The 34 member countries of the Organization for Economic Co-operation and Development (OECD) -including the U.S. – have set as their mission “the increase of general well-being“.

So how is the U.S. doing, compared to other member states? According to a report by the Bertelsmann Stiftung, not at all well. The U.S. is at the bottom of the list, in the same company as Greece, Chile, Mexico, and Turkey – as seen in this chart posted by Charles Blow at the New York Times.

Blow levels a fierce and damning indictment:

We are slowly — and painfully — being forced to realize that we are no longer the America of our imaginations.* * *

We have not taken care of the least among us. We have allowed a revolting level of income inequality to develop. We have watched as millions of our fellow countrymen have fallen into poverty. And we have done a poor job of educating our children and now threaten to leave them a country that is a shell of its former self. We should be ashamed.

According to the Congressional Budget Office, the very richest of us have been taking more and more while everyone else has had to settle for less and less.

The graph below from Barry Rizholtz The Big Picture showing that household income for all but the very, very richest has barely budged since 1979.

The CBO reports that incomes for “households” in all income groups have risen since 1979 – but that doesn’t mean that people are richer or better off. Much of the increase in “household” incomes is explained by more women entering the work force, forming dual income families.

But the additional household income doesn’t ensure that families are better off financially. Remember back when one income was enough to support a decent life?

Increasing income can disguise increasing poverty if the increase is eaten up by rising costs. For most people, energy and health care costs are growing faster than incomes, leaving less and less money for everything else despite increasing GDP.

And then there’s the fact that real average incomes in the U.S. have stopped growing at all, as seen in this chart posted by Michael Panzner at Financial Armageddon.

With more and more of a stagnant pie going to the top 1%, everyone else has no choice but to get by with less and less.

For the past 30 years or more, America has been obsessed with economic growth above all else. And acquiring wealth is the ultimate sign of virtue, as evidenced in the speech prepared by House Majority Leader Eric Cantor for presentation at the University of Pennsylvania’s Wharton School of Business, cancelled when the school opened attendance to the first 300 who showed up – and activists from Wall Street movement took up the invitation.

There are politicians and others who want to demonize people that have earned success in certain sectors of our society. They claim that these people have now made enough, and haven’t paid their fair share. But, pitting Americans against one another tends to deflate the aspirational spirit of our people and fade the American dream. I believe that the most successful among us are positioned to use their talents to help grow our economy and give everyone a hand up the ladder and the dignity of a job.

In an op ed at the Washington Times, Cantor reiterates that objecting to income inequality is “class warfare” that gets in the way of growth.

But the politics of division have reared up, fueled by efforts to incite class warfare. * * * Yet last week, the president called for more stimulus spending paid for by higher taxes and more job-killing regulations. The past two years have shown that this is no way to create jobs. In lieu of more wasteful stimulus spending, we should go all-in on ways to invigorate growth.

Economists don’t take trickle-down economics seriously – why do politicians? The consequences have manifested themselves over the last thirty years, for everyone to see. But the idolizing of economic growth enables us to pretend that inequality doesn’t matter.

The idea that exponential growth can continue indefinitely on a finite planet is insane. The consequences of pursuing it – most alarmingly, global warming and attendant climate change – are catastrophic. The social and ecological predicaments we find ourselves in can be addressed only if we let go of the idea of growth and instead embracing degrowth.

Bad news: a new study finds that the prospects for avoiding dangerous global warming are bleak, indeed.

In the study, titled Emission pathways consistent with a 2°C global temperature limit, the team of scientists reanalyzed a large set of previously published emission scenarios based on integrated assessment models. They found that in the set of scenarios with a ‘likely’ (greater than 66%) chance of staying below 2°C, emissions peak between 2010 and 2020 and fall to a median level of 44 Gt of CO₂ equivalent in 2020 (compared with estimated median emissions across the scenario set of 48 Gt of CO₂ equivalent in 2010).

Current climate models show if the increase in average global temperatures is to be kept below 2°C (3.6°F), emissions must not only peak by 2020, emissions must fall by almost 10% by 2020  – and then continue to fall rapidly to well under half of current emissions by 2050.

Climate scientist Neil Edwards commented on the study’s findings:

The alarming thing is very few scenarios give the kind of future we want.

