Singapore Peak Oil

A brilliant article which explains how and why the dominant economic paradigm is rooted in unreality and fantasy. The financial "wizards" and economic "high priests" of today rightly deserve to be castigated not only for the current worldwide credit crunch but also for our environmental woes. Our current model of relentless economic growth and accumulation of goods and capital is a recipe for ecological failure on a global scale. The economy is a subset of the ecosystem and not the other way round. Without a hospitable living environment, there can be no economy; hence, ecology precedes economy. I urge you to read the article in its entirety.

LINK: http://www.monthlyreview.org/090501-york-clark-foster.php

An essay mentioned in the article,“Economics Needs a Scientific Revolution,” can be found here: LINK

Singapore's Inter-Ministerial Committee on Sustainable Development (IMCSD) has unveiled its blueprint for sustainable development. You can download it at: http://app.mewr.gov.sg/data/ImgCont/1292/sustainbleblueprint_forweb.pdf

My impressions? In short, it is inadequate and myopic. It is another step on the road to diminishing returns on investments in social complexity. (See also: New Scientist article)

In spite of the blueprint's laudable efforts and lofty goals to maintain sustainable growth (an oxymoron really) and to promote green living standards, one topic that is sorely missing is any discussion at all about the future availability of dense energy sources, namely fossil fuels, to implement the "four-pronged strategy".

Energy is required for water recycling, purification and desalination, for waste management and recycling, for public transportation, for the construction of green buildings, etc. The big question which is not answered in the blueprint: where will we get the energy to carry out these activities in the next 20 years?

Sure the blueprint talks alot about energy efficiency and technologies, but they should focus on total overall consumption instead. If total overall consumption keeps growing, a finite resource like oil or natural gas will eventually be depleted regardless of how efficiently it is consumed per capita. See charts below.

Sources: EMA, Singstat and E2Singapore

The blueprint states:

In the past 10 years, households in Singapore consumed 64% more electricity, 21% more water, and generated 21% more solid waste. (p.40)

Will technology save us? No, because firstly it will likely result in greater consumption of energy and resources according to "Jevons Paradox," named after the 19th century English economist who observed that the increased efficiency in consumption of a resource tends to increase overall consumption and demand. Secondly, technology runs on energy. All forms of alternative energy depend on energy inputs from shrinking reserves of fossil fuels during the manufacturing process, and due to reasons of complexities of scale, diminishing energy returns, low energy qualities and energy interchangeability challenges, alternative energy supplies can never fully replace fossil fuels. Minister Yaacob Ibrahim, co-chairman of the IMCSD, has acknowledged this fact in the Business Times (28 April 2009, p.32):

"If you ask us whether we can really change our economic structure and replace all the fossil fuels that we import with alternative energy - not possible."

Considering that surplus energy is required for growth and complex societies like ours to function smoothly, how shall we live after peak oil if alternative energies are not viable substitutes?

The Export Land Model developed by geologist Jeffrey Brown and others forecasts that the top five net oil exporting countries of the world (Saudi Arabia, Russia, Norway, Iran and the UAE), who presently account for half of the world's net oil exports, will cease to export any oil by 2030 because of rising domestic consumption in their own countries and declining field production. In other words, they will have ZERO oil surpluses for export by 2030; they keep whatever they have for themselves and the rest of the world gets nothing. Actually, we don't even have to wait till 2030 to experience the painful effects because the model projects that their oil exports will be halved by 2015. If you think about that for a minute, the implications are profound and far-reaching; we're talking about distressing adjustments to the way we live, eat, work and play for the next 10-20 years.

Derrick Jensen, author of Endgame, defines a city as "people living more or less permanently in one place in densities high enough to require the routine importation of food and other necessities of life." Singapore certainly fits that description. Because of our excessive reliance on transient supplies of fossil fuels for food and electricity, densely populated cities like Singapore are by nature unsustainable and abnormal in the history of civilisation. William Catton, author of Overshoot, characterises this aberration as a "phantom carrying capacity" - that portion of a population that cannot be permanently supported when temporarily available resources [fossil fuels] become unavailable.

