AN ECONOMIC BIG PICTURE OF PEAK OIL
THE ENVIRONMENT AND THE ECONOMY- NO SEPARATION IS SAFE
Realizing this truth that our existence as a society is based on gathering energy from our environment drives the point home that the environment is not an afterthought or just another issue on the side. The environment is central to our economy security and very survival. That is why it is a grave and backwards mistake in priorities to make environmental / ecological economics into a marginal subset of the academic discipline of economics to be pushed aside from the significance it deserves. The environment in fact is our economy and it has been since the dawn of time. Until relatively recently in human existence environmental economics was in fact the only form of economics.
The financial meltdowns marked by the year 2008 have been disturbing and unsettling to many hopes and dreams. But the environmental peak oil and natural resource crisis is much more terrifying on an existential level. If taken to its logical conclusion ecological overshoot with a collapse in energy supply is threatening to the most basic safety net to our existence. If the stock markets have fallen and much of the credit is frozen what has really changed in a physical sense? Many of us may have less monetary capital due to financial upheavals, yet the amounts of natural resources we have are still physically present regardless. Since the financial crisis began it has sucked money supply into an economic black hole and has put on hold many opportunities for great social progress along with it. But if an environmental peak oil and natural resource crisis reaches a full blown scenario we would lose the entire underlying basis of the economy itself and the means of our very survival. There are many economic resources for us to utilize now which the tentacles of the financial crisis can not take away from us: our skills, our knowledge and productive capacity. These are the forms of capital we will utilize to work together in ways to offset the worst consequences of the twin crises of peak oil and global climate change. The feared consequences of global climate change threatens to suck our ecological capital into a black hole in the form of droughts, floods, crop losses, losses in biodiversity, loss of ecological resilience, rising seas onto major coastal cities, poverty, starvation, resource wars and so on to the point where it is useless to try to put a dollar value on the total costs. And to put it bluntly we only have a narrowing window of time for the needed preventative measures. Even in a lousy economy we absolutely need to do a new Apollo Energy project, as it will provide countless jobs and economic stimulus. Most of all, it will allow us to have a chance that our economy will not go from sluggish to depressed in a “long emergency”.
THE MAGIC OF ENVIRONOMICAL FUSION
The connection between the environment and the economy highlights how dangerously wrongheaded it is to frame administrative infrastructure for environmental protection as if it were some luxury we can not afford in this time of fiscal austerity.
For this purpose there is no idea more magical than the fusion of the environment and the economy. There is nothing more relieving than breaking out of the false dichotomy of jobs vs. spotted owls. The perception that environmental concerns and economic development are separate or mutually exclusive issues is a big wedge that threatens to divide the very blue-green alliance coalition we see emerging.
This is seen in the Republican excitement in late 2011 over forcing President Obama to make a yea- or nay decision on permitting the Keystone XL pipeline- to box him into “a damned if he does damned if he doesn’t” environment vs. labor false dichotomy.
We have an economic crisis to the same deeply embedded extent that we have an environmental crisis and therein lay the complication. The financial-economic crisis and the ecological crisis when combined present a mutually reinforcing double threat on an unprecedented global scale. That is why instead of a divisive choice between addressing either economic or environmental crises, we can resolve both of them together “environomically”. With the magic of the green-collar economy we have the means to do well by doing good and make room for a general solution to resolve both crises at once. It is inspiring to hear green jobs advocates to paint a picture of a green gold rush that we will all profit from in order to channel the magic from the fusion between environment and economy. This is an inspiration that we could all welcome to whether through our times and to direct a key level understanding.
Here are some encouraging findings to back up this point.
For every million dollars invested across a range of clean energy projects, including renewable energy, transit, and energy efficiency an average of 16.7 green jobs are created. NOTE 1
That is over three times more favorable than spending the same amount on fossil-fuel industries where an average of only 5.3 jobs per million dollars is created (NOTE 2 )
The median salaries for the green job sector are $46,343 or $7,727 more than the median wages of the overall economy. Nearly half of these green jobs are employable for workers with a less than a four-year college degree.
