Peak Everything (3 page)

This is exactly what happened with the oil price spike of 2008. Many commentators who understand the essence of the Peak Oil dilemma have tended to assume that, as petroleum and other resources become scarcer, commodity prices will simply escalate in a linear fashion. What we saw instead was a rapid rise in prices (driven by rising demand and falling supply, and then exacerbated by speculation) precipitating an economic crash, followed by collapsing oil prices and curtailed investment in oil exploration — which, in due course, will provoke another rapid price rise. Each time the cycle churns, it will likely have an even more devastating impact.

The same will happen with natural gas as conventional gas grows scarce and the industry is forced to rely on quickly depleting and expensive-to-produce shale gas; and the same will happen with copper, uranium, indium and rare-earth elements. Meanwhile, we will puzzle over the fact that the economy just doesn't seem to work the way it once did. Instead of having plenty of energy with which to mine gold from seawater, we will find we don't have cheap-enough fuel to keep the airline industry aloft. Alternative non-fossil energy sources will come on line, but not quickly enough to keep up with the depletion of oil, coal and gas. Prices of energy and raw materials will gyrate giddily, but the actual amounts consumed will be dropping. In general, labor costs will be falling and raw materials prices rising — the exact reverse of what occurred during the 20
^th
century; but the adjustments will be anything but gradual.

It will take most folks a while to realize the simple fact that conventional economic growth is over. Done. Dead. Extinct.

The economic crash of 2008 is commonly perceived as another in a long series of recessions, from which a recovery will inevitably ensue. Recessions always end with recovery; of course this one will as well — or so we are told.

Yet now the situation is different. With oil production peaking, climate changing and fresh water, soil, fish and minerals depleting at alarming rates, the computer-based scenarios of the 1972 Limits to Growth study seem thoroughly and frighteningly confirmed. Decades of expansion fueled by consumption and debt are ending; the time has come to pay bills, tighten belts and prepare for a future of economic contraction.

Now and again, we may see a year that boasts higher economic activity than the previous one. But we will probably never see aggregate activity higher than that in 2007. The Asian economies of China and India will be brief holdouts from this general trend; but, as coal supplies in that part of the world tighten, even the “Asian tigers” will soon be forced to confront limits to growth.

Contemplating the end of growth — not as a theoretical possibility, but as a
fait accompli
, forced upon us by circumstances largely of our own making — is of course a bit depressing. The 20
^th
century was one long expansionary surge punctuated by a couple of nasty world wars and a depression. At the beginning of that century, world population stood at a little over 1.5 billion; by the end, it was six billion. In the industrialized West, per capita Gross Domestic Product (GDP) grew from an average of $5,000 to nearly $30,000 (in inflation-adjusted terms). We all came to believe that “progress” would go on like this more or less forever. We would build colonies on the Moon, other planets, maybe even in other solar systems; we would conquer disease and hunger — it was only a matter of time.

But while we were planning for utopia, we were in fact setting the stage for collapse. We were depleting our planet's usable resources and altering the composition of Earth's atmosphere. And we were building a global financial regime built on the expectation of perpetually expanding consumption and debt, a regime that could not
function in a condition of stasis or contraction without generating billowing crises of default, insolvency and collapse.

So, instead of being a continuation of the upward trajectory we have all grown accustomed to, the 21
^st
century is destined to be one long downward glide punctuated by moments of financial, political and geopolitical panic. And in retrospect, we'll all probably eventually agree that our descent began in 2008.

We really have reached Peak Everything . . . but we've barely had a chance to enjoy the view; how brief was our moment at the apex! From here on, it's going to be a bumpy, downward roller-coaster ride.

Why bother to mention any of this? Is it just to wallow in cynicism? Clearly, the only useful purpose would be to somehow improve our collective prospects. Further economic growth may not be an option for global society, but that doesn't necessarily signify the end of the world. Indeed, the range of possible futures arrayed ahead of us is still wide, encompassing everything from (at one end of the scale) graceful industrial decline leading to a mature, sustainable world community of relocalized cultures, to (at the other end) human extinction, or something very close to it.

It's not hard to see what could lead to the latter outcome. If we are all still planning for expansion and it doesn't ensue, many people will likely become furious and look for someone to blame. Politicians, seeking to avoid that blame and channel citizens' anger for purposes of their own aggrandizement, will offer scapegoats. Some of those will be domestic, some foreign. Scapegoating of nations, religions and ethnicities will lead to global violence. Meanwhile, very little attention will be going toward addressing the underlying problems of resource depletion and environmental degradation (the death of the oceans, collapsing agricultural production due to climate change and desertification, etc.) — problems that warfare will only exacerbate. Add nuclear weapons, stir vigorously and voila: a recipe for utter and complete destruction.

It doesn't have to end that way.

