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We may be in the grip of the worst economic upheaval for half a century, but the UK is still at heart a forward-looking, modern economy, isn’t it? Smogs and satanic mills are things of the past and we have a model that is resource-light and service driven, don’t we?
Perhaps not. In the UK for the first quarter of this year, £1 in every £4 paid in dividends to shareholders came from a single industry: oil and gas. And, from that sector, just two companies – BP and Shell – accounted for the vast majority.
If the banking crisis taught us one thing, it is that putting too many of your economic eggs in one sector’s basket is a very bad idea. In banking it was a bad idea because they practised Narnia-nomics (which is probably a slur on Narnia). With the oil and gas sector it is a bad idea for two reasons, which may seem contradictory: the products are both very damaging and have no long-term future. Unfortunately, however, there’s still enough oil and gas left to cause more damage than the planet can handle (and an awful lot of coal, which people may turn to as the other fossil fuels become more expensive and harder to get).
Where the damage is concerned emissions continue to drive the loss of a climate system conducive to stable, flourishing societies. A combination of steadily rising greenhouse gas concentrations and temperatures suggest that in around 78 months we will enter a new, more dangerous category of risk for creeping climatic instability, reason enough perhaps, to disinvest in fossil fuels.
The second reason is that an economy so hard-wired to the oil and gas sector is hitching its future to a long-term loser. We are already decades past the point of peak global oil discoveries, and on the cusp of the peak of oil production.
A new assessment of 14 forecasts of global oil supply underlines how the short-lived empire of oil is already well into its dotage, with the end in sight during our own lifetimes.
Some speculate that the moment at which production levels-off and begins its inexorable decline is already with us. If so, it may be only the recession, which temporarily reduces demand, that is hiding it. Several more forecasts suggest it will happen over the course of this decade – mere seconds away in the calibration of economic planning. Crucially, the study concluded that no credible forecast could put the date more than 20 years away.
Expect to see repeats of BP’s disaster at its Deepwater Horizon rig as companies seek to extend their lives of by exploiting ever-more marginal and hard-to-get reserves. Accidents happen when limits get pushed and an industry becomes increasingly desperate.
While companies like Shell, BP and Exxon may dominate the current economic landscape like leviathans, it is a feature of the end of empires that they seem permanent (especially from within) until, suddenly, they are gone.
All the more important, then, to plan for the inevitable. This is starting to happen. As the peak, plateau and decline of oil production approaches, its price will rise dramatically. Companies that are heavily exposed or, in other words, dependent on the old oil economy, will be at risk. Thinking back to the oil price spike of 2008, the ratings agency Fitch recently reassessed a range of industrial sectors for how vulnerable they will be when oil again knocks on the door of $150 per barrel. Airlines, trucking, chemicals and various consumer goods sectors look to be in big trouble. But railways and renewable energy cash-in.
It’s not just the coasts of the Gulf of Mexico that have fallen victim to our economic dependence on oil, its the climate that we depend on, for example, to grow our food, and will soon also be huge chunks of the economy.
The quicker we arrange a separation between society, the economy and the oil and gas sector, the better. This era-defining problem falls on the watch of the new coalition government. They could start by substantially capitalising the proposed new green investment bank and turning the taxpayer-owned Royal Bank of Scotland – that once proudly called itself the “oil and gas bank” and is still up to its neck in fossil-fuel financing – into a Royal Bank of Sustainability. More or less we have just the lifetime of this parliament to get money out of oil and into renewables and low-energy infrastructure.
After the bank bailout, we were left with the question, “where did the money go?”. At least if we put our resources into the great transition away from fossil fuels there would be tangible results. We would be looking at a great wave of new employment opportunities, more energy security, a less vulnerable economy and the chance for a better future.
78 months and counting …
The capture and the long-term storage of CO2 is now central to plans for reducing CO2 emissions from large-scale fossil fuel uses. But new and controversial research argues the storage potential of CO2 may have been overestimated.
Carbon Capture and Storage (CCS) involves the capture of the greenhouse gas CO2 produced from the combustion of fossil fuels. The captured and compressed CO2 is then transported to a location for long-term storage. While several proposals for the storage phase exist, geological storage has received the most attention. This is partly because it is believed to have the least logistical constraints.
