The U.S. posted its biggest-ever decline in CO2 emissions from fossil fuels in 2009, according to the Energy Information Administration (EIA). But the reductions are not expected to continue:

CO2 emissions from fossil fuels fell by an estimated 6.3 percent in 2009. Emissions from coal led the drop in 2009 CO2 emissions, falling by nearly 11 percent. Declines in energy consumption in the industrial sector (a result of the weak economy) and changes in electricity generation sources are the primary reasons for the decline in CO2 emissions (U.S. Carbon Dioxide Emissions Growth Chart). Looking forward, projected improvements in the economy contribute to an expected 1.5-percent increase in CO2 emissions in 2010. Increased use of coal in the electric-power sector, and continued economic growth, combined with the expansion of travel-related petroleum consumption, lead to a 1.3-percent increase in CO2 emissions in 2011. However, even with increases in 2010 and 2011, projected CO2 emissions in 2011 are lower than annual emissions from 1999 through 2008.

The drop in emissions in 2009 was the biggest since data collection began in 1949. The Great Recession was primarily responsible, as U.S. real gross domestic product dropped 2.4% in 2009, in the biggest decline since 1946. Emissions dropped 5.8% in 2008.

It’s hard enough to imagine the U.S. and other developed nations voluntarily sacrificing economic growth, much less embracing voluntary frugality. Can you even conceive that China and India would voluntarily give up their ambitions to join the developed world? The entire world has joined in a suicide pact.

It’s beginning to look like the only thing that will save humans and other living things from the ravages of global warming is global economic collapse.

The planet is beset with a number of unprecedented crises that, as Dennis Meadows points out, are symptomatic of an underlying problem: exponential physical growth in a finite world.

At Countercurrents.org, Helena Norberg-Hodge makes a compelling case that “going local” – shifting economic activity back into the hands of local businesses instead of concentrating it in fewer and fewer mega-corporations – may be the single most effective thing we can do to begin to tackle the problem.

Norberg-Hodge points to food as a clear example of the multi-layered benefits of localization.  Local food systems can help reinvigorate entire rural economies and have social and environmental benefits:

• While globalized agriculture demands monocultural production of cash crops, a food system oriented towards local and regional markets gives farmers incentives to diversify.
• Diversity creates many niches on the farm for wild plant and animal species.
• Diversified farms can get by without heavy machinery or heavy doses of chemical fertilizers and pesticides.
• Most of the money spent on food goes to the farmer, not corporate middlemen.
• Small diversified farms employ more people per acre than large monocultures. Wages paid to farm workers benefit local economies and communities far more than money paid for heavy equipment and the fuel to run it: the latter is almost immediately siphoned off to equipment manufacturers and oil companies, while wages paid to workers are spent locally.
• Local food systems provide better food security.
• Small-scale, diversified farms have a higher total output per unit of land than large-scale monocultures.

Agribusiness interests dominate at the state, national, and international levels. For example, the Agribusiness Council is upfront about its aspirations for dominance of the global food system:

The Agribusiness Council (ABC) is a private, nonprofit/tax-exempt, membership organization dedicated to strengthening U.S. agro-industrial competitiveness through programs which highlight international trade and development potentials as well as broad issues which encompass several individual agribusiness sectors and require a “food systems” approach. Examples of such issues are commercialization of new technology/crops, environmental impacts, human resource development, trade and investment policy, natural resource management, and rural development.

touts its incestuous relationship with  the U.S. government:

Initiated under Federal government auspices by President Lyndon B. Johnson in 1967, The Agribusiness Council was formed by a group of business, academic, foundation and government leaders in order to facilitate American agribusiness participation in agricultural trade and development programs with developing countries – and represent private-sector agriculture interests to Federal government decision-makers.

and makes no bones about its objectives:

As an organization with international linkages, The Agribusiness Council seeks to strengthen the U.S. agricultural sector’s international outreach through stimulating private enterprise trade and investment solutions in Third World agro-industrial development.

Agribusiness interests may be too entrenched and government too corrupt to change. But we can change. We have the power to opt out of the global food system and to begin to grow local food systems, from the ground up.

