 | The Bullroarer - Friday 2 November 2007 | TOD: Australia/New Zealand | The Real ‘PPP’: Populism, Probity and Peak-oil in the River City’s Tunnel Deal |  |
67 comments on Part 2. The Future in Australia: The Next 13 years.
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Aeldric,
Correct me if I am wrong, but you seem to believe we will have a crisis which will turn out very rotten.
How about the following scenario:
- I sell my cars and buy a small fuel efficient car
- I go to work on a bike
- I will eat more healthy stuff and less meat
- I will isolate my house and put on a sweater
- If I loose my job, I will find another job
- I will not go on holiday with an airplane or car
- I will consume much less
- When visiting relatives & far friends, I will go by train
Seems to me PO is solved by then. The point is: Whenoil prices rise, this is what will happen.
Last but not least, you quote that after the collapse of the SU, a lot of people died. Please note that the population of Russia is still shrinking. But the mayor cause is alcohol abuse. They didn't die because of hunger.
Hi Richard,
My worst case scenario assumes that things will be "rotten" as you say, then get better. I give it a less than 50% chance of ever occuring.
My best case is pretty much the situation you describe, with one notable difference - regardless of which scenario plays out, at the end things will be different. We don't all just wear an extra jumper for a while, then go back to how things were. PO may get "solved", but that won't be enough. We need to learn that mindless consumption is not sustainable.
As for the quote that in Russia "a lot died", I had doubts about including that bit of the quote, as it jangled me too, but to stay true to Dmitri's message I needed to include it. You are right, hunger was not a major cause of death - I never suggested that it was, in fact I never discussed a drop in population in Russia at all. There was malnutrition, but not much starvation. The drop in population in Russia has other causes, including alcohol. Alcoholism is a problem in Russia - and always was. Dmitri feels that there was an increase in deaths due to alcoholism, crime and suicide and this increase can be blamed on the collapse. Is he right? I don't know. I wasn't there, but it seems plausible.
I will write part 3 with the Best Case last, so that I don't leave such a negative impression.
La "mayor" problema es la Tequila!!! LOL no seriously....
I'd really like to see if people don't keep their numbers down voluntarily when they're no longer captives of the Constant Growth religion, I think from Tikopia to the US's Great Depression you'll find that as with hunter-gatherers, people do regulate their numbers. The dramatic cases of starvation cannibalism etc were during "cliffs". Good examples being Stalingrad, that famine in Egypt you can read about on the net, etc.
Aeldric,
I'm not from Australia, but from Holland. Gas is here US$ 8.10, because of tax. NG that most people use to heat their home is equally expensive.
The good part is: A lot of people adapt to the high prices of energy by basically using less. For example: In the morning, a lot of people commute to work by bike. There is an excellent bicycle infrastructure and people actually use it.
All I can say is that high prices will push people to change their ways and they will do so rather fast. We shouldn't be too negative about it.
Hi Richard,
Yep. In Australia petrol prices bounce around a bit but it is around US$5 or US$6 per gallon (though of course we use litres not gallons), so I am not to worried that our US cousins will start to die if it hits US$4.
Aeldric,
Besides, some of them might benefit from the exercise ...
;-
Peak can take many shapes. As such, so can the consequences that unravel after it.
In a really bad scenario one may run out of: locally produced food, imported food, potable water, transportation capacity, jobs, money, security & economic stability. In a situation like this, riding a train probably will not help much.
Of course, it probably will not come to that (personally I give such a scenario a very low probability, but I can't _prove it_, it is a belief).
A good transformative scenario analyst builds a robust decision making model out of several possible scenarios and compares strategies and preparedness capability against all of them.
Preparing for one specific future scenario just raises the statistical likelihood of catastrophic failure on the preparer's part.
From the point of view of mitigation, risk management and opportunity preparedness, resilience through variety is the key.
Of course, if one likes to gamble and aims for the highest returns with highest risk, then it naturally makes sense to place bets on one scenario alone. This is a choice based more on personal traits than anything else (like rational comparison analysis), I believe.
