during the production of the things that we consume.

Caldeira and lead author Steven Davis, also at Carnegie, used published trade data from 2004 to create a global model of the flow of products across 57 industry sectors and 113 countries or regions. By allocating carbon emissions to particular products and sources, the researchers were able to calculate the net emissions “imported” or “exported” by specific countries.

For Europeans, the figure can exceed four tons per person. In Switzerland and several other small countries, outsourced emissions exceeded the amount of carbon dioxide emitted within national borders. Most of these emissions are outsourced to developing countries, especially China.

Davis explains:

Just like the electricity that you use in your home probably causes CO2 emissions at a coal-burning power plant somewhere else, we found that the products imported by the developed countries of western Europe, Japan, and the United States cause substantial emissions in other countries, especially China. On the flip side, nearly a quarter of the emissions produced in China are ultimately exported.

Where CO2 emissions occur doesn’t matter to the climate system. Effective policy must have global scope. To the extent that constraints on developing countries’ emissions are the major impediment to effective international climate policy, allocating responsibility for some portion of these emissions to final consumers elsewhere may represent an opportunity for compromise.

The report is published online in the March 8, 2010 Proceedings of the National Academy of Sciences.

The U.S. posted its biggest-ever decline in CO2 emissions from fossil fuels in 2009, according to the Energy Information Administration (EIA). But the reductions are not expected to continue:

CO2 emissions from fossil fuels fell by an estimated 6.3 percent in 2009. Emissions from coal led the drop in 2009 CO2 emissions, falling by nearly 11 percent. Declines in energy consumption in the industrial sector (a result of the weak economy) and changes in electricity generation sources are the primary reasons for the decline in CO2 emissions (U.S. Carbon Dioxide Emissions Growth Chart). Looking forward, projected improvements in the economy contribute to an expected 1.5-percent increase in CO2 emissions in 2010. Increased use of coal in the electric-power sector, and continued economic growth, combined with the expansion of travel-related petroleum consumption, lead to a 1.3-percent increase in CO2 emissions in 2011. However, even with increases in 2010 and 2011, projected CO2 emissions in 2011 are lower than annual emissions from 1999 through 2008.

The drop in emissions in 2009 was the biggest since data collection began in 1949. The Great Recession was primarily responsible, as U.S. real gross domestic product dropped 2.4% in 2009, in the biggest decline since 1946. Emissions dropped 5.8% in 2008.

It’s hard enough to imagine the U.S. and other developed nations voluntarily sacrificing economic growth, much less embracing voluntary frugality. Can you even conceive that China and India would voluntarily give up their ambitions to join the developed world? The entire world has joined in a suicide pact.

It’s beginning to look like the only thing that will save humans and other living things from the ravages of global warming is global economic collapse.

The planet is beset with a number of unprecedented crises that, as Dennis Meadows points out, are symptomatic of an underlying problem: exponential physical growth in a finite world.

At Countercurrents.org, Helena Norberg-Hodge makes a compelling case that “going local” – shifting economic activity back into the hands of local businesses instead of concentrating it in fewer and fewer mega-corporations – may be the single most effective thing we can do to begin to tackle the problem.

Norberg-Hodge points to food as a clear example of the multi-layered benefits of localization.  Local food systems can help reinvigorate entire rural economies and have social and environmental benefits:

• While globalized agriculture demands monocultural production of cash crops, a food system oriented towards local and regional markets gives farmers incentives to diversify.
• Diversity creates many niches on the farm for wild plant and animal species.
• Diversified farms can get by without heavy machinery or heavy doses of chemical fertilizers and pesticides.
• Most of the money spent on food goes to the farmer, not corporate middlemen.
• Small diversified farms employ more people per acre than large monocultures. Wages paid to farm workers benefit local economies and communities far more than money paid for heavy equipment and the fuel to run it: the latter is almost immediately siphoned off to equipment manufacturers and oil companies, while wages paid to workers are spent locally.
• Local food systems provide better food security.
• Small-scale, diversified farms have a higher total output per unit of land than large-scale monocultures.