If we understand the nature of the limits we are confronting, it is still possible to back our way out of the population-resources cul-desac we have entered. In other words, if we plan for contraction, we are likely to do a much better job of transitioning to a sustainable level of population and consumption than if we are still planning for growth and are continually finding our plans frustrated.

The first thing we must do to plan successfully for contraction is to set achievable goals, using sensible indicators. We must cease aiming for increases in scale, amplitude and speed with regard to nearly every material parameter of the economy. We must aim instead to increase society's resilience — its ability to absorb shocks while continuing to function. That means relocalizing much economic activity. We must aim also to shore up basic support services, education and cultural benefits, while de-emphasizing economic activity that entails non-essential consumption of resources.

Attainment of these goals will be greatly facilitated by the adoption of appropriate indicators. Currently, nearly all nations use Gross Domestic Product (GDP) as their primary economic indicator. GDP represents the total market value of all final goods and services produced in a country in a given year, and a rising GDP is generally taken as a sign of progress. If GDP is set to decline relentlessly in a post-growth world economic regime, then we need a way to focus our collective attention on non-consumptive aspects of economic and civic life so as to motivate useful action in directions where progress is still possible.

Fortunately, alternative economic indicators are beginning to garner attention in cities and nations around the world. I discuss the Genuine Progress Indicator (GPI) on page 17 of the Introduction, but it's also important to mention Gross National Happiness (GNH). That term was coined in 1972 by Bhutan's former King Jigme Singye Wangchuck to signal his commitment to building an economy that would preserve Bhutan's Buddhist culture as the nation opened trade with the West. Canadian health epidemiologist Michael Pennock helped design GNH, and has advocated for the adoption of a “de-Bhutanized” version of it in his home city of Victoria, British Columbia. Recently, Seattle has also expressed interest in adopting GNH.

Med Jones, President of International Institute of Management, has elaborated on GNH metrics, measuring socioeconomic development across seven areas, including the nation's mental and emotional health:

Contraction in population levels and consumption rates doesn't sound like much fun, but a few decades of improvement in Gross National Happiness — potentially achievable under material circumstances that are by now unavoidable — should be an attractive notion to most people.

The related idea that life can be better without fossil fuels is a core tenet of the Transition Town movement, which started in England in 2005 (I quote its founder, Rob Hopkins, on pages 135-136). Transition Initiatives are grassroots efforts to wean communities
off dependence on oil and other carbon fuels by promoting local resilience (through development of things like local food systems and ride-share programs). Transitioners realize that it is probably futile to wait for elected officials to take the lead in planning for the great energy shift, given that very few politicians understand our predicament — and given also that, even if they did, the measures they would likely propose would be deeply unpopular unless the populace were first educated about constraints on fossil-fueled growth. The genius of the movement lies in its engagement of the citizenry first. The Transition Initiatives appear to be taking off virally, with nearly 300 official sites around the world and over 70 in North America (as of mid-2010).

During the past two years, car sales have declined while bicycle sales have soared; the number of young people taking up farming has increased for the first time in decades; and organic seed companies have had a tough time keeping up with mushrooming demand from home gardeners. These trends show that higher fuel prices and public awareness will indeed motivate behavior change. But we have a very long way to go before the people of the world have broken our dependency on fossil fuels, scaled back our use of other resources and sufficiently reduced our impact on natural systems. Meanwhile, public education and citizen-led efforts (like the Transition Initiatives) are essential now to build community resilience so as to absorb the economic and environmental shocks that are on their way, and to help us all adjust to life after growth.

The peak has happened. Get over it — and get to work.

D
URING THE PAST few years the phrase
Peak Oil
has entered the global lexicon. It refers to that moment in time when the world will achieve its maximum possible rate of oil extraction; from then on, for reasons having mostly to do with geology, the amount of petroleum available to society on a daily or yearly basis will begin to dwindle. Most informed analysts agree that this will happen during the next two or three decades; an increasing number believe that it is happening now — that conventional oil production peaked in 2005-2006 and that the flow to market of all hydrocarbon liquids taken together will start to diminish around 2010.
¹
The consequences, as they begin to accumulate, are likely to be severe: the world is overwhelmingly dependent on oil for transportation, agriculture, plastics, and chemicals; thus a lengthy process of adjustment will be required. According to one recent US government-sponsored study, if the peak does occur soon replacements are unlikely to appear quickly enough and in sufficient quantity to avert what it calls “unprecedented” social, political, and economic impacts.
²

This book is not an introduction to the subject of Peak Oil; several existing volumes serve that function (including my own
The Party's Over: Oil, War and the Fate of Industrial Societies).
³
Instead
it addresses the social and historical context in which Peak Oil is occurring, and explores how we can reorganize our thinking and action in several critical areas to better navigate this perilous time.