Sharon June 11th, 2009
Rock, meet hard place. Hard place, meet rock. Rock, over here is known as “the economy.” Hard place, on the other side, can be described as “our energy situation.” Because while green shoots might look awfully good to a lot of people who are desperate to have the economy go back to what it was, we should remind ourselves that “what it was” involved awfully high energy prices. Sure, some of it was speculation, and some of it was the Chinese Olympics, and some of it was the falling dollar. And of course, the good news is that none of those things will ever happen again…we don’t have speculators in the energy markets anymore, of course – we took care of that right off, nor does the dollar ever…oh, wait. But I can promise that Beijing won’t host the Olympics again for a while, if that helps.
$70 isn’t that bad, you argue. With the economy in recovery, we can afford our gas and heat bills, right? People won’t decide that they have to save for next winter’s oil bill. And this recovery is so solid that it won’t matter that tax burdens are headed up to compensate for falling revenues and increasing debt – people will have plenty of money to pay for gas and food and those higher taxes, now that new jobs are being…oh, wait. It also won’t matter that at higher energy prices, the stimulus money buys less stuff – asphalt paving prices go up, and they hire two fewer guys. The energy costs of all this highway work and other infrastructure investment goes up, the number of salaries goes down. But we don’t need those jobs that bad, right?
Nor will the volatility of energy prices and debt servicing matter – a couple of years of people never knowing if they will have enough money for a summer’s a/c, or a winter’s heat, if they’ll be making enough to cover their commute and daycare costs, whether they can afford enough food to keep the pantry full, whether the unemployment benefits will run out or be extended… none of those measures of insecurity will affect consumer behavior at all. We’re all going to go back to buying stuff. Nor will the cutting of credit lines, and the addition of bad debt to the balance sheets of the banks, or rising interest rates. And we never did care about the trade deficit, right?
Rock, you know Hard Place. Now, let’s meet Immovable Object. This is climate change – she’ll be with us all the time now. Think of the current situation as you trapped, rock on one side, hard place on the other, and immovable object is now suspended very slightly above your head. And oh, yeah, it can move after all – you can’t move it, but it can come crashing down and squash you like a bug.
Now one of two things is going to happen in the next couple of years – in the climate talks occurring in Europe now, in the painful negotiations with China, in Congress in the US and in Copenhagen. We’re either going to do something about climate change, or we’re not. And one of two results is possible if we do something – either it will be sufficient, or it won’t.
Now I won’t lay odds here on these two bets, although I think I could. But let’s consider just our choices. “Do something” on a scale that actually would matter, means that we face higher energy prices. I realize that a lot of climate activists don’t like to talk about this part, but the truth is the truth – even if we attempt to offset those costs for lower income people with carbon trading revenues or whatever, energy prices will go up. In general, I think this is wise – however, it will have an effect on the larger economy. Yes, yes there are dozens of studies that presume that shifting to renewables will grow the economy. Each of those studies assumes growth – assumes we’re going to be getting richer, not poorer as it happens. None of those suggest that renewable energies can fix our economic crisis. And, quite bluntly, a lot of those used energy reduction targets that were far lower than anything we have to actually deal with – the Yale study that showed growth across the board topped out emissions reductions at 40%.
Unfortunately more likely is that we don’t do enough soon enough – the Waxman-Markey bill making its way through Congress right now is a good example – they keep trimming emissions targets. Even though 80% by 2050 will, we know, absolutely not mitigate climate change, we’re now down to about 45% by 2050, as Charles Komanoff demonstrates. In which case, we’ll probably see a drag on revenues and unmitigated climate change. Goody.
Sir Nicholas Stern’s famed Stern report estimated that unchecked, climate change could cost every single world economy 20% of its GDP – that is, we’d be using one fifth of our GDP just to fix the damage climate change was causing (this was a world average – those people whose countries won’t be there anymore probably find it hard to create a GDP at all). The statistics are probably higher for the US, which as Joseph Romm notes, has more wealth on its coastlines than almost any other nation.