The International Energy Agency (IEA) recently announced global CO₂ emissions decreased for the first time since 1990, due to the 2008-2009 economic crisis – but warned, don’t expect a trend. A large rebound is anticipated in 2010. (Note: a report published by the European Commission’s Joint Research Centre and PBL Netherlands Environmental Assessment Agency found that global carbon dioxide (CO₂) emissions increased by more than 5% in 2010, reaching an all-time high.)

The IEA’s findings are contained in a free document that contains highlights from CO₂ Emissions from Fuel Combustion 2011, an IEA statistics publication which will be released in November 2011. The full document, which contains all the latest information on the level and growth of CO₂ emissions, is being released to inform the upcoming UN climate negotiations in Durban. Key findings include:

1. Two-thirds of global emissions for 2009 originated from just ten countries, with the shares of China and the United States far surpassing those of all others (combined, these two countries alone produced 41% of the world’s CO₂emissions).
2. Between 1990 and 2009, CO₂ emissions from the combustion of coal grew from 40% to 43% and natural gas from 18 to 20%, while CO₂ emissions from oil fell from 42% to 37%.
3. Two sectors – electricity and heat generation and transport – produced nearly two-thirds of global CO₂ emissions in 2009, up from 58% in 1990.

In their study, the climate scientists found only three of the 193 scenarios examined would be very likely to keep the warming below the danger level – and all of those require heavy use of energy systems that actually remove greenhouse gases from the atmosphere. That would require, for example, both creating biofuels and storing the carbon dioxide from their combustion in the ground. Edwards put it this way:

What we need is at the cutting edge. We need to be as innovative as we can be in every way.

In the statement quoted above, Edwards is assuming that the objective is to preserve the energy-intensive economic growth paradigm. But the paradigm is the problem. Every day it is becoming increasingly clear that cutting edge technology and innovation are not the answer.

One example: many Oregonians across the political spectrum, including Governor John Kitzhaber, have promoted forest biomass as a energy source, thinking woody debris from thinning, brush clearing and removing dead trees could help the state meet its renewable energy goals while at the same time restoring forest health and providing jobs in rural communities. But not so fast, say OSU researchers: managing forests for biofuel production will increase carbon dioxide emissions from the forests by at least 14%. The OSU press release quotes co-author Beverly Law:

Until now there have been a lot of misconceptions about impacts of forest thinning, fire prevention and biofuels production as it relates to carbon emissions from forests. If our ultimate goal is to reduce greenhouse gas emissions, producing bioenergy from forests will be counterproductive. Some of these forest management practices may also have negative impacts on soils, biodiversity and habitat. These issues have not been thought out very fully.

Looking to technology and innovation to enable humans to continue to pursue the economic growth that is consuming the very ecosystems that sustain us is just the denial of an addict. What is necessary is acceptance: growth is destructive and must be reversed. We must welcome and embrace the collapse of our current economic system, and learn to live within an economic system that conserves rather than consumes the larger systems of which it is a part.

A study by Lieutenant Colonel Christopher Fleming at the U.S. Army War College concludes the volatility we’ve seen in oil prices and the lack of increased production as a response to high prices is evidence that we’re hitting geological limits to global oil production.

The excerpt below is from the abstract of the study “Considering oil production variance as an indicator of peak production“:

The primary finding was unprecedented statistical variance in oil production rates as well as in oil prices beginning approximately 2005 to 2010. In the case of oil production rates, variance is at historically low levels. In the case of oil prices, variance is at historically high levels. The data indicate a new higher order of inelasticity between oil price and oil production.

These findings support peak oil forecasts in the range of 2005 to 2010 and together provide strong evidence that geological factors could presently be limiting world oil production.

The inelasticity between oil price and oil production Fleming talks about is evidenced by the wild swings in oil prices over the last six years, as seen in this graph posted by Stuart Staniford at Early Warning . . .

. . . while the lack of response from oil producers can be seen in this graph posted by Gail Tverberg at Our Finite World showing production from the Middle East and North Africa (MENA) since 1965.

MENA Monthly crude oil production, based on EIA data.

