How much?

How Much Is Left? The Limits of Earth's Resources, made interactive.

This Web-only article (click image) is a special rich-media presentation of the feature, "How Much Is Left?" which appears in the September 2010 issue of Scientific American. The presentation was created by Zemi media. Click (or double click) the image to be taken to the presentation then just mouse and click around it.

Examined carefully, this SciAm interactive presentation will help even gung-ho “growthists” (and anti-environmentalists generally) to get past their prejudices and realise the extraordinarily sticky situation that 300 years of ever expanding growth has brought us to. Peak just about everything.

I have, as I put in my profile in this blog’s side bar,

“particular interest in how ordinary economics and business models start to fail (and what to do about it) when approaching the limits of growth (when the world starts to put up a "house full" notice). Which is now.”

Those who continue to preach the benefits of continued growth, and resist moves that will transition us to sustainable ways of doing things, are Yesterday’s Men. To me, I simply cannot comprehend how stupid or ignorant or callous or arrogant or short sighted the “business as usual” types are. And yet they are seemingly impervious to criticism and maddeningly cocksure in their crumbling beliefs. Their rhetoric no doubt sounds plausible because it is familiar – it sounds comfortably “right”.  This is because we have grown up with it – our entire civilisation has grown up with it. It always appeared to work before – look at what we have achieved with it... A constantly blown up balloon always gets bigger and more impressive. Until it bursts. We have to grow up and start acting responsibly. Humanity has reached the end of its adolescent economic growth spurt. Time to put away childish things and be wise. There is no sane Plan B.



 

Why further conventional economic growth has become a very bad idea

There are quite a few "knowledgeable" pundits who are speculating that we might be heading for a double dip recession - which is where you have a recession then see "green shoots" for a bit but then the recession carries on down. A bit like a "dead cat bounce" in an individual share on the stock market.
We keep hearing about the "green shoots" from our economic advisers, both here and on the UK mainland, and those who trust in them, as they continue to believe, like Annie, that "the sun'll come out tomorra - bet your bottom dollar". Rose tinted spectacles.
The likes of Treasury Minister Ozouf and Economic Development Minister Maclean are wedded to the hope that a resumption in economic growth will solve all ills and they think that it's just a matter of the Island/World bunkering down until the recession ends. However, more significant figures are whispering the "D" word - Depression.

We've got to this point because of centuries of Ponzi scheme-like money systems and vast economic growth, fuelled by relatively easily available and cheap fossil fuels combined with a global population level, and average international "standard of living", that meant that the available resources of Planet Earth appeared ample (ish) and inexhaustible.
We are now at the point where we can say that Peak Everything will dampen the growth party - maybe not today, maybe not tomorrow, but soon and for the rest of our lives (yes, it’s from Casablanca).

The United Nation's Environment Programme (GEO4) identified a few years ago that we we are living at least 25% beyond what the Earth can sustainably supply. The current recession/incipient depression will slow the assault on our planetary life support systems down a bit but the end result will be the same.

Indefinite unending conventional growth in a finite world is not possible. That is not an opinion or an assertion – it’s a statement of a law of the Universe. Ye cannae change the laws of physics, Jim! He’s featured on this blog before but step forward one more time the 9 billion tonne hamster.


Global population is only forecast to stabilise at 9-10 billion using the assumption that a developed world standard-of-living spreads to the "undeveloped" world, as a higher standard of living (=impact on resources) is seen as part of the reason why population growth falls in developed nations. Clearly the "necessary" growth in the undeveloped world that is "needed" to stabilise global population will send us careering wildly even further into ecological overshoot mode.

If we don’t stabilise population, everything must go to hell in a handbasket. What is presented as the way to stabilise population means that, if we do it, we will end up also going to hell in a handbasket.

Tricky, huh?