In four years, two American cities have effectively been destroyed – New Orleans and Galveston. What about the next one? What happens when it is Miami or some other major city? Besides the enormous human and communal costs, where will the money come from to rebuild, to evacuate, to deal with the economic costs? Anyone want to bet that we won’t see any more major hurricanes? Add on to that the little costs – the rising food prices from drought and flooding around the world, the costs of health care, of everything from new disease to increased low birth weight babies (yup, even that goes with climate change). Are we all set to grow our way out of that?
But even in the best scenarios, where we do limit emissions and get back down to 350 ppm, we cannot expect economic growth and radical emissions reduction simultaneously – they are are not compatible. Let’s say we do finally grasp how immovable this object is – and that we’re about to slam into it. Actually addressing climate change will require us to reduce total emissions by nearly 100% worldwide. We know that building out enough renewables just to keep up with basic needs will be a huge challenge, and may not be done fast enough to prevent a major energy bottleneck – moreover, as I keep pointing out, we may not be *able* to do this as fast as we’d like, even if we could build out renewables quickly – that is, since all our renewables are build with fossil fuels at every stage, we may not be able to do a massive buildout without risking crossing our tipping points – that is, we may have to say “ok, for the next decade we’re all going to do with a lot less energy, so that the future has some hope” and build out much more slowly. And we’re not going to be growing our economy.
Not to mention that fact that in such a case, where we allocate much of our fossil fuel production to a renewable build out, because we’re facing peak oil, we’re going to have to take the energy *from* somewhere – that is, we’re going to have to get our energy by not using it elsewhere – probably in the consumer economy. I’ve written much more about the fact that doing this would be a lot like WWII – no luxuries, no false usage, state controlled economy – than anyone has liked to admit.
I haven’t even talked about the ways that rock, our financial crisis, hits immovable object – because all of this requires enormous amounts of capital, and secure state economies. In order for nations to take on the enormous indebtedness required to push through this massive shift in our economy, we would have to have the ability to service that debt (each American now owes an additional 155K, btw), and buyers for that debt. Where is the money for this build out going to come from?
Rock, hard place and immovable object are going to continue to bang up against one another, and the space we’ve got to move in gets smaller and smaller – as does our hope of finding a way out. Roughly, our financial crisis makes it harder to finance the renewable energy we so desperately need to address both climate change and peak oil. Meanwhile, peak oil means that every time we start to climb out of the financial hole, we fall back in – we can’t grow without cheap oil, and we only have cheap oil when the economy is crashing. And climate change comes ’round and says “oh, and some of what money you do have will be needed to deal with me now – don’t plan on using it for anything affirmative, you’ll want it for the next city, or the next drought, or the next…” If we do address climate change, we push up energy prices, and create lots of ugly temptation for the government to take the revenues from cap and trade and spend them on debt servicing and bailing out rich people, rather than offsetting costs. High energy prices would be good – except that they come with high taxes, high price volatility for basic needs, high unemployment, high bankruptcy rates and declining credit, not to mention our energy intensive infrastructure.
Round and round and round she goes, and wherever she stops, we crash into something heavy and hard. My husband once said “isn’t it ironic that we’re facing all these crises simultaneously?” No, I don’t think it is ironic at all – I think it is inevitable – that is, as long as there was one way out of the hall of mirrors you could put off the crisis for a while, or at least, off thinking about it. That is, it seemed perfectly feasible to convert, someday, when we got around to it, to renewables as long as we were flush with wealth. It seemed perfectly possible to deal with the oil crisis as long as we were rich, and it was someday. It seemed perfectly possible to take on debt and build a credit card economy as long as we had energy to make the economy go. It seemed perfectly possible to address climate change, as long as we could switch to lower emissions natural gas and dig a little deeper… Again, I am reminded of the conclusions of the 30 year Update of The Limits to Growth – in most scenarios, the crisis point does not come because of one single thing, but because “the system runs out of the ability to cope.”
Our ability to cope has, to put it starkly, run out. I don’t mean that the end of the world is now here – I mean that we can no longer put off our problems. And we are stuck where we put ourselves.
Is there an out from this ugly trio? The only one I can see is this. If our ambitions became smaller, in proportion to our reality, we might be able to slip out of our trap in the cracks around our triple crisis. That is, if we acknowledged now that we cannot, as the Rolling Stones put it, get what we want, that we must settle for what we need, and content ourselves with the hope that our actions now can enable a decent future, we might be able to go forward.
