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

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 imagining the U.S. and other developed nations voluntarily sacrificing economic growth, much less embracing voluntary frugality. Can you even imagine China and India voluntarily giving 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.

* * *

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.

* * *

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.

Solastalgia:  the pain experienced when there is recognition that the place where one resides and that one loves is under immediate assault; a form of homesickness one gets when one is still at ‘home’; symptoms include anxiety, despair, numbness, a sense of being overwhelmed or powerless, grief.

Solastalgia is a neologism coined by the Australian philosopher Glenn Albrecht in 2003. It describes a form of psychic or existential distress caused by environmental change, such as mining or climate change. Solastalgia is a global condition, felt to a greater or lesser degree by different people in different locations but felt increasingly, given the ongoing degradation of the environment

Wikipedia explains:

As opposed to nostalgia – the melancholia or homesickness experienced by individuals when separated from a loved home – “solastalgia” is the distress that is produced by environmental change impacting on people while they are directly connected to their home environment. A paper published by Albrecht and collaborators focused on two contexts where collaborative research teams found solastalgia to be evident: the experiences of persistent drought in rural New South Wales (NSW) and the impact of large-scale open-cut coal mining on individuals in the Upper Hunter Valley of NSW. In both cases, people exposed to environmental change experienced negative affect that is exacerbated by a sense of powerlessness or lack of control over the unfolding change process.

An article in the New York Times quotes Albrecht:

There’s a scholar who talks about ‘heart’s ease.’ People have heart’s ease when they’re on their own country. If you force them off that country, if you take them away from their land, they feel the loss of heart’s ease as a kind of vertigo, a disintegration of their whole life.

Albrecht has found that this “place pathology” isn’t limited to natives or to the displaced. People can be despairing and depressed without being forced from their homeland. The land changing around them can bring about the same sense of mournful disorientation.

The researchers could have found evidence of solastagia by looking at me in Sacramento, California in the ’70s, as the paradise I was born and grew up in was devastated by rampant and uncontrolled “development.”  It got so bad I fled in a desperate attempt to maintain some semblance of sanity. The Seattle area in Washington proved little better. When at last I found a real home again here in Oregon, that traumatic experience provided the impetus to do everything in my power to prevent a repeat of the California and Washington experience.

In California, things have gone from bad to worse; it is now what Sasha Abramsky in an article in The Nation calls the “west coast wasteland.” California’s population has exploded from a little over 10 million in 1950 to about 37 million today. But as many have warned (including Eben Fodor in his landmark 1998 study “The Cost of Growth in Oregon“), growth costs a lot and doesn’t pay for itself. After 60 years of growth, the bills have come due.

As Abramsky observes, what was a gorgeous state with a terrific infrastructure built up over the past century now has no money or political will to keep the place running properly. Paradise is broken and in a perennial state of fiscal crisis as California threatens to become a failed state. And California is not alone.

My heart still aches for what once was and is now irretrievably lost. I still can’t bear to cross the border. Unfortunately, as the symptom of climate change shows, the disease of growth doesn’t respect borders. Growth now threatens to devastate the entirety of the globe.

Earth is the only home we have, there’s nowhere left to flee. As it succumbs to the ravishes of growth, are we not destined to see solastalgia spread and become a global contagion?

Chris Martenson used to be a corporate honcho with a big expensive house in the suburbs on the Connecticut coast. Now he’s downsized, is living in a rural community, has traded in his twin-engine fishing boat for a kayak – and travels the country giving lectures on why we’ll never see a “recovery” from our economic throes. What happened, and why?

