Category Archives: Post Growth

Links for Week Ending 23rd February

Posted on February 23, 2013 | 5 comments
  • The Forward on Climate Rally organised by 350.org attracted 40,000 people on 17 February and received wide publicity. This prompted a lively discussion as to whether direct protests make a difference to potential climate change outcomes or not. I think I fall into the camp of David Roberts at Grist who believes that street activism has a strong part to play in countering climate change. An excellent piece by him arguing against the more wonkish incrementalist approach of the NYT’s Andrew Revkin is here, and a follow-up piece on where the movement should go post the Keystone XL pipeline decision is here. The U.S. climate change movement now appears to have last gained some grass roots activist momentum in the U.S. I wish the same were true in the U.K.
  • Stuart Staniford has an update on “All Liquids” volume output  and OECD consumption trends at his Early Warning blog. Output appears to have been on a bumpy plateau for about a year now.  Not surprisingly, oil prices have been creeping up again. As I always say, if the cornucopian belief in technology is to be proved right, and previously inaccessible hydrocarbons can be easily unlocked, we need to see rising oil volumes and falling prices. We are currently seeing flat volumes and flat to rising prices.
  • Given what is happening in the oil markets, I recommend peak oil observers keep abreast of the work of Michael Kumhof, a senior economic modeller at the IMF. I previously blogged on the IMF’s incorporation of geological constraints into its forecasts here. To get a direct insight into Kumhof’s work, take a look at an easily accessible 20-minute presentation he gave here. A more technical IMF paper covering these issues was published in October 2012 here.
  • Via Barry Ritholtz’s The Big Picture, this article in the English edition of Le Monde diplomatique charts the surge in financial investment into agriculture. The article is a bit messy in its arguments but the key, and I think basically correct, point is that more and more people will be shut out of food markets via price. Everyone should think hard about how they can hedge against this.
  • Another horrible and depressing paper about permafrost thaw from Climate Central. This is one of the ‘known unknowns’ that we are gradually ‘knowing’ a lot more about. And it is not good.

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Posted in Climate Change, Investment, Peak Oil, Post Growth, Resource Constraints

Links for Week Ending 16th February

Posted on February 17, 2013 | Leave a comment
  • Professor Jim Hamilton is one of the few economists to give peak oil considerations a proper hearing. Moreover, as one of the world’s leading econometricians and author of the popular text book “Time Series Analysis” he cannot be accused of not knowing his numbers. This last week he has posted twice on oil (here and here) on his blog Econbrowser that he co-authors with Menzie Chin. Frequently, in any discussion of resource depletion, the standard economics response is that ‘price begets supply’. Hamilton points out that such logic only extends so far for an exhaustible resource. 
  • Dana Nuccitelli has a good post at Skeptical Science entitled “A Glimpse at Our Possible Future Climate, Best to Worst“. It delves into two of the major climate risk parameters: climate sensitivity and emission paths. Other major determinants of climate risk are changes in the carbon cycle, methane release and the extent of climate-related economic impacts themselves. And that is just the ‘known knowns’ and the ‘known unknowns’.
  • Veteran observer of the Chinese economy Michael Pettis has long argued that China’s supercharged growth rate is unsustainable. Here and here are recent restatements of his belief that we face a great re-balancing. This has major implications for both climate change-related CO2 emissions trajectories and resource depletion rates.
  • The Washington Post asks why monetary policy no longer works and economies fail to grow around the world. Personally, I think the answer is no longer solely to be found in the study of monetary and fiscal policy. Jeremy Grantham, the ever-thoughtful Chief Investment Strategist at GMO is squarely in my camp, with his firm predicating strategy on a U.S. long-term growth rate of 1.5%. Against this background his analogy is “of the Fed beating a donkey (the 1% growing economy) for not being a horse (Bernanke’s 3% growing economy)”. Read his last GMO letter on decelerating growth and the impact on investment here.
  • Grantham references an article by Chris Brightman of Research Affiliates which pegs long-term U.S. growth rates at 1% due to trends in population, employment and productivity. If true, and we then add in the impact of resource depletion and climate change over the next two decades (the pivot decades for me), we could easily be looking at a no-growth U.S. economy by 2030-2040.

