Monday, January 2, 2012

Erik Lindberg has cogent post on energy and world view, where he argues that economics (and all the vast politics that are built upon that economics) is coming to a kind of Copernican overturning.

In essence he looks forward to the current ingenuity-centered model of human progress being replaced by a more thermo-dynamic model.

In the established view it is an article of faith that the unprecedented growth of the last two hundred years is a result of human ingenuity that benefited from ever improving access to signals of supply and demand.  Add in growing, modernizing, educated, caste-less, democratic societies that use their human capital more fully and you had a recipe for an explosion of innovation and problem-solving.   Time and distance seemed to contract in the globalizing society.  We could ignore so-called natural limits:  when the soils were degraded or overwhelmed, we discovered chemical fertilizers; when we began to run low on water, we uncovered great fossil aquifers or constructed desalinization plants.  In the normal economic models, peak oil cannot be a serious problem, because we will find ways to replace the oil from our declining fields when the price incentive is great enough.

(There's another familiar critique to this model, namely that much of this apparent progress was built on -- and remains built on -- the extractions of colonialism and global inequality - but that doesn't really figure into this particular conversation.)

The thermo-dynamic critique doesn't doubt human ingenuity or the ability of supply and demand to set stakes and clarify incentives -- but it does pointedly thrust forth an elephantine caveat:  namely that oil is a exceptional case and a deal-breaker.  First, it is access to energy (more so than markets or social development) which has enabled progress.  The industrial age in particular has tracked exactly upon our ability to extract and harness fossil fuels, especially coal and oil.  Second, and more importantly, in strict thermo-dynamic terms there is no replacement for oil -- nothing so energy-dense, so easy to access and transport, or available on the vast scale necessary to keep our civilization running.  We can't just invent a replacement and the decline of this energy source requires a fundamental re-tooling of human society.  

Lindberg's view is that we're looking at a moment like Copernicus, not just because a fundamental change in world view is required, but also because the entrenched establishment has chosen faith over facts and will not perceive or anticipate the coming collision with natural limits.  We are not doing anything about Peak Oil (or climate change for that matter), because we'll solve that problem when we need to.  The idea that oil (or climate) is bound to permanently derail our civilization of growth and progress is not an idea that can be entertained by the model, and it is not an idea that gets aired in the media or policy circles.

So on the one hand, we have mainstream economic orthodoxy that more growth and dynamism (which  means using more fossil fuel) is the key to solving the problem of getting past whatever doldrums the global economy is suffering through.  Burning through our existing oil and coal is a good thing that moves us on.  On the other hand we have people in the peak oil and transition communities who see the current economic downturn as the first shudder of a true energy crisis, and are trying to figure out how to stretch our existing supplies as far as possible and invest them to create a low-energy civilization that can coast down off this century's huge, unprecedented explosion of oil and coal consumption.

I'm no expert in thermo-dynamics, but I am something of an expert in humans, their motivations and their societies, and I can recognize today's conventional wisdom as a tottering and maladapted world view.   I paid attention through the "" bust and the real estate bubble.  In both of those cases, there was all along a stench of bad math, mass hypnosis, denialism and optimism-faith that was striking.  Today that same unmistakable reek exudes from every economist that sits before a TV monitor and every politician standing confidently at the podium.

The people working on transition and peak oil may not be right about where exactly the future is headed, but today's economists and politicians are certainly, utterly wrong.