I am a little amazed that our sustainability blueprint for the next 20 years would exclude any major discussions of future energy sources. Just like the Ministry of Trade and Industry's "Energy for Growth - National Energy Policy" report, the sustainable blueprint has been disappointing. IMCSD has failed to connect the dots between the economy and the ecosystem by erroneously believing "that growth and environmental sustainability are compatible and mutually reinforcing (p.78)" and by neglecting any studies on future energy availability.

Fellow Singaporeans, brace yourself for a tumultuous future.

The only viable long term solution? Stop growing. Relocalize and embrace a steady state economy.

An email that I sent recently....

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Dear MND and MEWR,

As a concerned Singaporean, I am alarmed to read the following in a speech by Minister Mah Bow Tan:

Cities have to ensure that economic growth is not stunted by infrastructure bottlenecks and that growth does not come at the expense of clean air, clean water and a liveable environment. http://www.mnd.gov.sg/newsroom/Speeches/speeches_2009_M_24042009.htm

I urge the Minister to reconsider that statement because research done by the authors of the "Limits to Growth", ecological economists and scientists have proven that "there is a fundamental conflict between economic growth and environmental protection, including conservation of biodiversity, clean air and water, and atmospheric stability. This conflict is due to natural laws (thermodynamics and ecological structures) - it is simply a result of the way the world works. Mounting evidence of this conflict demonstrates the limits to growth."

A cursory reading of the daily news reports will tell us that we are loosing biodiversity, fresh water, top soil, and clean air at an unprecedented rate and all of this is due to human economic expansion.

I plead with you to read the following articles and re-examine the growth paradigm which has guided us for at least the last 50 years and come to an understanding that this cannot go on forever. At some point, probably now, we will clash with the earth's ecological limits to sustain itself and Nature always wins. This means that societal collapse and die-offs are inevitable unless we take steps now to descend the growth ladder in a controlled manner, or else massive social dislocation is likely to ensue in the years ahead.

A sustainable Singapore requires a new non-growth paradigm to guide us, not the current one that has left the earth devastated and poorer for future generations.

Revisiting the Limits to Growth After Peak Oil
http://www.esf.edu/efb/hall/2009-05Hall0327.pdf

Economics in a Full World
http://www.publicpolicy.umd.edu/faculty/daly/sciam-Daly5%20copy%201.pdf

Prosperity Without Growth
http://www.sd-commission.org.uk/publications/downloads/prosperity_without_growth_report.pdf

Why our Economy is Killing the Planet
http://www.scribd.com/doc/13482709/Ecological-Economics-Beyond-Growth-Why-Our-Economy-is-Killing-the-Planet-New-Scientist-18-Oct-2008

Ecological Economics - Beyond Growth - Why Our Economy is Killing the Planet - New Scientist 18 Oct 2008

Some people think that a sustainable economy should sustain the rate of growth of GDP. According to this view, the sustainable economy is equivalent to the growth economy, and the question of whether sustained growth is biophysically possible is begged. The political purpose of this stance is to use the buzzword “sustainable” for its soothing rhetorical effect without meaning anything by it. -- Herman Daly

Ecological Economics in a Full World by Herman Daly _SCIAM Sep 2005_ -

Irish Times
By John Gibbons

Growth and the pursuit of growth is the secular religion of the western world, and its dogma is infecting every society.

BRIAN COWEN and Enda Kenny suffer from this. So does Gordon Brown and at least nine in 10 other world leaders. All are labouring under the same crippling psychosis. This is their shared conviction that, whatever the problem, the solution lies in economic growth.

So deeply ingrained has the notion of relentless, limitless growth become that to suggest that it may be the cause of, rather than the solution to, our greatest challenges borders on heresy.

Growth and the pursuit of growth is the secular religion of the western world, and its dogma is gradually infecting every society on Earth via globalisation. Every cult needs its clergy, and the high priests of growth are our economists. Purporting to understand such magic as the "hidden hand of the marketplace", economists have been feted by presidents and parliaments as the new alchemists, with their dazzling theories suffused with the promise of technological transubstantiation that will somehow lift us beyond the mortal limits of our fragile blue planet.

These sorcerers have led politicians and populations alike to believe that they alone understood and could tame the raging marketplace, while extracting from it an infinity of goods to sate our ever-expanding appetites.