Automatic Earth riffs on this quote by Treasury Secretary Tim Geithner, speaking to the House Budget Committee on Wednesday (2/24/10):

Without growth, we cannot begin the process of restoring fiscal responsibility. . . . before the federal government can begin attacking soaring deficits and a massive national debt, it needs to increase jobs and ensure economic growth.

Calculated Risk points out housing (not existing home sales!) is historically the best leading indicator for the economy and unemployment, using Residential Investment (quarterly from the BEA’s GDP report), monthly data on Housing Starts and New Home sales from the Census Bureau, and builder confidence from the NAHB. How do these look?

Total starts had rebounded to 590 thousand in June, and have moved mostly sideways for eight months. Single-family starts were at 484 thousand (SAAR) in January, up 1.5% from the revised December rate, and 36% above the record low in January and February 2009 (357 thousand). Just like for total starts, single-family starts have been at about this level for eight months.

Housing starts are moving sideways . . .

The housing market index (HMI) was at 17 in February. This is an increase from 15 in January.

The record low was 8 set in January 2009. This is still very low – and this is what I’ve expected – a long period of builder depression. The HMI has been in the 15 to 19 range since May 2009.

More moving sideways . . .

New Home Sales in January were at a seasonally adjusted annual rate (SAAR) of 309 thousand. This is a record low and a sharp decrease from the 348 thousand rate in December.

And it would be generous to even call this “moving sideways”.

Automatic Earth continues:

Sheila Bair’s report on the banks is abysmal, lending in the private sector is falling off a cliff while public lending is running up that same cliff, and in that quote above Geithner just told us that there are no plans to quit adding to the debt before spending gives birth to growth in some fictional fairy tale of immaculate financial conception. But it’s beyond foolish not to ask what happens if no such fairy tale ending exists, if only simply because the risk that pervades the entire endeavor is as palpable as it is terrifying.

The taxpayer funds presently spent on the thus far evasive dream of recovery and growth resumption could be spent on programs to soften the blow of possibility number two, where growth never resumes, or doesn’t do so for many years to come. It’s one thing for everyone to want growth, it’s quite another to actually get what you wish for.

Jim Kunstler has for years been predicting that we’ll blow our last wad trying to maintain business as usual long after BAU is over for good.

Given the reality of peak energy, it’s time to begin planning for “possibility number two, where growth never resumes”.   As economic activity is dependent on energy inputs, declining energy availability means return to growth simply isn’t in the cards.

Time for Plan B.

Amanda Gelder has a great interview with Jeremy Rifkin at Culturelab. What I find most intriguing are the connections Rifken draws among psychology, politics, and economics. We find ourselves in a pickle of historic proportions at the moment at least in part because of errors in thinking about these things.

I’ll try to pull together a couple of threads to focus on economic thinking and its relationship to the global crisis we face:

The Enlightenment view is that human beings are rational, detached agents that pursue our own self-interests and our nation states reflect that view. . .

A lot of interesting new discoveries in evolutionary biology, neuroscience, child development, anthropology and more suggest that human nature might not be what Enlightenment philosophers suggested. For instance, the discovery of mirror neurons suggests that we are not wired for autonomy or utility but for empathic distress; we are a social species.

* * *

Geopolitics is an extension of the Enlightenment view of human nature, the idea that we pursue our utilitarian pleasures and individual self-interests. In geopolitics, the nation-state becomes a macro view of that. Nations deal with nations by being rational, detached and calculating, pursuing self-interests, excercising power and acquiring more capital and wealth. That’s why Copenhagen failed. The world leaders weren’t thinking biosphere, they were thinking geopolitics. Everyone was looking out for their nation’s self-interest.

* * *

A lot of business people would say that you can’t be empathic in the market. But the market is a secondary institution–it’s an extension of culture. The real invisible hand of the market is trust, which is the result of empathic engagement. The only way you can have a market is if you have a shared narrative. The market is not a utilitarian frame of reference, it only exists by the social trust that allows people to engage in anonymous settings and believe that their engagements will be honored. When that trust fails, markets collapse and that’s what is happening now.

