Confounding Collapse

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Published on Peak Surfer on April 16, 2017

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"As brilliant as your conceptual breakthrough may be, there is no escaping your cultural milieu."

 

 

 

The Paris Agreement calls for deep decarbonization by 2050 (net neutrality) and drawdown of all the legacy carbon thereafter, returning humans to the comfortable Holocene from which we evolved.

A recent study by Energy Innovation Reform Project (a pro-nuclear, pro-coal think tank), reviewing the now extensive literature on the renewable energy transition, concluded that a 100% renewables goal, while technically feasible, still faces many challenges:

To achieve Paris policy goals — by no means an assurance that climate catastrophe will be averted — power sector CO2 emissions must fall to zero by 2050. The pressure of this timeline is itself disruptive. Decarbonization is significantly — exponentially —  more difficult than mere emissions reductions, even if it loses the baggage of that Dogberry neologism ("decarbonization").

 

 

  • Renewables are primarily delivered by electricity, and to a lesser extent by liquid or pelletized biofuels. To abate carbon, there needs to be a shift to electricity for transportation, heating, and industrial energy. 
  • Power generation systems involving renewables such as wind and solar are physically larger, requiring more land area.
  • Wind and solar require much greater total installed capacity — 3 to 6 times peak demand — to offset their intermittency.
  • Stable electric grids require a mix of “dispatchable” energy (variable generation on demand) and long-duration (seasonal) energy.
  • Battery storage is infeasible for long duration storage. In the USA, for instance, you would need 37.8 billion Tesla Power Wall 2.0 home energy storage systems—or 320 Power Walls per household to sustain present power consumption.
  • Biofuel backup, the most practical form of seasonal storage, would entail converting some fraction of Earth’s photosynthetic capacity to supplying electricity while somehow maintaining the other essential functions that natural ecosystems supply. You can’t rob Peter (Rabbit) to PayPal.

When one considers that the so-called industrial revolution was fueled by a switch from energy-light whale oil and firewood to energy-dense petroleum and coal — enabling expansion of human population from 1 billion to 7 billion — reversion to some sort of status quo ante is a daunting prospect. To start with, where will you find the whales?

Even if new generations of solar cells can take the place of whales in lighting homes, it is questionable whether those can provide the kinds of surplus energy that enabled construction of the world’s megacities, airborne armies, or space programs capable of landing men on the Moon or operating satellite-based Cloud technologies.

Humans now propose to switch from dependency on Earth’s 650-million-year-old savings account of fossil sunlight to a much more modest daily ration of photons arriving from the Sun. To do so, they must first gather and store those photons or their effects (e.g.: wind, tides, radiant heat, growing things) and then dispense them in some fashion similar to their previously accustomed habits for using oil or coal. They must finance all that while under the pressure of economic decline and mounting climate catastrophes. And they must overcome the problems of intermittentcy, diffusion and storage.

 

 

Consumer optimism is at a 17 year high — no worries, invest!

These are not small challenges. To suggest that we can supply a consumerist economy elevated to the scale of 7 billion — soon-to-be 12 billion as the pent-up demographic time bomb explodes — from silicon wafers, neodymium turbines, or terrestrial and marine vegetation, seems deluded.

Nonetheless, most governments, and all the major international development banks, now have the scare in them. Typical is the InterAmerican Development Bank, whose 2017 portfolio is 80% mitigation ($2.127 billion) and 20% adaptation (562 million). Mitigation refers to efforts to reduce or limit fossil emissions, or to a lesser extent, to drawdown and sequester greenhouse gases. Adaptation refers to efforts to reduce or limit vulnerability by restructuring shelter, food and water security around the new normal. 

IDB’s 2016 report warned its client countries that 60 to 80 percent of publicly listed fossil fuel reserves “are unburnable if the world is to avoid disastrous climate change.” Worse, they broke it to them that their agriculture systems, tourist industries, and most of the jobs they have created to productively employ their workforce over the past century of industrialization are all stranded too. IDB would now seem to agree with James Howard Kunstler that Robert Moses' utopian vision of America as happy-motoring affluent suburbia was the worst misallocation of resources in human history.

