After listening to the panel of IPCC experts on Tuesday night - which kinda spooked me - I needed to hear this on halting fossil fuel use: "Renewable energy could provide all global energy needs by 2090," according to a study just released by the European Renewable Energy Council and Greenpeace. But it all depends on political will. If there's one thing the IPCC scientists don't agree on, it's whether or not humanity has the gumption to make the changes necessary to avoid dangerous levels of climate change. Science and technology are not the obstacles. Does it require flooding of the Cape Flats before we take this thing seriously?
We've had a dot.com bubble, a financial bubble, and all kinds of other situations where human behaviour has taken us beyond reason. On a longer timescale, we are in a carbon bubble, bingeing on a resource that seems too good to be true - as indeed it is. Like every other bubble, this one will end. It's not possible to indefinitely sustain limitless growth based on borrowing beyond our means, ignoring the casualties, hoping that rational behaviour will ensure that things don't get out of control. And like every other bubble, things got out of control long before we recognised it. We explain away the early warning bells as aberrations, the messengers as freaks, and the first fatalities as fools who lost their nerve.
With this one, our "borrowing" is in the form of capital depletion (dipping into energy and water stores that are non-renewable within the timeframes that we work with) and destruction of habitat at a rate that is faster than Earth can regenerate its ecosystems.
As with the housing bubble, the carbon bubble is based on the expectation that we are in a never-ending bull market: energy will always be available in increasing supply to finance economic expansion. Just as financial instruments are threatened by lack of liquidity, so too the carbon-financed energy system needs to be a well-oiled machine that provides uninterrupted access to energy.
The housing bubble was a case of homeowners getting loans on the basis of steadily increasing house prices. When house prices fell, the loans had no material security; panic accelerated the fall, and loans dried up. Banks cannot recoup the losses on defaulted loans because the underlying value has been destroyed. In the carbon bubble, non-renewable resources are the loans, and we have defaulted on the loans simply by not making repayments at a rate that will ensure a continuous and sustainable supply of energy. We are making withdrawals of ever-increasing amounts, thinking that there is no end to the supply. The fact is, there is a physical limit, based on geology and ecology, not economics.
I mention ecology as an aspect of the physical limits to energy supply because it's not only the physical quantity of coal or oil that limits our ability to use these resources, it's also our recognition of climate change and other environmental impacts of carbon-intense fuels. As we are coming to appreciate the dangers of carbon emissions, we are realising that even if we could continue extracting fossil fuels indefinitely, the environmental side-effects of doing so at current rates would cause untold damage. We face a near-term future where availability of energy will be constrained by more than engineering limits to extracting it from the ground. Carbon emission controls will be a driver of change in the way we fuel economic growth.
Economists might think this energy situation is ok, that the balance between supply and demand is self-enforcing. There's no need to regulate the flow of carbon in the energy market; the market will find its own way to maintain energy supply. But that would be tantamount to saying the same thing about the current global financial crisis. In the long run, the energy crisis will indeed be sorted out, one way or another, and life - one hopes - will carry on. Does that mean it's ok to stand by and watch the economy implode and the environment degrade? A laissez-faire approach brings pain that could easily be worse than glitches in a new regulatory regime.
Governments are trying to save the financial markets by maintaining liquidity. The equivalent approach to minimising the fallout from the carbon bubble is to inject alternative (low-carbon) fuel sources into the energy system to compensate for dried-up supplies of fossil fuels. That's what we should hope for, and that's what the study quoted at the start of this post is saying is possible. But is that enough? I suspect not, and here's why.
As far as I can see, the main reason why governments are now busy bailing out bankrupt banks is so that taxpayers can continue borrowing to maintain an expanding economy. And governments are doing this by borrowing, in turn, from those same taxpayers. This is a holding pattern, not a solution. The same can be said of efforts to find new energy sources to replace old ones. The assumptions are that an ever-expanding global economy is a Good Thing, that it requires at least the level of resource inputs that have been needed up to now, and that it is sustainable.
Many people wiser than I have questioned these assumptions, and it makes intuitive sense to me that we should use this juncture in history to re-evaluate the energy basis of economic growth, as well as other resource inputs such as water and mined commodities. At the very least, we need to improve efficiencies so that we can establish a balanced budget with Mother Earth. Running a deficit can only take us so far before she calls in the loans. Essentially, living within our means requires not only a low-carbon economy, but a low-energy one that reduces the range of negative impacts and minimises the need to take risks with technologies like nuclear energy or large-scale geo-engineering.
The debate swirling around the carbon bubble now is exactly the same as with all the other bubbles. Should we increase regulation? Will taxes do the trick? Is cap-and-trade just a ruse to keep the economy humming? How hard will be the landing when the bubble bursts? What will be the ultimate cost to the economy and society, and how can we prevent a recurrence?
These questions need answers, but we can't afford to wait before taking action. We need reason, and we need determination. On Tuesday night, Bruce Hewitson quoted Horace Greeley (1811 - 1872): "Apathy is a sort of living oblivion."
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