The clean energy sector of the overall economy has been growing at an average rate of 8.3 percent annually; nearly double that the growth rate of the overall economy from 2003 to 2010. Solar thermal energy has had an especially successful expansion of 18.4% annually.
The overall understanding to be built is that the best ways to fix the planetary emergency are also the best fixes for the economic meltdown. Nowhere does this become clearer than with an understanding of peak oil. We see falling wages, job insecurity, growing inequality, decaying infrastructure, a tattered social safety net, a stagnated standard of living etc. In a bold statement, the same green policies that address the long-term environmental crises are the same economic medicine for the short-term crises. The true political wedge issue is not between the jobs and the environment but between a long-term consideration and short-term emphasis. Ecology is long-term in its values while the economy has a “we have got to compete to stay afloat” type of short-term urgency. Yet it turns out that there are short-term competitive reasons to “go green” as well. The magic of environomical fusion is speaks loudest when going green is not just the realm of generous altruism or visionary idealism but speaks to pure self-interest as well.
Linking the mitigation of environmental concerns to the resolving of economic concerns in a New Apollo project/ Sustainability Transition fills the void for the desperately needed initiative 1: to unite us all into a common mission on a macro scale and 2: to revive local communities on a micro scale. When the truth about peak oil is factored in, a New Apollo Project/ Sustainable Transition is the only genuine way for competitiveness to last into the future and as a bonus it provides the ideal mission to unite our communities around.
If the citizens who are already concerned specifically about peak oil see that the community around them is building a new sustainable foundation for our society then it be relieving to so many of their greatest of the worries. The greatest worry is the one that our window of opportunity to save what is best about our civilization will be missed. The critical point to pry open the window of opportunity is to channel the economic crisis in a way that kick-starts rather than derails green stimulus plans around the world.
REALIZING THE ACHILLES HEEL OF THE ECONOMY
No conversation about the economy can be intellectually honest unless oil dependency is addressed. There is an abundance of evidence from history how petroleum dependency is the Achilles heel of the entire economy starting with the price spikes of the 1970’s. Because petroleum has sunken its hooks of dependency into nearly every aspect of our lives, its dramatic rise in price has the potential to send the entire economy into a tailspin of stagflation: A recession in economic growth at the same time as runaway inflation; when prices keep going up while job availability numbers keep going down. The economic meltdown following the oil price spike in the summer of 2008 was a case in point.
Realization of the simple economic truth that energy is the foundation of the economy goes a long way to granting peak oil the laser-like focus of attention that it deserves. Since it takes energy to make anything, the prices of everything go up when the price of the underlying energy skyrockets. When consumers stop buying, employers hold back on making job offers and fewer people gain earnings. If people are discouraged from producing or selling goods due to depressed consumer demand, then how would entrepreneurs be encouraged to invest, and how would companies grow? If prices of key resources become the limiting factor to economic “growth” then the answer to innovation is toward production of goods that more labor intensive but less resource intensive than the typical throwaway items. This is the start of the creative thinking behind the multi-level solutions to our crises. The creative thinking put forth on environmental economics is so mesmerizing; if only it was not such a struggle to fend off dangerous economic ideas that threaten to keep us going in the wrong direction. If only the dangerous economic ideas would not eclipse this creative thinking then we could have an undiluted public demand for a space-race type new energy Apollo Project that uses the profits of Exxon-Mobil and the rest of the “greenhouse gangsters” to fund it.
NOTE 1 http://www.peri.umass.edu/fileadmin/pdf/other_publication_types/green_economics/economic_benefits/economic_benefits.PDF
NOTE 2 - By , (Top 10 Reasons Why Green Jobs Are Vital to Our Economy Millions of Competitive Jobs Created and Sustained “September 7, 2011 http://www.americanprogress.org/issues/2011/09/top_ten_green_jobs.html
NOTE 3: (Sizing the Clean Economy: A National and Regional Green Jobs Assessment) Report | July 13, 2011 http://www.brookings.edu/reports/2011/0713_clean_economy.aspx