MENA’s oil consumption is rising, so even if MENA’s oil production could rise, that does not mean that oil exports would rise. For example, Saudi Aramco projects Saudi Arabia’s domestic consumption will reach an equivalent of 8.3 million barrels by 2028, more than double the 3.4 million barrels equivalent in 2009 – leaving precious little for export.

Ecological economist David Stern recently published a paper on the essential role of energy in economic growth, aptly titled ‘The Role of Energy in Economic Growth“. Stern observes that mainstream economic theory pays no attention to the role of energy; however, physics shows that energy is necessary for economic production and, therefore, economic growth. The “synthesis” model proposed by Stern explains the industrial revolution as a releasing of the constraints on economic growth due to the development of methods of using coal and the discovery of new fossil fuel resources.

Climate considerations aside, for business as usual – the continuation of economic growth – it’s bad enough that the world is bumping up against limits to oil production volume; however, the energy returned on energy investmen (EROI) is dropping, too – it’s costing more and more energy to produce the same amount of oil. A new study titled “A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production” finds:

EROI for finding oil and gas decreased exponentially from 1200:1 in 1919 to 5:1 in 2007. The EROI for production of the oil and gas industry was about 20:1 from 1919 to 1972, declined to about 8:1 in 1982 when peak drilling occurred, recovered to about 17:1 from 1986–2002 and declined sharply to about 11:1 in the mid to late 2000s. The slowly declining secular trend has been partly masked by changing effort: the lower the intensity of drilling, the higher the EROI compared to the secular trend. Fuel consumption within the oil and gas industry grew continuously from 1919 through the early 1980s, declined in the mid-1990s, and has increased recently, not surprisingly linked to the increased cost of finding and extracting oil.

A new paper by economist James Hamilton titled Oil Prices, Exhaustible Resources, and Economic Growth documents that a key feature of the historical growth in production has been exploitation of new geographic areas rather than application of better technology to existing sources, and suggests that the end of that era is nigh. Hamilton shows that economic dislocations have historically followed temporary oil supply disruptions.  He concludes:

If the peaking of global production results in further big increases in the price of oil . . . the economic consequences of reduced energy use would have to be significant.

* * *

If the future decades look like the last 5 years, we are in for a rough time.

Most economists view the economic growth of the last century and a half as being fueled by ongoing technological progress. Without question, that progress has been most impressive. But there may also have been an important component of luck in terms of finding and exploiting a resource that was extremely valuable and useful but ultimately finite and exhaustible. It is not clear how easy it will be to adapt to the end of that era of good fortune.

Tom Murphy writes that we now find ourselves in an energy trap.

In brief, the idea is that once we enter a decline phase in fossil fuel availability—first in petroleum—our growth-based economic system will struggle to cope with a contraction of its very lifeblood. Fuel prices will skyrocket, some individuals and exporting nations will react by hoarding, and energy scarcity will quickly become the new norm. The invisible hand of the market will slap us silly demanding a new energy infrastructure based on non-fossil solutions. But here’s the rub. The construction of that shiny new infrastructure requires not just money, but . . . energy. And that’s the very commodity in short supply. Will we really be willing to sacrifice additional energy in the short term—effectively steepening the decline—for a long-term energy plan? It’s a trap!

A rough time, indeed. Effectively coming to grips with this new reality won’t be from the top down; it’s futile to look for or expect political solutions. Rather, doing so will require the kind of “magic” that begins with the individual, and works outward from there. It’s not the destination that matters, but rather the journey. And anybody can take that first step.

IEAs chief economist Fatih Birol, speaking at a conference in London, said that the oil import bill in Europe, the U.S. and Japan is close to the level hit in 2008, when high prices were a contributing factor in the severe recession. Birol noted that when expenditures on oil rise to around 5% of gross domestic product, it has historically caused economic problems. He then warned:

Today with a more than $100 oil price, we are close to that 5% hurdle.

Birol said that of all the economies in the Organization of Economic Cooperation and Development, the U.S. is most vulnerable to high oil prices.

Although oil prices have not yet approached the $147/barrel mark hit briefly in 2008, the total OECD oil import bill for 2011 is close to that of 2008. Brent crude is up again, hitting $113/barrel earlier this week, an increase of nearly $14 a barrel over last week’s lows. WTI prices have recently been hovering around $86 a barrel. The spread between Brent and WTI this week widened again to $25.79 a barrel, only a dollar below the record high of $26.87 set on September 26th.

