OFC Meeting 5

08 May 2018: Don Giberson presents...

BACK TO THE FUTURE:

How We Can Address Four of Our Biggest Global Challenges

We are living in very challenging times. There are 4 major issues that pose serious threats not only to our way of life, but to our very existence. In this presentation, I would like to offer two possible solutions that, together, address all 4 of these major issues.

We are facing a number of major issues today. These are sometimes referred to as the E4 Crises: Energy, Economy, Ecology and Equity. Let’s briefly look at each of these.

Global Crisis #1: Energy

Energy is everything: nothing happens without energy. It is the foundation of life.

For most of our time on earth, our energy came from human or animal muscle power or from the sun, wind or water. These forms of energy were limited, which, in turn, limited the amount of work we could perform. But that all changed when we discovered fossil fuels. Oil, coal and natural gas are all amazing discoveries: they are incredibly concentrated forms of energy, they are portable (so we can move them from where they are found to where they are needed), they have been abundant and they have been cheap.

Let’s say your car gets 30 mpg. Then one gallon of gas will propel your car 30 miles; and will probably do so in less than 30 minutes. And that gallon of gas cost you less than $6.00. Now imagine pushing that car 30 miles: how long would it take you, how much energy would you use and how much would it cost you in food to generate that energy? What if you wanted to pull the car with a couple of horses? Again, imagine how long it would take, how much energy would be needed and what it would cost. So fossil fuels really have been an amazing discovery. Not surprisingly, we have used them as much as possible. We use them to power our cars, trucks, buses, airplanes, ships, tractors and all kinds of other machines. We use them to heat our homes and generate our electricity. We use them to produce steel, concrete and other energy-intensive materials. We use them to grow our food, mine for minerals and metals, produce goods and services, and to transport those goods and services around the world. We use them in plastics, cosmetics and numerous other products. We have built an entire global, interconnected economy on the back of cheap fossil fuels.

But there is one B-I-G problem; and it rarely gets mentioned in the mainstream media. And that problem is: Peak Oil. Peak Oil is defined as: “the point when further expansion of oil production becomes impossible because new production flows are fully offset by production declines.” Most indicators suggest that we have already reached this point and that we are on the downward curve of oil supply. One example: global oil production has basically flat-lined since 2005. In other words, we are starting to run out of oil. Although we are still discovering new sources of oil, these new sources are usually smaller in size (quantity) or poorer in quality than those they need to replace. One indicator of this is EROEI: Energy Return on Energy Invested. EROEI is calculated by dividing energy delivered by the energy required to deliver that energy. In 1930, the EROEI was 100:1; one barrel of oil spent on oil production resulted in 100 barrels of oil produced. By 1970, that had declined to 30:1. By 2005 it was down to 15:1. It is now around 10:1 to 5:1 and continues to decline. This means more and more of the limited amount of oil remaining is going into oil production and energy output is declining.

However, these lower EROEIs are still higher than many proposed alternatives: solar collectors, solar flat plates, bitumen tar sands oil, biodiesel, corn ethanol, sugar cane ethanol and shale oil all have an EROEI of 5:1 or less. Photovoltaics have an EROEI of 6.8:1, geothermal without hot water heating is 9.5:1, wind is 18:1, CSP (Concentrated Solar Power) Electric is 19:1, geothermal with hot water heating is 32:1, hydro is 100:1 and nuclear is 105:1. Hydro and nuclear both have high EROEIs but most potential hydro sites have already been developed and nuclear is very expensive and carries significant environmental concerns. Coal has an EROEI of 80:1, is abundant and is fairly cheap; which explains why it is a preferred energy source for many developing countries. However, burning coal carries significant environmental consequences. Unfortunately, except for coal, there are few alternatives to oil that produce anywhere near the same energy return. This means we are ultimately heading towards a lower energy future; which has huge implications for our high-energy globally interconnected and interdependent world.

Global Crisis #2: Economy

The discovery of oil, coal and natural gas unleashed an energy revolution. We built machines to run on these fossil fuels and these machines could do far more work than could be done previously with human, animal, solar, wind or water power. Productivity skyrocketed and economies grew: it was a heady period of expansion and growth.