While discrete components of a geological CCS system are mature, there is a broad consensus [subscription required] that significant technological and cost improvements are necessary for commercial CCS deployment. But in the absence of large-scale CCS demonstration plants, the technology is still surrounded by a haze of uncertainty such as cost and speed of deployment.
Adding to these uncertainties, a new study published in The Journal of Petroleum Science and Engineering argues the potential for geological storage has been significantly overestimated. The results have prompted a very public and highly technical spat. A large body of experts from industry and academia have now contested the paper’s claims. Read the rest of this entry »
I can’t recall the last time I’ve seen a pure blue sky without the tapestry of contrails that sketch out the invisible highways of the global aviation network.
The reality of the closed airspace due to the volcanic plume from an eruption near the Icelandic glacier Eyjafjallajoekull (pronounced aya-feeyapla-yurkul) hit me whilst strolling back along the Southbank on a warm spring Sunday afternoon. As I walked along the river, the world seemed strangely calm. The overhead roar of jet engines from aircraft as they march with military precession along the flight path to Heathrow, were conspicuous by their absence.
But, such events also reveal that we are hugely dependent on what often seems like hidden infrastructure, woven together to create an intricate web of interdependence across the globe.
Today, new zero-carbon energy company Lemonadability launches the first electricity tariff, fuelled entirely by lemons.
CEO and Lemonadability founder, Arthur Citrus says, ‘ it came to me one evening after a Gin and Tonic. I’d become increasingly worried by climate change and peak oil. And then it suddenly it dawned on me – in my school days we carried out an experiment with a zinc and copper electrode and a lemon. We made enough electricity to light up a small LED. And it just went from there.’
Reassurance is fine as long as it’s well founded. And in the midst of fears about gas supplies and the panic buying of food Gordon Brown is hardly likely to scream that we are all doomed. It is, after all, his job to tell us that all will be well. But will it? People were shocked at the scale of social breakdown when Hurricane Katrina revealed a long-term, creeping erosion of civic resilience. Are we just waking up to the fact that several wrong turns have left our essential supplies much more vulnerable than they need to be?
In 2004 Britain ceased to be able to meet its energy needs domestically. Since then our dependence on imports, particularly of natural gas, has risen dramatically. The situation can only worsen as gas is subject to the same iron law of depletion as oil, and its moment of peak production lags not far behind.
Similarly, Britain’s ability to feed itself has been in long-term decline, and food prices are reportedly rising in the cold spell. It was only two years ago that droughts in Australia caused a crisis in world grain supplies; in April 2008 food crises affected at least 37 countries and there were related riots in many. As climate change and volatile oil prices destabilise global agriculture, we are becoming more dependent on food and energy imports just as the geopolitics of both make it less likely that the world will generously meet our needs.
This year is the 10th anniversary of the fuel protests, when supermarket bosses sat with ministers and civil servants in Whitehall warning that there were just three days of food left. We were, in effect, nine meals from anarchy. Suddenly, the apocalyptic visions of novelists and film-makers seemed less preposterous. Civilisation’s veneer may be much thinner than we like to think.
Part of the problem lies in the infrastructure that emerges from a market system focused on narrow cost savings. The result is easily disrupted just-in-time supermarket food supply lines, and a risky assumption that anything we need can easily be bought on global markets. The latter becomes problematic when in response to global shortages, governments around the world understandably choose to meet their domestic needs first. In Britain, not only are our strategic fuel reserves low by international comparison, our strategic food reserves are history.
One response to the vulnerability revealed in 2008 has been the rise of the so-called land grab. Several wealthy countries and companies have targeted up to 20m hectares of productive farmland in poor countries for acquisition and control. In Madagascar, public outcry led to the government’s fall.
As a child I was quietly haunted by Doris Lessing’s book The Memoirs of a Survivor. Society had broken down, and people were on the move, displaced amid an increasingly brutal disorder. The presiding government was useless but just about able to “adjust itself to events, while pretending probably even to itself that it initiated them”.