One sign that global oil production has hit a plateau is that crude oil production is no longer responsive to price signals, as seen in this chart posted by Gail Tverberg at Our Finite World.

Robert Hirsch (of Hirsch Report fame) observes that global oil production has been on a plateau for the last seven years, fluctuating within a 6% range. He expects production to continue to fluctuate within a narrow range for another 1-4 years, and then to transition into decline.

Tom Whipple at the Falls Church News-Press writes that the ongoing and intractable European debt crisis is a symptom of the depletion of cheap oil. The European economies – and economies of the rest of the OECD, and especially the U.S. – are, for the foreseeable future, likely to contract under the weight of expensive energy. Bailouts and recapitalizations will prove futile, serving only to transfer more wealth from taxpayers to the rich and powerful, especially the banksters.

While global economies might take a hit from high oil prices, that won’t do much to postpone the inevitable decline in global oil production. Hirsch calculates that even a decline of a few million barrels per day in world oil consumption would result in a relatively small delay in the onset of world oil production decline.

Kurt Cobb observes it’s hard to imagine a future that is different from the recent past – for most people, perhaps an insuperable task. Even as conditions worsen, people will expect that if governments would just take the right steps, the world will return to the path of exponential economic growth. For a while longer, politicians – Democrat and Republican alike – will get elected promising to do just that. But wish though we might, those dreams are over. Little by little, we’ll have to begin to let go of the dreams we’ve grown up with, and to begin dreaming something altogether new.

Global oil (all liquids) production appears to have exceeded levels reached in July 2008 and reached a new all-time high in 2011, according to both OPEC and the IEA.  This chart is posted at Early Warning.

Despite record production and faltering western economies, oil prices remain stubbornly high. The global benchmark Brent crude is trading above $112 today (September 15); and WTI, which has seemingly become disconnected from global markets, is trading above $89. Again, Early Warning posts a revealing chart.

The IEA blames high crude prices on “fundamental market tightness”, reporting demand has been outpacing supply since the middle of 2010, leading to a depletion of stocks. Despite the drops in demand in western countries, global consumption continues to outpace supply.

Tom Whipple at the Falls Church News-Press observes we are seeing  “a three way race among OECD demand, which is large but falling by roughly 3-4 percent from last year; the non-OECD world where demand is rising at a rate of about 4 percent over last year; and global production which for now is rising slowly[.]”

If demand growth continues at its present or even somewhat reduced pace, demand should be pushing up against 92 million b/d by the end of next year. The world will soon see whether it’s possible to push global production to that level.

Regardless, the economic consequences of pushing up against the limits of global oil production are not going to be pretty, as we are already seeing. Ronald White at the L.A. Times reports U.S. motorists are on pace to spend $491 billion for gasoline this year, the most ever. Drivers have shelled out more for fuel this year than in 2008 because prices rose faster this time and have stayed high longer. The 2008 average U.S. price was about $3.25 a gallon. This year, the average price has been about $3.66 a gallon. Fuel prices have remained high despite weak demand: Energy Department statistics show that gasoline demand in the U.S. is running 157,000 barrels a day below 2010 levels.

High fuel prices are resulting in less driving. In 2011, cumulative travel on U.S. roads is down from 2010. Truck traffic – an indicator of economic activity -  is down, too. Truck traffic never recovered from the recessionary levels of 2008, as seen in this chart showing real-time diesel fuel consumption, posted at Calculated Risk.

In the U.S., people are not only driving less – they’re buying fewer cars. When the 2008 recession hit, sales of new cars crashed as people hung on to their old cars in an unprecedented fashion.

The fleet turnover rate remains at historically high levels, while new car sales remain in the doldrums.

Goldman Sachs is forecasting Brent crude oil to reach $120 a barrel by the end of 2011, $130 in 12 months, and $140 by the end of 2012. If oil prices continue to rise, hopes for any economic recovery are doomed to disappointment, regardless of any stimulus, regulatory relaxation, or unleashing of the so-called “job creators”.

Tom Bowerman recently sent me this chart showing that real gas prices are now back where they were at the beginning of the oil age.