The first item on that agenda would be a realistic assessment of what we need to do for climate change. The odds are this would be painful, and politically unpopular. And we need to do it anyway – emissions targets must be set lower and sooner, and while we can all hope that economic growth will magically begin, we must begin from the assumption that it will not. That is, we must cut much of our emissions simply by not making them. That means a massive shift in our society – ideally with tradable rationing as George Monbiot has proposed, which is the sanest of a lot of mediocre options. Thus, the poor who already make fewer emissions than the rich, get to trade off their emissions allotment, and get a little richer, if they are willing. But there must be absolute, strict caps.
The bailing of the rich and its corporations must stop – if we accept that economic growth in any sustained way is manifestly unlikely in the coming years, we can’t keep borrowing. So what money we spend has to be spent on protecting the people, and reviving the domestic and informal economy – because, after all, if people’s basic needs are met, growth itself isn’t as important – this doesn’t mean that such a contraction will be easy, but it can be far less painful than it will be. And the political difficulties could be navigated by a leader powerful enough to make the case for self-sacrifice for a larger goal. I don’t claim this is easy – merely necessary.
Finally, we would simply need to use vastly less energy, while gradually allocating as many of our resources as humanly possible to renewables and infrastructure investments, not primarily for the short term, but for the long term. We must begin from the assumption that all of our densest energy sources are in decline – we face peak oil, coal and natural gas, and that our supplies of all are uncertain – so reducing our reliance on these *and* preserving a supply of these valuable materials for the future is essential.
Most of us reading this blog have thought for a bit about the implications of needing less energy, and they realize that in and of itself, this need not be unmitigated suffering – that is, we are not going back to banging rocks together in caves. But we must invest our resources in making this possible, both at the personal and at the national, state and regional levels. And we need to make compelling the vision of the future that we are offering – hope for our children and grandchildren, vs. no hope; a simpler life, harder in some ways, better in others; an honest truth, with some good and some bad.
All this would entail convincing the American public that at this point, the most important thing we can do is to protect our future. We have done this in the past – in World War II, that was our narrative. We asked millions to risk death, to be parted from their families. Hundreds of thousands actually died for this goal. The story we were told is this – we face a vast and terrible threat, one that risks destroying everything we value, we must fight it with everything in our power- and your sacrifice now buys you a future. As Franklin Roosevelt said in 1941,
“We are now in this war. We are all in it all the way. Every single man, woman and child is a partner in the most tremendous undertaking in American history. We must share together the bad news and the good news, the defeats and the victories – the changing fortunes of war.”
I do not claim that getting the American or the world’s people to share in this project would be easy. I do claim that it is possible - every time I mention this many observe that we are now lazier, softer, more selfish than our grandparents ever were. And that may be true. But more than our grandparents, even, I think we long for meaning and purpose, for a vision of the future, even if it is difficult. Nor are we as soft as we like to say – Americans are very much invested in their own image of themselves as tough, as willing, as courageous - so invested that I have little doubt that they will rise to the occasion. I have no doubt this would be very hard. I also have no doubt it is possible.
That said, I don’t find it probable, much as I would like to, that our present leadership will lead us there. And there is a real chance that even if we made the shift, we might fail to mitigate climate change, we might fail to create a decent future – we’re pretty close to the edge here. But then again, we might have failed in World War II as well – at the start, it seemed very unlikely that Britain would not fall to the Germans at the very least. The fact that you might fail might not be as important as we think it is. In the end, if we face up to our realities, and acknowledge them, the very best any of us can do is everything we can.
Our present position, is, to put it mildly, unenviable. We are trapped, proverbially, between rock and hard place, with immovable object pressing down on top. We have squandered our chance to find the easy ways out, and our best options aren’t that appealing to most of us.
The only possible case for them is that they are real. That is, that outside the world of fantasy, outside those invested in raising consumer confidence or denying our ecological predicament for their own purposes, we have the choices we have. Nobody chose this. Nobody wanted it, and yet, it happened, and we allowed it. And now, we go from where we are. Or we do not, and we never go anywhere at all worth going – we spend the rest of our lives in a trap, with the walls slowly moving together.
Sharon
), in the coming weeks, but I think first we have to understand what it is we’re facing.