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New UN Report Is Cautious On Making Climate Predictions by Fred Pearce: Yale Environment 360

New UN Report Is Cautious On Making Climate Predictions by Fred Pearce: Yale Environment 360.

24 MAR 2014: ANALYSIS

The draft of the latest report from the Intergovernmental Panel on Climate Change warns that the world faces serious risks from warming and that the poor are especially vulnerable. But it avoids the kinds of specific forecasts that have sparked controversy in the past.

by fred pearce

Batten down the hatches; fill the grain stores; raise the flood defenses. We cannot know exactly what is coming, but it will probably be nasty, the latest report from the UN’s Intergovernmental Panel on Climate Change (IPCC) will warn next week. Global warming will cause wars, displace millions of people, and do trillion-dollar damage to the global economy.

But careful readers will note a new tone to its discussion of these issues that is markedly different from past efforts. It is more humble about what scientists can predict in advance, and far more interested in how societies can make themselves resilient. It also places climate risks much more

IPCC cautious predictions

Rob Elliott/AFP/Getty Images
The draft IPCC report cites sea level rise and storm surges among eight “key risks.”

firmly than before among a host of other problems faced by society, especially by the poor. That tone will annoy some for taking the edge off past warnings, but gratify others for providing a healthy dose of realism.

The study, the result of a five-year review of published papers, is from the IPCC’s scientists working on the impacts of climate change. It complements an IPCC study late last year on the planetary science and will be followed next month by another that will focus on what we should do about it.

A leak of the final draft prepared by scientists at the end of October 2013 is circulating. It is not the final version, which will be a summary for policymakers that will be released on March 31, though there is unlikely to be much change. And, since government delegates at international talks in Japan this week will scrutinize the final draft before signing off

Hopes that better science and greater computer power would allow more precise forecasts have often proved wrong.

for publication, what we have is effectively “the scientists’ cut.”

Past impacts reports from the IPCC were based around attempts to produce detailed forecasts of local climate in future decades and somewhat mechanistic assessments of what this would mean for society. But the new report is much more wary, especially of putting numbers on likely changes. Many previously firm-sounding forecasts have disappeared since the last major IPCC climate-impacts report in 2007, such as spreading droughts and crop losses in Africa and more violent hurricanes in the Atlantic.

The reason for avoiding precise forecasts is twofold. First, overly precise predictions got the authors of the 2007 report into trouble. The most famous faux pas was the claim that Himalayan glaciers would be gone by 2035, when 2350 is a more likely date. But there were other unsubstantiated forecasts, such as that “projected reductions in [crop] yield in some countries [in Africa] could be as much as 50% by 2020” — a misinterpretation of a paper, which was not peer-reviewed, that looked at rain-fed agriculture in just three North African countries.

The hundreds of authors of the draft report have been silent for some time, following IPCC rules by refusing to discuss their draft with journalists. But their chairman, Chris Field of the Carnegie Institution in Stanford, California, told me soon after taking on the job in 2009 that he recognized serious mistakes had been made last time and that he was “committed to sufficient checking and cross-checking to ensure a truly error-free product next time.”

Another reason for the more measured tone is that hopes that better science and greater computer power would allow more precise forecasts than seven years ago have often proved wrong. For parts of the world, model forecasts of regional climate change are diverging rather than converging. The more we know, it seems, the less we know for sure.

Caution is the watchword. Take the treatment of Africa. Last time, the chapter on that continent began with a declaration that up to a quarter of a billion Africans “are projected to be exposed to increased water stress due

The draft report lays out eight ‘key risks,’ including sea level rise and storm surges that could affect hundreds of millions.

to climate change.” This time, the leaked draft states simply that while “a reduction in precipitation is likely over North Africa … projected rainfall change over sub-Saharan Africa is uncertain.”

The draft agrees that “climate change will amplify existing stress on water availability in Africa” and will “very likely” reduce cereal crop productivity. But this time the discussion is not about how big or small those reductions might be, but on how African farmers might cope with less water, through terracing and agroforestry for instance.

Asia has fallen into a similar forecasting limbo. Last time, the IPCC warned that there would be less water in most Asian river basins and up to a billion people could experience “increased water stress” as early as the 2020s. This time, “there is low confidence in future precipitation projections at a subregional level and thus in future freshwater availability in most parts of Asia.” Last time the IPCC predicted “an increase of 10 to 20% in tropical cyclone intensities” in Asia. This time it reports “low confidence in region-specific projections of [cyclone] frequency and intensity.”

Some certainties do remain. The leaked draft suggests growing agreement among climate modelers that Scandinavia and much of Canada will see more precipitation and that the southwestern U.S., southern Australia, the Middle East, southern Europe, and North Africa can expect more droughts and emptier rivers.

Southern Europe looks set to fry, with crops shriveling in the fields, reservoirs emptying, deserts spreading, tourists staying away, and demand for air conditioning going through the roof. Even its vineyards will suffer, though a reference in a March 2013 draft to Venice being “lost forever” beneath the waves has since been removed.

Globally, the draft report lays out eight “key risks”: sea level rise and storm surges in coastal areas that could affect “hundreds of millions… by 2100”; food insecurity for the poor from warming and drought; inland flooding of cities; loss of access to water for drinking and irrigation; breakdown of infrastructure due to extreme events; loss of fisheries, due to a “global redistribution of maximum catch potential”; loss of terrestrial ecosystems such as

The idea that climate change is of an entirely different order to other threats faced by the world has been rooted out.

“forest dieback … in the next one to three decades”; and extreme heat, especially for the poor in cities.

But it asks us to be grown-up about the uncertainties involved in what plays out when. “Responding to climate-related risks involves making decisions and taking actions in the face of continuing uncertainty about the extent of climate change and the severity of impacts in a changing world,” the draft report says. Or as Field put it to journalists in 2010: “Most people spend their lives making decisions under uncertainty, and that’s what dealing effectively with climate change demands — the same kind of decisions you make when you decide to buckle your seatbelt.”

The 2007 report was almost all about the impacts of climate change. Most of this report, and in particular most of the summary for policymakers, is about resilience and adaptation to inevitable climate change.

Central to that new take is setting climate change in a context of other risks, uncertainties and mega-trends such as poverty and social inequality, urbanization, and the globalization of food systems. What some call “climate exceptionalism” — the idea that climate change is something of an entirely different order to other threats faced by the world — has been rooted out. Here climate change is painted as pervasive, since nobody can avoid it wholly, but as usually only one among many pressures, especially on the poor.

“Climate-related hazards constitute an additional burden to people living in poverty, acting as a threat multiplier,” it says. “Vulnerability is rarely due to a single cause.” Even for someone living on a sand spit in coastal Bangladesh, at constant risk of being washed away by rising tides and

On food security, the report is markedly more gloomy than the previous assessment in 2007.

superstorms, the country’s pervasive land inequality may be a bigger threat.

Thus climate will exacerbate and amplify pre-existing problems. The report notes how a drought in Australia in 2007 sent global food prices soaring in 2008. But it cannot answer whether we should blame climate change or a dysfunctional food system.

Food security is, nonetheless, one area where the report is markedly more gloomy that its immediate predecessor. The 2007 assessment argued that increases in crop yields in mid-latitudes could offset losses in hotter climates, at least for the next few decades. “Globally,” it said, “the potential for food production is projected to increase with increases in local average temperature over a range of 1-3 degrees C.” But that optimism has faded. The leaked draft forecasts that “local temperature increases of 1 degrees C or more… are projected to negatively impact yields.”

Average yields of major grains could fall by up to 2 percent a decade from here until the end of the century, it predicts. With demand for food crops likely to rise by 14 percent a decade, that sounds a daunting prospect — though it also suggests that climate change is only a small element in the emerging 21st century crisis over global food security.

