Jennifer Marohasy

a forum for the discussion of issues concerning the natural environment

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Economic Growth Relevant, Even if Global Population Declines: A Note from Pinxi

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Many people are concerned by the current dominant global socio-economic paradigm in which economic growth is expected to continue forever.

I’ve commented at a previous thread that the associated issues, including resource depletion, may become “somewhat redundant” once global population starts to decline which many predict will happen before the end of this century.

A regular reader and commentator at this blog, Pinxi, disagrees. She writes:

“In my worldview, economic growth and resource depletion will remain relevant issues for the foreseeable future. These issues are not about to become redundant, regardless of whether we will achieve a declining (or stable) global population or decreased resource intensity.

I formed this opinion considering:

1) the large gaps in living standards (within & between countries) between the minority ‘haves’ & the majority ‘have nots’

2) the pressures and desires for continually rising living standards

3) that we haven’t decoupled living standards from resource throughput; we haven’t decoupled quality of life from materials

4) that looking at the rich countries with declining (& stable!) populations there is no evidence that economic growth or resource depletion has become redundant

5) MNCs see the huge populations in third and second world economies as massive untapped market opportunities – more sales needs more products & distribution needs more resources

6) more consumption means more resource use, and methods to reduce the linear nature of resource throughput require more energy for reuse, recycling, repurposing etc so there’s more entropy, less exergy

If global population is declining, you could have longterm negative economic growth but that doesn’t make economic growth redundant. Without a paradigm shift, economic growth is still relevant to our socioeconomic mechanics.

Industrialised societies are organised with economic growth at core and now expect continual improvements in living standards (and we get scared of potential threats to our way of life, such as global warming, peak oil, China, and cheap immigrant labour).

The paradigm will still persist unless we have a paradigm shift. What would bring on a paradigm shift (far-reaching disasters aside)? How would such a paradigm shift manifest?

We haven’t managed to decouple economic growth or maintenance of living standards from resource and energy throughputs yet. Until we do so, economic growth and associated resource throughput will remain an ongoing concern.

All those ‘other demanding people’ in ‘the other countries’ though want better living standards & cars, houses, coca cola & Maccas just like us. Meanwhile we still want to get one up on the Joneses, and marketers flog more must have items at us. All this requires resource throughputs.

A decline in birth rates in the third world is linked with education, health, food and women’s rights (self-determination, property, jobs etc) and while in some areas of the Millenium Development Goals we’re making percentile progress, we have huge improvements to make if we want real declines in the number of people living in poverty and dire inequality.

Basic human rights, and reduced risk and uncertainty in livelihoods and survivial, reduce population pressures. But that doesn’t by itself bring people up to speed with our first world standard of living. It simply means meeting bare minimum conditions for life for most people.

So even when/if population growth steadies, there’ll still be massive differences in quality of life and material standards, and bigger markets for marketing more unnecessary stuff that we all simply must have.

That attempt to catch up, and the never ending consumptive drive, will demand more resources.

Thankfully I still have my resource shares!”

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This is a slightly edited version of a comment originally posted here: https://jennifermarohasy.com.dev.internet-thinking.com.au/blog/archives/001779.html at 3.22pm on 11th December.

John Howard: Trying for Balance on Climate Change

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Yesterday, on the same day long time anti-nuclear campaigner Peter Garrett was given the job of Shadow Environment and Climage Change Minister, the Australian Prime Minister, John Howard, announced the establishment of a joint government businesss Prime Ministerial Task Group on emissions trading.

He said, “As a world community we need to find new practical global solutions to climate change that include all major economies and emitters and that take account of national goals for economic prosperity, energy security and environmental sustainability.

Australia is blessed with abundant coal, gas and uranium reserves and significant renewable assets. In assessing Australia’s further contribution to reducing greenhouse gas emissions these advantages must be preserved.

While there is no one single solution to the global climate change challenge we need to maintain the prosperity that our abundant fossil fuels have given us while at the same time exploring options for global climate change solutions and accelerating the development and deployment of low emissions and clean coal technologies.”

Today, the Prime Minister made comment that:

“In all of our policies we seek a sense of balance.

In health, we strongly fund, through the Government, the Medicare system and that is balanced by private incentives for health insurance. In education, we support both government and independent schools. In social security, we achieve a sense of balance by avoiding, on the one hand the harshness of the American approach and also the over indulgent, nanny-state approach, of many European countries.

It’s crucial that in the important area of climate change we achieve the same sense of balance. We must play our part in responding to the challenge of growing greenhouse gas emissions, but we must do it in a way that does not damage the industries such as the coal industry and uranium, which have given us a competitive advantage.