Cheap oil made the oil age possible. It’s looking like high gas prices will prove to be the bookends of the oil age.

Light vehicle sales were at a 12.12 million SAAR in August, up 5.3% from August 2010 and down <1% from the July 2011 sales rate of 12.2 million.

The above chart, posted by Bill McBride at Calculated Risk, shows car sales poking along at levels typical of three, four, even five decades ago, and last seen two decades ago. In 1991, the population of the U.S. was 50+ million less than it is today – and there were 35 million fewer licensed drivers, as seen by comparing statistics here and here.

Globally, 35 million new vehicles were registered last year. So even with the collapse in U.S. auto sales, the U.S. still accounts for over a third of the global market. And with 240,000,000 light vehicles on the road, the U.S. maintains almost one-quarter of the global light vehicle fleet. Tom Whipple at the Falls Church News-Press points out that in the U.S there is now a motor vehicle for every 1.3 people and at least one for every licensed driver. But in an era of little or no economic growth, limited employment opportunities and rising energy costs, it is highly unlikely that there will be anything approaching 240 million registered vehicles in the U.S. 25 years from now.

Last month, Wards Auto published a story pointing out that the world’s motor vehicle count for the first time exceeded one billion – which explains why global oil prices remain extraordinarily high even while economies continue to struggle. Brent crude is trading at almost $116/barrel ($115.80 as of 9/7/2011), and is trading at a near record premium of $25.70 to WTI crude at ~$90/barrel ($90.10 as of 9/7/2011).

One of the predictions of peak oil theory is that as the peak in global oil production rates is approached, economic activity will begin to stumble and eventually decline. Peak oil means the era of economic growth is over and a new era of economic contraction begins. Global oil production reached a plateau in 2004, and has been bouncing around that level ever since. It should not be surprising that the level of economic activity has been bouncing around too, unable to sustain the path of robust growth that we have become accustomed to view as normal.

One indicator of economic activity is transportation. A recent post here noted travel on all U.S. roads and streets was down 1.9% compared with May 2010. VMT has been below the 2008 peak for 42 months. That’s a new record for longest period below the previous peak, and we’re still counting. The 2008 peak in VMT may never again be breached.

Rail freight traffic is down, too. Carload traffic peaked in 2008, and intermodal traffic (using intermodal or shipping containers) in 2006 – as seen in these graphs posted by Bill McBride at Calculated Risk.

Another indicator of economic activity is employment. As this chart posted by Mish Shedlock shows, employment peaked in the U.S. in 2008.

Employment today is not only substantially below the 2008 peak- it’s lower than it was 10 years ago.

The participation rate as well as the absolute number of people employed in the U.S. economy peaked ten years ago, as seen in this chart posted by Calculated Risk.

People are dropping out of the economy. A record number of people are now participating in the economy only on a part-time basis, as seen in this chart posted at Calculated Risk:

Many are dropping out of the economy completely. Were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%, instead of the 9.1% recently reported by the Bureau of Labor Statistics (BLS).

If you start counting all the people who want a job but have given up, all the people with part-time jobs who want a full-time job, all the people who have been dropped off the unemployment rolls because their unemployment benefits ran out, you get a more accurate  picture of what the real unemployment rate is. That number – the U-6 number- is seen in in the last row of this chart posted by Mish Shedlock: 16.1%.

Much of the economic growth seen in the U.S. over the last fifty years was a function of more and more people leaving the household economy to participate in the formal economy, where their efforts are measured (and taxed). The last decade demonstrates how hard it is to maintain economic growth – and government revenues – as people are dropping out of the formal economy rather than entering it.

A key investment firm in Saudi Arabia is projecting that Saudi production – which stood at around 9.4 million bpd in 2005 before diving to 8.2 million bpd in 2010 – will rebound to 9.3 million bpd in 2015, to around 10 million bpd in 2020, to 10.7 million bpd in 2025, and to a record high of 11.5 million bpd in 2030. Good news, right?

But wait a minute. The same report projects Saudi demand to grow as well, leaving less than ever for export. The report forecasts domestic use of crude – which averaged 2.4 million bpd in 2010, up from 1.9 million bpd in 2007 and 1.6 million bpd in 2003 – to swell to 3.1 million bpd in 2015, to 3.9 million bpd in 2020, to 5.1 million bpd in 2025 and 6.5 million bpd in 2030.