Some nightmare scenarios are robustly defused. Past IPCC reports have warned that there might be as many as 50 million “climate refugees” around the world, who will flee drought, rising tides and spreading deserts. This report is set to dismiss that idea. “The current alarmist predictions of massive flows of so-called ‘environmental refugees’ are not supported by past experiences of responses to droughts and extreme weather,” the draft

MORE FROM YALE e360

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Now Outlived Its Usefulness?

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Some scientists are saying the latest report from the Intergovernmental Panel on Climate Change is overly conservative and fails to mention some of the most worrisome possible scenarios. The panel, they contend, is no longer fulfilling its mission of informing policy makers of the risks of global warming.
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says. “Predictions for future migration flows are tentative at best.” It also points out that migration is a good “coping strategy,” often to be encouraged rather than feared.

The report may irritate politicians in poor countries who look to blame climate change caused by the rich world for the ills of their people and want to demand reparations. But it may also dismay those who want to cite other factors to “prove” that climate change is never to blame. The world is more complicated, the scientists who prepared the draft conclude. The lesson of their report is that climate change will be implicated in a vast array of global ills, but it will rarely be the sole cause.

Climate change skeptics may want to characterize the report as debunking what they regard as the scaremongering of past reports. They may latch onto statements such as that “for most economic sectors,” factors such as changing demography, technology, lifestyles, and governance “will be large relative to the impacts of climate change.” And the report is, on the face of it, more optimistic than the famous review of the economics of climate change by Britain’s Nicholas Stern in 2006.

Stern put the likely cost to the global economy of warming this century at 5-20 percent of GDP. The new IPCC draft says that a global average temperature increase of 2.5 degrees from pre-industrial levels may lead to a global loss of income of between 0.2 and 2 percent.

But if Americans think this puts them in a good position, they are wrong. While the report is silent on whether there might be more or stronger hurricanes hitting North America from the Atlantic (and “Katrina aside,” saw no trend in U.S. hurricane deaths since 1970), it states that “much of North American infrastructure is currently vulnerable to extreme weather events.”

The message is clear. We may not be able to make hard and fast predictions, but prudency requires that we prepare for the worst.

NASA Models Predict Total Societal Collapse: "Irreversible"

NASA Models Predict Total Societal Collapse: “Irreversible”.

Mac Slavo
March 25th, 2014
SHTFplan.com

societal-collapse

The end of the world as we know it is coming.

You’ve likely heard this before, especially from the growing number of voices in the alternative news and preparedness communities. Often dismissed as conspiracy theory or outright lunacy, there is a growing body of evidence that suggests these fringe thinkers may well be on to something.

Despite assurances from most political leaders, experts and researchers who argue that we live in a stable and sustainable world, a new study utilizing mathematical models developed by NASA’s Goddard Space Flight Center may confirm our worst fears.

According to the Socio Economic Synthesis Center, which led the study’s research team and was made up of well respected natural and social scientists from various U.S.-based universities, society as it exists today is decades, perhaps just years, from a complete collapse of our way of life.

Given economic strati cation, collapse is very difficult to avoid and requires major policy changes, including major reductions in inequality and population growth rates. Even in the absence of economic strati cation, collapse can still occur if depletion per capita is too high. However, collapse can be avoided and population can reach equilibrium if the per capita rate of depletion of nature is reduced to a sustainable level, and if resources are distributed in a reasonably equitable fashion. (SESC via Steve Quayle)

The study cites scores of historical examples of civilization collapse dating back thousands of years. Given the facts it is clear that humanity’s long sought after Utopian society is a goal that is simply unachievable. Every five hundred years or so, the whole system simply falls apart.

There are widespread concerns that current trends in population and resource-use are unsustainable, but the possibilities of an overshoot and collapse remain unclear and controversial.

How real is the possibility of a societal collapse?

Can complex, advanced civilizations really collapse? 

It is common to portray human history as a relentless and inevitable trend toward greater levels of social complexity, political organization, and economic specialization, with the development of more complex and capable technologies supporting ever-growing population, all sustained by the mobilization of ever-increasing quantities of material, energy, and information. Yet this is not inevitable.

In fact, cases where this seemingly near-universal, long-term trend has been severely disrupted by a precipitous collapse often lasting centuries have been quite common.

This brings up the question of whether modern civilization is similarly susceptible. It may seem reasonable to believe that modern civilization, armed with its greater technological capacity, scientific knowledge, and energy resources, will be able to survive and endure whatever crises historical societies succumbed to.

But the brief overview of collapses demonstrates not only the ubiquity of the phenomenon, but also the extent to which advanced, complex, and powerful societies are susceptible to collapse.

In short, the mathematical models utilized to determine the results of the study indicate that there are two key causes for what the authors call an “irreversible” collapse.

First, with the earth’s population now over 7 billion people our civilization is burning through resources faster than they can be replenished, and the burden of paid “non-workers” (i.e. those who are given resources for performing no actual function in society) leads to a complete break down in the system.

We can see how an irreversible Type-N (full) collapse of Population, Nature, and Wealth can occur due to over-depletion of natural resources as a result of high depletion per capita.

Workers and Non-Workers with the same level of consumption, i.e., with no economic strati cation. The Non-Workers in these scenarios could represent a range of societal roles from students, retirees, and disabled people, to intellectuals, managers, and other non-productive sectors. In this case, the Workers have to deplete enough of Nature to support both the Non-Workers and themselves.

Second, and this may come as no surprise, “elite” members of society are accumulating whatever available resources there are in an effort to maintain control over the “commoners.”

The Elite population starts growing significantly… hence depleting the Wealth and causing the system to collapse.

Under this scenario, the system collapses due to worker scarcity even though natural resources are still abundant, but because the depletion rate is optimal, it takes more than 400 years after the Wealth reaches a maximum for the society to collapse.

In this example, Commoners die out first and Elites disappear later. This scenario shows that in a society that is otherwise sustainable, the highly unequal consumption of elites will still cause a collapse. This scenario is an example of a Type-L collapse in which both Population and Wealth collapse but Nature recovers.

The Elites eventually consume too much, resulting in a famine among Commoners that eventually causes the collapse of society. It is important to note that this Type-L collapse is due to an inequality-induced famine that causes a loss of workers, rather than a collapse of Nature. Despite appearing initially to be the same as the sustainable optimal solution obtained in the absence of Elites, economic strati cation changes the fi nal result: Elites’ consumption keeps growing until the society collapses.The Mayan collapse in which population never recovered even though nature did recover is an example of a Type-L collapse

There are several other scenarios outlined in the study, but the above two are seemingly the ones that may be responsible for the coming collapse of our own civilization.

In America, nearly 50% of the population produces nothing, yet receives payment in the form of money, goods and services. This takes resources out of the hands of those who actually produce these resources.

Furthermore, it should be obvious that elite members of society simply take what they want through force, whether by taxation or criminal activity (as defined by natural law), putting even more strain on the system.

Over time, the debt builds and pulls forward wealth from generations ahead, resources are depleted, and costs begin to reach levels that are simply unsustainable for everyone, including the elites who attempt to amass as much as they can.

In the end, we all suffer the same fate.

According to this and other studies, like one recently published by the UK Government Office of Science and entitled A Perfect Storm of Global Events, we are very quickly approaching the breaking point. Over the next fifteen years, it is predicted that the strain could become so burdensome on society that the system will crack and eventually break down.

The result will be famine, war, and what some refer to as a “die off.” This will affect all segments of society.

Naturally, there will be those who survive, and it will likely be the people who are able to develop their own sustainable environments on a personal, familial or communal level. These people may have taken steps to not only prepare for long-term crises, but to develop sustainable practices that will allow them to produce their own food and energy.

The mathematics being cited here have been seen time and again in other studies, and they don’t bode well for human civilization as we know it today.

With seven billion people on the planet, a massively unproductive non-workforce, and the greed of the elite, it is only a matter of time before something breaks and there is a real possibility that our civilization will not be able to survive it.