The Task Group I announced yesterday brings together industry and government people to give us the way forward in relation to a global emissions trading system that will respond to the greenhouse gas challenge, but in a way that does not hurt Australia’s competitive position. In this way, once again, we in Australia can achieve that sense of balance which is so important in many areas of public policy.”

What might the Task Group actually recommend?

Peter Garrett: Carbon Trading without Uranium Mining

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Peter Garrett, once rock star in Australian band Midnight Oil, then President of the Australian Conservation Foundation and board member of Greenpeace International, then parachuted into federal politics, and now, following the elevation of Kevin Rudd to the position of leader of Australia’s Labor Party, the Shadow Minister for Environment and Climate Change.

On ABC radio this morning Garrett talked about the need for “targets and timelines” to address climate change. He didn’t mention alternative energy sources.

Some say that the only real greenhouse neutral alternative to coal, for baseload power generation, is uranium. The Australian Prime Minister, John Howard, recently commissioned an inquiry into nuclear energy and is likely to make nuclear power an election issue next year. Interestingly Peter Garrett has always been an ardent critic of nuclear power and uranium mining.

Few would dispute that climate change is likely to be a focus for the next federal election. Is Garrett, as shadow environment minister, going to limit the potential for the Labor party to do anything except back carbon trading and Kyoto? Furthermore, how effective is carbon trading likely to be, if there are no realistic carbon neutral sources of energy generation in Australia?

It is also interesting to ponder the extent to which Peter Garrett has been an integral part of the Australian environment movement. In June 2004 I explained in The Land that:

“Perhaps the best kept secret is Garrett’s significant contribution to building and giving impetus to the Australian environment movement through the Mittagong Forum.

Peter Garret was President of the Australian Conservation Foundation (ACF) from 1989 to 1993 and then most recently from 1999. It was in 1999 that the ACF Strategic Plan announced the need to ‘broaden and strengthen the environment movement in Australia’.

The concept was realized through a series of meetings held in Mittagong in the Southern Highlands.

Garrett also lives there. He played a key role in getting the big environmental organizations together including Greenpeace, World Wide Fund for Nature and State conservation councils.

Early discussion included methods to increase movement wide collaboration on issues and campaigns, along with understanding emerging issues and developing potential strategies to tackle them.

In 2000 ACF received a substantial grant from a philanthropic trust and directed the funds towards the Mittagong Forum, which has met at least 14 times since 2000.

Its vision is to, ‘develop capability, generate strategic insights, and to work collaboratively, to enhance the effectiveness of Australia’s Environment Movement.’

‘Fundraising to increase independence of organizations and for the Mittagong Forum’ has also been a key goal.

The forum recognizes that different environmental groups will not ‘necessarily agree on issues’, but says by working together they can more effectively achieve broad and specific environmental conservation outcomes.”

Garrett has always been outcome focused… and he has always opposed uranium mining. An interesting combination for a potential Environment Minister given the current overwhelming concern about global warming.

Weekend Reading

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Regulars at this blog know I have started posting a collection of links to interesting opinion pieces, interviews and newly published articles on some Saturdays under the heading ‘Weekend Reading’. This gives me the opportunity to quickly pass on information. But please note, the information is passed on, not endorsed.

I usually read every piece before I post the link. But this last week has been busier than usual and I’ve received more contributions for ‘Weekend Reading’ than usual. So, here’s a collection of links to pieces that I haven’t read, but will hopefully include much food for thought and discussion.

1. Environmentalism versus Constitutionalism

A paper ‘Environmentalism versus Constitutionalism: A Contest without Winners’ is now accessible in PDF at the New Zealand Business Roundtable website:

http://www.nzbr.org.nz/books_and_reports.asp?DocType=BooksandReports

This paper is based on the keynote address to the 2006 Conference of the Law and Economics Association of New Zealand by Professor Suri Ratnapala, Centre for Public, International and Comparative Law, TC Beirne School of Law, University of Queensland.