Perhaps their greatest sleight of hand has been in selling the notion of infinite growth within a finite - and sharply declining - ecosystem. Take Robert Solow, a Nobel Prize-winning US economist. "The world can, in effect, get along without natural resources," was his breathtakingly myopic analysis.

Ask an economist to value a forest, and he'll tell you how much timber sells by the tonne. The Amazon releases 20 billion tonnes of water into the atmosphere every day, free of charge. Forests control floods, purify water, protect biodiversity and keep the planet habitable, but what does this matter to a hedge fund manager? Another trick, called temporal discounting, allows economists to sell our children's future down the heavily polluted river in favour of short-term profit.

Yet this analytical vacuity is the norm, not the exception, among the economic elite. Alan Greenspan, former chairman of the US Federal Reserve, dressed up political ideology and passed it off as rational economics, while cheerfully choreographing the world's greatest financial crisis since the 1930s. None of this has dented the collective self-confidence of the ruling cabal of economists, nor cooled the media's love affair with them.

Tune in to RTÉ or Today FM any day of the week to hear the very economists who sold us the poison during the boom years; now they are peddling their repackaged "cures" in the form of the latest economic elixirs of growth. Heavy drinkers will be familiar with this logic: it's called the hair of the dog.

In nature, growth is a phase, leading to the equilibrium of maturity. An adult that continues growing can only do so by becoming obese. Within the body, cells that multiply exponentially in an otherwise stable organism are more commonly known as a cancerous growth or tumour. The World Wildlife Fund's Living Planet Index has tracked the ecological health of the world since 1970. Its 2008 report found that total planetary resources have been permanently depleted by 30 per cent in well under four decades.

"The possibility of financial recession pales in comparison to the looming ecological crunch," said the fund. The report found that three in four people live in countries that have exceeded their own ecological limits. Ireland is well up the debtor list. We consume resources requiring three times the amount of land actually available globally per person. We are ecologically as well as economically in hock. You really wouldn't want to be around when this debt is called in.

For now, we continue propping up our house of cards by rapidly running down the ecological capital of other countries to maintain our astonishing bubble of affluence. In famine times, this was called eating the seed corn. When our political elite, guided by their hierarchy of economics believe they can cure the recession by "jump-starting" the consumption-driven economy and so plunge us deeper into ecological debt, you see just how the cancer cult of growth economics has metastasised throughout the body politic.

Capitalism, in the words of John Maynard Keynes, an economist now back in vogue having been deemed passé by the seeming triumph of right-wing political ideology, "is the astounding belief that the most wickedest of men will do the most wickedest of things for the good of everybody".

Many people who live in man-made environments like cities may wonder what ecology has got to do with them. Put simply, our environment is to human survival and wellbeing what water is to a fish. If growth is toxic, what about the alternatives? In 1972, a group called the Club of Rome published its prescient book, The Limits to Growth .

Reaching what they call equilibrium would require hard choices. We would have to trade some freedoms, such as the right to have unlimited population growth and resource consumption, "for other freedoms, such as relief from pollution and crowding and the threat of collapse of the world system".

In the 36 years since its publication, Earth now bends under the burden of an additional 3.3 billion people. As we fret about declining property prices, philosopher Henry David Thoreau's observation was never truer: "What good is a house, if you haven't got a tolerable planet to put it on?"

Our world now faces challenging ecological and environmental problems (peak oil, climate change, energy security, food inflation, loss of biodiversity, wildlife extinctions, overpopulation). From what I have been reading, our government's solutions to these problems are more growth: 1) allow the population to increase to keep us economically competitive; 2) keep the economy growing and strong so that we become richer, and with our riches we can solve these problems.

Excerpts from a speech by PM Lee Hsien Loong at NTUC May Day Rally, 1 May 2008:

http://app.sprinter.gov.sg/data/pr/20080501991.htm

So, this is the way to grow our economy, create more jobs and more opportunities and improve the lives of all our workers and when I say all our workers, that means all of them. Not just the highly qualified and educated ones, but all collars, from cleaners and security guards, to technical and professional staff. Not just young workers but all ages, from new job entrants to mid-career and mature workers and not just local workers but all nationalities, from Singaporeans to others who are here, to work here and to help us reach our goals for Singapore.