The scary version? According to these studies, the consequences will be felt within most of our lifetimes.

Why peak oil signals the world's end, or at least the one we know – Zawya

Why peak oil signals the world’s end, or at least the one we know – Zawya.

By Joel Guglietta

While global financial markets are still levitating somewhere between the stratosphere and the Kingdom of Asgard, by 60°24′31″ North and 172°43′12″ West, in the middle of nowhere, an isolated island of 137.857 sq-mi holds the key of three major economic developments and risks:

  1. November 2013, Lawrence Summers raised the question whether the “secular stagnation” and the impossibility for the US and other major economies to grow without the help of recurring bubbles was not doomed to become the “new normal”.
  2. March 2014, the Conference Board released a study (figure 1) showing the falling trend in global total factor productivity, i.e. in the share of output not explained by the “accumulation of factors” (more on this economic jargon below).
  3. March 2014 again, the NASA published a research paper answering to “widespread concerns that current trends in resource-used are unsustainable, but possibilities of overshoot/collapse remain controversial”. This study tells us that, based on a well-known prey-predator model to which they add “wealth and economic inequality”, a total collapse is “very difficult to avoid” (figure 2).

w
Source: The Conference Board, January 2014

3
Source: NASA, 2014

1. – The tragic fate of the fat caribou, or why we have to fear the reindeer of St Matthew more than the wolves of Wall-Street

During World War II, the US Coast Guard decided to install long range aids to navigation in St Matthew Island, a remote rock in the Bering Sea in Alaska, and to stock emergency food source there. In August the same year, they released 29 reindeer (known as caribou in North America) on the island as a backup food source for the 19 men stationed there. As World War II drew to an end, the Coast Guard left the island and, by the same token, the population of reindeer growing unchecked as their only predators, the 19 men on duty there, were sent back home. It followed a dramatic boom & burst of population dynamics (figure 1). From 1944 to 1966 the number of these herbivores, which did not have to worry anymore about any predator and ate all the available lichen, increased from 29 to 6,000. In 1957, their body weight was found to exceed that of reindeer in domestic herds by 24.5 percent among females and 46.6 percent among males. Then, the following winter, as they faced a limited food supply to sustain their number and their massive body weight, they underwent a crash die-off, the population falling from 6,000 to 42 (figure 3).

There is a lot of food for thought in this story. First, as the NASA study suggests, when one species (for example the top 1 oercent living in the Galapogos, another rock ,as I put it in a paper issued last year “Why Kings of Galapagos are long equity under (mild) Mugabenomics?”) thrive to the abject detriment of another one (the lichen, or the “bottom” 99%), bad things eventually happen.

2
Source: The Conference Board, TED, January 2014

1
Source: Manicore

Second, and more generally, the point of this story boils down to the mundane fact that resources are everything, and when they vanish, the transition from a given state to another one, namely from unchecked growth and exuberance to complete obliteration, is dramatic most often than not. This holds all the more true for the key resource, i.e. oil, which brings us to the second chapter of our tale.

2. – The peak-oil: a conspiracy theory or a mandatory mathematical truism?

Most of the discussions on oil hover around the question of “reserves”. I am going here to state the obvious but the key argument to keep in mind is that these reserves are meant for one and only purpose: oil production. ….woooh!, that’s new, next please! Okay, but bear with me. Till someone proves me I am wrong, I assume that the volume of Earth is finite, so that oil reserves are finite.Now, for a given stock of non-renewable resource, all production functions obey to the same law: they start from zero, grow to a maximum and decline to zero in a “bell-shape” way (figure 4). Now, the area under this curve is called the integral of the production function and it is strictly equal to the oil reserves. Because oil reserves are finite, the integral is necessarily convergent and because they are non-renewable the production function (the derivative function of the oil reserve) cannot have another form than a bell shape. You can stretch it, you can squeeze it, but the general form is this one and not any other. This is mathematical certainty like 2+2=4. The peak-oil is a mandatory mathematical truism, not a “conspiracy theory”.

Obviously, the key question is: the “peak-oil”, is it for now?

Well, running the risk of stating one obvious thing after another, I assume that we all agree that a compulsory task to perform before extracting oil from the ground is to find it. This has profound implications as this makes us certain that a peak is mandatory given the resource potential of the oil field. It also tells us that the higher the proven reserves and the bigger they are with respect to production, the closer the peak of oil production (remember: the integral is the area under the production curve). If I take the example of the United-States, as evidenced by King Hubbert, there is a 35-year lag between discovery and production (figure 5). If evidence proves Hubert peak was a bit bad on timing, possible production curves, based on the world ultimate reserves. i.e. total extractable petroleum, suggest that the peak is now.

4
Source: Laherrere, 2003

f
Source: Manicore

This is old story and, as the world still goes around, one could dismiss all this analysis. However, what is new is that business conditions are becoming more challenging for the oil majors as figure 7 suggests. Indeed since 2009, the capital expenditures of ExxonMobil, Royal Dutch Shell and Chevron have increased by 39-89 percent while their production has stalled. This is the balance-sheet-based proof that the peak-oil is happening now.

d
Source: Wall Street Journal

Now, the last point on the peak-oil, and this is key to understand the third and last chapter of our tale. We have to keep in mind that when we hear that we still have for 20 or 30 years of oil ahead of us it does not mean that we live the “good life” for the next 2 to 3 decades with constant consumption and then, the year after, we fall straight to zero consumption in a crash die-off as our reindeer herd experienced. Actually, consumption will be following the bell-shaped production function, it will be a slow death, and in the meanwhile, as the oil majors experience, the massive rise of capital expenditure will be weighting on the marginal energy return of energy. Indeed, according to Kopits, total upstream industry spendind since 2005 has been USD 4 trillion (about USD 2.5 trillion spent on legacy crude oil production), and legacy oil production has declined by 1 mmb/d since 2005. By comparison, between 1998 and 2005 the industry spent USD 1.5 trillion on upstream development and added 8.6 mmb/d to total crude production. This declining energy return in energy production, which is nothing but the by-product of declining/exhausting oil reserves and the very fact we are experiencing the peak-oil, drives the whole economy down.

Indeed, though we live in the age of the “information technology” it is worthwhile to remember that the information society is an energy ogre (not mentioning the globalisation mantra which gives a central role to the transport industry which consumes two-third of total oil). For example, according toASU engineer Eric Williams 227 to 270 kilograms (or 500 to 594 pounds) of carbon dioxide are emitted in manufacturing a laptop computer. Mark Mills , the CEO of the Digital Power Group, teaches us that a medium-size refrigerator will use about 322 kW-h a year whereas the average iPhone uses about 361 kW-h a year once the wireless connections, data usage and battery charging are tallied up.

3. – There is something deeply wrong about macro-economic theory

So how all this relates to the “secular stagnation” scenario and all the fall in total factor productivity. Well, this is where things get a little bit technical and where our tale comes (finally!) to an end.

Most economists are big fan of more or less complex equations designed to explain everything in a highly stylised fashion. In this quest, in order to explain the origin of economic growth, they use the so-called Cobb-Douglas production function which states that GDP (Y) is a function of technology (A), capital (K) and labour (L). More precisely, the Holy Grail equation takes this form: Y = A * Ka * Lb, with “a” and “b” the elasticity of production to capital and labour. Total factor productivity is for instance derived from this equation.

Now, as the purpose of this equation is to explain the origin of economic growth, let’s put ourselves in the shoes of the Neanderthals. While we are planning to go in the wild to bring back some proteins to the tribe, we look around us. We do find sturdy arms, sturdy legs and few well-functioning brains. In a word, we find “labour”. Do we find “capital”? A broad and outstanding No! However, as the time goes by, our species is evolving. We will find primal energy in the form of fire, and then, at a very latter stage fossil energy and we will understand how to use it. “Capital” will appear at a much latter stage based on accumulated labour (whatever it is “inspiration”, aka knowledge, or “transpiration”, aka sweat and hard work) and the use of energy around us.