As brilliant as your conceptual breakthrough may be, there is no escaping your cultural milieu.

What we might call civilization, historian Joseph Tainter recast as something more nuanced: complexity. In his 1988 classic, The Collapse of Complex Societies, Tainter did not attribute the rise of the Greek, Mayan or the Roman Empires to military conquest, slavery or some new form of energy. He said that complexity creates resources just as resources create complexity. The binding energy is social organization.

A corollary of that is that depletion of resources does not necessary doom a civilization, even one that has been sawing off the tree limb it is perched upon. Rather, Tainter said, what is experienced in the periodic arrival of collapse is the normal and routine feedback of complexity.

Endlessly iterating intermediation as a society complexifies places greater demands on resources while yielding diminishing returns, both energetically and in terms of social benefit. Think of the store in the mall that only sells baseball caps. It is highly specialized. The store’s owner, who probably pays a franchise fee, requires a trained sales force, working probably at minimum wage but with health and unemployment insurance; rent to the mall owner; store liability, fire and theft insurance; advertising; payroll accountant; tax accountant; inventory depreciation; and more. The store management has a long list of complex regulations it has to abide by.

At the same time, its business model is very fragile. Success depends on people having discretionary income to buy new baseball caps. It is predicated on a demand adequate to meet the overhead of the store and avoid insolvency. It assumes people will continue to drive from some distance away to shop at the mall. It assumes that the costs to light, heat, cool and secure the mall will not become so prohibitive that the mall closes.

Today it is not just that business model that is too fragile. Its the entire global consumer economy. The signs are all around us. The collapse phase of the civilizational cycle is here. Two distinguishing features of this one are that it is global in scope for the first time and that it is capable of being watched in real time by nearly everyone.

In a recent interview with Steve Keen, Michael Hudson described the plight of the average US city dweller in 2017:

 

 

Hudson: Let’s say that debt is equal to 100% of GDP, which it is, at least in almost every country. Now, if countries are only growing at 1%, then if you pay interest at usually 5%, a country would have to grow 5% per year — the GDP — just to pay the interest. And if countries are growing at 1%, and the interest rate for average that everybody pays, about 5% or 6%, then you’re going to have the actual economy shrinking every year as there’s this siphoning off of interest. That’s what debt deflation is.

And that’s the situation that England is in. That is turning Eurozone into a dead zone. And it’s the situation of the US economy. That all of the surplus is paid for interest — not to mention financial returns, capital gains, and economic rent to the landlord class and to the monopolies.

So no wonder the economy is shrinking. Nobody has enough money to buy what they produce anymore. So that’s why there are so many vacancies in storefronts in New York. Why stores are going out of business. Restaurants are going out of business. There’s a squeeze on.

Keen: Yeah. Can you – is that palpable in the States? Because in England it’s not quite so palpable.

Hudson: Well, just imagine the average paycheck. I don’t know if it’s similar. In the United States, the big chunk off the top of every paycheck is for housing. Now in America almost all mortgages — 85% of mortgages are guaranteed by the government and banks will write a mortgage up to the limit of 43% of your total income.

So imagine, here’s a family that in order to have a home is either paying 43% of its income on a mortgage, or it’s paying that in rent. The average rent in New York City is $4,500 a month. Well, you can imagine if the average salary is about $80,000, do the math for yourself. [$54000 or 67.5%]

Now in addition to that, people have to pay maybe 10% more of their income to the banks for credit card debt, student loans, auto debt. And then also taken off the front of every paycheck is 15% of a forced saving of social security and medical care. So that’s taken off. And there’s about another 15% recombination of state and local and federal income taxes. And then you have the value-added taxes. So you add all that up. To the 43%, to 10% to the banks, maybe the 25% for taxes, you have only about 25% of the average paycheck that’s available to be spent on goods and services.