In a speech before the Commonwealth Club in San Francisco, Martenson lays out the hard facts:

• There are 70 million more people on the surface of the planet this year than last year.
• Each of these new humans consumes some amount of resources such as food, oil, air, soil, water, copper, coal, or timber.
• Someday, perhaps already, maybe a little later, the global flow rate of oil coming out of the ground will peak and then decline inexorably thereafter.
• From 2000 to 2008, eight short years, the total amount of debt in this country doubled while no net jobs were created and median incomes actually went backwards.
• During the industrial revolution, humans have consumed vastly more energy each decade. During the lifetime of a 22-year-old, humans will have burned more than half of all the oil ever consumed throughout history.
• Oceanic fish stocks, ancient aquifers, and topsoil are all being depleted at unsustainable rates.

Martenson goes on to explore the implications of these realities. To summarize:

All these facts share a single common feature: they are tied to exponential growth in some way. There’s nothing inherently wrong with exponential growth, as long as you have unlimited room and unlimited resources. We live on a finite planet. Time runs out in a hurry towards the end of any exponential growth system, forcing hurried decisions and severely limiting options. And there are clear signs that several key resources on our planet are in their final minutes.

Just as higher prices for fish will not cause more cod to come from the depleted fisheries, oil fields will yield their treasures in accordance to geological limits and not because our economics textbooks say they should.

Adapting to a future of less and less oil will take decades of preparation – but we’ve not yet even begun. TIME is a critical factor. SCALE is an issue. And then there’s COST.

COST – now there’s the economic rub. Every dollar in circulation was loaned into existence, with interest. The effect of loaning all of our money into existence, with interest, is this: there is always more debt than money floating around in the system. Always. And the amount of debt will compound over time – that is, it will grow exponentially. To service the debts that are growing exponentially, the economy must also grow exponentially.

See the problem?

An energy crisis rooted in resource limits will quickly translate into an economic crisis unlike any other. Consequently, the era of growth is ending and what Martenson calls “an exciting new chapter” is about to begin.

Why the optimism? Martenson sees our challenge as not to find vast new resources to exploit, but to undertake the far more sophisticated and worthwhile task of using what we’ve got more wisely. A life with less pollution, more free time, meaningful jobs, more happiness, less stress and greater connection to each other as well as to nature are all within the realm of the possible.

As Martenson says, the longer we fiddle around the more our options shrink. Let’s hope it’s not already too late.

In 2009, cars scrapped in the U.S. exceeded new car sales  for the first time since World War II, shrinking the U.S. vehicle fleet from the all-time high of 250 million to 246 million.

The 14 million cars scrapped exceeded the 10 million new cars sold, shrinking the U.S. fleet by 4 million, or nearly 2% in one year. The U.S. fleet has apparently peaked and started to decline.

Lester Brown at Treehugger identifies “market saturation” as the dominant factor. The United States now has 246 million registered motor vehicles and 209 million licensed drivers – nearly 5 vehicles for every 4 drivers.

Brown points to Japan as an example. In Japan, annual car sales peaked 1990 and have since shrunk by 21%.

Mish Shedlock looks at the data and asks, what about boomer demographics and teenage driving?

The massive wave of boomer retirement is about to hit. Many boomers will go from two cars to one, or from two new cars to one new car and an “emergency” clunker.

As for teens, parents can no longer afford to buy cars for their kids. And with teenage unemployment at the highest rate in history, teens can no longer afford to buy their own cars.

Peak oil, peak autos.  What’s next?

Architect and urban planner Andres Duany blames peak oil and global warming on the American lifestyle:

Seth Bauer at the Huffington Post quotes Duany:

It’s where we live, the size of our houses, the distances we drive for work, commerce, play–everything.

And goes on to summarize Duany’s rant:

And it’s all a vicious circle. The reason our houses are so big (and inefficient), he says, is because we have eliminated a healthy civic life. We build homes with giant foyers because we have no public squares. We need media rooms because it’s not easy or pleasant to drive to a multiplex theater, cross a parking lot through an ocean of cars, and pay a fortune for popcorn. We build bars in our basements because there are no neighborhood pubs. We have giant refrigerators and ever-growing storage needs because shopping is both far away and unpleasant (hello, Costco). The result? We heat and air-condition unused rooms in oversized unpleasant houses. And because our home bars and foyers are empty and our media experiences private, we’re lonely, to boot.