The point is very simple: the central equation explaining economic growth is plain wrong and we need to transform it in order to make capital an inner feedback loop to the system as it is mentioned in the Report to the Club of Rome (2003) or suggested by Jean-Marc Jancovici . How to do this?

Well in order to make things simple, let’s assume that returns to scale are constant (if I multiply resources by 2, output will be increased by 2, which fares as a reasonable assumption) so that we get b = 1-a, and therefore Y = A * Ka * L1-a. Now, let’s make the capital K dependent on energy (E) and labor (L) (or accumulated labor, (integral of L), so that K = c * E * L (with “c” a constant and simply labour which does not change the qualitative properties of the model). Our equation becomes: Y = A * ba * Ea * L.

Add to this new equation a reasonable assumption about the dynamics of labour (I assume a logistic function for the dynamics of the population with a sharp increase followed by an asymptotic rise) and the knowledge we have gained over the shape of the oil production function and thus of the dynamics of how available reserves evolve, we can build a toy-model and easily simulate the path of the economy (figure 8) on an oil(energy)-dependent computer. This toy-model clearly shows how sensitive an economy can be to the downward shift in oil-production during and after the peak-oil.

Do not get me wrong here. I do not believe that the Stone Age ended because we were short of stones. My point comes down to say that we are smack in the middle of an energetic transition, that this transition has a much more profound current negative effect that many can believe and that the world as we know is coming to an end, evolving towards “something else”. The hope here is that, flawed economic models, lack of political will to manage this energetic transition or ideological foolishness from the Talibans of the “all-green” regarding the nuclear energy as “evil”, will not drive us toward the tragic fate of the reindeer herd of St Matthew Island and other unfortunate raging bulls (figure 9). Indeed, the NASA research suggests that high wealth inequality is sufficient to create a total collapse. Add inequality regarding access to energy, water and food (agriculture is oil-dependent too) on the top of that, and we have a Mad-Max-Moment ahead of us. In this state of urgency, do we attend a rise in global capex in renewable energy that could make us more optimistic? Well, unfortunately not. Global investment in renewable energy fell 11 percent in 2013 to USD 254 billion according to Bloomberg New energy Finance. This is the second decline in renewable investments since 2001. So, yes the crash die-off of our fat caribous is unfortunately still a scenario.

v
Source: Joel Guglietta

Joel Guglietta is Managing Director of OCTIS Asset Management in Singapore

Author Steen Jakobsen, Chief Economist & CIO, Saxo Bank
Saxo Bank provides an execution-only service. The material on this website does not contain (and should not be construed as containing) investment advice or an investment recommendation, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Saxo Bank accepts no responsibility for any use that may be made of these comments and for any consequences that result.

Why peak oil signals the world’s end, or at least the one we know – Zawya

Why peak oil signals the world’s end, or at least the one we know – Zawya.

By Joel Guglietta

While global financial markets are still levitating somewhere between the stratosphere and the Kingdom of Asgard, by 60°24′31″ North and 172°43′12″ West, in the middle of nowhere, an isolated island of 137.857 sq-mi holds the key of three major economic developments and risks:

  1. November 2013, Lawrence Summers raised the question whether the “secular stagnation” and the impossibility for the US and other major economies to grow without the help of recurring bubbles was not doomed to become the “new normal”.
  2. March 2014, the Conference Board released a study (figure 1) showing the falling trend in global total factor productivity, i.e. in the share of output not explained by the “accumulation of factors” (more on this economic jargon below).
  3. March 2014 again, the NASA published a research paper answering to “widespread concerns that current trends in resource-used are unsustainable, but possibilities of overshoot/collapse remain controversial”. This study tells us that, based on a well-known prey-predator model to which they add “wealth and economic inequality”, a total collapse is “very difficult to avoid” (figure 2).

w
Source: The Conference Board, January 2014

3
Source: NASA, 2014

1. – The tragic fate of the fat caribou, or why we have to fear the reindeer of St Matthew more than the wolves of Wall-Street

During World War II, the US Coast Guard decided to install long range aids to navigation in St Matthew Island, a remote rock in the Bering Sea in Alaska, and to stock emergency food source there. In August the same year, they released 29 reindeer (known as caribou in North America) on the island as a backup food source for the 19 men stationed there. As World War II drew to an end, the Coast Guard left the island and, by the same token, the population of reindeer growing unchecked as their only predators, the 19 men on duty there, were sent back home. It followed a dramatic boom & burst of population dynamics (figure 1). From 1944 to 1966 the number of these herbivores, which did not have to worry anymore about any predator and ate all the available lichen, increased from 29 to 6,000. In 1957, their body weight was found to exceed that of reindeer in domestic herds by 24.5 percent among females and 46.6 percent among males. Then, the following winter, as they faced a limited food supply to sustain their number and their massive body weight, they underwent a crash die-off, the population falling from 6,000 to 42 (figure 3).

There is a lot of food for thought in this story. First, as the NASA study suggests, when one species (for example the top 1 oercent living in the Galapogos, another rock ,as I put it in a paper issued last year “Why Kings of Galapagos are long equity under (mild) Mugabenomics?”) thrive to the abject detriment of another one (the lichen, or the “bottom” 99%), bad things eventually happen.

2
Source: The Conference Board, TED, January 2014

1
Source: Manicore

Second, and more generally, the point of this story boils down to the mundane fact that resources are everything, and when they vanish, the transition from a given state to another one, namely from unchecked growth and exuberance to complete obliteration, is dramatic most often than not. This holds all the more true for the key resource, i.e. oil, which brings us to the second chapter of our tale.

2. – The peak-oil: a conspiracy theory or a mandatory mathematical truism?

Most of the discussions on oil hover around the question of “reserves”. I am going here to state the obvious but the key argument to keep in mind is that these reserves are meant for one and only purpose: oil production. ….woooh!, that’s new, next please! Okay, but bear with me. Till someone proves me I am wrong, I assume that the volume of Earth is finite, so that oil reserves are finite.Now, for a given stock of non-renewable resource, all production functions obey to the same law: they start from zero, grow to a maximum and decline to zero in a “bell-shape” way (figure 4). Now, the area under this curve is called the integral of the production function and it is strictly equal to the oil reserves. Because oil reserves are finite, the integral is necessarily convergent and because they are non-renewable the production function (the derivative function of the oil reserve) cannot have another form than a bell shape. You can stretch it, you can squeeze it, but the general form is this one and not any other. This is mathematical certainty like 2+2=4. The peak-oil is a mandatory mathematical truism, not a “conspiracy theory”.

Obviously, the key question is: the “peak-oil”, is it for now?

Well, running the risk of stating one obvious thing after another, I assume that we all agree that a compulsory task to perform before extracting oil from the ground is to find it. This has profound implications as this makes us certain that a peak is mandatory given the resource potential of the oil field. It also tells us that the higher the proven reserves and the bigger they are with respect to production, the closer the peak of oil production (remember: the integral is the area under the production curve). If I take the example of the United-States, as evidenced by King Hubbert, there is a 35-year lag between discovery and production (figure 5). If evidence proves Hubert peak was a bit bad on timing, possible production curves, based on the world ultimate reserves. i.e. total extractable petroleum, suggest that the peak is now.