Oil exports fell from about 7.5 million bpd in 2005 to 5.8 million bpd in 2010. Exports are projected to dip from current levels to six million bpd in 2015, to 5.6 million bpd in 2020, and to as low as 4.9 million bpd in 2030.

Earlier this month, the OPEC Monthly Oil Market Report (MOMR) reports that Saudi production rate exceeded 9.4 million bpd. In late 2004, Saudi Arabia reached a plateau of 9.5 million bpd, but then production fell right at the end of 2004. Production slowly recovered to 9.5 million bpd in summer 2008 – at which point, as the global financial crisis hit, demand fell and production was sharply reduced. Stuart Staniford suspects Saudi Arabia’s sustainable capacity has eroded from ~9.5 million bpd in 2008 to ~8.8 million bpd today.

But who knows for sure? Staniford points out that historically the Saudis have never maintained this level of production for very long, never mind gone beyond it.

The International Energy Agency (IEA) in its most recent report (Energy Outlook 2010, published last November) projected Saudi production would increase by 5 million bpd to 14.6 mbd by 2035.  Even Saudis are calling out the IEA’s numbers as nothing more than wishful thinking.

Even if we accept the optimistic view that Saudi Arabia will in fact increase production by 2 mbd more than they’ve ever been able to do before, the bad news is this: less will be available for oil consuming countries, including the U.S.

For the U.S., peak oil is here.Peak VMT is here. Peak economy is here: “recovery” remains elusive, as oil prices remain extraordinarily high (~$100 WTI, ~$118 Brent) despite faltering demand in the developed nations.

In Washington, the big debate is what policies need to be followed to get us out of the doldrums and back on the road to economic growth. The right asserts all we have to do is get government out of the way, pare taxes and government expenditures to the bone, shovel money in the hands of the masters of the universe who are the “job creators”, and the so-called “free market” will do the rest. The more that experience proves this a fantasy – witness the last three decades of declining real income except for the very rich, real unemployment/underemployment (U6) stubbornly stuck at ~16%, and the most extreme disparity in wealth since the ’20s; coupled with a devastated ecosystem, most catastrophically embodied in climate change, that promises to destroy civilization itself, for rich and poor alike – the more desperately the right clings to its dogma.  The argues that a healthy dose of fiscal stimulus will get the economy going again – like it did for St. Roosevelt back in the ’30s – and that the resulting robust economic growth will raise all boats while filling government coffers, making it possible to resume robust economic growth and pay back the debt incurred. Believing this requires ignoring the fact that the U.S. is no longer the virgin nation it once was, rich in promise and untapped resources. The land is now raped and pillaged, too exhausted and too bitter to respond to caress or cajoling.

In Europe, reality is just as studiously ignored: the huge debts that have been run up by financiers in quest of speculative returns require renewed, robust economic growth if they are to be repaid. The required economic growth will never be forthcoming. Piling new debt onto old will just make the crash bigger when it comes.

The debate amongst economists and politicians in Washington and Europe is like a debate amongst scholastics: how many angels can dance on the head of a pin? St. Thomas at last had an epiphany, that all was so much straw. We should be so lucky.

One of the predictions of peak oil theory is that peak oil would manifest itself in economic dislocation as the peak in global oil production approaches, because economic growth is dependent on ever-increasing supplies of energy. As energy becomes more scarce and more expensive, maintaining economic growth becomes more and more difficult until finally the economic edifice faces crisis and even collapse as its financial underpinnings become unstable.

Stuart Staniford at Early Warning points out that peak oil is not synchronous: the peak in oil consumption arrives earlier in some countries than in others. In the U.S., the peak oil consumption is clearly in our rear view mirror.

US consumption peaked in 2005. The major countries of western Europe peaked earlier, Italy in 1995, followed by France and Germany. Japan peaked right after Italy.

While oil consumption in most wealthy countries may be peaking, oil consumption is still growing in other countries – especially China and other countries in Asia and the Middle East. Norway and Australia are the exceptions.

The countries in which oil consumption is still increasing account for a little over a third of global consumption. As their oil consumption grows and global oil production fails to keep up, somebody must get by with less.