But the American lifestyle is really just a symptom of a larger disease – if not industrialization itself, certainly the ideology of growth that it has spawned.

Politicians and economists around the globe are focused on one thing: economic growth. When “the economy” falters, all efforts are towards returning the global economy to a path of growth. As Chris Martenson says in a piece titled Copenhagen & Economic Growth – You Can’t Have Both at the Energy Bulletin:

We need more jobs, we are told; we need economic growth, we need more people consuming more things.  Growth is the ever-constant word on politicians’ lips.  Official actions amounting to tens of trillions of dollars speak to the fact that this is, in fact, our number-one global priority.

Martenson is spot on in pointing out that any solution to global warming requires that carbon emissions be reduced by a vast amount over the next few decades. But economic growth and reduced emissions are mutually exclusive.  You can’t have both.

Even if we can’t muster the moral fortitude do do anything to avert catastrophic global warming, we still may fail in our desperate efforts to maintain economic growth. The primary implication of peak oil is that the era of economic growth is over. The current recession is very much energy-related. The whole concept of recession as a temporary period where growth is briefly interrupted within a long-term trend of economic growth is likely to become irrelevant in a world where oil is becoming ever more expensive to extract and oil supplies are decreasing.

We’re seeing a feedback loop develop with oil eerily similar to the feedback loops operating in the global warming context. The global financial crisis has resulted in oil investment shrinking by 20%, which in turn will result in less oil and more expensive oil in the future, causing more financial turmoil in an ever-worsening downward spiral.

We already are seeing the future beginning to emerge. As the election results in Massachusetts show, that future will hold ugly surprises.

Dr. Dennis Meadows, one of the authors of “Limits to Growth” and its subsequent updates, has a powerpoint presentation and podcast of a recent talk available at the Population Institute site.

Most interesting is his view that the end of growth does not come directly from depletion, but indirectly from rising capital expenditures as the costs of exploiting resource sources and dealing with saturating sinks rise exponentially. And as he points out, that’s what we’re beginning to see already:

Most people assume that the major global difficulties would occur after the end to growth.

This is not correct.

The globe’s population would experience the most stress prior to the peak, as pressures mount high enough to neutralize the enormous political, demographic, and economic forces that now sustain growth.

We are in the early phases of that period now.

Meadows’ presentation finishes up with a chart showing CO2 emissions as a function of four factors:

1. Number of people.
2. Number of units of capital per person, which is a surrogate for living standards.
3. The amount of energy required to build and operate that capital.
4. The fraction of that energy that comes from non-fossil sources.

Meadows points out the key to our climate change predicament lies in reversing population and consumption growth. If we can’t change those, technology can at best only prolong the agony.

Gail the Actuary at The Oil Drum transcribes his finishing words:

So far, our concern about climate change had manifested itself through efforts to improve efficiency and to implement alternative energy sources–the so-called technology options. I will just close by pointing out that as long as we ignore demographic and cultural issues, the growth in the first two factors will continue to offset all of the improvement we make in factors 3 and 4. And so until we can understand how to begin reducing the growth in the first two factors, climate change is a foregone conclusion.

Richard Heinberg also has his presentation posted at the same site. Heinberg focuses on how peak oil and the consequent end of growth led to the financial crisis, one that will not be resolved in the way to which we have become accustomed. The end of growth means we have entered a new era.

Postings have been slim (like totally absent) over the past week. This wasn’t planned. It’s just that everybody seems to have shut down over the holidays. There’s been nothing that seemed important enough to report on or react to.

The down time and the days absent of rain (albeit cold and mostly foggy) gave me time to finish pruning the vineyard.

I also took the opportunity to  do a little work in the cellar. A bit of hydrogen sulfide suddenly showed up in the barrels of ‘09, necessitating racking and aeration.