2. Skeptics in the US & A Guide to Debunking Global Warming Alarmism

Professor Bob Carter from James Cook University, Townsville, has been in the US giving expert testimony to the Senate: http://epw.senate.gov/109th/Carter_Testimony.pdf

And I was sent a note from another colleague in the US … Senator James Inhofe has offered this download containing the treasure trove of info that is currently on his site, but will probably be erased by the pro-AGW Barbara Boxer who takes over after the first of the year. Here is the link:

http://epw.senate.gov/repwhitepapers/6341044%20Hot%20&%20Cold%20Media.pdf

3. Fifty-one Albatross Dead

Hi Jennifer, You might be interested in this article:

The New Zealand government is considering imposing a temporary ban on surface longline fishing in the Kermadec Islands after a fishing vessel was reported to have killed 51 albatrosses in a single trip…

http://www.birdlife.org/news/news/2006/12/swordfish_ban.html

Regards, Ann Novak

4. Andrew Bolt on ‘Mine Your Own Business’

http://www.news.com.au/heraldsun/story/0,21985,20889770-25717,00.html

5. Largest US Corporations to Buy Green Power

Some of America’s largest corporations pledged Monday to support green power, responding to a challenge posed by the Environmental Protection Agency. So-called green power is generated from renewable energy sources like the sun, wind and biomass such as plants or garbage and helps reduce greenhouse gas emissions that contribute to global warming. The EPA is calling for Fortune 500 companies to double their green power purchases to more than 5 billion kilowatt hours by the end of next year – or enough electricity to run more than 400,000 homes in the U.S. a year.

Read the article here: http://money.cnn.com/2006/12/04/news/companies/green_challenge/index.htm

6. Deepak Lal on Foreign Aid in Africa and Democracy in Asia

Foreign aid’s achieved very little in the past 50 years; it might have done more harm than good. Development economist Deepak Lal says it’s time to ditch aid if we want to help the poor. … you can read or listen to this Michael Duffy interview at the Counterpoint website:

http://www.abc.net.au/rn/counterpoint/stories/2006/1799918.htm

Bushfires Across North East Victoria: A Note from Max Rheese

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There are out-of-control fires burning across northern Victoria, Australia, with more than 170,000 hectares consumed so far. There is an update in today’s The Age and also a photo gallery which can be accessed from the main page.

Yesterday I phoned Max Rheese a friend and colleague from Benalla. He said he was OK and that he would send me a note for the blog about the fires:

“Seven days ago, on Friday December 1, I relaxed in the family room of my home in Benalla in North East Victoria and watched the first of the summer thunderstorms pass overhead. I witnessed the lightning strike in the nearby ranges that started the first of fifty fires to be ignited by that thunderstorm. A week later I sit in the same room and cannot see more than 200 metres into the paddocks because of the thick smoke that has enveloped Benalla from the still burning fires.

A total of 150,000 hectares of mainly native forest has been burnt in the past week. Tomorrow the forecast temperature is 39 degrees with northerly winds and dire predictions of impending disaster by everyone from Premier Bracks to the local hairdresser. Speculation of 600,000 hectares being burnt by the end of next week are reported.

A distinct feeling of déjà vu pervades, as North East Victoria went through the same sort of event in the Alpine fires of 2003 where 1.1 million hectares of mainly public land was burnt in 59 days of inferno that was unequalled, in area burnt, since Black Friday in January 1939.

It is difficult to comprehend for many people that we should be facing a potential holocaust this summer after the very recent disastrous fires of 2003. Ample evidence was presented at a number of inquiries into the 2003 fires that a lack of prescribed burning over a twenty year period had increased the fuel load in many areas of the high country of Victoria.

Athol Hodgson, a former chief fire officer for the then Department of Conservation, Forests and Lands presented submissions to the inquiries that followed the 2003 fires detailing the lack of prescribed burning over the previous two decades. This was not disputed.

The following is an extract of a paper that Hodgson delivered to The Eureka Forum in Ballarat in 2004:

Another top priority is to restore prescribed burning programs in forests. Immediately after the Ash Wednesday fires in 1983 the Government injected $1 million extra into the programs effectively doubling the money available for field staff to do the work. Yet the programs crashed. In 1992 the Auditor General found that the Department of Conservation and Environment had failed to achieve its planned fuel-reduction targets in three consecutive seasons and that those areas the Department identified as warranting the highest level of protection to human life, property and public assets received the lowest level of protection. And in 2003 the Auditor General found that since 1994, fuel reduction burning has never met the Department’s planning and operational fuel-reduction targets. In allowing that to happen, the Department ignored the truism heralded by Judge Stretton in 1939, repeated by Sir Esler Hamilton Barber in 1977 and further reinforced by the Miller Report on the Ash Wednesday fires in 1983, that fire prevention must be the paramount consideration of the forest manager.

The Government and the Department must lift their game. They must do so, not only in places where the priority is to protect life and assets. Those places are a very small proportion of the forest estate and to concentrate on them to the exclusion of the rest of the forests will lead inevitably to more feral fires. Prescribed burning has been done successfully in the past on broad areas to create forest diversity and reduce the damaging effects of wildfires. The practice had little community and no political support from the mid-1980’s until 2003 and was the reason why fuel management programs crashed in that era. That support must be won and the practice reinstated in our forests in a safe way.

