A year ago, with the jet stream firmly to the north of us, the future looked bright. Lockdowns had an “off school early” feel to them, as millions of non-essential workers were sent home either to work via the internet or to spend their days binge-watching Netflix. Just the fact of breaking the routine of commuting into the city centre to work in an office or shop was sufficient to create a psychological sense of liberation. And then there were those NASA satellite images showing just how quickly the blanket of pollution had lifted above the Wuhan region of China. Establishment media commentators were soon asking why, “if we can do this in response to a pandemic, can’t we do it for climate change?”
It was into this optimistically speculative mix that an article by a Danish politician, Ida Auken – originally titled “Welcome to 2030. I own nothing, I have no privacy, and life has never been better” – Drew the applause of the technocratic elite which breathes a little too much of the high-altitude Swiss air at Davos. Feeding into the more dystopian vision of a “Great Reset,” the article was little more than a rehashing of the usual bright green nonsense so beloved of the global elite in the last couple of decades. And it is about as solid and grounded in reality as the swirling snow clouds above the Davos ski resort:
“By 2030, your CO2 emissions will be greatly reduced. Meat on your dinner table will be a rare sight. Water and the air you breathe will be cleaner and nature will be in recovery. The money in your wallet will be spent on being with family and friends, not on buying goods…
“The air you breathe in the city is cleaner because there are far fewer cars on the streets and the rest are electric – all electricity is green in fact…”
There is though, a great deal of truth in the article… although for very different reasons than those imagined by Ms Auken. This is because the various disruptions to our complex global supply chains are only now cutting in to give the lie to the belief that lockdowns and restrictions would be painless if only governments borrowed and printed enough currency to see us through. Moreover, the energy and resources required to build the bright green world of Ms Auken’s imagination – often likened to the effort involved in fighting the Second World War – have already been consumed in the relentless pursuit of profit of the past 75 years. As Tad Patzek explains :
“To compare the WWII industrial effort with the global dislocation necessary to ameliorate some of the effects of climate change is surprisingly naïve… This comparison also neglects to account for the human population that has almost quadrupled between the 1940s and now, and the resource consumption that has increased almost 10-fold. The world today cannot grow its industrial production the way we did during WWII. There is simply not enough of the planet Earth left to be devoured.”
Crucially, the global economy is subject to its own version of Liebig’s Law of the Minimum. It matters not one iota that we have sufficient materials to make the steel and concrete to build all of the wind turbines and solar panels required to replace the annual 137,860 terrawatt hours of energy we currently derive from fossil fuels if, for example, those fossil fuels deplete before the proposed replacements – which today provide just 8,109 terrawatt hours – have been deployed. And fuel – for such things as transporting and erecting the component parts – is just one potential limitation. The amount of rare and expensive minerals required to fulfil Ms Auken’s fantasy is truly eye watering. As scientists at the UK’s natural history museum explain:
“To replace all UK-based vehicles today with electric vehicles (not including the LGV and HGV fleets), assuming they use the most resource-frugal next-generation NMC 811 batteries, would take 207,900 tonnes cobalt, 264,600 tonnes of lithium carbonate (LCE), at least 7,200 tonnes of neodymium and dysprosium, in addition to 2,362,500 tonnes copper. This represents, just under two times the total annual world cobalt production, nearly the entire world production of neodymium, three quarters the world’s lithium production and at least half of the world’s copper production during 2018. Even ensuring the annual supply of electric vehicles only, from 2035 as pledged, will require the UK to annually import the equivalent of the entire annual cobalt needs of European industry…”
It might, at a stretch, be possible if the task was solely to respond to British warming. But the problem is global; and there is nowhere near enough energy and resources to meet the task – which requires the construction of a Hinkley Point nuclear power station every two days for the next thirty years or, alternatively, for two Hornsea wind farms per day to be constructed over the same period.
Those raising the alarm about the shortage of materials to achieve the bright green future adopted by most policy makers by 2020 were talking about theoretical shortages in the future. But as a consequence of the pandemic lockdowns and restrictions, shortages are popping up everywhere. Globally there is a dearth of lumber which has fed into shortages of building materials. To add to the woes of the building industry – the people who are going to have to build Ms Auken’s brave new world – cement and plaster are also hard to obtain. Shortages of computer chips have already disrupted the global car industry; and are, in any case going to be a much greater problem as the industry switches to electric cars which are far more reliant on micro processing.
Rather like the oil shocks of the 1970s, it is possible to console ourselves that the shortages which are now materialising are in some sense “artificial.” There was though, an underlying basis for the oil shocks of the 1970s – the world had passed the peak extraction of the cheap and easy, land-based oil. There was more than enough oil to go around, of course, but from the 1970s, the energy cost of oil would rise remorselessly. This, in turn, led to increased costs across the economy which resulted in the offshoring of manufacturing to regions offering cheap labour and minimal environmental regulation. The shortages of today, while brought forward by lockdowns and restrictions, were visible in the economic trends of the previous decade. Peak oil extraction had already occurred a year before SARS-CoV-2 embarked on its world tour. And since oil is involved in the manufacture and transportation of just about every other good and service in the economy, generalised price increases and eventual supply shortages were already baked in. The pandemic merely brought forward the predicted shortages.