The hours spent pruning and winemaking offered plenty of time for reflection. Events and developments over the past year have made clear the futility of current approaches to “the economy” and to climate change.

The current great recession is the result of a crisis of the global financial system triggered by spiking oil prices, and is but a preview of the troubles ahead for an economics based on exponential growth when the underpinnings of that expansion – cheap and abundant energy – have vanished. We have seen that in our present economic system the absence of growth results in financial crisis, which in turn threatens the entire economic edifice with collapse.

Obama’s economic policy – and the ability to repay the trillions of dollars of debt taken on to bail out the financial system – is predicated on a return to robust economic growth.  How’s that likely to work out?

Global warming is similarly but a symptom of a more basic predicament: ecological overshoot of a population that has, due to its sheer numbers and to its impacts on ecological systems, overtaxed both the sources necessary to sustain itself and the environmental sinks which absorb the wastes that would otherwise kill it off. This condition of global ecological overshoot is what makes our current predicament unprecedented in human experience.

In an overshoot situation, traditional policy responses not only fail to work. They make the situation worse because they increase rather than decrease the degree of overshoot. Peak oil and global warming are predicaments that cannot be “solved” through more of the economic growth that caused them. Our situation demands not only the end of growth – it demands that the human footprint shrink, dramatically and quickly.

The approach to global warming embodied by the Kyoto accord – which finally blew up at Copenhagen – was a futile attempt to retain the objective of  industrial development of the world’s poor countries and growth in the rich countries, all the while imagining that the consequences of growth could somehow be made to disappear.  At Copenhagen, the world’s biggest polluters made it clear that they would have none of any effort which might stifle growth.

At least the nonsense that we can have growth without its consequences is no longer on the table. Forget targets, even the ambitious targets floated at Copenhagen of limiting atmospheric CO2 to 350 ppm or limiting the global temperature increase to 1.5 degrees C. The target is not important. What is important is what must be done to avoid dumping so much carbon into the atmosphere that runaway global warming becomes inevitable – and that is, leave coal (and tar sands) in the ground.  We can’t wait for consensus among governments dedicated to sustaining economic growth at any cost. We is needed is direct action by people, everywhere and around the globe. No more coal-fired power plants. Phase out existing plants, the sooner the better. No more coal mining. No more coal trains. No more tar sands or other unconventional oil. No more pipelines stretching from Athabasca to fill gas tanks in Canada, the U.S., or anywhere else.

Peak oil and global warming demand that we craft a new economics, one that is capable of recognizing and valuing ecological reality. Every species has its economics, a way of living within its environment. Humans are no different. It should be obvious that an economics that destroys its environment and the ability to continue to exist is not one that produces prosperity. Prosperity, not growth, must be the goal and measure of a new economics: enough to eat, enough to drink, adequate shelter, loving and enriching community, within a stable and beautiful ecosystem, all imbued with a sense of the sacred.

All species survive by tapping energy available in the environment. Again, humans are no different. Over the last two centuries, tapping millions of years of ancient sunlight has fueled an explosion in both human numbers and human impacts. As the days of ancient sunlight draw to a close, even the best of us dream of new stores of unlimited power, waiting to be tapped.   We’re willing to trade our souls for nuclear, bequething upon the grandchildren of our grandchildren the burden of dealing with deadly waste and with dangerous facilities that will need tending for tens of millennia. This would require that a stable, complex, wealthy, and energy-intensive society also endure for tens of millennia – a feat never before accomplished, in all of human history. What hubris.

What’s needed is a rediscovery of humility. If we begin the work now, we may be able to put in place the infrastructure to enable the future to maintain some of the comforts of the present, as the foresighted leadership of Aruba has done in building a windfarm that will provide a very substantial portion of the island’s electricity. Solar thermal offers promise in sunny locations – Europe is betting its future on it.  Solar photovoltaic keeps looking more and more promising.