Events are revealing that many of the things we take for granted, like bank accounts, fuel and food, are vulnerable. If we value civilisation, the litmus test for economic success should not be short-term profitability, but resilience in the face of climatic extremes and resource shortages. When Gordon Brown meets Cobra, the civil contingencies committee, this week, item one should be the transition to a more sustainable food and energy system.
The good news:
- An inventor has developed adjustable glasses which could bring better vision to a billion of the world’s poorest people: Josh Silver, a professor of physics at Oxford University has created glasses with lenses that can be “tuned” by the wearer using small knobs, eliminating the need for prescriptions or specialist equipment. Silver’s idea is stirring example of how simple technological interventions can sometimes be the most elegant. Small is beautiful after all.
- A campaign has been launched to encourage people in the rich world to donate 10% of their money to help the poorest people in the world. Once again proving that there are academics who venture beyond the ivory tower, moral philosopher Toby Ord (again, from Oxford University) has pledged to give away a third of his £30,000 a year salary this year, with 10% year on year after that. His new website – Giving What We Can – allows visitors to enter their post-tax earnings, to see where they rank in the global rich list, which is adjusted for Purchasing Power Parity. It then calculates the number of lives that could be saved or school hours bought with your donation, and suggests a handful of very effective and targeted aid agencies to support. Of course, at nef we believe that there won’t be a way out of global poverty unless we very quickly put a stop to climate change, and introduce fundamental changes to the global financial system. But working to change the economy shouldn’t stop us from donating to save lives here and now.
- There is still a chance of a climate deal at Copenhagen. Less than a day after Barack Obama announced that he didn’t think there was enough time to secure a global deal on climate change mitigation at the UN COP15 in Copenhagen, Chinese president Hu Jintao and Obama issued a joint statement promising to press for a deal next month.
The bad news:
- Peak oil is closer than we thought, due to deliberately distorted figures, according to a senior official at the International Energy Association. The Guardian reports that the whistleblower has accused the USA of forcing the IEA to “underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves”.
- The average global temperature is likely rise by 6°C by 2100 if no action is taken according to an international study from the Global Carbon Project. Mark Lynas, who compiled scientific research on this subject for his Royal Society prize-winning book Six Degrees, writes that amount of warming would “cause a mass extinction of almost all life and probably reduce humanity to a few struggling groups of embattled survivors clinging to life near the poles.”
- Lord Griffiths perpetuates the myth that inequality is somehow ‘good’ for us.The Conservative peer – who is also the vice-chair of investment bank Goldman Sachs – tried to justify the bonus culture of the City by telling an audience that “inequality is a way of achieving greater opportunity and prosperity for all”. Richard Wilkinson, of the Equality Trust, provided a rebuttal, while nef‘s own research in The Great Transition shows that inequality could cost the UK alone up to £4.5 trillion over the next forty years, because of the social problems it causes.
We live in bittersweet times. On the one hand, we face multiple challenges, crises and threats, from climate change, economic instability, growing social inequalities and resource depletion. On the other, we’ve got a real chance for change in the way we think about economics, the things we value and what really matters to us as societies and communities. It’s with this bewildering and complex dynamic in mind that I bring you Friday’s over-simplistic Good News, Bad News.
This week, the good news is:
- Carbon emissions have decreased by 3% from 2008 levels, because of the recession. This is the sharpest fall in emissions for 30 years, according to the International Energy Association.
- E.on will not be building a new coal-fired power station at Kingsnorth, at least for now. While pressure from climate campaigners may have had a impact, the company cited the recession as being the main reason for shelving the plans.
- Income inequality is now coming under the political radar of the Conservative Party. The painstakingly thorough work of Richard Wilkinson and Kate Pickett of the Equality Trust has shown that countries with less inequality are generally stronger, safer and happier places to live. nef held fringe events on inequality, featuring Dr. Wilkinson, at all three party conferences.
The bad news:
- Peak oil is still likely to hit us within the next ten years, despite recent discoveries of new fields in the Gulf of Mexico, says a new report from the UK Energy Research Centre.
- British people say they wouldn’t give up their flights to help the climate. A study conducted by Loughborough University found that fewer than 20% of people said they were trying to reduce the number of flights they took.
