Act Now - Change the Future

Getting the sums right

The International Energy Agency – described by the Financial Times rather implausibly as the ‘oil watchdog’ – announces that if we don’t invest very heavily indeed in new exploration and production, world oil production can be expected to fall by 9.1% per annum from now on. Apparently meeting the demand from China, India and other developing countries’ demand will cost around $360bn each year until 2030. And even if we do make all that investment, it will fall by 6.4% anyway. So peak oil is well and truly here.

Curiously, this does not occur to the FT, who then add that the IEA has consequently revised its projections for oil consumption downwards from 116 mbd (million barrels a day) to 106 mbd - a little under 10% less. Yet we are currently producing only about 87 mbd. So according to the FT, if we start with 87 and subtract at least 6% a year, we will get to 106 in 2030…

Who says educational standards are falling? Evidently some of the best educated members of my own generation – the FT’s journalists – can’t add up either.

But the FT are hardly alone in this peculiar visual impairment. Governments everywhere seem to be totting up the figures for economic development – especially in the developing countries – and coming up with equally fantastic numbers for all sorts of things. Oil, gas – even coal looks a bit shaky now. Industrialisation will proceed apace, yet the supply of many of the most important inputs will peak soon. Nor do we have even an idea about substitutes for most of them. So prices will rise and rise, supplies will grow scarce and then fall to nothing – but industrialisation will proceed apace.

Population too – it will level off at around 9 billion sometime around 2050. Yet many of the basic ‘inputs’ for population growth – water for crops and drinking, fertile land, farming skills, people in the right places (i.e., not in giant slums) – are not only in hopelessly limited supply for such a number but we are actively reducing them by our current policies. We are currently producing less and less cereals per head each year, we spent most of the summer sorting out a global crisis in rice supply, we are responding to the melting of the glaciers on which a huge proportion of the world relies for basic drinking water by introducing crops that demand more water – but there will still be another 2,500,000,000 of us by 2050.

Why the double vision? Because a) we don’t want it to be true, b) most of the tools we have for analysing the problem simply don’t work when faced with problems like this, and c) we haven’t a clue what to do about it, not least because we have absolutely no faith in popular willingness to support radical change.

Take environmental economics – surely that can give us the answers? The clue’s in the name!

Not really. Like all other flavours of ‘modern’ economics, environmental economics assumes that most problems can be understood in marginalist terms - balancing claims on our resources to maximise marginal utility, optimise the distribution or substitution of resources, etc. But it has nothing to say about a situation in which resources fall below basic survival level and we haven’t any substitutes, or where the decision to be made about ‘utility’ is about who will die and who won’t. Not really a ‘marginal’ question, unless you are willing to regard the falling over the edge of a cliff as just another incremental step.

That doesn’t add up either. Perhaps it’s time for remedial maths classes for economists or politicians.

9,000,000,000 people? No problem!

One of the most basic determinants of whether we weather the impending ecological storm is a simple issue: How many of us are there? And for as long as I can recall, demographers have agreed that the world’s population is likely to peak at around 9-10 billion people.

Is that a sustainable number? Hardly. We passed the Earth’s carrying capacity in about 1980, and the current population is consuming the Earth’s resources at least 25% faster than can be sustained. For seven of the last eight years we have consumed more grain than we produced, the most important energy resources are peaking as I write, and all the other basics of life – water, every other major food source, the majority of major ecosystems – all are becoming less able, not more, to support even the present population.

And that assumes we stand still, which simply isn’t going to happen. China alone catching up with western standards of consumption – currently scheduled for about 2030 - will double the burden humanity places on the environment. Add to that India’s expected 1,500,000,000, and then twice as many again as the rest of the world joins us here at the top table, and we are talking about resources running out far ahead of the 9 billion mark.

For example, if the whole world shared America's gas-guzzling habits, oil production would have to rise from about 81 to 450 million barrels per day. Yet there probably isn't enough oil in existence for it to exceed 100 million - and that may be a very optimistic figure, given how implausible so many claimed oil reserve figures are.

In such conditions, the world will not have to wait until the tradition ‘demographic transition’ is over. We don’t have to wait for decades until the cultures of high-growth countries catches up with the novel fact of low mortality. There is no need to wonder when population will reach the magic figure – because it never will. The environmental catastrophe that will result from this impossible balancing act – the disaster that befalls us as we collectively tumble from the tightrope of history – means the mortality rate will soon restore itself to a number far above the fertility rate. Far from being a sustainable number, 9,000,000,000 isn’t even achievable. Far from billions of extra births, we can all look forward to billions of deaths from hunger, disease and war.

No problem then, eh?