We can’t have it all, not without destroying ourselves and the Earth itself (at least the Earth as we know it). If we lower our sights, get to work, and do our best, we may be able to have enough.

Even as the climate change talks begin today in Copenhagen and as EPA Administrator Lisa Jackson announces the U.S. will begin regulating greenhouses gases regardless of what the House and Senate do, some are warning: what we are considering doing, won’t be enough.

Consider that economic infrastructure now being installed around the globe is locking in future increases in fossil fuel consumption. Take China, for example.

In 2008, less than nine million cars were sold in China. In 2009, car sales will rise to between 12 and 13 million. By 2015, car sales are expected to reach 16 million – an increase of 44% over 2008 levels. The cumulative increase in cars on the road in China cannot do other than increase future demand for oil, as gasoline and diesel.

At the beginning of 2006, China had an estimated 350 gigawatts of coal-fired capacity in operation. An additional 600 gigawatts of coal-fired capacity (net of retirements) is projected to be brought on line in China by 2030 – an increase of 42% over 2006 levels.

Not to pick on China. The U.S. is responsible for 29% of carbon dioxide emissions over past 150 years, triple China’s share. But assigning blame for greenhouse gas emissions is irrelevant to crafting a solution to the climate change crisis.

Even while a new study published in Nature Geoscience (abstract here) reports that over the long term Earth’s temperature may be 30-50% more sensitive to atmospheric carbon dioxide than has previously been estimated, the decade of the 2000s will go down as the warmest on record – and climatologists warn warmer weather is on the way.

In a speech to delegates at Copenhagen, IPCC head Rajendra Pachauri went down the list of impacts from global warming, some of which we are already beginning to see:

• More heat waves and heavy rainfall events
• Increase in tropical cyclone intensity
• Disappearance of Arctic sea ice
• Decrease in water resources in semi-arid areas, such as the Mediterranean Basin, western United States, southern Africa and north-eastern Brazil
• Elimination of the Greenland ice sheet and a resulting contribution to sea level rise of about 7 meters
• Species threatened with extinction
• Greater stress on water resources from population growth and economic and land use change, including urbanization
• Significant future increase in heavy rainfall in many regions, with greater flood risk, while other regions dry up
• More than two billion people will live in areas threatened by flood
• Increasing threat to low-lying island nations and coastal cities and deltas from rising seas Seas are already rising because of melting glaciers and icesheets as well as expansion of the oceans as they warm

The good news may be that the scenarios spun out by the IPCC are fantasies when it comes to potential future fossil fuel consumption. The fossil fuels – oil, gas, and coal – simply will not be physically available to generate the greenhouse gas emissions projected in the several IPCC scenarios. Even the IEA, in its recently released World Energy Outlook 2009, is admitting its projections of future energy availability are nothing more than “faith based”, conceding the majority of oil production in 2030 will be coming from “fields yet to be developed or found” and that “output at existing fields . . . will drop by almost two-thirds by 2030.”

The bad news is, the science keeps getting increasingly gloomy. Every new study seems to report that Earth’s climate is more sensitive than previously believed and that “tipping points” are fast approaching, if not already exceeded.

And the good news is pretty dismal, for business-as-usual. If peak production of fossil fuels is near enough to ensure that climate catastrophe will not occur no matter what emissions policies we adopt, that in turn means that our energy policies are hopeless when it comes to transitioning to a social and economic system based on renewable energy resources that in any way resembles the industrial society we have come to think of as normal and desirable.

We cannot avoid the reality that any possible solution to our energy and climate predicament requires that we invent an entirely new economic model, one that doesn’t strive for or depend on economic growth but instead is based on the ecological principle that we must learn to find happiness within limits imposed by the natural systems within which we all live.

Unfortunately, economic growth remains the official ideology at Copenhagen. How to continue on that path is the agenda.