Agribusiness interests dominate at the state, national, and international levels. For example, the Agribusiness Council is upfront about its aspirations for dominance of the global food system:

The Agribusiness Council (ABC) is a private, nonprofit/tax-exempt, membership organization dedicated to strengthening U.S. agro-industrial competitiveness through programs which highlight international trade and development potentials as well as broad issues which encompass several individual agribusiness sectors and require a “food systems” approach. Examples of such issues are commercialization of new technology/crops, environmental impacts, human resource development, trade and investment policy, natural resource management, and rural development.

touts its incestuous relationship with  the U.S. government:

Initiated under Federal government auspices by President Lyndon B. Johnson in 1967, The Agribusiness Council was formed by a group of business, academic, foundation and government leaders in order to facilitate American agribusiness participation in agricultural trade and development programs with developing countries – and represent private-sector agriculture interests to Federal government decision-makers.

and makes no bones about its objectives:

As an organization with international linkages, The Agribusiness Council seeks to strengthen the U.S. agricultural sector’s international outreach through stimulating private enterprise trade and investment solutions in Third World agro-industrial development.

Agribusiness interests may be too entrenched and government too corrupt to change. But we can change. We have the power to opt out of the global food system and to begin to grow local food systems, from the ground up.

The planet is beset with a number of unprecedented crises that, as Dennis Meadows points out, are symptomatic of an underlying problem: exponential physical growth in a finite world.

At Countercurrents.org, Helena Norberg-Hodge makes a compelling case that “going local” – shifting economic activity back into the hands of local businesses instead of concentrating it in fewer and fewer mega-corporations – may be the single most effective thing we can do to begin to tackle the problem.

Norberg-Hodge points to food as a clear example of the multi-layered benefits of localization.  Local food systems can help reinvigorate entire rural economies and have social and environmental benefits:

• While globalized agriculture demands monocultural production of cash crops, a food system oriented towards local and regional markets gives farmers incentives to diversify.
• Diversity creates many niches on the farm for wild plant and animal species.
• Diversified farms can get by without heavy machinery or heavy doses of chemical fertilizers and pesticides.
• Most of the money spent on food goes to the farmer, not corporate middlemen.
• Small diversified farms employ more people per acre than large monocultures. Wages paid to farm workers benefit local economies and communities far more than money paid for heavy equipment and the fuel to run it: the latter is almost immediately siphoned off to equipment manufacturers and oil companies, while wages paid to workers are spent locally.
• Local food systems provide better food security.
• Small-scale, diversified farms have a higher total output per unit of land than large-scale monocultures.

Agribusiness interests dominate at the state, national, and international levels. For example, the Agribusiness Council is upfront about its aspirations for dominance of the global food system:

The Agribusiness Council (ABC) is a private, nonprofit/tax-exempt, membership organization dedicated to strengthening U.S. agro-industrial competitiveness through programs which highlight international trade and development potentials as well as broad issues which encompass several individual agribusiness sectors and require a “food systems” approach. Examples of such issues are commercialization of new technology/crops, environmental impacts, human resource development, trade and investment policy, natural resource management, and rural development.

touts its incestuous relationship with the U.S. government:

Initiated under Federal government auspices by President Lyndon B. Johnson in 1967, The Agribusiness Council was formed by a group of business, academic, foundation and government leaders in order to facilitate American agribusiness participation in agricultural trade and development programs with developing countries – and represent private-sector agriculture interests to Federal government decision-makers.

and makes no bones about its objectives:

As an organization with international linkages, The Agribusiness Council seeks to strengthen the U.S. agricultural sector’s international outreach through stimulating private enterprise trade and investment solutions in Third World agro-industrial development.

Agribusiness interests may be too entrenched and government too corrupt to change. But we can change. We have the power to opt out of the global food system and to begin to build local food systems, from the ground up.

Amanda Gelder has a great interview with Jeremy Rifkin at Culturelab. What I find most intriguing are the connections Rifken draws among psychology, politics, and economics. We find ourselves in a pickle of historic proportions at the moment at least in part because of errors in thinking about these things.

I’ll try to pull together a couple of threads to focus on economic thinking and its relationship to the global crisis we face:

The Enlightenment view is that human beings are rational, detached agents that pursue our own self-interests and our nation states reflect that view. . .

A lot of interesting new discoveries in evolutionary biology, neuroscience, child development, anthropology and more suggest that human nature might not be what Enlightenment philosophers suggested. For instance, the discovery of mirror neurons suggests that we are not wired for autonomy or utility but for empathic distress; we are a social species.

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Geopolitics is an extension of the Enlightenment view of human nature, the idea that we pursue our utilitarian pleasures and individual self-interests. In geopolitics, the nation-state becomes a macro view of that. Nations deal with nations by being rational, detached and calculating, pursuing self-interests, excercising power and acquiring more capital and wealth. That’s why Copenhagen failed. The world leaders weren’t thinking biosphere, they were thinking geopolitics. Everyone was looking out for their nation’s self-interest.