But we reached a point of over-production: we were producing more than we needed. This led to the Great Depression of 1929. To solve the problem of overproduction, we developed the ideas of consumerism and economic growth; which were promoted through advertising and supported by the availability of credit. This was further driven through globalization, trade, cheap oil and a global financial system; factors which allowed large corporations to scour the globe in search of the lowest priced energy, labour and resources. So we have built an entire global economy driven by consumerism and perpetual economic growth that is heavily dependent on cheap energy to keep it all going.

But as we have already seen, the cheap oil is running out and increasing demand and decreasing supplies will drive oil prices up dramatically. This will lead to a major global economic contraction. When oil prices spiked in the 1970s, the U.S. economy went into a recession.

As author Richard Heinberg points out: “Oil has become the world’s foremost energy resource. There is no ready substitute and decades will be required to wean societies from it. Peak oil could therefore constitute the greatest economic challenge since the dawn of the Industrial Revolution”.

Global Crisis #3: Ecology/Environment

The third crises we need to face and address is ecological: we are living beyond the earth’s carrying capacity. We depend on nature for the air we breathe, the water we drink and the food we eat. Nature provides the materials to build our homes and to heat and cool them. Every manufactured good uses minerals, metals or other materials that come from nature. We depend on nature for our very survival; yet we are rapidly depleting many of the planet’s non-renewable resources and we are using up many of the planet’s renewable resources (such as fish and forests) faster than nature can replenish them. Species extinction, loss of biodiversity, acidification of the oceans, pollution, and climate change are other major ecological issues caused by our consumerist culture.

There are two main factors driving the depletion of the earth’s resources: population growth and consumerism under the guise of perpetual economic growth. There are about 7.5 billion people on the planet and that number is growing at about 1% per year. 1% doesn’t sound like much but a 1% growth rate means that the world’s population would double to 15 billion in just 70 years. We are adding about 80 million more people each year (net births minus deaths). That’s 80 million more people each year who need food, water, clothing and shelter.

The other main driver of resource depletion is the pursuit of global economic growth. Perpetual growth on a finite planet is simply not possible. To illustrate this, consider the following example. Let’s say the global economy is using 1/8 of the world’s resources and we want to maintain global economic growth of 3%. How long would it take before we overwhelm the earth’s carrying capacity? The answer is: just 69 years. At a 3% growth rate, the economy would double every 23 years. That means that in 23 years the economy would double and we would go from using 1/8 to 2/8 of the earth’s resources. In another 23 years, the global economy would double again and we would be using 4/8 of the earth’s resources. Another 23 years, only 69 years in total, and the global economy would be using 8/8 or all of the earth’s resources. We have been pushing the idea of global economic growth for almost a century now; and the Global Footprint Network calculates that we are using 12/8 of the world’s resources; we are actually exceeding the earth’s carrying capacity. The global economy has gotten too big and we are depleting many of the planet’s resources that we depend on for our survival. We are killing the golden goose.

This explains why physicist Albert Bartlett has said “The greatest failing of the human race is our inability to understand the exponential function.”

Global Crisis #4: Equity

The fourth crisis we need to address is the equity crisis. Income inequality has grown steadily over the past few decades. The promotion of consumerism and the ready availability of credit led many people into debt. Wealth flowed from borrowers to lenders, concentrating wealth and growing income inequality. The wealthy used their money and influence to shape public policies which and become even richer. The same thing happened globally; with “wealthy” nations becoming wealthier and “poor” nations becoming poorer. Today, the 300 wealthiest individuals own as much wealth as the poorest 3.5 billion combined!

The wealthy have also grown their wealth by expropriating the commons. "The Commons" refers to the cultural and natural resources that are accessible to all members of society and not privately owned. In our earlier agrarian societies, many people shared food and resources and had a shared interest in preserving them. Beginning in the Middle Ages, the wealthy began expropriating the commons and could defend their seizures. This privatization of the commons has continued to the present and claims much of the world. Correcting inequality will require reclaiming and expanding the commons once more.