Stuart Staniford at Early Warning has posted this chart showing that new vehicle fuel economy wasn’t very responsive to the oil price spike of 2005-2008.

Unlike the oil crisis of the late ’70s, people just didn’t run out and trade in their gas guzzlers for new fuel-efficient cars. And “cash for clunkers” did very little to offset the impacts of lower gas prices.

With gas prices down from the spike in 2008, vehicle miles traveled (VMT) is once again on a growth path after falling in 2008. The Federal Highway Administration reports travel on all roads and streets was up 2.5% (5.8 billion vehicle miles) for September 2009 as compared with September 2008. Cumulative Travel for 2009 through September was up 0.3% (6.7 billion vehicle miles) over 2008.

U.S. Vehicle Miles through January 2009

The decline in VMT totaled 122 billion for the period December 2007 to January 2009, compared to the same 14-month period a year earlier. If VMT keeps increasing by almost 6 billion miles a month, it won’t be long before VMT is back to where it was before the oil price spike hit. If oil prices spike again . . . ?

The Energy Information Administration reports petroleum used for transportation in 2009 remains significantly less than in 2007 and 2008 (8.0% and 4.2%, respectively).

Falling oil production in Mexico is having grave impacts, in Mexico and around the globe.

Mexico’s oil output is expected to continue to decline sharply next year as state-owned Petroleos Mexicanos enters a sixth year of falling production. Total Mexican production has tumbled by 850,000 barrels a day as of October 2009 since peaking at 3.45 million barrels in December 2003.

Mexican oil output. Source: Barclays Capital

Analysts at Barclays Capital expect this year’s decline to be slightly less bad than last year’s:

For the year to date, Mexican oil output is down 6.3%. While this represents a deceleration compared to the 8.9% fall recorded in 2008, it is still a much faster pace of decline than that averaged since the start of the Mexican oil production downtrend in 2005.

But forecast that next year the decline rate will once again increase:

We expect Mexican oil output to continue to decline sharply, and we forecast the pace of fall to average 8.9% in 2010.

Plunging output from Mexico’s once-great Cantarell is the big problem. Production at Cantarell peaked at 2.1 million barrels per day in 2003 and has since declined precipitously.  In September 2009, daily production at Cantarell fell 39% from a year earlier to 573,760 barrels. Mexico could become a net oil importer as soon as 2015.

Falling oil production means big budget problems for Mexico’s government. Pemex has in the past provided over 1/3 of public-sector revenue. As income from oil drops, Mexico’s finance ministry fears tax revenues will also drop, to account for only about 10% of the country’s economy as compared to the 17.5% in 2008. With rampant evasion and dependence on dwindling oil revenue to fund the government, the government is now tapping 58% of Pemex’s total revenue. You can’t milk a shriveling cash cow forever.

Bumping up against the limits of global oil production has global implications. Jeff Rubin, for nearly 20 years the chief economist of CIBC World Markets, has warned the traditional laws of supply and demand are no longer working for oil, one of the global economy’s most basic and essential commodities. These terrific graphs from Stuart Staniford’s new blog Early Warning illustrate the point:

Oil price versus US crude production 1900-2009

Spot oil price versus Saudi Arabian oil supply, 2001-2009

Spot oil price versus Russian oil supply, 2001-2009

Rubin argues the subprime mortgage crisis was not the cause of the recession, but was a symptom of a much bigger problem – an energy shock – and cautions:

It was oil prices that brought about the last recession, and unless we make some major changes to the way we live, it’ll be oil prices that bring about the next recession as well.

The oil-linked financial crisis extends far beyond the borders of the U.S. Gail Tverberg and Kjell Aleklett both observe that the Dubai World meltdown, like the housing market meltdown in the US, is symptomatic of a financial system dependent on  economic growth, which in turn is based on the assumption that oil will continue to be plentiful and cheap.