Rifken thinks the new world of distributed knowledge and distributed energy means we’ve moving from Homo sapien to Homo empathicus. His vision is attractive. I wish I could share his optimism. Still, we too often forget that philosophy does not live just in acedemia – it has real world implications. The “market” we have come to deify today is really nothing more than a myth, a powerful one that has turned destructive and threatens to consume civilization itself.

Rifkin has just published a new 600-page book, The Empathic Civilization: The Race to Global Consciousness in a World in Crisis, in which he expands on the ideas explored in the interview. I recall in my college days (note we were flower children of the 60s) reading books about evolving human consciousness.  Pierre Teilhard de Chardin’s  The Phenomenon of Man. Lancelot Law Whyte’s The Next Development in Man. Remember Charles Reich’s The Greening of America? Answer: not without some embarrassment.

So count me skeptical. My remaining aspirations are much less ambitious than forging a new human consciousness, rather just to eat well and live warmly in an increasingly uncertain world.

Sergio Gabrielli, CEO of Petrobras (a Brazilian multinational energy company headquartered in Rio de Janeiro), says global oil production (including biofuels) will peak in 2010 due to oil capacity additions from new projects being unable to offset world oil decline rates.

Gabrielli points out in his presentation that the world will need to produce oil from new sources equivalent to one Saudi Arabia every two years to offset future world oil decline rates – which he sees at about 5% per year.

Finding and bringing to production the needed magnitudes of new oil is simply not going to happen. Even managing to maintain historically observed decline rates may prove to be a challenge. Take Nigeria, for example. As the world teeters at the edge of economic and political collapse, Nigeria seems to be going over the edge. Nigeria, which in 2008 produced over two million barrels of sweet crude a day and today provides 9% of U.S. oil imports, could vanish as an oil exporter, virtually overnight. Despite its enormous reserves, Venezuela is looking none too stable as a producer and exporter, either.

Chris Nelder takes a close look at Mexico, Venezuela, and Saudi Arabia and warns the oil export crisis has arrived – we just haven’t felt it yet:

[W]hen oil prices rise again, the pain will be far greater for the U.S. than it is for our top suppliers. Next time, the spear of declining oil exports will puncture a lung.

If the gap between demand and supply shown in the chart above cannot be filled with new supply, the only alternative is for prices to increase to reduce demand to equal supply: “demand destruction.”  That means economic shrinkage rather than growth, and a consequent financial crisis of epic proportions. Consequently we are going to find it harder to extract other energy and mineral resources. As George Mobus points out in a post at The Oil Drum, our net energy is already in decline and that is at the root of the global economic problems we are seeing. You cannot have a growing economy when the basis of all economic wealth production is in decline.

The economic tremblings we’ve seen over the last couple of years may prove to be mere foreshocks. No matter how many trillions we throw at the problem, all the king’s horses and all the king’s men won’t be able to put Humpty Dumpty back together again.

Rather than trying to save the irretrievably lost, we’ll have to accommodate ourselves to the new reality:

We can only start simplifying our societies and giving up the many discretionary expenditures of energy that we currently enjoy without much thought. We can learn to once again live on real-time solar influx via our food raising systems. And even then we are talking about an ability to support only a small fraction of the current population. Ironically the simplification of society involves the increasing complexity of individual lives. What this means in practice is that each individual must start to become more of a generalist in terms of the functions that support life. Everyone will have to become a food grower! Believe it or not that isn’t simple! Knowing how to grow your own nutrients is actually quite complicated and will demand a whole new set of cognitive skills.

For the environment, peak oil and economic collapse offers a glimmer of hope. For example, oil accounts for 43% of our CO2 emissions from energy use. Consequent economic collapse will mean that a lot of coal plants in the works will never get built, and maybe we’ll even see existing plants begin to wither away.

Chris Martenson used to be a corporate honcho with a big expensive house in the suburbs on the Connecticut coast. Now he’s downsized, is living in a rural community, has traded in his twin-engine fishing boat for a kayak – and travels the country giving lectures on why we’ll never see a “recovery” from our economic throes. What happened, and why?