4
Source: Laherrere, 2003

f
Source: Manicore

This is old story and, as the world still goes around, one could dismiss all this analysis. However, what is new is that business conditions are becoming more challenging for the oil majors as figure 7 suggests. Indeed since 2009, the capital expenditures of ExxonMobil, Royal Dutch Shell and Chevron have increased by 39-89 percent while their production has stalled. This is the balance-sheet-based proof that the peak-oil is happening now.

d
Source: Wall Street Journal

Now, the last point on the peak-oil, and this is key to understand the third and last chapter of our tale. We have to keep in mind that when we hear that we still have for 20 or 30 years of oil ahead of us it does not mean that we live the “good life” for the next 2 to 3 decades with constant consumption and then, the year after, we fall straight to zero consumption in a crash die-off as our reindeer herd experienced. Actually, consumption will be following the bell-shaped production function, it will be a slow death, and in the meanwhile, as the oil majors experience, the massive rise of capital expenditure will be weighting on the marginal energy return of energy. Indeed, according to Kopits, total upstream industry spendind since 2005 has been USD 4 trillion (about USD 2.5 trillion spent on legacy crude oil production), and legacy oil production has declined by 1 mmb/d since 2005. By comparison, between 1998 and 2005 the industry spent USD 1.5 trillion on upstream development and added 8.6 mmb/d to total crude production. This declining energy return in energy production, which is nothing but the by-product of declining/exhausting oil reserves and the very fact we are experiencing the peak-oil, drives the whole economy down.

Indeed, though we live in the age of the “information technology” it is worthwhile to remember that the information society is an energy ogre (not mentioning the globalisation mantra which gives a central role to the transport industry which consumes two-third of total oil). For example, according toASU engineer Eric Williams 227 to 270 kilograms (or 500 to 594 pounds) of carbon dioxide are emitted in manufacturing a laptop computer. Mark Mills , the CEO of the Digital Power Group, teaches us that a medium-size refrigerator will use about 322 kW-h a year whereas the average iPhone uses about 361 kW-h a year once the wireless connections, data usage and battery charging are tallied up.

3. – There is something deeply wrong about macro-economic theory

So how all this relates to the “secular stagnation” scenario and all the fall in total factor productivity. Well, this is where things get a little bit technical and where our tale comes (finally!) to an end.

Most economists are big fan of more or less complex equations designed to explain everything in a highly stylised fashion. In this quest, in order to explain the origin of economic growth, they use the so-called Cobb-Douglas production function which states that GDP (Y) is a function of technology (A), capital (K) and labour (L). More precisely, the Holy Grail equation takes this form: Y = A * Ka * Lb, with “a” and “b” the elasticity of production to capital and labour. Total factor productivity is for instance derived from this equation.

Now, as the purpose of this equation is to explain the origin of economic growth, let’s put ourselves in the shoes of the Neanderthals. While we are planning to go in the wild to bring back some proteins to the tribe, we look around us. We do find sturdy arms, sturdy legs and few well-functioning brains. In a word, we find “labour”. Do we find “capital”? A broad and outstanding No! However, as the time goes by, our species is evolving. We will find primal energy in the form of fire, and then, at a very latter stage fossil energy and we will understand how to use it. “Capital” will appear at a much latter stage based on accumulated labour (whatever it is “inspiration”, aka knowledge, or “transpiration”, aka sweat and hard work) and the use of energy around us.

The point is very simple: the central equation explaining economic growth is plain wrong and we need to transform it in order to make capital an inner feedback loop to the system as it is mentioned in the Report to the Club of Rome (2003) or suggested by Jean-Marc Jancovici . How to do this?

Well in order to make things simple, let’s assume that returns to scale are constant (if I multiply resources by 2, output will be increased by 2, which fares as a reasonable assumption) so that we get b = 1-a, and therefore Y = A * Ka * L1-a. Now, let’s make the capital K dependent on energy (E) and labor (L) (or accumulated labor, (integral of L), so that K = c * E * L (with “c” a constant and simply labour which does not change the qualitative properties of the model). Our equation becomes: Y = A * ba * Ea * L.

Add to this new equation a reasonable assumption about the dynamics of labour (I assume a logistic function for the dynamics of the population with a sharp increase followed by an asymptotic rise) and the knowledge we have gained over the shape of the oil production function and thus of the dynamics of how available reserves evolve, we can build a toy-model and easily simulate the path of the economy (figure 8) on an oil(energy)-dependent computer. This toy-model clearly shows how sensitive an economy can be to the downward shift in oil-production during and after the peak-oil.

Do not get me wrong here. I do not believe that the Stone Age ended because we were short of stones. My point comes down to say that we are smack in the middle of an energetic transition, that this transition has a much more profound current negative effect that many can believe and that the world as we know is coming to an end, evolving towards “something else”. The hope here is that, flawed economic models, lack of political will to manage this energetic transition or ideological foolishness from the Talibans of the “all-green” regarding the nuclear energy as “evil”, will not drive us toward the tragic fate of the reindeer herd of St Matthew Island and other unfortunate raging bulls (figure 9). Indeed, the NASA research suggests that high wealth inequality is sufficient to create a total collapse. Add inequality regarding access to energy, water and food (agriculture is oil-dependent too) on the top of that, and we have a Mad-Max-Moment ahead of us. In this state of urgency, do we attend a rise in global capex in renewable energy that could make us more optimistic? Well, unfortunately not. Global investment in renewable energy fell 11 percent in 2013 to USD 254 billion according to Bloomberg New energy Finance. This is the second decline in renewable investments since 2001. So, yes the crash die-off of our fat caribous is unfortunately still a scenario.

v
Source: Joel Guglietta

Joel Guglietta is Managing Director of OCTIS Asset Management in Singapore

Author Steen Jakobsen, Chief Economist & CIO, Saxo Bank
Saxo Bank provides an execution-only service. The material on this website does not contain (and should not be construed as containing) investment advice or an investment recommendation, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Saxo Bank accepts no responsibility for any use that may be made of these comments and for any consequences that result.

End Result: “The Total Devastation of Everything That You Know”

End Result: “The Total Devastation of Everything That You Know”.

SHTFplan-logo-350-1

Mac Slavo
March 22nd, 2014
SHTFplan.com

If you are an observer of the goings-on in the world and how the political, administrative and business elite operate, you have likely come to the conclusion that the whole situation is mind-boggling.

Millions of hard working Americans and our counterparts around the world alike sit at the very brink of an unprecedented economic collapse orchestrated by the financial and economic machinations of the privileged  few. They speak of belt tightening, the need for sacrifices and often mandate extreme taxation, promising that these strategies will make life better for everyone. Yet, while we struggle to put food on the table and keep roofs over our heads they enjoy lavish multi-million dollar vacations, state dinners, and unfathomable wealth as they indenture the rest of us and our progeny to lifetimes of servitude.

On the political front, leaders from the United States, Europe, China, Russia, Iran and just about every other nation on earth often speak of cooperation and are nominated for the highest of peace honors, while behind the scenes they mobilize armies and spew rhetoric whose outcome can only lead to widespread conflict. They seem completely devoid of consideration for the billions of lives that will be affected should the world, once again, be thrust into war.

At every turn the people are being deceived and led to slaughter like sheep.

In his most recent commentary Charlie McGrath of Wide Awake News puts things into perspective, warning that it is these very behaviors of the elite and the apathy of the American people that will invariably lead to America’s apocalyptic demise:


(Via the Rense Radio Network)

The hypocrisy… the outright, no holds barred in your face deception by government and by the upper echelons of the political elite class and by the upper echelons of the financial class… the ruling elite… the brazen attack on the truth is beyond comprehension…

It’s hard to even put together these commentary videos anymore… too look at the current state of our country… the path we’re on… our financial devastation that’s being laid out before us… the pain and the suffering that’s going to come with that final devastation that is yet to be realized by the majority of the people of this country but will be realized…

The stage is being set for never ending conflict… never ending control being given to the military and security industrial complex.

To sit back and watch this happen… it’s to the point that I just don’t understand…

Where are my fellow Americans? Where are you?

Where is the outrage by the people in this country?

Are we so simply bought off by bread and circus that as long as we have some kind of regular programming on television or the beer is cold we’re not going to stand up and say enough is enough?

When are we going to realize? Is it going to be after the lights go out? After the destruction of our dollar and our way of life?

….Every single day that passes by you’re losing more and more of your freedom.