A new report by the European group Transport & Environment titled “How to avoid an electric shock: Electric cars from hype to reality” finds that while there may be significant potential environmental benefits to be had from a switch to electric vehicles, the supposed benefits are wholly dependent on changes in the way electricity is generated, energy is taxed and CO₂ emissions are regulated. Current EU legislation contains loopholes that are likely to lead to emissions and oil use going up rather than down.

Why is this? Binding EU targets for car CO₂ emissions agreed last December include ‘super credits’ that enable carmakers to sell up to 3.5 gas-guzzling SUVs for every electric vehicle they sell and still reach their official EU target. Electric cars are also counted as ‘zero emissions’ despite the fact that the electricity they use can come from high-carbon fossil fuels such as coal. The combined effect of these loopholes would be that carmakers that choose to market electric cars to meet EU targets would have to do less to reduce emissions of conventional cars. The overall effect would be higher CO₂ emissions and oil use.

The report says electric cars can help reduce CO2 emissions from the transport sector provided two conditions are met: first, they must be more energy-efficient than state-of-the-art conventional vehicles on a ‘tank to wheel’ basis; second, the electricity to power the cars must be sourced from renewable sources.

The first of these conditions appears to have been met: electric vehicles are between two and three times more efficient than petrol hybrid and advanced diesel vehicles on a ‘tank-to-wheel’ basis.

The second condition, which depends on ‘well-to-wheel’ environmental impacts, is far from guaranteed, as it depends on the type of electricity generation. Electric cars powered by wind or solar energy are obviously superior. But if the electricity comes from coal, hybrids perform better.

The extra electricity required to power electric vehicles will require increased generating and grid capacity, which will require investment in the power sector. Even if the grid has the capacity and the basic infrastructure to meet the needs of electric cars, the new demand patterns they will create may result in greater use of coal and nuclear power.

And then there’s Jevons paradox. While the initial cost of acquiring an electric vehicle is high, the operating costs are low, with fuel savings ultimately fully compensating for the higher up-front expense. Low operating costs of electric vehicles would encourage people to drive more, especially since the initial purchase price is a “sunk cost.” These effects would result in extra demand for car transport. To offset this effect, it would be necessary to tax electricity. Meters in cars would be needed to measure the amount and environmental quality of electricity used [how "environmental quality" might be measured is left a mystery].

David Korten, speaking at the recent Economics of Peace Conference in Sonoma, California, says our economic system has not only failed – it’s evil, and deserves to die:

So what is real wealth? We might say it is anything that has a real intrinsic value: land, labor, knowledge, food, education.

Most valuable of all are those forms of wealth that are beyond price: Love, a healthy, happy child, a job that provides a sense of self-worth and contribution, membership in a strong caring community, a healthy vibrant natural environment, peace—none of which find any place on Wall Street balance sheets or in our calculations of GDP.

Pull back the curtain, as the financial crash has done, and the truth is revealed that Wall Street acquires its power by destroying real living wealth to create phantom financial wealth. Wall Street is more than immoral, it is an institutional manifestation of evil.

The full text of Korten’s speech was published in Yes Magazine. A one-page version is not available, so you have to click through five pages (most annoying!). The excerpt quoted about is found on the second page.

Korten argues that our economic and political systems no longer work for or protect the public interest:

From the late 70s onward, Wall Street market fundamentalists mobilized to roll back the rules to unleash a consolidation of corporate power and de-link it from public accountability. Their right-wing social-engineering experiment allowed Wall Street to colonize the Main Street economy, decimated the middle class, undermined democracy and sense of community, reduced our national happiness index, and brought financial, social, and environmental devastation wherever it has reached.

Korten pleads for an economic system based on three foundational principles: ecological balance, shared prosperity, and living democracy; and for a shift from a “production-oriented” measurement system to one focused on the well-being of current and future generations.

Bring down Wall Street? Fat chance. But then again, who could have imagined that the Soviet Union would collapse and disappear, virtually overnight?