In a speech before the Commonwealth Club in San Francisco, Martenson lays out the hard facts:

• There are 70 million more people on the surface of the planet this year than last year.
• Each of these new humans consumes some amount of resources such as food, oil, air, soil, water, copper, coal, or timber.
• Someday, perhaps already, maybe a little later, the global flow rate of oil coming out of the ground will peak and then decline inexorably thereafter.
• From 2000 to 2008, eight short years, the total amount of debt in this country doubled while no net jobs were created and median incomes actually went backwards.
• During the industrial revolution, humans have consumed vastly more energy each decade. During the lifetime of a 22-year-old, humans will have burned more than half of all the oil ever consumed throughout history.
• Oceanic fish stocks, ancient aquifers, and topsoil are all being depleted at unsustainable rates.

Martenson goes on to explore the implications of these realities. To summarize:

All these facts share a single common feature: they are tied to exponential growth in some way. There’s nothing inherently wrong with exponential growth, as long as you have unlimited room and unlimited resources. We live on a finite planet. Time runs out in a hurry towards the end of any exponential growth system, forcing hurried decisions and severely limiting options. And there are clear signs that several key resources on our planet are in their final minutes.

Just as higher prices for fish will not cause more cod to come from the depleted fisheries, oil fields will yield their treasures in accordance to geological limits and not because our economics textbooks say they should.

Adapting to a future of less and less oil will take decades of preparation – but we’ve not yet even begun. TIME is a critical factor. SCALE is an issue. And then there’s COST.

COST – now there’s the economic rub. Every dollar in circulation was loaned into existence, with interest. The effect of loaning all of our money into existence, with interest, is this: there is always more debt than money floating around in the system. Always. And the amount of debt will compound over time – that is, it will grow exponentially. To service the debts that are growing exponentially, the economy must also grow exponentially.

See the problem?

An energy crisis rooted in resource limits will quickly translate into an economic crisis unlike any other. Consequently,  the era of growth is ending and what Martenson calls “an exciting new chapter” is about to begin.

Why the optimism? Martenson sees our challenge as not to find vast new resources to exploit, but to undertake the far more sophisticated and worthwhile task of using what we’ve got more wisely. A life with less pollution, more free time, meaningful jobs, more happiness, less stress and greater connection to each other as well as to nature are all within the realm of the possible.

As Martenson says, the longer we fiddle around the more our options shrink. Let’s hope it’s not already too late.

We are in the midst of a time of great uncertainty about the future. Peak oil threatens to disrupt not only global financial systems, but also “the economy” as we have come to think of it as an engine of inevitable growth. Even more serious but perhaps longer term, global warming and climate change threaten to disrupt the 10,000 year period of climate stability that allowed human civilization to emerge and the ecosystems within which all species on Earth – including humans – are enmeshed.

For all species, including humans, nothing is more critical than food. Jason Bradford in a post at The Oil Drum argues that reliability of food production in the face of change requires resilience rather than efficiency. A food production system capable of surviving disruptions and failures and of responding quickly to changing circumstances is essential.

Our existing food system is not resilient. As a result of government policies, financial pressures, cheap fossil fuels, and market trends over the past several decades, our food system has become dominated by a relatively few large players. As a result, our food system has become rigid and brittle.

The key to resilience in social-ecological systems is diversity. Biodiversity plays a crucial role by providing functional redundancy. Social and economic systems are no different.

Bradford sketches out what a resilient farm might look like:

A resilient farm has diversified operations to buffer against volatility. The benefits of diversity accrue in many ways.

Organic and especially agroecological farms are less dependent upon outside inputs that can change in price rapidly and unpredictably. Crop rotation plans include many species of plants and animals that are complementary in functions, such as legumes fixing nitrogen, grasses building soil carbon, and animal manures making nutrients more readily available to plants. Instead of buying mechanized services or fertility inputs, the farm integrates the functional diversity of life to create synergies.

Inherent diversity means no single crop failure will ruin the farm, and soil imbalances are prevented. The focus is on soil health, with all fields going through periods of planting in perennial and deeply rooted species to build soil organic matter and mobilize minerals such as phosphorus from deep layers. Fungi associating with roots locate source rock and solubilize minerals that are trans-located to leaves. Topsoil fertility is therefore built from below.