As for Russia, the major cause of epidemic premature deaths is not alcohol per se. It is merely the final weapon of choice in the prolonged suicide.
The real cause is poverty and utter lack of hope in any kind of personal future worth striving for.
If we took 20 years to make this shift, then I would agree that it might work. Even 10 years in a crash program ala the Hirsch report. Let's examine these one by one;
- I sell my cars and buy a small fuel efficient car
Who will buy your car, and what would they do with it? How fast can the car making industry shift over to producing only fuel efficient cars? How much production per year after that will it take to replace the current fleet?
- I go to work on a bike
An excellent step. Can you convince several others to do the same?
- I will eat more healthy stuff and less meat
An excellent step. Can you convince several others to do the same?
- I will isolate my house and put on a sweater
Not sure what 'isolate' means. Sounds like an excellent step. Can you convince several others to do the same?
- If I loose my job, I will find another job
In times of high unemployment, such words are hollow.
- I will not go on holiday with an airplane or car
Good on ya. Can you convince everyone else to do so?
- I will consume much less
Of what items in particular? In times of high unemployment, this will not be a choice for the majority.
- When visiting relatives & far friends, I will go by train
What is the current carrying capacity of the train system now? If everyone wanted to do the same, how much more capacity would be required? How many years and how much money would be required to implement such a capacity change?
Now it is easy to say that you can make these lifestyle changes, but much harder to actually live them out. Can you make a pledge to live out these changes for 1 year? If so, could you keep us posted on your progress?
I've made similar lifestyle changes; passive solar house, powered by PV, vanpooling, conservation mindset with regards to energy and resource consumption, large vegetable garden, hybrid car used sparingly, biking used liberally. Bike touring vacations. Writing a book about the topics discussed in this article.
Good Job, Will!
People respond to example a lot more readily than they do to exhortation. When it comes down to it we are all going to have to be responsible to ourselves first in order to change, and its going to be difficult and full of little slip-ups and digressios. But the world is a much better place than it was only 150 to 200 years ago, when slavery and genocide were the status quo. Bob Ebersole
Will,
You seem to be very angry.
To respond to your questions: I don't have to convince anybody. The price of gas will do that for me. For instance: People keep their car on average for 5 years, so next time they buy a new one, they can decide: A big one or a small one. I'm very sure they will choose a small one, when gas prices are high.
One small remark: Why is every PO'er convinced that when oil supplies dwindle, we will have mass unemployment? We didn't have mass unemployment in the middle ages. Wouldn't it be more logical that we will have less unemployment, because productivity gains will be smaller?
Not every PO'er is - I for one think there is a potential for a huge boom as we completely retrofit our transport systems and industrial civilisation generally to a completely different model...
Admittedly I'm a small (but vocal) minority.
You seem to be very angry.
Certainly not angry; skeptical, but perhaps a bit too dismissive as you seem to be still in the early stages of denial. Let's just say your measures won't simply make impacts from PO disappear unless most do them. And a main point is that the infrastructure won't change overnight to enable a full shift away from air transport to rail, and we are stuck for at least two decades to come with the current new auto fleet's dismal fuel mileage.
To respond to your questions: I don't have to convince anybody. The price of gas will do that for me.
Note that even with gas prices high, demand keeps climbing. Don't underestimate lifestyle inertia. Too many people will cling to what they know and how they were raised, until the pain becomes too great. By that time, the economy will be in the tank.
For instance: People keep their car on average for 5 years, so next time they buy a new one, they can decide: A big one or a small one. I'm very sure they will choose a small one, when gas prices are high.
Car last on average 18 years now, so that means someone would buy your car (as you said you would sell it). Your 'old' car will be in use for another 13 years to come. If not, a new car would need to be purchased. If this were the trend for all of the SUVs, Pickups, and less than economical cars on the road, automobile production would need to ramp up more than double, which we all know is not going to happen.
