Michael Callaghan
Staff Writer
“There is simply no question that the risks here are beyond anything that any of us have ever dealt with.” These are the words of Robert Hirsch in the Hirsch Report,no commissioned by the United Stated Department of Energy, in 2004, to examine the effects and implications of peak oil on society and the economy.
The Economic and social implications of peak fossil fuels will force us to re define our economic system and it will become necessary to re – assess our pre conceived notions of what is economically and socially possible. In effect it will lead to a forced localisation of our economic activities, which will undoubtedly bring certain difficulties and hardships in the short run, however, if communities respond in a collaborative way to these new realities they can put in place the necessary mitigations to help build more sustainable and resilient communities which will stand the test of time. The alternative is simply frightening.
Economic Growth Dilemma
Climate Change, Biodiversity loss and the social and economic impacts of peak oil are only symptoms of another problem, that problem being economic growth. It is simply not possible to have finite growth on a finite planet, especially one which has exceeded its carrying capacity in an era where a larger number of people are placing an ever growing demand (both numerically and in the form of rapid economic growth in certain parts of the world) on an ever diminishing supply of natural resources. It has been said by some that we will never see an end to our current recession. How can this be so? For the last 150 years there has been a set cycle of economic growth and recession, quickly followed by subsequent periods of economic growth. However, for the last 150 years the global economy has had the benefit of an ever increasing supply of cheap fossil fuels. This is about to change. It has been estimated that after peak, depletion will proceed at 2 to 6% a year. If this is the case, we can expect to see further huge price increases coupled with a scramble among net importing nations for the dwindling reserves of major exporters. This makes these nations particularly vulnerable and susceptible to the economic impacts of price shocks.
Ireland, which imports over 90% of its fossil energy would be especially at risk, not least because of the huge role that multinationals play in our economy. If oil prices continue to rise at a rapid speed, it may quickly become unattractive for these companies to remain in Ireland. There has been talk for years of the possibility of creating a green energy economy in Ireland, a country that has the potential to become a net exporter of renewable energy. However, we may have run out of time on this one. The Hirsch Report, which describes our predicament as “truly frightening” suggests that we need a minimum of ten, but preferably twenty years, to put in place alternative infrastructure. Given the state of our current finances, and the likelihood that we are already at or are very near to peak oil, it is unlikely that such a huge investment programme has the possibility of being successful. Our current economic and monetary system is one which is dependent on long term economic growth. If this economic growth becomes impossible due to new rapidly emerging constraints, our entire economic and trading model may not survive long in a post carbon era. The challenge facing us is how to manage this shift in economic reality and how to build a more localised, sustainable, low energy economy.
What Can I do?
As an individual it is vital that you inform yourself about these issues. There is no doubt that what we are about to experience is has never been seen before. There is a great opportunity to re mould and re build our society, however this can only happen if there is a general consensus that our current system is one which cannot survive the post peak world. Our future plans and economic models should be assessed on the basis of what energy is available and how these energy sources are likely to develop, as opposed to the development of economic plans and models based on the energy that is needed for their workability, energy which might simply not be available.
It is important to try to imagine the world in five or ten years time when there has been a significant decrease in the availability of oil supply, coupled with rising prices. Ask yourself what does this mean for the global economy? What does this mean for Ireland? What does this mean for my local community, and most importantly, what does this mean for me? Now is the time to think about the type of skills that will be needed in the future. Will a traditional business or commerce degree, which focuses on the highly interconnected nature of our globalised world, be of more use that a knowledge of horticulture and craftsmanship? What role will these various skill sets play in the future?
It is important, especially for young people, to engage with the ongoing debate on how to over – come our current problems? Is our current economic predicament simply a banking problem that can be solved through a series of draconian budgets and bailout funds, or is it part of a larger more fundamental problem where the economy’s desire to grow is pushing against the economic limits to growth created by our environment? It is vital that young people engage on these issues as these are the issues which will dominate much of this century and failure to engage and to recognise the true extent of the problems could have catastrophic effects.
David Korten has described this period of change as “the greatest creative challenge the species has ever faced.” We can both engage positively with this period of change and build life boats to ride out the storm or we can simply hold out, close our eyes and hope nature will be kind!