It should not be surprising to find the peak in oil consumption in the U.S. to be accompanied by a peak in vehicle miles traveled (VMT). VMT in the U.S. appears to have peaked in 2008.

With fewer miles being driven, it follows there should also be lessening demand for cars. Light vehicle sales in the U.S. almost certainly peaked in 2001, and the number of light vehicles on U.S. roads in 2008 when the number of vehicles sold fell below the scrappage rate. The light vehicle sales rate has remained below the scrappage rate ever since.

Could it also be that the U.S. has seen peak employment? As seen in this chart posted at Calculated Risk, the employment/population ratio and the labor force participation rate both appear to have peaked around 2001.

As Sharon Astyk points out, much of what has passed for “economic growth” over the last decades has simply been moving work from the household economy to the formal economy, where it can be measured (and taxed). That displacement of the household economy by the formal economy is a major reason why the participation rate rose over the last 50 years. That movement from the home to the workplace now appears to be reversing.

Even more startling than the decline in participation rates, the absolute number of people employed in the U.S. may have seen its peak – around 2007-2008, as seen in this chart posted by Charles Hugh Smith at Of Two Minds.

The formal economy is dependent on factors beyond the control of economists or politicians, and those factors have now begun to predominate as physical limits to growth have been reached or exceeded. As in times past when the formal economy has failed, people will increasingly abandon the pursuit of wealth and growth as the informal economy – household labor, barter and “black market” exchanges between friends and neighbors, volunteer work, reliance on family and even crime – takes up the slack and become a bigger and bigger part of our everyday lives.

The U.S. may never see a “recovery” from this period of economic crisis. Pity the poor politician who has to break the news to the American people that the party’s over.

Think the world is making any progress in tackling global warming?  Think again: 2010 set a record high for greenhouse gas emissions.

Energy-related carbon-dioxide (CO2) emissions in 2010 were the highest in history, according to the latest estimates by the International Energy Agency (IEA).

After a dip in 2009 caused by the global financial crisis, emissions are estimated to have climbed to a record 30.6 Gigatonnes (Gt), a 5% jump from the previous record year in 2008, when levels reached 29.3 Gt.

In addition, the IEA has estimated that 80% of projected emissions from the power sector in 2020 are already locked in, as they will come from power plants that are currently in place or under construction today.

44% of the estimated CO2 emissions in 2010 came from coal, 36% from oil, and 20% from natural gas.

The IEA’s 2010 World Energy Outlook set out the 450 Scenario, an energy pathway supposedly consistent with achieving the goal of limiting average global temperature increase to 2°C. The IEA believes this pathway can be achieved if global energy-related emissions in 2020 are not be greater than 32 Gt. Achieving this would require that over the next ten years, emissions would have to rise less in total than they did between 2009 and 2010.

Of course, 450 ppm CO2 is much too high to avoid catastrophic consequences.

The conclusion that limiting CO2-equivalent to 450 ppm will succeed in limiting temperature increase to 2°C is based on the assumption that no feedback loops will kick in, an assumption that is already proving unfounded – for example, Arctic amplification is already kicking in and thawing permafrost will further accelerate global warming.

If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted, paleoclimate evidence and ongoing climate change suggest that CO₂ will need to be reduced from its current 385 ppm to at most 350 ppm. To be safe, we’ll likely have to get back to pre-industrial levels of 280 ppm, and rather quickly.

So how are we doing?

393 and counting.

Dr Fatih Birol, Chief Economist at the IEA, isn’t sounding optimistic.

Our latest estimates are another wake-up call. The world has edged incredibly close to the level of emissions that should not be reached until 2020 if the 2ºC target is to be attained. Given the shrinking room for manœuvre in 2020, unless bold and decisive decisions are made very soon, it will be extremely challenging to succeed in achieving this global goal agreed in Cancun.

The IEA sees the challenge as squaring the circle: “improving and maintaining quality of life for people in all countries while limiting CO2 emissions.” The phrase “improving and maintaining quality of life” translates into continued economic growth, growth that is dependent on energy consumption and results in the greenhouse gas emissions which are threatening to destroy Earth as we know it. More of what got us into this mess is not going to get us out.