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A lot of business people would say that you can’t be empathic in the market. But the market is a secondary institution–it’s an extension of culture. The real invisible hand of the market is trust, which is the result of empathic engagement. The only way you can have a market is if you have a shared narrative. The market is not a utilitarian frame of reference, it only exists by the social trust that allows people to engage in anonymous settings and believe that their engagements will be honored. When that trust fails, markets collapse and that’s what is happening now.

Rifken thinks the new world of distributed knowledge and distributed energy means we’ve moving from Homo sapien to Homo empathicus. His vision is attractive. I wish I could share his optimism. Still, we too often forget that philosophy does not live just in acedemia – it has real world implications. The “market” we have come to deify today is really nothing more than a myth, a powerful one that has turned destructive and threatens to consume civilization itself.

Rifkin has just published a new 600-page book, The Empathic Civilization: The Race to Global Consciousness in a World in Crisis, in which he expands on the ideas explored in the interview. I recall in my college days (note we were flower children of the 60s) reading books about evolving human consciousness.  Pierre Teilhard de Chardin’s  The Phenomenon of Man. Lancelot Law Whyte’s The Next Development in Man. Remember Charles Reich’s The Greening of America? Answer: not without some embarrassment.

So count me skeptical. My remaining aspirations are much less ambitious than forging a new human consciousness, rather just to eat well and live warmly in an increasingly uncertain world.

Sergio Gabrielli, CEO of Petrobras (a Brazilian multinational energy company headquartered in Rio de Janeiro), says global oil production (including biofuels) will peak in 2010 due to oil capacity additions from new projects being unable to offset world oil decline rates.

Gabrielli points out in his presentation that the world will need to produce oil from new sources equivalent to one Saudi Arabia every two years to offset future world oil decline rates – which he sees at about 5% per year.

Finding and bring to production the needed magnitudes of new oil simply not going to happen. Even managing to maintain historically observes decline rates may prove to be a challenge. Take Nigeria, for example. As the world teeters at the edge of economic and political collapse,  Nigeria seems to be going over the edge. Nigeria, which in 2008 produced over two million barrels of sweet crude a day and today provides 9% of U.S. oil imports, could vanish as an oil exporter, virtually overnight. Despite its enormous reserves, Venezuela is looking none to stable as a producer and exporter, either.

Chris Nelder takes a close look at Mexico, Venezuela, and Saudi Arabia and warns the oil export crisis has arrived – we just haven’t felt it yet:

[W]hen oil prices rise again, the pain will be far greater for the U.S. than it is for our top suppliers. Next time, the spear of declining oil exports will puncture a lung.

If the gap between demand and supply shown in the chart above cannot be filled with new supply, the only alternative is for prices to increase to reduce demand to equal supply: “demand destruction.”  That means economic shrinkage rather than growth, and a consequent financial crisis of epic proportions. consequence we are going to find it harder to extract other energy and mineral resources. As George Mobus points out in a post at The Oil Drum, our net energy is already in decline and that is at the root of the global economic problems we are seeing. You cannot have a growing economy when the basis of all economic wealth production is in decline.

The economic tremblings we’ve seen over the last couple of years may prove to be mere foreshocks. No matter how many trillions we throw at the problem, all the king’s horses and all the king’s men won’t be able to put Humpty Dumpty back together again.

Rather than try to save the irretrievably lost, we’ll have to accommodate ourselves to the new reality:

We can only start simplifying our societies and giving up the many discretionary expenditures of energy that we currently enjoy without much thought. We can learn to once again live on real-time solar influx via our food raising systems. And even then we are talking about an ability to support only a small fraction of the current population. Ironically the simplification of society involves the increasing complexity of individual lives. What this means in practice is that each individual must start to become more of a generalist in terms of the functions that support life. Everyone will have to become a food grower! Believe it or not that isn’t simple! Knowing how to grow your own nutrients is actually quite complicated and will demand a whole new set of cognitive skills.

For the environment, peak oil and economic collapse offers a glimmer of hope. For example, oil accounts for 43% of our CO2 emissions from energy use. Consequent economic collapse will mean that a lot of coal plants in the works will never get built, and maybe even we’ll see existing plants begin to wither away.