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Links for Week Ending 2nd February

Posted on February 3, 2013 | Leave a comment
  • This blog covers two subjects that have the potential to morph into existential threats to civilisation if various factors align. The two in question are climate change and resource depletion. Unfortunately, any consideration of existential threats have been viewed as the province of cranks for the last few decades—or at least of fiction authors with a taste for the dystopian. Now at last the topic is getting some respect with the establishment of the Centre for the Study of Existential Risk at Cambridge, England. The NYT has a good introduction here, and CSER’s web site is here (note the impressive line-up of founders and advisors—no cranks!). 
  • To the Financial Times’ credit, the dark side of the shale gas revolution is given some sympathetic coverage; for example, these articles on shale gas flaring here and here. This contrasts sharply with the Wall Street Journal, whose mantra appears to be “drill baby drill”.
  • Photographing Climate Change in the New Yorker show cases a committed few. I am reminded of Bill McKibben’s lament “where are the goddamn operas“. The artistic community often appears missing in action when it comes to climate change, despite the fact that global warming poses a monumental threat to mankind’s artistic endeavour.
  • The New York Times has a lovely article on “The Preppers Next Door“.
  • A thoughtful post by David Altig from the Federal Reserve Bank of Atlanta at his Macroblog on Robert Gordon’s ‘end of growth’ hypothesis.
  • Climate change was directly addressed in President Obama’s inauguration speech (what a contrast with the Presidential debates). But what could really change? Here is the somewhat gloomy view of Harvard’s Robert Stavins.

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Posted in Climate Change, Peak Oil, Post Growth, Resource Constraints, Technology

The Wealth of Households and Existential Threats

Posted on January 30, 2013 | Leave a comment

Among the plethora of statistics put out by governments around the world, numbers on household wealth are relatively rare. The Office for National Statistics (ONS) in the U.K., however, is an exception through its publication of a detailed household wealth survey. Moreover, the survey size is such that we are able to get a sense of the household wealth of the British nation as a whole.

The lessons that can be drawn from this survey are not limited to the U.K. In short, the survey highlights the link between economic growth and individual wealth worldwide.

And here is the result. Aggregate total household wealth in the U.K. was £10.3 trillion (click for larger image, original report can be found here) for the most recent survey period.

Aggregate Total Wealth jpg

Interestingly, the greatest component of household wealth today is pensions rather than property (click for larger image).

Breakdown of Aggregate Wealth jpg

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Links for Week Ending 26th of January

Posted on January 27, 2013 | Leave a comment
  • The San Francisco Chronicle has a must-read article for anyone exposed to low-lying U.S. real estate (here). 
  • On my bookshelf is a wonderfully written book by science historian and physicist Spencer Weart called the Discovery of Global Warming. Via The Big Picture, I find that The American Institute of Physics is hosting a user-friendly hypertext accompaniment to the book that tells you everything you need to know about the discovery of global warming.
  • Bjorn Lomborg is in the news again with an Op-Ed piece at the Wall Street Journal. Climate Science Watch does the debunking here. Lomborg, like Matt Ridley, appears to have open access to the Wall Street Journal’s pages. If you come to his writings with no background in the subject nor knowledge of primary sources, he appears persuasive. I must admit to having given a copy of “The Skeptical Environmentalist” to my mother as a Christmas present many years ago (before I saw the error of my ways). His arguments contain one part truthfulness, to one part falsehood to one part misrepresentation. At the end of the day, you have to rely on what mainstream climate scientists say about Lomborg’s views—which is that much of what Lomborg says is plain wrong.
  • I recently came across the Weatherdem blog. My type of blog: solid, concrete analysis coupled with a call to action. I am currently trying to get my head around the IPCC’s new Representative Concentrations Pathways (RCPs)—the CO2 emission projections commensurate with a certain level of greenhouse gas warming; Weatherdem has a good post explaining the emission paths here.
  • The two Bretton Woods institutions have been missing in action when it comes to climate change. Fortunately, one now “gets it”. The World Bank’s “Turn Down the Heat” report released in November 2012 is a watershed. Even more encouraging is that the president of the World Bank Jim Young Kim has thrown his authority behind the awareness raising. This article by him in the Washington Post could not be more clear. And it’s personal: ‘My wife and I have two sons, ages 12 and 3. When they grow old, this could be the world they inherit. That thought alone makes me want to be part of a global movement that acts now.” Bravo. Now if only the IMF could get on board (it’s current coverage of climate risk is desultory).

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The Institute of Actuaries and the Club of Rome

Posted on January 26, 2013 | Leave a comment

I recently blogged on one of the most durable of myths surrounding resource depletion. It can be encapsulated in the rhetorical question: “Didn’t the Club of Rome predict back in the 1970s that we would already have run out of oil?”