Further conventional economic growth would be "uneconomic growth" where the bad consequences outweigh any benefits. In short, we cannot afford conventional economic growth any more. We have come to the end of that particular road. Unfortunately, conventional economics says that we need growth to resume to get us out of this current colossal financial mess, let alone the staggering levels of international debt that depend on a huge expansion of the global economy to ever be paid back. If the reader didn’t know what unsustainable meant before, they ought to by now!
Back to the current recession/depression. Here's a couple of sites to make Geoff Cook's (Jersey Finance’s Chief Executive) toes curl. The first - The Energy Report - is relatively optimistic (although you'd never know it until you read the second, much longer, one...). Brace yourselves for The Automatic Earth (which references the first article). It takes a while to get going, but stick with it.

By the way, sustainable or ecological economics shows us a way out of the dilemmas but, until the powers that be acknowledge the grave problems the world faces honestly and in public, nothing is likely to be done. While the general population still have some faith in unbearably stupid irresponsible people, like our glorious leaders and their advisers, the pressure for real sustainable change will never build up. Our leaders will continue to prescribe more of what they think worked in the past. It won’t help. People need to get the rocks out of their heads. Bob Dylan said "Don't follow leaders". Until our leaders start speaking reality, I think we should agree with him.

The 9 billion tonne Hamster – be scared!

Today we are hearing lots of rejoicing in Britain that the recession is over and that the economy is growing once again because we got a tiny bit of "growth" in the last quarter. Leaving aside the Christmas splurge and the car scrappage effect, which are an alternative possible source of the growth which might dampen the celebrations a bit, we have to ask ourselves if the resumption of conventional growth is entirely beneficial.

Yesterday, I sent a version of the text quoted below to our Treasury Minister, the Minister for Economic Development and a couple of greenish States members. I also sent it to the local paper. Unfortunately, I could not include this video from the New Economics Foundation (as I only saw it today) but, as they say, a picture is worth a thousand words and I suppose a video might be worth a million? or maybe a billion... but I'm spoiling the plot...

It demonstrates why economic growth is only a good thing for a certain period. After that time it becomes dangerous - like a larger than natural hamster

Here’s my letter:

“It's time to face up to the situation we are in because it would be irresponsible to do otherwise. As the world struggles with the latest and largest "bust" in the boom and bust economic cycle, many are starting to realise that the very basis of that economy, cheap fossil fuelled growth, is no longer sensible. More economic growth, of the type that conventional economists think will solve all ills, is no longer an option. All the experts that Finance Ministers and captains of industry and such-like rely on must be now regarded as false prophets. Their discipline is, of course internally self-consistent, which gives their pronouncements a spurious gravitas but the dangerous flaw is that it is based upon an oxymoron - an impossibility - unending exponential growth.

Successful as a theory for many decades, we are now coming up against the hard-wired physical limits of the planet and the serious nature of the large holes in the foundations of that theory are starting to show. Rather like Einstein had to come up with Relativity when Newtonian mechanics were no longer adequate to describe what we knew of the physical world, so too does conventional economics have to step aside for something more all encompassing.

The elephant-in-the-room flaw is that conventional economics just doesn't take enough into account when measuring the success or otherwise of businesses or economies. A car designed solely for high miles per gallon may appear, to the naive, to be the most efficient and cheapest to run but without consideration being given to the concomitant expensive maintenance costs, or the longevity of the engine and bearings, it is not a good deal. Similarly, the theories, expectations and prescriptions of conventional economists for the economy are a threat to the much larger natural environmental economy that supports it, supplies it and absorbs its waste.

While further economic growth is no longer desirable, economic development is still possible within the environmental and ecological limits that really should not be ignored or discounted any more. Are our Ministers fully aware of this imperative or are they hiding their heads in the sand?

sincerely,

Nick Palmer”

Age of Stupid movie to be released March 20th

The "Age of Stupid" is the new movie from Director Franny Armstrong (McLibel) and producer John Battsek (One Day In September). Pete Postlethwaite stars as a man living alone in the devastated future world of 2055, looking at old footage from 2008 and asking: why didn’t we stop climate change when we had the chance? It will be released in UK cinemas on 20 March 2009, followed by other countries.