There are challenges ahead -- the US economy, higher food prices, cost of living, low wage workers and so on -- and there will be more challenges to come. But our approach is working, so we have to persevere and press on, because we are heading in the right direction. Build our tripartite partnerships, educate and train our people, help our industries to innovate, upgrade, build social safety nets to assist needy Singaporeans. Then, however choppy the waters, we can maintain a steady course, sail ahead and secure a brighter future and a better life for all of you and us. Thank you.

I think this is a big mistake. Our leaders don't understand our limits to growth. They do not understand that the neoclassical economic growth model assumptions that we have embraced cannot be sustained with peak oil and a burgeoning world population. If we continue with this growth model, the system will collapse under its own weight.

There is one word that describes our government policies: insane. Insanity is doing the same thing over and over again and expecting different results. Why do I say their policies are insane? Because the cause of our current problems is overgrowth: overpopulation, over-consumption of resources, over-exploitation of planet earth. Will more economic growth solve our problems? If overgrowth is indeed the root cause, then why does the Singapore government continue to insist that "more growth" is the answer to our problems?

Our government needs to consider alternative solutions, and Singaporeans have the right to be aware of such alternatives. The alternative to consider is a Steady State Economy (SSE). I urge our policymakers to consider the SSE as an alternative to a growth economy.

What is a Steady-state economy? It is an economy viewed as a subsystem in dynamic equilibrium with the parent ecosystem/biosphere that sustains it. Quantitative growth is replaced with qualitative development or improvement as the basic goal. (Ecological Economics: Principles and Applications).

This synopsis by Herman Daly is a good explanation of why we need a SSE and how we can go about implementing it. You can read it in full here: http://www.theoildrum.com/node/3941

A failed growth economy and a steady-state economy are not the same thing; they are the very different alternatives we face. The Earth as a whole is approximately a steady state. Neither the surface nor the mass of the earth is growing or shrinking; the inflow of radiant energy to the Earth is equal to the outflow; and material imports from space are roughly equal to exports (both negligible). None of this means that the earth is static—a great deal of qualitative change can happen inside a steady state, and certainly has happened on Earth. The most important change in recent times has been the enormous growth of one subsystem of the Earth, namely the economy, relative to the total system, the ecosphere. This huge shift from an “empty” to a “full” world is truly “something new under the sun” as historian J. R. McNeil calls it in his book of that title. The closer the economy approaches the scale of the whole Earth the more it will have to conform to the physical behavior mode of the Earth. That behavior mode is a steady state—a system that permits qualitative development but not aggregate quantitative growth. Growth is more of the same stuff; development is the same amount of better stuff (or at least different stuff). The remaining natural world no longer is able to provide the sources and sinks for the metabolic throughput necessary to sustain the existing oversized economy—much less a growing one.

Economists have focused too much on the economy’s circulatory system and have neglected to study its digestive tract. Throughput growth means pushing more of the same food through an ever larger digestive tract; development means eating better food and digesting it more thoroughly. Clearly the economy must conform to the rules of a steady state—seek qualitative development, but stop aggregate quantitative growth. GDP increase conflates these two very different things.

We have lived for 200 years in a growth economy. That makes it hard to imagine what a steady-state economy (SSE) would be like, even though for most of our history mankind has lived in an economy in which annual growth was negligible. Some think a SSE would mean freezing in the dark under communist tyranny. Some say that huge improvements in technology (energy efficiency, recycling) are so easy that it will make the adjustment both profitable and fun.

Regardless of whether it will be hard or easy we have to attempt a SSE because we cannot continue growing, and in fact so-called “economic” growth already has become uneconomic. The growth economy is failing. In other words, the quantitative expansion of the economic subsystem increases environmental and social costs faster than production benefits, making us poorer not richer, at least in high consumption countries. Given the laws of diminishing marginal utility and increasing marginal costs this should not have been unexpected. And even new technology sometimes makes it worse. For example, tetraethyl lead provided the benefit of reducing engine knock, but at the cost spreading a toxic heavy metal into the biosphere; chlorofluorocarbons gave us the benefit of a nontoxic propellant and refrigerant, but at the cost of creating a hole in the ozone layer and a resulting increase in ultraviolet radiation. It is hard to know for sure that growth now increases costs faster than benefits since we do not bother to separate costs from benefits in our national accounts. Instead we lump them together as “activity” in the calculation of GDP.

Full article