One small remark: Why is every PO'er convinced that when oil supplies dwindle, we will have mass unemployment? We didn't have mass unemployment in the middle ages. Wouldn't it be more logical that we will have less unemployment, because productivity gains will be smaller?
Massive shifts in employment modes (i.e., back to the land), would mean a tremendous flight from the city and tremendous amounts of new homes close to the fields where people would be working. Knowing that PO will result in inflation, likely stagflation, with all of the inferred economic impacts, where will the money come from for all of this new investment in homes for newly converted farmers? Certainly not from selling the homes they had to practically abandon.
Everybody wants to believe that a shift over to non-petroleum based fuels will be a painless one, but we have to face the fact that PO won't allow us to live in a such a fantasy world. Can people take steps now to insulate themselves from the worst of it? Absolutely...
Will,
Well, this weekend I bought one of these
My wife thinks I'm crazy, but my kids think I'm the coolest dad on the block! I rock!
;-)
The thing costs 2190 euro so I better be. Any idea how much beer I can get into this thing?
btw, why do you think PO will cause inflation? Milton Friedman said that inflation is always and everywhere a monetary phenomenon.
Same question: All PO'ers seem to be so sure that PO will cause inflation. Looks to me then to be the perfect time to buy a very large, very expensive house ...
My wife thinks I'm crazy, but my kids think I'm the coolest dad on the block!
I would agree!
btw, why do you think PO will cause inflation? Milton Friedman said that inflation is always and everywhere a monetary phenomenon.
Inflation is simply defined as the overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index. When fuel costs rise, anything dependent on fuel costs will rise. As I believe you would agree, many, many items are affected in this manner, from the food we eat, to the price we pay at the pump, to goods delivered by truck, etc. The Netherlands are one of the least oil-addicted developed nations, so you may not see as much inflation as the US. $100 in 2000 dollars is $121 in 2007 dollars.
Many economists project oil price hikes to result in inflation, Stephen Leeb being one.
Buying a large house means you will need to buy lots of furniture to fill it up, but more importantly, it if is like most large homes, it will need much more fossil fuel to heat it.
Of course, if most developed nations lived like the Dutch, peak oil would have come 20 years later...
Will,
I know your explanation of inflation, it is the standard econ 101.
Milton Friedman, who won the Nobel price, argued differently:
Total amount of money
----------------------- = Average price
Total amount of goods
So if PO decreases the total amount of goods, that would cause inflation, right?
Well, only if the total amount of money stays the same. To reduce the total amount of money, the FED, ECB, BoJ, PBC, etc can sell state bonds and thus reducing the amount of money (and raising the interest rate in the process)
This is a very potent mechanism. We have been doing this the last 30 years or so and it works remarkably well.
Why should it suddenly not work?
While you are free to embrace the economic model of your choice, I don't invariably accept Friedman's explanation.
There are so many factors in play, such as the prime interest rate, liquid cash holding, amount of debt (national and personal), GDP, etc, etc.
Offering state bonds also presumes that they would be sold easily. The money acquired through bonds usually goes into government spending of some sort (roads, buildings, education, etc), which enters right back into the economy.
I must note that I am a staunch admirer of the Dutch low-energy lifestyle, and the large number carfree areas in so many of your cities.
I think you give the Dutch too much credit. People look alike all over the world, the Dutch are no exeption.
Hello All,
2190 euros for that ? Sorry to criticize, but why not just by a mountain bike for 200 and a bike-trailer for 300?
But now to the point, i.e. PO causing inflation, Stoneleigh over on TOD Canada, the guy who puts out the excellent finance updates every week, thinks we will first go through deflation and he speaks of it lasting years. Followed by heavy inflation.
Check out his posts, they are very interesting.
Ciao,
FB
I just saw myself as a true Grizzly Adams riding his cargo bike through town. Have to grow a beard though.
It's what people do when they are waiting for their midlife crisis.
I already have the porsche & the harley ...