The film was simultaneously premiered in 65 places (including the Eden project)

website www.ageofstupid.net

U.K. Minister for Energy and Climate Change Ed Milliband was interviewed afterwards onstage (video below), but he continues to use "growth" as an option! They say that if you're not part of the solution, you're part of the problem and so Milliband must be part of the "Age of Stupid" problem. Until these people begin to integrate their thinking about all the threats - climate change; peak oil; economic meltdown and global population - into one seamless strategy, they will not comprehend that economic growth is no longer an option. Economic development is. Further conventional economic growth is impossible without the worst of all consequences. Somebody please try to get this through to our "Age of Stupid" States.

I am fed up with being polite. I think the time is ripe for people who know their stuff to stand up and call into question the "Age of Stupid" and the politicians and their advisers who promulgate it as somehow sensible and maintain and enhance it with their half baked hubris and their delusions of adequacy. Above all else, they are recklessly fooling the public - whether deliberately or inadvertently is moot. Sustainability is not merely desirable, it is a matter of life or death.

Recession 2 - the sequel

Mike Higgins' talk at the Peirson attracted a roomful of people - about 23-24. Without wishing to stereotype, I would say that finance industry types were probably under-represented. I intersperse my own comments and interpretations throughout this piece.

Mike initially "did a Daniel" by discovering that he had forgotten part of his material but he managed to do a very interesting talk, that covered a lot of material, off the cuff - no-one would have realised if he hadn't told us... he wasn't a lecturer in economics for nothing!

He started by saying that Jersey was not technically in a recession yet but soon would be - this was due to the lag of the figures behind reality. A true recession needs two quarters of negative growth. A depression would be a long term 10% fall in growth. He sketched out the basic reasons why the global economy is in the state it is and suggested that one of the reasons for the almost total lack of credit available at the moment is because the banks and institutions are all suspicious of each other - they don't know who it is safe to lend on to, even if they get deposits, because they don't know who to trust with all the unknown amounts of toxic debts floating around on the other party's balance sheets.

With reference to the Jersey States, Mike said that it was proving extremely hard to get information out of civil servants and he suggested that the Island was run by the top civil servants (who are obviously un-elected). I can't see that this is a healthy situation as, let's just assume, if we had a situation where the top civil servants were neither civil nor our servants and their hierarchical organisation meant that anybody who didn't toe the "from on high" party line couldn't progress in (or even stay in the service), then this would have inevitably lead to a self-reinforcing, self-propagating and virtually impregnable system. Not good. If true, it explains an awful lot of what happens in Jersey. Even when we employ new civil servants from outside the Island, clearly the HR processes of the States are constrained to employ people who will fit in, and be cosy with, the existing Mandarins, structures, employees, beliefs and practices. Very not good.

We heard that in England and Wales, up to 1/3 of the shops are empty and it's a similar picture on the industrial estates.

Mike said that he had had meetings with the Fiscal Policy Panel, a high powered group of three national-level economists who advise the States of Jersey on financial matters. He asked them flat out what they thought about the situation and basically the truth of the matter is that absolutely nobody is sure how this will play out - it is an unprecedented situation - there have been recessions before, and also depressions, but there has never been a global depression/recession before. Bear this in mind next time you hear Terry le Sueur and Philip Ozouf metaphorically singing "the Sun'll come out tomorra - bet your bottom dollar".

Perhaps now the architects of globalisation, "efficiency", competition, mergers and acquisitions, consolidation, outsourcing and downsizing etc etc will come to realise the final consequences of their bankrupt philosophy as the sting in the tail of shifting most manufacturing to China and allowing international finance to grow too big, too speculative and too unregulatable comes home to roost (I love mixing metaphors!).

