<Potential Impact of Cantarell's Decline on Mexico's Oil Production The Oil Drum DrumBeat: July 15, 2006>

266 comments on The Course of Our Lives WILL Be Determined by the First Derivative of a Function

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Prodigal Son on July 14, 2006 - 10:51pm Permalink | Subthread | Comments top
I don't think it's that people don't understand, it's that they don't have the incentives to change their behavior.

Why did the folks on Easter Island continue to chop down trees when it was apparent that the cut rate wasn't sustainable?

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Halfin on July 14, 2006 - 11:28pm Permalink | Subthread | Parent | Comments top
Probably a lack of property rights in the trees, otherwise the owners would see the increase in value of their property as the trees became scarce, and reduce consumption rates. Of course, Easter Island was probably never a model of laissez-faire capitalism.
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Prodigal Son on July 15, 2006 - 12:26am Permalink | Subthread | Parent | Comments top
But trees are a renewable resource as they can be regrown.

Beyond that, my problem with your argument is that intellectually, we all recognize that there is only so much oil in the ground, yet price signals have sent the message of 'cheap oil' for decades and decades. We are only now getting the relatively weak signal that oil may be more scarce than we thought but, realistically, the same situation of exponential growth and a limited resource base existed well before the price-signal 'alarm' went off.

Why didn't the alarm go off before this when the same situation and logic applied? Oil was just as scarce, in the long-run, as it is today, yet the alarm didn't sound. In fact, it sent the signal 'all is well, continue as normal!' If you really buy into the Walrasian rational-market myth then this is a real anamoly that needs explanation. Why didn't the market forsee the eventual long-term scarcity of oil and price it accordingly in the decades before this?    

The only explanation is that the way we discount the future in economic decision-making means we grossly underprice non-renewable resources used today. Markets are too incomplete and information too imperfect for prices to adequately convey information beyond a few years. Ideally, if markets were perfect and information complete, the price you pay at the pump for a gallon of gas today would reflect the fact that oil will be incredibly scarce in 2050. The price would even take into account the probability of alternatives being developed through some sort of futures marekt.    

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step back on July 15, 2006 - 5:14am Permalink | Subthread | Parent | Comments top
But trees are a renewable resource as they can be regrown.

Ah. Clearly you have not read Jared Diamond's Collapse.
Let me give you a sneak preview.

No tree is an island onto itself.
Every tree is an integral part of a constantly maturing ecosystem.
Its roots extend into the ground to hold topsoil during rainy seasons.
Its leaves block sun from potentially competing weeds.
Its nuts feed the squirrels.
Its maple syrup makes the pancakes taste better.
Its branches are perches for migrating birds.
People eat bird meat.

OK. I admit it. I made up that bull about the squirrels and the maple syrup.
But Jared Diamond postulated that migratory birds were part of the Easter Islander's food source. They were killing off much more than they understood each time they chopped down another part of their "private property".

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Prodigal Son on July 15, 2006 - 10:51am Permalink | Subthread | Parent | Comments top
I've read Diamond's collapse. That still doesn't answer why they kept cutting does those trees.
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mbkennel on July 16, 2006 - 2:26pm Permalink | Subthread | Parent | Comments top

Because, in the short run, those with power and trying to gain it (for access to females) did better than their peers by getting one more damn tree.

People are biologically programmed to look at threats and competition with other people---and wild beasts---not abstract forces of nature.

Look at the hysteria from 9/11.  Compare to the 15,000 people killed by hot weather in Europe, with the knowledge that this, unlike 9/11 is guaranteed to increase in severity for "as far as the eye can see".

It took enormous suffering before people understood the problem of infectious disease and adopted correct assumptions.

People want to find the perpetrator, not the derivative.

Consider the viewership of "real crime" stories which infest all the news channels to the time devoted to physical and biological issues in the world.