Landscape structure is created to provide habitat for native and naturalized species that participate positively in the farm food web, such as pollinators and predators. No need to buy pesticides when raptors have homes in the trees, predatory wasps have nectar sources, frogs can breed in clean water, and ground beetles have zones of refuge from tillage, for example.

While the emphasis is on letting the biology do the work, renewable energy infrastructure also creates resilience. Farms are often ideal places for wind and solar technologies, and on-farm biofuels are likely to have positive energy returns.

A resilient food system requires in the farm economy as well. Creating healthy and resilient rural economies requires transforming the entirety of our food system.

What might healthy and resilient rural economies look like? Again, Bradford sketches an outline:

It will be organized akin to an ecosystem, or food web. Farms and renewable energy infrastructure occupy the level of primary producers, with businesses acting as conduits for feeding omnivorous humans. In contrast to our current food system, which is linear in structure, the future food system will cycle nutrients back to the farm. This structural constraint will mean that much more food is grown for local populations.

Farms might be more self-sufficient, producing a wide variety of products, for trade, barter, and gifting as well as cash sales. This is a strategy many of our friends are already pursuing, seeking to diversify their income sources and means of support as a way to increase their personal financial resilience.

There structure impediments to our markets which inhibit building resilience. For example, the best and often the only use for much of Oregon’s farm land – even in the Willamette Valley, especially where irrigation is not available – is  as pasture. Grass-fed livestock avoids the health and environmental problems associated with grain-fed livestock and feedlots, while recycling nutrients back into the soil. But the lack of inspected slaughterhouses and butchering facilities means that marketing is a challenge, especially for small-scale producers, as access to retail customers is restricted to the big players.

Similarly, the dominance of giant chain supermarkets makes it difficult for local producers to find outlets for their goods. Buyers for the chains can’t be bothered with small producers. You have to go to independent locally-owned markets like the First Alternative Co-op in Corvallis or to an online marketplace like Eugene Local Foods to find locally grown produce, local cheeses, or locally raised meats and poultry.

Developers push “destination resorts” as a boost to rural economies. But destination resorts don’t do anything for the people already living there – rather, they are pretty much self-contained units, alien invaders that remain distinct and disconnected from the local rural economy. For an idea of a model of tourism that is immersed in the local rural economy looks like, look to France and gîtes ruraux – accommodations at a private farm that can be rented for a week, a weekend, or a short stay.  Gîtes foster a real relationship between the owner of the property, the visitor, and the surrounding countryside. The additional income goes straight to farmers and other residents of the rural area, adding resilience to the local rural economy. In France, gîtes are vigoroulsy promoted by the government.

So here’s an impromptu agenda for beginning to build healthy and resilient rural economies: allow and encourage local processing of poultry and livestock; encourage independent, local markets; and authorize and promote direct rural tourism.

More ideas, anyone?

In 2009, cars scrapped in the U.S. exceeded new car sales  for the first time since World War II, shrinking the U.S. vehicle fleet from the all-time high of 250 million to 246 million.

The 14 million cars scrapped exceeded the 10 million new cars sold, shrinking the U.S. fleet by 4 million, or nearly 2% in one year. The U.S. fleet has apparently peaked and started to decline.

Lester Brown at Treehugger identifies “market saturation” as the dominant factor. The United States now has 246 million registered motor vehicles and 209 million licensed drivers – nearly 5 vehicles for every 4 drivers.

Brown points to Japan as an example. In Japan, annual car sales peaked 1990 and have since shrunk by 21%.

Mish Shedlock looks at the data and asks, what about boomer demographics and teenage driving?

The massive wave of boomer retirement is about to hit. Many boomers will go from two cars to one, or from two new cars to one new car and an “emergency” clunker.

As for teens, parents can no longer afford to buy cars for their kids. And with teenage unemployment at the highest rate in history, can no longer afford to buy their own cars.

Peak oil, peak autos.  What’s next?