The growth of the corporation, with the emphasis on profit, has also concentrated wealth. Today, if we rank countries by GDP and corporations by revenues, 48 of the largest “economies” would be corporations! So correcting inequality may require new forms of business and ownership. There are many alternatives: cooperatives, B Corps (Benefit Corporations), Social Enterprises, etc. Or perhaps we change the corporate laws to shift the goal from profit to the triple bottom line: profit, people AND planet.

The World Bank says that “economic growth is the essential ingredient for sustained poverty reduction.” But the statistics prove this wrong. The global economy has increased 25 fold over the past century yet more than 1 billion people live on less than $1 per day. For every $100 of global economic growth that occurred between 1990 and 2001, only 60 cents went to people below the $1-a-day line. In other words, to get the poorest people an extra $1 required a $166 increase in global production. Someone is profiting off economic growth but it is not the world’s poor.

This is also true in the wealthier nations, with economic benefits increasingly flowing to the wealthiest individuals. For instance, in the 1950s and 1960s, top corporate executives in the U.S. took home 25 to 30 times the income of typical workers. In 1980, CEOs earned 40 times more than workers. By 1990, the gap had widened to 100 times. And in 2007 the difference was an astonishing 350 times. More and more wealth is concentrating at the top of the economic pyramid. And this is occurring in most developed countries, not just the U.S.

Income inequality is a slow-burning powder-keg that threatens to explode if we don’t tackle it. And numerous studies have shown that improving equity has numerous and far-reaching benefits:

People enjoy better health and longer life expectancy
Fewer citizens develop drug addictions
People are less victimized by violence
Birth rates among teenage girls is lower
Children experience higher levels of well-being
The rate of obesity declines
Mental illness is less common
Fewer people end up in prison
Opportunities for social mobility are more widespread

These are worthy benefits that justify a determined pursuit of equity.

Two Solutions to Our Four Global Crises

The E4 Crises of Energy, Economy, Ecology and Equity are major challenges and, as we have seen, they are all closely inter-related. Tackling any one, without understanding and addressing this interconnectivity, will have limited impact.

With this in mind, here are two “big ideas” that, together, could go a long ways to addressing all four of these issues: Community Resilience (or Relocalization) and a Steady State Economy.

Let's look at each of these briefly.

Community Resilience

The above E4 Crises are likely to produce significant global shock waves that will ripple across the planet right down to our local communities. We need to identify these potential shocks and develop strategies to address them.

That is the idea behind Community Resilience. Community Resilience refers to a community’s ability to adapt to and bounce back from shocks and disruptions. It is a community-based, people-driven, solutions-oriented approach to finding workable solutions to global problems at the local level.

One of the main strategies for developing community resilience is relocalization: the idea that a community should produce locally as much of its essential needs as possible. This is done to reduce reliance and dependency on vulnerable global systems (transportation, food, energy. finance, etc.).

This includes such initiatives as:

local food (meeting food needs from local food sources as much as possible)
local energy (decentralized, locally owned power systems as opposed to large scale centralized energy grids)
local economies (more local businesses and fewer large multi-national chains)
local housing (building homes using local building supplies)
local business exchanges and cooperatives
local currencies (to reduce the outflow of capital from a community)
local education
local medicine/health (for example: developing local medicines to reduce dependency on foreign drugs)

Community Resilience does not oppose trade, but seeks to provide as much of the community's needs locally/regionally as possible and then to rely on trade for what cannot be provided locally/regionally.

It should also be noted that this presentation uses the word "relocalization" instead of "localization" because this is how we humans have lived for most of our time on earth. It is only over the last 200 years or so, with the discovery of cheap fossil fuels and the adoption of consumerism, economic growth and globalization that we have moved away from these strategies.

In the "old days" of trains and steamships, it was very expensive to transport things over long distances. Usually only the very wealthy were able to afford to import things; especially if they were heavy. So things were produced locally as much as possible.

Community Resilience or releocalization is a big "Back To The Future" idea that addresses all 4 of the crises described above.

Steady State Economy

Another big idea that also addresses all 4 crises is the concept of a Steady State Economy.