We’re giving it away to people who could care less about you, your family or your future.

…There is no other path this will lead to other than the total devastation of everything that you know.

As much as we’d like to believe things are going to change, it’s time we accept the likelihood of a continued degradation of life in America as we know it. Unless just about every single politician in Congressional buildings around the country is immediately recalled and the founding principles outlined in the U.S. Constitution restored, we will continue to slide into a calamity unlike anything we have seen before in this country.

It’s time to begin taking immediate steps to prepare for the worst, because as you well know, the people in charge already have a plan in place, and it most certainly will not benefit you and your family.

End Result: "The Total Devastation of Everything That You Know"

End Result: “The Total Devastation of Everything That You Know”.

SHTFplan-logo-350-1

Mac Slavo
March 22nd, 2014
SHTFplan.com

If you are an observer of the goings-on in the world and how the political, administrative and business elite operate, you have likely come to the conclusion that the whole situation is mind-boggling.

Millions of hard working Americans and our counterparts around the world alike sit at the very brink of an unprecedented economic collapse orchestrated by the financial and economic machinations of the privileged  few. They speak of belt tightening, the need for sacrifices and often mandate extreme taxation, promising that these strategies will make life better for everyone. Yet, while we struggle to put food on the table and keep roofs over our heads they enjoy lavish multi-million dollar vacations, state dinners, and unfathomable wealth as they indenture the rest of us and our progeny to lifetimes of servitude.

On the political front, leaders from the United States, Europe, China, Russia, Iran and just about every other nation on earth often speak of cooperation and are nominated for the highest of peace honors, while behind the scenes they mobilize armies and spew rhetoric whose outcome can only lead to widespread conflict. They seem completely devoid of consideration for the billions of lives that will be affected should the world, once again, be thrust into war.

At every turn the people are being deceived and led to slaughter like sheep.

In his most recent commentary Charlie McGrath of Wide Awake News puts things into perspective, warning that it is these very behaviors of the elite and the apathy of the American people that will invariably lead to America’s apocalyptic demise:


(Via the Rense Radio Network)

The hypocrisy… the outright, no holds barred in your face deception by government and by the upper echelons of the political elite class and by the upper echelons of the financial class… the ruling elite… the brazen attack on the truth is beyond comprehension…

It’s hard to even put together these commentary videos anymore… too look at the current state of our country… the path we’re on… our financial devastation that’s being laid out before us… the pain and the suffering that’s going to come with that final devastation that is yet to be realized by the majority of the people of this country but will be realized…

The stage is being set for never ending conflict… never ending control being given to the military and security industrial complex.

To sit back and watch this happen… it’s to the point that I just don’t understand…

Where are my fellow Americans? Where are you?

Where is the outrage by the people in this country?

Are we so simply bought off by bread and circus that as long as we have some kind of regular programming on television or the beer is cold we’re not going to stand up and say enough is enough?

When are we going to realize? Is it going to be after the lights go out? After the destruction of our dollar and our way of life?

….Every single day that passes by you’re losing more and more of your freedom.

We’re giving it away to people who could care less about you, your family or your future.

…There is no other path this will lead to other than the total devastation of everything that you know.

As much as we’d like to believe things are going to change, it’s time we accept the likelihood of a continued degradation of life in America as we know it. Unless just about every single politician in Congressional buildings around the country is immediately recalled and the founding principles outlined in the U.S. Constitution restored, we will continue to slide into a calamity unlike anything we have seen before in this country.

It’s time to begin taking immediate steps to prepare for the worst, because as you well know, the people in charge already have a plan in place, and it most certainly will not benefit you and your family.

EXTRACTED: Power is nothing without control: how to lose an empire

EXTRACTED: Power is nothing without control: how to lose an empire.

Sunday, March 23, 2014

Power is nothing without control: how to lose an empire

Image from an advertising campaign for Pirelli in the 1990s.

Empires seem to be a typical human structure that reappears over and over in history. The problem is that empires are often so efficient that they tend to overexploit and destroy even theoretically renewable resources. The final result is a destructive cascade of feedbacks: not only the empire gradually runs out of resources, but it also runs out of the capability of controlling them; with the two effects reinforcing each other. Power is nothing without control. And, usually, control seems to run out before power.

In practice, empires in trouble tend to fragment into independent blocks or statelets before actually disappearing as economic systems. It is the result of the increasing costs of control, which are not matched any more by the diminishing flux of natural resources. We have seen this phenomenon in recent times with the fragmentation and the disappearance of the Soviet Union. We may be seeing it today with the modern worldwide empire we call “Globalization.” The recent events in Ukraine seem to show that the system, indeed, has troubles in controlling its periphery and may soon fragment into independent blocks.

Of course, it is still too early to say whether what we are seeing today in Ukraine is just a bump in the road or a symptom of impending systemic collapse. As usual, however, history may be a guide to understand what lies ahead. In the following post, I examine the collapse of the Roman empire in light of considerations based on control and resources. It turns out that, even for the ancient Romans, power was nothing without control.

Peak gold: how the Romans lost their Empire

by Ugo Bardi

A Roman “Aureus” minted by Emperor Septimius Severus in 193 CE. At nearly 8 grams, the Aureus was truly an imperial coin – the embodiment of Rome’s wealth and power. (image from Wikipedia).
In this post, I argue that precious metal currency was a fundamental factor that kept together the Roman empire and gave to the Romans their military power. But the Roman mines producing gold and silver peaked in the first century CE and the Romans gradually lost the capability of controlling their resources. In a way, they were doomed by “peak gold.”

When I heard for the first time that the Roman Empire fell because of the depletion of its silver and gold mines, I was skeptical. Compared to our situation, where we are facing the depletion of fossil fuels, the Roman case seemed to me to be completely different. Gold and silver don’t produce energy, they don’t produce anything useful. So, why should the Roman Empire have fallen because of something we might call “peak gold”?

And yet, as I delved into the matter, I noticed how evident was the correlation of declining gold and silver availability with the decline of the Roman Empire. We have scant data on the production of Roman mines, mainly located in Spain, but it is commonly believed that production peaked at some moment during the first century CE (or perhaps early 2nd century CE). Afterwards, it rapidly dwindled to nearly nothing, even though gold mining never completely stopped (1).

As you can see in the figure, the loss of precious metal production was reflected in the silver content of the Roman currency. The Romans didn’t have the technology needed to print paper bills, so they just debased their silver currency, the “denarius,” by increasing its copper content. By mid 3rd century, the denarius was nearly  pure copper: “fiat money” if there ever was one. During that  period, gold coins were not debased, but they basically disappeared from circulation. (graph above from Joseph Tainter (2)).

As I argued in a previous post, the progressively dearth of precious metals  correlates well with the various events that took place during the declining phase of the empire and with its eventual disappearance. Of course, correlation doesn’t mean causation but, here, the correlation is so strong that you can’t think it is just a question of chance. With time, it appeared clear to me that there were also clear links between several factors in the collapse of the Empire.

In general, complex systems tend to fall in a complex manner and the Roman Empire did not simply fall because of the lack of its primary energy source which, at that time, was agriculture. Energy (and power) is useless without control and for the Romans controlling the energy generated by agriculture requires capital investments for troops and bureaucracy. Both were affected by the decline of the production of precious metals. In time, the reduced military effectiveness of the empire disrupted the ability of controlling the agricultural system. That condemned the Empire to collapse.

This is a hugely complex story that can’t possibly be exhausted with a mere blog post. Nevertheless, the problem is very general and it can be condensed in a single sentence: “power is nothing without control” So, I believe it is possible to lay down in a relatively short space the main elements of the interplay between gold, military power, and food in Roman times. Let me try.