…”that fire prevention must be the paramount consideration of the forest manager”.

This is not rocket science, but we as a community have lost the plot. We are so busy embracing the notion of protecting our forests that we cannot see the forest for the trees.

For goodness sake! How many times do we have to go through this before we get it right?

Figures supplied by the Department of Sustainability and Environment [responsible for fire management on public land] to the Auditor General show that 127,000 hectares were burnt in 2004 – 2005 in prescribed burns. This very mediocre total was one year after the disastrous Alpine fires of 2003. This is well below the 10 year average for burns of 200,000 hectares and even further behind the high points of prescribed burning in the 1980’s where totals of upto 450,000 were burnt one year and over 300,000 hectares were burnt in several other years.

We need to stop the blame game, encourage the Victorian government to adopt a proper scientific regime of sufficient prescribed burning that will deliver confidence in the management of native forests to lessen the impacts of fires in years of severe drought such as this year.

Governments and the community must accept that there is inherent risk in prescribed burning and that occassionally a burn will escape. To not accept this risk and to be overly prescriptive with protocols for burning operations will result in the situation that country Victorians will face this weekend; multiple uncontrolled wildfires in areas that have not had fuel reduction burns for many years.

Max Rheese
Executive Director, Australian Environment Foundation “

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My thoughts are with the communities in northern Victoria and also the communities of forest animals.

Pondering Peak Oil: Following Transport Fuels Forum

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James Ward, convenor of the Australian Association for Peak Oil and Gas Young-Professionals Working Group, recently attended a Forum in Adelaide on ‘Transport Fuels: Future Prices & Supply Security Risks’. Here is his very much abridged summary of proceedings:


“1. The most optimistic projection (from ExxonMobil) is for world oil production to start declining around 2030, with high prices expected up until then.

2. Statistically, based on the published uncertainty parameters within the US Geological Survey estimates, there is about a 60% chance that global oil production will start declining before 2015.***

3. There is great uncertainty about OPEC reserves and production capacity, yet the whole world is relying on OPEC increasing production to make up for the fact that most non-OPEC countries have gone into declining oil production.

4. Huge growth in China is making it a very major competitor in the global oil stakes.

5. Alternatives to crude oil are expensive and take a very long time to set up; some have dubious energy returns.

6. Australia is incredibly vulnerable due to poor vehicle efficiency, a high level of car dependence in general, and many households are particularly vulnerable due to high levels of debt and increasing interest rates.”

James has also commented that:

“Coal and gas will probably be used as substitutes for oil. Now, Australia’s reserves of coal are only good for a couple of hundred years at current consumption rates, and much less if we continue to increase consumption rates.

… We cannot predict the lifestyle or desires of future generations but I think it is fair to say that if we leave them with no energy resources then they will not be grateful. Or to put it another way, if we leave them with energy resources and they choose not to use them, they will not hate us for it.

I am more concerned about the “paradigm” we will leave to future generations than the physical resources. My children are currently set to inherit a socioeconomic paradigm in which economic growth is believed to continue forever, which is obviously not true (basic mathematics can prove this).”

James also brought to my attention a newly released federal Senate committee report on peak oil: http://www.aph.gov.au/senate/committee/rrat_ctte/oil_supply/.

James has asked my opinion on the various issues raised above, including my thoughts on the paper by Eriks Velins entitled ‘Responding to the Challenge’. A summary of the Velins paper follows.**

I will admit to often finding ‘peak oil’ arguments tedious. The idea that oil supply will plateau some time and that there may be a scramble to find alternative energy sources seems unremarkable. It is interesting to ponder how much oil is actually left and what alternatives already exist, but I find it difficult distinguishing the hyperbole from the fact while assuming that concern about global warming is atleast hastening development of alternatives

As regards future generations, I tend to think our children will be more upset that we let species like the Yangtze River dolphin and Sumatran rhinoceros disapear than that we used up all the oil.

Furthermore, I think concern about economic growth “forever” and resource depletion will become somewhat redundant once global population starts to decline which many predict will happen before the end of this century.

As regards the paper by Erik Velins, I can not agree that biofuels are of limited potential. I am not sure that biodiesel has a big future, but I am hopeful that production of ethanol will become much more efficient in the not too distant future.

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** You can read James Ward’s detailed notes on the Forum here: http://www.aspo-australia.org.au/References/Bruce/AIE-NOTES.doc . According to the ASPO-Australia website homepage, presentations from the various speakers will be uploaded soon.