Now think of the circular flow. The whole of economics was founded by a doctor, Francois Quesnay in France, that looked at a national income like the circulation of blood in the body. But you have this blood being drained — 75% of the circular flow now is drained for what we call the FIRE sector – finance, insurance, and real estate.

It is when progressively increasing complexity goes past the point of net energetic loss and starts to drain blood that hooded figures bearing scythes appear.
 

Buoyed by low energy prices and buyer confidence the markets keep climbing

Exceeding biophysical limits may not be the proximate cause of collapse, assuming Tainter is correct, but the societal response to the encounter is critical. The Collapse of Complex Civilizations does not ask why a society would be utterly unable to change course, even in the face of imminent disaster, but it begs that question. Is our social inertia so hard wired? Are homo that un-sapien?

In her inside look at the Federal Reserve, Fed Up: An Insider’s Take on Why the Federal Reserve is Bad for America, Danielle DiMartino Booth depicts the bank presidents who make up that board as nervous engineers, clinging to unproductive Keynesian stimuli in a desperate effort to re-track the train after it has derailed.

Since the 2008 crisis the Fed, along with the European, Chinese, Japanese and every other central bank, have racked up mountainous debt, with inflationary effects hidden only by the much-derided income gap whereby the super-rich take money out of circulation nearly as quickly as it is created. To the cabal of economists who haunt the halls of the central banks, the modern tools of money manipulation have gotten so good that economic growth is forever assured. DiMartino Booth, David Stockman, Nicole Foss, Max Keiser and many others believe a reckoning is long overdue.

The shape of the descent will not resemble the shape of the ascent — a smooth bell curve — because of the Seneca trap. The more you employ artifice to extend the peak, the steeper the downslide that comes when you can no longer pretend to extend. 

With the crash of fossil fuel production, already well along and scraping the barrel for the dirty, tarry scraps, greenhouse gas emissions may decline much faster than they grew up, which is good news. Of course, so will world GDP, and with it, food supply, consumer goods and, inexorably, population. This is not going to be pretty.

The economic earthquake that pundits warn is coming might keep us within a hospitable climate a while longer, but it will only slow the exit from that normalcy, not return it.

Eventually, and with absolute certainty now, we will arrive at both the collapse of the global economy and runaway climate change, the two of them feeding off each other the way crumbling empires eat their seed corn.

In a number of those historic collapse events, rapid-onset climate change was the triggering event. The gun — mass psychosis — was cocked and loaded.

Since the problem is overcomplexity, what we really need is reversion to simpler ways to live. We need degrowth and depopulation; relocalization and transition; antifragility and mutually assured security.

When we described our cool lab concept we gave the example of a rural village in Haiti. While cities pose more of a challenge, we showed in the example of Los Angeles Eco-Village that it is possible to accomplish the required change anywhere and everywhere.

What we most need next are the vehicles — the change agencies, accellerants, and transformation catalysts. For those we will need to open the tool chest of social inventions.

3 Responses to Confounding Collapse

  • Ken Barrows says:

    The principal question that should be debated never is:  Can total debt increase faster than output forever?  The idea that cutting debt is going to preserve our way of life makes about as much sense as Jesus coming back next Tuesday.

    • Davebee says:

      How about cutting the endless supply of kids I see every time I venture into my closest shopping complex Ken?

      I live in South Africa and the idigenous population here seem hell bent on Easter Islanding themselves (and myself) out of existence by making photo-copies of themselves at an incredible rate of knots.

      One would have imagined that vastly improved and cheaper digital telecomms would have brought the message home that the future aint what it used to be and that too many kids = lots and lots of BIG trouble, but nope the birth rate just goes relentlessly up and up.

      Want to know what the OFFICIAL unemployment rate is here Ken? It's 30%. Want to know the REAL unemployment rate my friend? About 50% and counting. Now add to that the demographic time bomb I mentioned above and I think that Seneca cliff isn't too far away for us here in the Last Outpost.

  • Ken Barrows says:

    Why globalization isn't a good idea: too few want to downsize, whether number of children or toys.

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