– The Romans and gold

Ultimately, what creates and keeps together empires is military force. The Roman Empire was so large and so successful because it was, possibly, the mightiest military force of ancient times. The Romans had been so successful at that not because of special military innovations. The recipe for their success was simple: they paid their fighters with precious metal currency. The combined technology of gold mining and coin minting had allowed the Romans to create one of the first standing armies in history. Still today, we call our enlisted men “soldiers”, a term that comes from the Roman word “Solidus;” the name of the late empire gold coin.

Not only money could create a standing army, it could also swell it to large sizes. Enlisting in the legions – the backbone of the army – was reserved to Roman citizens, but anyone could enlist in the “auxilia“, “auxiliary” troops. In the figure, you see Roman auxilia (recognizable by their round shields) presenting the severed heads of Dacians to Emperor Trajan during the Dacian campaign of the 2nd century CE. Normally, Romans were not supposed to cut off enemies’ heads, it was seen as uncivilized, but the auxilia were notoriously a little unruly (note how the Emperor, on the left, looks perplexed). But, by the time of the Dacian wars, the auxilia had become a fundamental part of the Roman army and they were to remain so for the remaining lifetime of the Empire.

Gold and silver were essential elements in the hiring of troops for the Romans and that was especially true for foreign ones. Put yourself in the caliga (sandals) of a German fighter. Why should you put your framea (lance) in the service of Rome if not because you were paid? And you wanted to be paid in serious money; copper coins would not do. You wanted gold and silver coins that you knew could be redeemed anywhere in Europe and especially in that gigantic emporium of all sorts of luxury goods that was the city of Rome, the largest of the ancient world. And, by the way, where did these luxury items come from? Mostly, were imported. Silk, ivory, pearls, spices, incense, and much more came from India and China. Importing these items was not just an extravagant hobby for the Roman elite, it was a tangible manifestation of the power and of the wealth of the empire; something that was an important factor in convincing people to enlist in the auxilia. But the Chinese wouldn’t send silk to Rome in exchange for worthless copper coins – they wanted gold and they obtained it. Then, that gold was lost forever for the Empire which, basically, could produce only two things: grain and troops, neither of which could be exported at long distances.

This situation explains the gradual military decline of the Roman empire. With the decline of the precious metal mines, it became more and more difficult for emperors to recruit troops. The lack of a strong central power caused the empire to become engulfed in civil wars; with the army mainly engaged in fighting chunks of itself and the empire splitting in two parts: the Eastern and the Western. During this phase, the number of troops was not reduced, but their quality strongly declined. After the military reform by Emperor Diocletian during the third century CE, the Roman army was formed mainly of limitanei; not really an army but a border police unable to stop any serious attempt on the part of foreigners to puncture the borders. To keep the empire together, Emperors relied on the “comitatenses” (also with other names) mobile crack troops which would plug (or try to plug) the holes in the border as soon as they formed.

The combination of limitanei and comitatenses worked in keeping the barbarian out of the Empire for a while. But the hemorrhage of gold and silver continued. So, during the last decades the empire, the paradigmatic Roman troops were the “bucellarii” a term that means “biscuit eaters”. The name can be taken as implying that these troops fought for food. Of course that may not have been always true, but it is a clear indication of the dearth of money of the time. There are also reports of troops paid in pottery and in some cases with land – the latter use may have been a factor in creating the feudal system that replaced the Roman empire in Europe.

In a way, as we see, the Romans were doomed by their “peak gold” (and also “peak silver). By the loss of their precious metal supply, the Romans lost their ability of controlling their troops and as a result of their resources. And power is nothing without control.

But the Roman empire did not fall just because it was invaded by foreigners or because it split in multiple sectors. It experienced a systemic collapse that wasn’t just a military one: it involved the whole economy and the social and political systems as well. To understand the reasons of the collapse, we need to go more in depth in the way the Roman economic system worked.

– The Romans and energy

The energy of the Roman Empire came from agriculture; mainly in the form of grain. At the beginning of their history and for several centuries onward, it seems that the Romans had little or no problems in producing enough food for their population. That makes sense considering that in Roman times the population of Europe was less than one tenth of what it is today and hence there was plenty of free space for cultivations. Reports of food problems in the Empire appear only with the 1st century CE and truly disastrous famines appear only with the 5th century CE – when the Western Roman Empire was already in its terminal phase. “Peak food”, apparently, came much later, about 3-4 centuries, than “peak gold”.

The very existence of a “peak food” for the Roman empire is somewhat puzzling: agriculture is, in principle, a renewable technology that had been able to feed the Roman population for several centuries. During the last period of the empire, there is no evidence of a population increase; on the contrary, it is clear that it declined. So, why couldn’t agriculture produce enough food?

The problem is that producing food doesn’t just involve plowing some land and sowing crops. Agricultural yields depend on the vagaries of the weather and, more importantly, agriculture has the tendency of depleting the land of fertile soil as a result of erosion. To avoid this problem, the ancient had a number of strategies: one was nomadism. From Caesar’s “De Bello Gallico” we learn that, as late as in the 1st century BCE, European populations still practiced a nomadic life style. They would do that in order to find new, pristine land and planting crops in the rich soil that they could produce by slashing and burning trees. That was possible because continental Europe, at that time, was nearly empty of people and entire populations could move unimpeded.

The Romans, instead, were a sedentary population and they had the problem of soil depletion. As population grew, erosion became a problem, especially in a mountainous region such as Italy is (3). In addition, some urban centers – such as Rome – became so big that they were impossible to supply using just local resources. With the 1st century BCE, the situation led to the development of a sophisticated logistic system based on ships that carried grain to Rome from the African provinces, mainly Libya and Egypt. It was a major task for the technology of the time to ensure that the inhabitants of Rome would receive enough grain and just when they needed it. It required large ships, storage facilities and, more than all, a centralized bureaucracy that went under the name of “annona” (from the Latin world “annum“, year). So important it was this system, that Annona was turned into a full fledged Goddess by imperial propaganda (you can see her in the image above, on the back of a coin minted at the time of Emperor Nero – from Wikipedia). For us, turning bureaucracy into a divine entity may appear a bit farfetched but, perhaps, we are not so far away from that.

Despite its complexity, the Roman logistic grain system was successful in replacing the insufficient Italian production and it permitted to feed a city as large as Rome, whose population approached (and perhaps exceeded) one million inhabitants during the heydays of the empire. But it was not Rome alone which benefited of the grain transportation system and the system could create a relatively high population density concentrated along the shores of the Mediterranean sea. It was this higher population density that gave to the Romans a military edge over their Northern neighbors, the “barbarians”, whose population was limited by a lack of a similar logistic system.

But what actually moved grain from the shores of Africa to Rome? In part, it was the result of trade. For instance, grain shipping companies were in private hands and they were paid for their work. But grain itself didn’t move because of trade: the provinces shipped grain to Rome because they were forced to. They had to pay taxes to the central government and they could do so either in currency or in kind. It seems that grain producers paid usually in kind and Rome didn’t ship anything in return (except in terms of troops and bureaucrats). So, the whole operation was a bad deal for provinces but, as usual in empires, opting out of the system was not allowed. When, in 66 CE, the Jews of Palestine decided that they didn’t want to pay taxes to Rome any more, their rebellion was crushed in blood and Jerusalem was sacked. In the end, it was military power that kept the system under control.

The Roman annona system may not have been fair, but it worked fine and for a long time: at least a few centuries. It seems that the African agricultural system was managed by the Romans with reasonable care and that it was possible to avoid soil erosion almost until the very end of the Western Empire. Note also that the annona system doesn’t seem to have been affected – in itself – by the debasing of the silver denarius. This is reasonable: grain producers had no choice; they couldn’t export their products at long distances and they had only one market: Rome and the other major cities of the empire.