Here’s a summary by James of a paper ‘Responding to the Challenge’, by Eriks Velins: Velins started off talking about the nature of the current crisis. It differs from past crises, in that right now the oil crisis is a result of systematic under-investment by industry and lack of government action (presumably he means the government needs to regulate the industry to make sure it invests for the future). A long term agenda needs to be set that includes the development of new engine and fuel technologies.

The responses to the current crisis from the oil industry are basically to keep supply and demand tight – OPEC producers don’t need any more money so it makes more sense to constrain supply rather than invest huge amounts of money and reduce the price. Another theory is that oil producers are anticipating a reduction in demand as cars become more efficient (eg hybrids).

Velins mentioned that OPEC quoted oil reserves have remained constant for some years despite continuing consumption (OPEC has a reserve-based quota system so a country has an incentive to overstate their reserve figures, the true values of which are generally kept a national secret). Also, different countries quote different figures for their oil reserves – some use the 10% confidence figure, others use the 90% one. Australia adds condensate to its oil reserves. So we don’t know how much oil we’re dealing with.

In the U.S., ethanol production diverts corn away from cattle feed, while in Australia ethanol would mostly come from wheat. In both cases, there is a complex problem with various interests. All in all, he said biofuels are of limited potential. He questioned the usefulness of alternatives like tar sands because of the energy required to extract the oil.

Velins mentioned that the timing of peak oil is now irrelevant as all predictions fall within the planning horizon of the majors. China could be in for real trouble as economic growth depends on energy growth. He then raised an interesting question: Why has the IPCC not factored peak oil into greenhouse gas forecasts?

Because of the limited potential for alternatives, oil and gas will remain the dominant transport fuels for some time, but the price will continue to increase. Governments must act now to prepare for a future of high transport fuel costs. We need “a good decade” to prepare, in terms of establishing the necessary skills and labour, and ensuring mobility. A great quote was that “the greatest skills shortage is leadership!”

Velins have a chilling view of the Middle East. Afghanistan was invaded by the U.S. under the motive of fighting terrorism but a “secondary” motive was stabilising a key piece in the Middle East energy puzzle. Ditto for Iraq. Iran is an interesting case because it is a traditional enemy of the Arabs, and is also an enemy of Israel. Iran has a proven missile delivery mechanism for nuclear weapons. If Iran acquires the oil-fields of Iraq, it could become bigger than Saudi Arabia and would be “the new superpower” of the Middle East. What would this mean for consumers?

His final comments related to market failure, which he said CAN happen. Taxation is an effective tool, eg in Europe where diesel was favoured due to fuel taxes and this encouraged more people to buy diesel cars (which are more efficient than petrol ones). Demand management like this is necessary. We need substantial investment in skills, supply security and most of all, education of the public as to the nature of energy supply & cost.

Points of interest: Because of an upsurge in resource nationalism (eg Venezuela, where Hugo Chavez nationalised the previously private oil industry), oil companies are actually lacking investment opportunities to the point where they are returning capital to shareholders!
The government response of subsidising LPG and ethanol is not useful because it doesn’t help alleviate demand, forces increased reliance on imports and is therefore bad for fuel security.
In response to the recent price hike, in Australia there have been declining sales in 4WDs and large vehicles in general – Velins pointed out that the biggest sufferers of the oil crisis could be the vehicle manufacturers.
There have been large ($billions) cost overruns on high-tech ventures (presumably he means enhanced oil recovery and similar) that have caused a reversion to older, proven technology.
Australia has a “voluntary” fuel efficiency target of 6.8L/100km for cars, and according to Velins it is currently more like 14L/100km, meaning efficiency needs to more than double in 4 years. In contrast, Japan’s target is 4.9L/100km.

***Interestingly, just this morning Rog sent me a media release from the Cambridge Energy Research Associates claiming: “In contrast to a widely discussed theory that world oil production will soon reach a peak and go into sharp decline, a new analysis of the subject by Cambridge Energy Research Associates (CERA) finds that the remaining global oil resource base is actually 3.74 trillion barrels — three times as large as the 1.2 trillion barrels estimated by the theory’s proponents — and that the “peak oil” argument is based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future.”

Of course, it is possible to get around without oil. I travelled for two day in this cart with my friend Sheila O’Connor (pictured) back in about 1986. My landrover had not run out of oil, but it did have a mechanical problem leaving us stranded along the Onilahy River near Sept Lacs in south west Madagascar. From memory we travelled just 80 kms in two days.

sheila on bullock cart.jpg
Shiela in the cart probably somewhere near Tanandava. We were on our way to Tulear.

Ian Mott is a great fan of the bicycle: https://jennifermarohasy.com.dev.internet-thinking.com.au/blog/archives/001478.html.