A Steady State Economy is defined as an economy that aims to maintain a stable population and a stable and sustainable level of resource consumption. It’s an economy in which material and energy use are kept within ecological limits, and in which the goal of MORE (economic growth or increasing GDP) is replaced by the goal of BETTER (improving quality of life).

Our global economy is a human invention. We created it; and we can change it. It is possible To create a global Steady State Economy (SSE).

How would we get to a Steady State Economy? Consider a diagram with Size of the Economy on the vertical-axis (too small, optimal and too large); and Resource Use on horizontal-axis (increasing, stable, decreasing). This would produce four quadrants and each nation’s path to a SSE would depend on its starting point:

A nation in Quadrant 1 (Undesirable Growth) has an economy that is consuming too many resources and its resource use is still increasing. Degrowth is necessary before this nation can achieve a steady state.
A nation in Quadrant 2 (Desirable Degrowth) has an economy that is still consuming too many resources but its resource use is declining; it needs to continue its path of degrowth.
A nation in Quadrant 3 (Undesirable Degrowth) has an economy that is too small and is shrinking; so it needs to pursue a policy of growth to get to a steady state.
A nation that is in Quadrant 4 (Desirable Growth) is increasing its use of resources but its resource use is still below a stable level; this nation can continue to grow until it reaches a steady state.

It is worth noting that the idea of a Steady State Economy does not preclude the possibility of growth; but it limits growth to those nations whose economies have not reached optimal size and whose resource use is still below sustainable levels.

This is a fair, balanced and sustainable approach to the global economy. Developed nations have about 16% of the world’s population but they account for about 78% of the global consumption expenditures. Such nations can adopt a policy of degrowth, bringing their economies into line with their country’s ecological limits, and still meet the needs of their citizens.

On the other hand, 40% of the world’s population struggles to subsist on less than $2 per day. Clearly, these nations need to grow their economy to better meet the needs of their citizens.

The Steady State Economy does not advocate blanket global economic growth for everyone (which is not sustainable) but allows for economic growth for those who truly need it.

So what would a Steady State Economy look like?

The goal of a SSE would be sustainable and equitable human well-being (BETTER, not MORE).

The foundation of a SSE would be based on 4 key building blocks:

Sustainable scale (material and energy use are stabilized and kept within ecological limits)
Fair distribution (inequality is reduced; people have equal opportunities for wealth/income)
Efficient allocation (resources are efficiently allocated among competing interests through markets and other means when markets don’t work)
High quality of life (GDP growth takes a back seat to what really matters to most people: health, happiness, secure employment, leisure time, strong communities and economic stability)

How do we get there from here? To move to a SSE, we will need to:

Limit resource use and waste production
Stabilize population
Distribute income and wealth equitably
Reform monetary and financial systems
Change the way we measure progress
Secure full employment
Rethink how businesses create value
Replace the culture of consumerism with a culture of sustainability
Stimulate political debate and media coverage of the limits to growth and the steady-state alternative
Change national goals regarding growth and improve international cooperation

The above is not a radical idea; it describes how we have lived on this planet for most of our existence. Earlier agrarian economies had many of the features of a Steady State Economy described above.

Remember: the global economy is a human invention. We created it. This means we can re-create it. We can abandon the unsustainable ideas of consumerism and perpetual economic growth and create a global Steady State Economy that is fairer, more balanced, sustainable and equitable.

Isn't that a goal worth pursuing?

Back to the Future

In the future, we may "go back" to the way we used to do certain things.

In his book, The Retro Future, John Michael Greer suggests an approach many people would find unthinkable: deliberate technological regression as public policy.

Much of today's "progress" has reached the point of "diminishing returns": is the latest technology (cellphone, television, automobile, etc.) really that much better than yesterday's model? In most cases the answer is no; yet we continue to use up valuable resources producing these "new but not improved" products.

Greer argues that there are many "older" technologies that work as well or better than current technologies; and many use far fewer resources and are thus more sustainable.

We live on a finite planet and most of the planet's "resources" are also finite, so a global economy built on perpetual growth/personal consumption is simply not possible. We need to consider what level of technology is sustainable on a planet with finite resources.