Being a rhetorical question, the speaker is using the question for effect—safe in the knowledge that the audience knows the answer is “yes”. Except, of course, the answer is “no”, the Club of Rome never said that. I have posted the relevant pages from “The Limits to Growth: A Report for Club of Rome’s Project on the Predicament of Mankind” showing what was actually said back in 1972 here. Better still, read the original book which can be bought here.

Nonetheless, the Club of Rome is still a source of mild ridicule. So then imagine my surprise when I discovered the most unlikely supporter of the Club of Rome’s “Limits to Growth” report: the U.K. Institute and Faculty of Actuaries (IFA). Actuaries are professionals who specialise in the financial impacts of risk and uncertainty. The professional exams required to join the institute have a fearsome reputation with respect to their difficulty. Further, my image of an actuary is of a stolid quant who would dismiss the idea of resource depletion out of hand.

However, in a report entitled “Resource Constraints: Sharing a Finite World“, we see this statement:

The Limits to Growth report attracted significant controversy and rejection of its scenarios, however the data available to the present day agrees worryingly well with the projections, as figure 1 below illustrates.

And this chart (click for larger image):

Actuary and Limits to Growth copy

Continue reading →

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Global Trends 2030: Futurology Fit for a President? (Part 3 Growth and Technology)

Posted on January 15, 2013 | Leave a comment

In my final post on the  National Intelligence Council (NIC) briefing for the  U.S. president called “Global Trends“, a report that covers potential risks to the United States 20 years ahead, I take a quick look at economic growth and technology as dealt with in the report.

In the Alternative Worlds chapter, the NIC considers four scenarios for 2030. The global GDP growth outlook for these scenarios looks like this (click for larger image):

GDP Share jpg

In my mind, none of the four scenarios look particularly pessimist. The NIC, however, describes the Stalled Engine scenario, under which the U.S. and Europe turn inward and growth slows, as ‘bleak’. Nonetheless, GDP has still gone from $67.3 trillion in 2010 to $105.7 trillion in 2030, an increase of 57%. China’s growth has slowed to 3% per annum. Frankly, I would be amazed if China’s growth hadn’t slowed to below 3% in 20 years time. Continue reading →

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Links for Week Ending 12th January

Posted on January 13, 2013 | Leave a comment
  • Desdemona Despair looks back at the year through 50 images.
  • While Prof Stephan Lewandowsky at Shaping Tomorrow’s World lists the 19 top climate events of 2012.
  • A lovely piece of journalism by Edward Platt in the New Statesman  covering Britain’s flood capital Tewkesbury.
  • Stuart Staniford’s Early Warning blog is consistently interesting. This week Stuart has some insights into CO2 emission paths (here).
  • Brace yourselves for food price rise in 2013 according to Liam Halligan in The Telegraph.
  • Joe Romm at Climate Progress flags the release of a draft of the U.S. Climate Assessment. I intend to post on this over the coming week.
  • One of my favourite authors, Jared Diamond, has a new book out called “The World until Yesterday”. A previous book of his, “Collapse”, is a must read for anyone who wants to understand the implications of a changing climate. A summary of the collapse theme plus a link to an excellent presentation on Youtube made by Diamond can be found at TH!NK (here).

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All Change for Employment?

Posted on January 6, 2013 | Leave a comment

Every month, the benchmark nonfarm payroll employment numbers are reported by the U.S. government and every month Bill McBride at Calculated Risk puts out a comprehensive post analysing the figures. The post (or rather posts) invariably include the following two graphs (click on either graph for a larger image):

Percent Job Losses jpg

Employment Population Ratio copy

Both graphs suggest that there is something about the current recovery that is different; in other words, Continue reading →

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Links for Week Ending 5th January 2013

Posted on January 5, 2013 | Leave a comment
  • NYT dates the start of the Great Recession from Q4 2007 and 5 years on has a great graphic showing the current state of play. No recovery to pre-recession levels in Britain, Japan, France, Italy and Spain. Has the end of growth already arrived in these countries?
  • The knock-on effect of earlier-than-expected Arctic sea ice melt will be greater-than-expected absorption of sunlight and, therefore, higher Arctic circle temperatures and faster-than-expected permafrost thaw. NYT highlights a study (here) confirming the first part of this causation chain.
  • National Geographic has a nice piece all about methane.
  • Since the economist Robert Gordon came out with his technological stagnation thesis earlier in the year, the flood gates have opened for economic comment in this area. The FT’s Izabella Kaminska has put together a wonderful linkfest on the subject at her blog Towards a Leisure Society.
  • The Oil Drum (TOD) is reposting its top 10 articles for 2012. Among them, I recommend Art Berman’s take on shale here and Ron Rapier on tight oil, shale oil and oil shale here.

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