- The Conservative Party are putting corporate lobbyists up for parliamentary seats. An investigation by the Times newspaper found that over a fifth of the Conservative Party prospective parliamentary candidates most likely to gain seats in the next election are or have been involved in corporate lobbying or public relations.
Regular readers will have no doubt wondered what has happened to the nef blog in recent weeks. Truth is I’ve been on holiday. Although perhaps ‘holiday’ is too strong a word, given that my colleagues have teased me for giving up my hard-earned annual leave to do a course in environmentally-friendly land management. Perhaps I should take it as a compliment: getting mocked for being too much of a greenie at nef of all places shows that I must be doing something right.
I mentioned a while back that the practice of permaculture might hold some answers to our present predicaments around energy, climate change and looming food scarcity. Now, having spent two weeks in the Forest of Dean actually studying the thing, I feel knowledgeable – or foolhardy – enough to attempt to explain it here.
Permaculture was first developed during the energy crisis of the mid-seventies by two Australian scientists, David Holmgren and Bill Mollison. Its name stands for both permanent agriculture and permanent culture: a way of growing food and organising human life in a manner that is genuinely sustainable. Permaculture seeks to be fossil fuel free: while organic agriculture dispenses with pesticides and fertilizers, it still relies on diesel to run farm machinery and operates on a similar scale to conventional agriculture. When oil becomes expensive and scarce, even organic farms will feel the pinch. To many, it is hard to imagine how we could even grow food without the help of oil. We certainly wouldn’t be able to return to a life of hard physical labour to get our daily bread: most of the knowledge and physical strength simply isn’t with us anymore.
Permaculture’s answer is a fairly simply one: rather than struggling against nature, either by hard labour or with big energy input, aim to work with it by designing food growing systems which mimic natural ecosystems. This means creating more or less closed systems, where human input is kept to a minimum (read: less work) and all outputs are used in a productive way (read: no waste). Permaculturists always avoids monocultures. Diversity – an important aspect of natural ecosystems – is used to create beneficial relationships between different plants, people, animals and other aspects of the land and living space.
Imagine you have a house at the top of a slope. You dig a pond beside it, because this will reflect light into the house, meaning you need to use less energy. And because the pond is at the top of the slope, you can use its water to irrigate vegetable gardens and orchards at the bottom of the slope. The pond will provide a habitat for ducks, who you will periodically invite into your vegetable garden so that they can go on slug patrol. You can also dig a trench coming out of the pond and fill it with reeds. This can be used to filter gray water (waste water from sinks, showers and baths), cleaning it for later use. In the pond you might also have some carp, who feed on tiny animals in the water, turning unusable protein into a human food (fish). On one side of the pond you grow willow, which can be used for fencing, decoration, craft materials and firewood, while on the other you dig out “chinampas” – fingers of land that jut into the pond. Here you can grow yet more vegetables, particularly those which need lots of water. Note how inputs such as water for the garden and food for the ducks and fish have been removed or minimised, and otherwise unused outputs such as light from the pond, waste water from the house and slugs in the garden become useful parts of the system.
By clever design and a keen understanding of the kinds of ecological relationships which animals and plants need to survive, permaculturists have been able to do some remarkable things. According to a documentary we watched on the course, the self-dubbed ‘rebel farmer’ Sepp Holzer has managed to grow figs, cherries and even kiwi fruits at an altitude of over 4,000 feet in the Austrian mountains, all by using permaculture principles.
Permaculture is satisfying because its solutions are so elegant, so simple and yet also so ingeniously thought out. We tend to have the notion that “technology” must mean something complex, and yet we forget that some of the best technologies, the ones we use everyday without even noticing, are perfected in simplicity and need no further work. Witness the button, the stairs, the pencil. You reach the end of a permaculture course armed less with a host of facts than a way of thinking which informs a huge range of decisions you might take in your life.
And contrary to my colleagues’ jibes, the course did manage to hold its own as a holiday. Staying on an organic farm, with beautiful scenery, fantastic food, good company and regular camp fires, it hardly felt like I was doing any work at all. And that is a crucial permaculture principle. As permaculturist Andy Langford put it: “Ask yourself, as a permaculture designer, how many siestas can I easily take this week? If its less than three or four, be worried.”