The conventional view is that we are about to experience a wave of inflation as shortages translate into higher prices and as higher prices force wages up. Things may not be so straightforward though. In a growing economy, higher costs could be passed on to consumers. In economies where precariarity and low incomes have grown over decades though, workers’ collective purchasing power is insufficient to bear the additional cost. Some businesses will get away with it; but only at the cost of other businesses going bust as the economy re-adjusts to lower levels of demand.
This though, puts us in a vicious spiral because the loss of wages from the businesses that are forced to close serves to lower aggregate demand still further. This is what Karl Marx saw as a “crisis of over-production” – in reality, a crisis of under-consumption. In an autocratic economy, the solution would be to print currency and hand it to the unemployed. This though, does not work in a globalised system in which most consumer goods have to be paid for in a different currency.
What this suggests is that we face stagflation – a combination of high unemployment and under-employment coupled to rising prices – rather than simple monetary inflation. And the usual means of dealing with inflation – higher taxes and interest rates – can only serve to exacerbate stagflation. There is, in fact, only one means by which we get to escape a prolonged period of stagflation… which brings us back to Ms Auken’s musings. We need an energy revolution.
Escaping the stagflation of the 1970s required the offshoring of jobs and disempowering trade unions, incorporating domestic reserves of labour, and tapping into new – albeit more expensive – sources of energy – the North Sea, Alaska and the Gulf of Mexico. None of those options are available today. The first two because we’ve already done them; the third because there are no more accessible high quality oil reserves left on planet Earth; and because there is no energy-dense replacement for them.
Ms Auken’s article does not specify what energy source is providing the power for her idea of utopia; but her buddy, Herr Schwab is keen on a mix of wind, solar and “green” hydrogen (produced by splitting water). The current impossibility of such a hydrogen-powered economy is summarised by Ugo Bardi – a professor of physical chemistry at Florence university who was once informally known as “professor hydrogen:”
“You can move forward, but the farther you go, the more expensive it becomes — to say nothing of the reliability problems of highly sophisticated technologies that deal with dispersed nanoparticles. And no way has been found, so far, to replace platinum with some other metal in low temperature fuel cells. Without a substitute for platinum, the hydrogen-based economy remains a pie in the sky.
“Note also that the platinum supply is just one of the problems plaguing the idea of the ‘hydrogen economy.’ There are many others: storage, safety, durability, efficiency, energy return, and probably more.”
The same basic problem applies to non-renewable renewable energy-harvesting technologies (NRREHTS) in general. As Simon Michaux, a scientist at the Finnish Geological survey explains, we have neither the energy nor the mineral resources to build out an alternative infrastructure on which to build the kind of futurist economy that Schwab and Auken imagine. More importantly, while Schwab, Auken and the other techno-utopians at Davos are narrowly focused on climate change – so much so, indeed, that in January 2020 they refused even to consider the threat of a pandemic – they are entirely blind to the consequences of peak oil (not to be mistaken with peak oil demand) and resource depletion.
In the Auken version of the future, such problems are reversed by the simple process of electronically printing new currency into existence. With enough new currency, any problem, no matter how serious, may be overcome… apparently:
In reality though, as the energy available to power the economy depletes, so ever more of the things we used to be able to do – like commercial supersonic flight or manned missions to the Moon – cease to be viable. Currency still matters, of course, because it is a claim on the remaining energy. And since most of the currency is in the hands of buffoons, we can expect all kinds of vanity projects to be pursued by those at the top even as those at the bottom fall ever deeper into poverty.
In Britain in 2008, hardly anyone had ever heard of a food bank. Today, not only is there a food bank in every town in the country, but there are even competing food bank providers, vying with each other over who can feed the poor most efficiently. Automated services which were common prior to the crash were being replaced with labour-intensive alternatives long before the pandemic. And in its wake, supermarkets will be competing with charity shops to sell second hand clothing as the impacts of declining prosperity are felt higher up the income ladder.
Prior to the pandemic most people in the developed states were getting poorer. The response to the pandemic has no doubt accelerated the trend. It is tempting to predict that once the pandemic dust has finally settled, we may find ourselves in an economy akin to that of the Great Depression of the early 1930s. But that is not right either because we are moving into a period of “make do and mend” in which we attempt to eke out the lives of the material goods we already have (perhaps pretending to ourselves this is some kind of circular economy). Learning to repair the plethora of labour saving devices we have inherited could prove to be a smart move for any youngster leaving school in 2021; because ever fewer people will be in a position to buy new replacements. What money most of us are left with will have to be spent on increasingly expensive essentials like food, water, heating and lighting. That you will own next to nothing is without doubt; but don’t let anyone kid you that you are going to be happy about it.
As you made it to the end…
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