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Nick on July 16, 2006 - 4:24pm Permalink | Subthread | Parent | Comments top
"Consider the viewership of "real crime" stories which infest all the news channels to the time devoted to physical and biological issues in the world. "

No question there's a genetic predisposition at work here to look out for predators, but the main thing making people watch crime stories instead of science is that the crime stories are much more entertaining.  People are stressed out, and they want relief (escape, encouraging stories, and entertainment), not boredom from bad science documentaries.

When science is covered in a way that's interesting, inspiring and encouraging, people will watch.  If it's boring, or depressing, they won't.

Why was Schindler's List a success?  It was educational.  It didn't whitewash the holocaust.  But people watched anyway.  Why? because it was entertaining, and inspiring.

I think we should have more respect for the intelligence of most people.  For instance, the public in the US is way ahead of the Bush administration on energy and the environment.  Think where they'd be if the media and government didn't work so hard to misinform them....

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step back on July 17, 2006 - 4:52am Permalink | Subthread | Parent | Comments top
Why was Schindler's List a success?  It was educational.  ... it was entertaining, and inspiring.

I think the real answer is because a critical mass of people started seeing it and everyone else wanted to be part of the mainstream stampeding of the herd.

(Why do you care what MSM says if not for recognition that being part of the "mainstream" herd is important? Why do you think Hollywood cares so much about the opening weekend proceeds if not for the stampede effect?)

I don't think there is that much rhyme or reason for why a movie does well or not. Part of it is just the whims of the fickle herd on a given weekend.

Look at this weekend's Box Office chart

11     An Inconvenient Truth     $1,112,000 $16,980,000
12     The Fast and the Furious $1,037,000 $59,724,000

In the number 11 slot we have Al Gore's Inconvenient Truth. It is educational.  ... it is entertaining (well kind of), and inspiring. But total gross is just under $17M

By contrast, the number 12 slot is occupied by a juvenile car racing (and gas guzzling) movie with a gross so far of just under $60M. It leaves Al Gore in the dust.

And who is in the number one slot position?
1     Pirates of the Caribbean: Dead Man's Chest     this weekend=$62,186,000     total=$258,205,000

Argghh maties. The pirates just blow away the competition. Well at least they use wind power rather than petro power to win the race.

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tstreet on July 15, 2006 - 8:03pm Permalink | Subthread | Parent | Comments top
Even if information was perfect, we would still have a high discount rate.  After all, this is the future we are talking about. What did the next generation ever do for me?  And, especially the one after that?  

Oddly, I am 59 and yet my discount rate is rather low.  That's the real puzzler.  

Solution.  Increase longevity, but cut the birth rate way back. If we had to live with the consequences of our lack of concern for the future, then perhaps we could lower that discount rate.

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Prodigal Son on July 16, 2006 - 12:42pm Permalink | Subthread | Parent | Comments top
Good point. :-) No one cares about a future they won't see.
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Halfin on July 16, 2006 - 1:02pm Permalink | Subthread | Parent | Comments top
I think you misunderstand his point. He said his discount rate is low despite his advanced age, meaning that he cares more about the future than most. And in fact, historically it is the elders of a tribe and a society who are seen as the wisest and having the most long-term view, who are entrusted with the decisions. Contrary to your statement, people do in fact care very much about futures they will never see.
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TrueKaiser on July 16, 2006 - 3:34pm Permalink | Subthread | Parent | Comments top
from what i have seen they are vastly out numbered..
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AlanfromBigEasy on July 16, 2006 - 9:30pm Permalink | Subthread | Parent | Comments top
The whole concept of forestry (with the exception of some southern pulp wood forests with 20 to 25 year cycles) is based upon "over the horizon" benefits for most decision makers (typically age 50+).  

Iceland plants over 1 million Siberian larches every year.  Time to harvest - 90 to 110 years (extrapolated from 1903 trial plantings).  Swiss stone pine takes 40 to 60 years before bearing pine nuts, yet almost 100,000 are plated each year, many around summer cabins.

The same is true in many areas of the world.