Architect and urban planner Andres Duany blames peak oil and global warming on the American lifestyle:

Seth Bauer at the Huffington Post quotes Duany:

It’s where we live, the size of our houses, the distances we drive for work, commerce, play–everything.

And goes on to summarize Duany’s rant:

And it’s all a vicious circle. The reason our houses are so big (and inefficient), he says, is because we have eliminated a healthy civic life. We build homes with giant foyers because we have no public squares. We need media rooms because it’s not easy or pleasant to drive to a multiplex theater, cross a parking lot through an ocean of cars, and pay a fortune for popcorn. We build bars in our basements because there are no neighborhood pubs. We have giant refrigerators and ever-growing storage needs because shopping is both far away and unpleasant (hello, Costco). The result? We heat and air-condition unused rooms in oversized unpleasant houses. And because our home bars and foyers are empty and our media experiences private, we’re lonely, to boot.

But the American lifestyle is really just a symptom of a larger disease – if not industrialization itself, certainly the ideology of growth that it has spawned.

Politicians and economists around the globe are focused on one thing: economic growth. When “the economy” falters, all efforts are towards returning the global economy to a path of growth. As Chris Martenson says in a piece titled Copenhagen & Economic Growth – You Can’t Have Both at the Energy Bulletin:

We need more jobs, we are told; we need economic growth, we need more people consuming more things.  Growth is the ever-constant word on politicians’ lips.  Official actions amounting to tens of trillions of dollars speak to the fact that this is, in fact, our number-one global priority.

Martenson is spot on in pointing out that any solution to global warming requires that carbon emissions be reduced by a vast amount over the next few decades. But economic growth and reduced emissions are mutually exclusive.  You can’t have both.

Even if we can’t muster the moral fortitude do do anything to avert catastrophic global warming, we still may fail in our desperate efforts to maintain economic growth. The primary implication of peak oil is that the era of economic growth is over. The current recession is very much energy-related. The whole concept of recession as a temporary period where growth is briefly interrupted within a long-term trend of economic growth is likely to become irrelevant in a world where oil is becoming ever more expensive to extract and oil supplies are decreasing.

We’re seeing a feedback loop develop with oil eerily similar to the feedback loops operating in the global warming context. The global financial crisis has resulted in oil investment shrinking by 20%, which in turn will result in less oil and more expensive oil in the future, causing more financial turmoil in an ever-worsening downward spiral.

We already are seeing the future beginning to emerge. As the election results in Massachusetts show, that future will hold ugly surprises.

Dr. Dennis Meadows, one of the authors of “Limits to Growth” and its subsequent updates, has a powerpoint presentation and podcast of a recent talk available at the Population Institute site.

Most interesting is his view that the end of growth does not come directly from depletion, but indirectly from rising capital expenditures as the costs of exploiting resource sources and dealing with saturating sinks rise exponentially. And as he points out, that’s what we’re beginning to see already:

Most people assume that the major global difficulties would occur after the end to growth.

This is not correct.

The globe’s population would experience the most stress prior to the peak, as pressures mount high enough to neutralize the enormous political, demographic, and economic forces that now sustain growth.

We are in the early phases of that period now.

Meadows’ presentation finishes up with a chart showing CO2 emissions as a function of four factors:

1. Number of people.
2. Number of units of capital per person, which is a surrogate for living standards.
3. The amount of energy required to build and operate that capital.
4. The fraction of that energy that comes from non-fossil sources.

Meadows points out the key to our climate change predicament lies in reversing population and consumption growth. If we can’t change those, technology can at best only prolong the agony.

Gail the Actuary at The Oil Drum transcribes his finishing words:

So far, our concern about climate change had manifested itself through efforts to improve efficiency and to implement alternative energy sources–the so-called technology options. I will just close by pointing out that as long as we ignore demographic and cultural issues, the growth in the first two factors will continue to offset all of the improvement we make in factors 3 and 4. And so until we can understand how to begin reducing the growth in the first two factors, climate change is a foregone conclusion.

Richard Heinberg also has his presentation posted at the same site. Heinberg focuses on how peak oil and the consequent end of growth led to the financial crisis, one that will not be resolved in the way to which we have become accustomed. The end of growth means we have entered a new era.