- Patrick Whitefield – a pioneer of British permaculture, and the brilliant teacher of my course
- The Permaculture Association of Britain
- Permaculture Magazine
- The Agroforestry Research Trust – if its hard facts and practical research you want, you’d do no better than see the work of Martin Crawford.
- “High time agriculture got back to its healthy roots” – veteran environmental journalist John Gibbons, who recently completed a permaculture design course, writing in the Irish Times.
The hiss from the audience could have been shock, surprise or a simple misunderstanding. A woman whose question stretched almost to the length of a speech by Fidel Castro said that Cuba‘s dire economic predicament was the result, partly, of a criminal government. It just wasn’t clear which government she meant (more on which below). This was the first of a series of Hay events organised by nef called Surviving the Crash, and it looked into Cuba’s forced, but artful, transition from oil dependency.
Today, the UK and the US are living through challenging economic times. But, so far, we face nothing compared to the shocks endured by Cuba over the last two decades. It was uniquely unlucky at the end of the cold war, losing the support of one superpower, the Soviet Union, while keeping the animosity – and a comprehensive economic embargo – of the other, the US. Only now, years later, is there a suggestion of a thaw in relations.
But regardless of what American administrations think, suddenly the world is finding Cuba interesting for reasons that are little to do with the cold war’s long shadow. Like a nervous scout sent ahead of the main party to see what risks lurk in the valley beyond, Cuba has been hit by a triple crunch – three separate shocks that are creeping up on the rest of the world. Speaking earlier in the day, Adrian Goldsworthy, a writer on ancient Rome, said that the remarkable thing about the Roman empire was not that it fell from a position of unchallenged power, but that it lasted so long. Conversely, hearing the litany of misfortune that has befallen modern Cuba, the astonishing thing is not the threadbare state of the economy, but the fact that the country has not descended into complete chaos and become a failed state.
One crunch was the loss of cheap oil imports on which almost the whole of Cuba’s economy, including transport and farming, depended, following the Soviet Union’s collapse. On the panel, Julia Wright, author of Sustainable Agriculture and Food Security in an Era of Oil Scarcity, described how a massive revival of largely organic, small scale, and community-driven urban agriculture helped prevent starvation. Even more, the general health of the nation improved dramatically, much as in Britain during the second world war, as people’s diets became healthier and they exercised more.
Another regular impact is the kind of extreme weather set to become more common with global warming. Cuba sits in the pathway of annual hurricane season in the Caribbean. The other speaker, Carlos Alfaro, who was for years the Cuban advisor to various UN agencies, had to plan for major disasters and emergencies in a country largely lacking fuel for its vehicles. Yet a combination of central planning and local organisation means that even when big hurricanes hit small, poor Cuba casualties are minor and recovery is quick. Compare this to the chaos of New Orleans after Hurricane Katrina. The final crunch is the continuing US economic embargo (and this was the criminal act by a government referred to above). To get some sense of what that must be like, perhaps we need to imagine something like the current banking crisis in the US and UK carrying on for 20 years.
Cuba has seen it all and survived. It’s not perfect, but after living through the decline of oil, climate change and an economic crisis, it still has an impressive health and education system and an ingenious population who cope with adversity.
nef will be at the Hay Festival Wales from Tuesday 26 May presenting a series of talks called Surviving the Crash. Our event on the Transition Towns movement is already sold out, but it’s not too late to get tickets for the rest of our programme.
We’ll be exploring how Cuba survived its oil crash of 1989, examining the power wielded by city investors in deciding our environmental fate, dbeating the potential of the Green New Deal and discussing what Britain’s homefront during World War II can teach us about a national response to climate change.
We have a host of fantastic speakers including the economist John Kay, gardening guru Monty Don, London Food czar Rosie Boycott, Guardian journalist John Vidal and our own Andrew Simms and Stewart Wallis.
At every event, the onehundredmonths clock will be ticking down in the background, bringing a sense of planetary urgency to an otherwise sleepy, secluded part of the country.