They all thought simple economic growth would lead everybody to prosperity, employment, security and cheap goods. Instead, it has put the world into a highly vulnerable situation for the next few years, not to mention possible environmental calamity. It's possible the world might just be pulling out of this current economic disaster in three or four years but then, waiting in the wings, there will be the colossal hammer blow of Peak Oil which is forecast to start affecting the global economy within five years as the rate of discovery of new oilfields starts to fail to keep pace with the demand. In this case, the price of energy will go up and up and won't come back down again. This will have an almost unimaginably serious impact on world food prices and availability. Conventional economic growth will become implausible, not to mention irresponsible. Listen to the greenies!

Surely some of the responsibility for the instability that is being played out on the world financial markets is down to the activities of hedge funds which promised to make money for their clients whether markets were rising or falling. When economies are in the "inflating bubble" stage, hedge funds tend to amplify that bubble. Unfortunately, due to their tendency to short currencies and industries during periods of weakness or setback, they act to amplify downturns - amplify recessionary and depressionary pressures. Apparently we have about 1600 hedge funds registered in Jersey which were encouraged to settle here by Philip Ozouf and Alan Maclean. One wonders what Barack and Brown and Sarkozy etc will make of this.

Everybody in the room pricked up their ears when Mike mentioned that at some financial meeting he was at, a figure of 10% GST was mentioned as a possibility and that a civil servant behind him gave a sort of "high-five" yesss! as if he had won a bet...

Mike passed on that the Fiscal Policy Panel say that we need to make contingency plans. For example, if we have a major contraction in Financial Services in Jersey, we will all be in serious trouble. Mike speculated that he thought there were probably people in the room who disliked Finance so much that they would be happy to see it go but he warned everybody that, if Finance went, it would not be pretty for those left. I am no fan of "yuppies" but too many ordinary people have built their lives around the presence of Finance for me to want it to fail. I think somehow Jersey needs a managed retreat from having all our eggs in one basket. It's often the ordinary people just trying to make a modest life for themselves who get hurt the most in these situations, while the Fred Goodwin's of this world waltz off into the sunset with their £600,000 pensions and severance pay. The £140 million Stabilisation fund that they're talking about is only for immediate needs and the £500 million Strategic Reserve - the "rainy day fund" - is for situations as serious as if Finance has to "exit Jersey, stage left".

Mike also talked about what is called "regulatory capture" which is another aspect of us having allowed Finance to get too dominant. The "too big to fail" approach has been used to force taxpayers to bail out and prop up ailing banks and financial institutions because, if we didn't, it is said the ensuing financial meltdown would be too horrendous to contemplate. Similarly, "regulatory capture" refers to the banks and institution's excessive power to dictate the terms under which they operate, or to influence the drafting of Laws to benefit themselves, in their chosen area. Basically, if the States don't play ball with them, they threaten to take their ball away and go somewhere else. In essence, Finance has been able to dictate to government. Our States do not appear to have the testicular fortitude to show any poker playing ability inasmuch as they never - ever - seem to call a bluff (q.v. the Les Pas Holdings silliness).

Clearly, the processes of competition, globalisation, rationalisation, mergers and acquisitions and all the familiar "yuppie" philosophy etc have created monsters which are too big and dangerous and arrogant - they have ended up being pathological to the economic and environmental safety of the world. Of course, in the discipline of ecological economics, the dangers of allowing any one financial "species" to get too dominant or too destructive are all too obvious. It's just a shame that the proponents of classical economics do not realise that they are bound by exactly the same fundamental rules as a biological habitat. "Ye cannae change the laws of physics, Jim!"

Attempting (metaphorically) to create a global "rat and cockroach" economy and doing the equivalent of introducing goats or cane toads into vulnerable environments, was always bound to lead to tears before bedtime. It's just a pity that those in power didn't listen. They're not listening still - perhaps they never will.