Greer offers 7 older technologies that would work well and be more sustainable than current alternatives. One example is windjammer ships for global transportation of goods. These were economically viable until the discovery of cheap oil; and will become viable again as oil supplies decline and oil prices climb.

But we need to recapture the knowledge of how to build and operate these ships; and the lead time means we need to start building/training BEFORE they again become economically viable.

Our pursuit of progress has caused us to abandon many older technologies that worked well and which may again be needed in the future. And our seniors/elders will be critical to this return to older technologies because they are the only ones with real world knowledge and experience with these technologies.

For instance, how many younger people know how to bake bread, make butter, can foods, etc.? How many have operated a long-range radio or used a slide rule?

Our seniors/elders have a wealth of vital knowledge and experience that must not be lost!

Community Resilience (or relocalization) and a Steady State Economy are two ideas that fit with Greer's idea.

Community Resilience and a Steady State Economy are two big ideas that, together, address the 4 major global crises described at the beginning of this discussion.

Community Resilience and relocalization provide us with concrete actions we can take at the local level to address these global issues.

And the concept of a Steady state Economy provides a framework for building national economies and a global economy that works for everyone and respects the ecological limits of the planet.

These two ideas aren’t really new; they describe how we humans have lived for most of our time on planet earth. It is only in the last 200 years or so that we have gotten away from these tried-and-true approaches. Perhaps it is time that we revisit these strategies to get: Back to the Future.

Questions for Discussion

Here are some questions to consider for our "Back to The Future" discussion:

What are your thoughts on the four global crises discussed above?
What are your thoughts on the concept of "Community Resilience"?
What are your thoughts on the idea of a "Steady State Economy"?
What are your thoughts on Greer's proposal for "deliberate technological regression as a matter of public policy" as a way to adopt practices/technologies that are more sustainable on a planet with finite resources?
What "older" tools/techniques/technologies/processes have you used in the past that worked well and are more sustainable than current alternatives?
What "older" knowledge/skills do you have that could become necessary again in a "retro future"?

References

If these ideas interest you, here are some books and resources you may want to explore:

Books:

"The Retro Future" by John Michael Greer
"Enough is Enough: Building a Sustainable Economy in a World of Finite Resources" by Rob Dietz and Dan O'Neill
"Prosperity Without Growth: Economics for a Finite Planet" by Tim Jackson
"Supply Shock: Economic Growth at the Crossroads and the Steady State Solution" by Brian Czech
"The Transition Handbook", "The Transition Companion" and "The Power of Just Doing Stuff", all by Rob Hopkins
"The Upside of Down" by Thomas Homer-Dixon
"Powerdown: Options and actions for a Post Carbon world"
"Eco-Mind" by Frances Moore-Lappe (offers a contrary perspective/counter-argument to many of the above authors)

Websites:

Transition (a community resilience movement that began in the UK in 2005 and has spread across the globe)
PostCarbon (the Post Carbon Community website)
Community Renewal (the website for the Canadian Centre for Community Renewal in Port Alberni)
CASSE: the Center for the Advancement of the Steady State Economy)
BALLE: the Business Alliance for Living Local Economies)

Inspirational Motto contributed by Jess:

MINUTES

Anyone care to describe the meeting?

From Philip:

Here are my ideas from the meeting that Don has not already mentioned above.

I believe “steady state economy”, “circular economy” and a “sustainable economy” all refer to the same thing.

To help achieve a steady state economy and a high quality of life we need to replace our car-oriented suburban big-box store cities with walkable, affordable, attractive, medium density, mixed zone, local communities.

We should replace the Gross Domestic Product as a measure of the strength of an economy with the Genuine Progress Indicator.

Governments should pay more attention to measures of happiness in the country and try to maximize them.

Recognize the powerful interests such as the banks that benefit from the economy as it is so they can be controlled.

Governments should penalize companies that continue to focus on maximizing profits and share prices in the short term. We can do this by changing the limited liability charters so corporations pay attention to the longer term and to goals other than profit -- employees, the environment and society as a whole.

Somehow change societal norms to stop measuring everything with money.

To facilitate change we need to pay close attention to why people believe what they do.

Advanced A.I. should help us find a path to a steady state economy.

OFC Meeting 5

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