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Prodigal Son on July 17, 2006 - 9:04am Permalink | Subthread | Parent | Comments top
do'oh! You're right of course.
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slx on July 15, 2006 - 5:23am Permalink | Subthread | Parent | Comments top
When trees became more valuable, they would just cut them down faster. After all, the demand for status, hence, statues, hence, trees & ropes was insatiable.
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Prodigal Son on July 15, 2006 - 10:52am Permalink | Subthread | Parent | Comments top
ding ding ding, we have a winner!
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tom deplume on July 15, 2006 - 1:37pm Permalink | Subthread | Parent | Comments top
A while back there was a post the quite effectively debunked the idea that private ownership of trees would preserve them better than public ownership. Only a government which has alternate sources of revenue will preserve a forest for future sustainable use. In a monetized economy interest rates need to be extremely low, well under 1% to make a sustainable rate of forest use sensible. At any interest rate we commonly experience means that clear cutting the forest then living off the bank deposits is more profitable in the long run then waiting for prices to go up. Letting the trees live means running the risk of loss through drought, fire, and pests where as money in the bank is, you know. When there is high demand for a resource that is the time to sell as much of it as possible then invest the profits elswhere. That's why the Arab royalty have such nice houses in Switzerland.
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biologist on July 15, 2006 - 3:17pm Permalink | Subthread | Parent | Comments top
Actually, the current   r e a l   interest rate is only 1%:
inflation rate 4.2% (whole inflation, not the bogus core CPI)
10-year treasuries at 5.1%

>>>> real interest rate is 0.9 %.

Recommendation: plant American Walnut trees, start harvesting nuts after 10 years, your children will start harvesting wood after 40 years...

Conclusion: there must be something else in play psychologically, not only interest rates. Maybe 40 years is equal to "infinite" in our minds.

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Agric on July 15, 2006 - 5:24pm Permalink | Subthread | Parent | Comments top
I wholeheartedly endorse your recommendation, walnut trees are wonderful: nuts, oil, some medicinal and chemical uses, beautiful wood. While you are at it may I suggest you plant the odd witch hazel, holly, hazelnut and chestnut.

The current real interest rate is probably still negative:
http://www.shadowstats.com/cgi-bin/sgs

Interesting conclusion. I think you are right psychologically but I don't think the 40 year infinity is the real problem. I'd say it is selfishness: most people are happy to have what they want even if others (elsewhere or future) suffer more than they benefit.

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fleam on July 15, 2006 - 10:10pm Permalink | Subthread | Parent | Comments top
I think it's one measure of how abnormal and sick our present society is that our landscaping is almost entirely non-edible and non-useful. This is not at all normal for human settlements. Normal is for the plants that surround human habitations to be useful/edible. It just makes sense - if you're going to have a tree outside your hut for shade, why not get nuts or fruit from it too? Traditional societies that are settled at all tend to be surrounded with edible/useful trees and plants, and even hunter-gatherers tended to encourage the growth of useful plants and trees in places they frequented even if they were only there one season out of the year.
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odograph on July 16, 2006 - 10:53am Permalink | Subthread | Parent | Comments top
Didn't ornamentals start as a display by the rich that they didn't need to grow food, they could grow beauty?  So cities, homeowner associations, etc. still feel rich enough for that.  Should it change, they can be somewhat reactive.  We could even cut water use at the same time (a drip-irrigated orchard being more water/energy efficient than a lawn).
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odograph on July 15, 2006 - 10:24am Permalink | Subthread | Parent | Comments top
Why did the folks on Easter Island continue to chop down trees when it was apparent that the cut rate wasn't sustainable?

Would it be apparent to me, if I were born on Easter Island?  Let's say the island was at 1/2 the original tree density (or 1/10).  If that's what I was born into, wouldn't I think that was natural?  I might even think (or hope, or justify) that cutting a few more was sustainable.

We face the same problem today, but we can fight it with books and histories.  This book, for instance, makes a strong case a how far we have fished down the oceans from their natural state.  We should have a better chance than the Easter Islanders at getting the word out.

... I certainly hope that our ocean treaties and fishing limits are better than their forest treaties and tree limits (???) ever were.

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266 comments on The Course of Our Lives WILL Be Determined by the First Derivative of a Function

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