But the system that fed the city of Rome appears to have declined and finally collapsed during the 5th century CE. We have some evidence (3) that it was in this period that erosion turned the North African shores from the Roman “grain belt” into the desert we see nowadays. Possibly, the disaster was unavoidable, but it is also true that warfare does a lot of damage to agriculture and this is surely true for the North African region, object of extensive warfare during the last period of the Roman Empire. More in general, the strain to the economic system generated by continuous warfare may have led producers to overexploit their resources, privileging short term gains to long term stability. Were it not for these events, it is likely that the agricultural productivity of the land could have been maintained for a much longer time. But that was not the case.

With the North African land rapidly turning into a desert, King Genseric of the Vandals (see his face on a “siliqua” coin in the figure), ruling the region, halted the shipping of grain to Rome in 455 CE, then proceeding to sack the city in the same year. That was the true end of Rome, whose population shrunk from at least a few hundred thousands to about 50,000. It was the end of an age and never again would the North African shores be exporters of food.

– The fall of the Roman empire

Complex systems tend to fall in a complex manner and several interlocked factors played a role together first in creating the Roman empire, then in destroying it. At the beginning, it was a technological innovation, coinage of precious metals, that led the Romans to develop a military might that allowed them to access a resource which would have been impossible to exploit otherwise: the North African agricultural land. But, as it is often the case, the exploitation mechanism was so efficient that eventually it destroyed itself. Lower productivity of the precious metal mines reduced the efficiency of the Roman military system and this, in turn, led to fragmentation and extensive warfare. The increasing needs of resources for war were an important factor in destroying the agricultural system whose collapse, in turn, put an end to the empire.

The dynamic interplay of the various elements involved in the growth and the fall of the empire can be seen in the figure below, from a previous essay of mine.  In the diagram, the source of energy is agriculture, but it is just an element of a complex system where various entities reinforce or dampen each other.

The diagram is patterned after the one originally created by Magne Myrtveit for our society described in the 1972 “Limits to Growth” study. This, as other studies of the same kind, provide a nice, aggregated view of the trajectory of an economic system which tends to overexploit the resources it used. As models, however, they are not completely satisfactory in the sense that they don’t include the question of control. It is a cost which needs to be paid and the gradually declining flow of resources makes it difficult. As a result, empires rarely collapse smoothly and as a whole, but rather tend to fragment and engage in internecine wars before actually disappearing. That was the destiny of the Roman Empire which experienced the general rule that power is nothing without control.

The Romans and us

It has always been fashionable to see the Roman Empire as a distant mirror of our civilization. And, indeed, we see that the points of contact are many. Just think of the sophisticated Roman logistic system: the navis oneraria which transported grain from Africa to Rome are the equivalent of our super-tankers transporting crude oil from the Middle East to Western countries. And think how China and India are playing today exactly the same role they were playing in the remote Roman times: they are manufacturing centers which are gradually soaking the wealth of the empire that we call, today, “globalization”.

This said, there is also an obvious difference. The Roman energy system was based on agriculture and hence it was theoretically renewable, at least until the Romans didn’t overexploit it. Our system is based on fossil fuels, which are obviously non renewable resources. Hence, we tend to be more worried about the depletion of our energy resources rather than that of gold and silver which – it seems – we could safely remove from our financial system without evident problems.

Still, there remains the fundamental problem that power is useless without control. The control system of the globalization empire works on similar principles as the older Roman one. It is based on a sophisticated financial system which, eventually, works because it is integrated with the military system. In the globalized army, soldiers, just like the Roman ones, want to be paid. And they want to be paid with a currency that they can redeem with goods and services somewhere. The dollar has, so far, played this role, but can it play it forever?

Eventually, everything that humans do is based on on some form of belief of what has value in this world. The Romans saw gold and silver as stores of value. For us, there is a belief that bits generated inside computers are stores of value – but we may be sorely disappointed – not that there will ever be a “peak bits” as long as there are computers around, but surely a major financial collapse would not just impoverish us, but most of all it would disrupt our capability of controlling the energy resources we need so desperately.

So, when oil pundits line up oil reserves as if each barrel were a soldier ready for battle, they tacitly assume that these reserves are available for use of the global empire. That’s not necessarily true. It depends on the degree of control that the empire will be able to exert on producers. That depends on the financial system which may well turn out to be the weak link of the chain. Without control, power is useless.

The Roman empire was lost when the financial system ceased to be able to control the military system. When the Romans lost their gold, everything was lost. In our case, it may well be that we will lose our ability to control the military system before we actually lose our ability to produce energy from fossil fuels. If the dollar loses its predominance in the world’s financial system, then producers may be tempted to keep their oil for themselves or, at least, not so enthusiastic any more in allowing the Empire to access it. What’s happening today in Ukraine may be a first symptom of the impending loss of global control.

1. “Mining in the Later Roman Empire”, J.C Edmondson, The Journal of Roman Studies, 79, 1989, 84,http://www.jstor.org/stable/301182
2. Tainter, Joseph A (2003. First published 1988), The Collapse of Complex Societies, New York & Cambridge, UK: Cambridge University PressISBN 0-521-38673-X,
3“The Roman Empire: Fall of the West; Survival of the East”, James F Morgan, Bloomington 2012

 

Oil Limits and the Economy: One Story, Not Two

Another great article by Gail Tverberg:

Our Finite World

The two big stories of our day are

(1) Our economic problems: The inability of economies to grow as rapidly as they would like, add as many jobs as they would like, and raise the standards of living of citizens as much as they would like. Associated with this slow economic growth is a continued need for ultra-low interest rates to keep economies of the developed world from slipping back into recession.

(2) Our oil related-problems: One part of the story relates to too little, so-called “peak oil,” and the need for substitutes for oil. Another part of the story relates to too much carbon released by burning fossil fuels, including oil, leading to climate change.

While the press treats these issues as separate stories, they are in fact very closely connected, related to the fact that we are reaching limits in many different directions simultaneously. The economy is the…

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The Reality of Collapse: “Many Preppers Will Die”

The Reality of Collapse: “Many Preppers Will Die”.

Selco
March 21st, 2014
SHTF School

 

Editor’s Note: In the following article well known Balkan War survivor and developer of the SHTF School Selco shares yet more of his insightful experiences. Many of us have taken steps to insulate ourselves should the worst happen. But is that enough? Selco explains that regardless of the supplies and tools you have in your possession, you still face the very serious risk of injury or death should the system around us collapse. 

many-preppers-will-die

Why Many Preppers Will Die
By Selco

Survivalists and preppers are (or are supposed to be) by definition something like smart folks, people who do not trust mainstream bu..s..t, who follow their own path to be winners at the end.

Actually in reality truth is different.

We all like to say that we are different but just like everyone else we fall under the influence too.

How many times you or some prepper you know built or formed opinion without even checking it? How many times you bought some item and store it just because you think it makes sense, not because you know it makes sense and you check on it. It is often easier way to believe others and you can not try everything yourself of course.

One of the most stupid things or worst mistakes that you can make in prepping is to become “mainstream”. Slap label of prepper on you and you start to think you are smarter than others. You may think that preppers and survivalists can not be mainstream because it is not logical, but yes we can.

We gonna buy bug for BOB because someone said “it is best for BOB” usually without checking who is the guy who said it. Or we gonna say “I have best gun for SHTF” because someone put huge amount of money for marketing it. If most preppers look at their storage they can find items they know theory of using it, but never used it.

The problem here is not buying these things. The problem is with forming your opinion and many survivalists think they know and they have plan but that makes them in reality less flexible to consider all options.

When SHTF and you realize quickly that you have completely wrong boots (or weapon, or BOB or whatever) you maybe still can fix it if you act. Changing way of thinking (or plan…) is harder.

There was man who before SHTF was owner of few cafes, pretty wealthy man. He was involved in some crime business and you could hear from time to time how he was involved in some fight, or he was arrested, or served some time.

Sometimes he was out of the country for months or year, rumors were that he was something like professional thief, specialised for breaking into “high class” homes, jewellery and safes and similar.

Those stories were rumors only, but in his cafe in town all guests were his crew, and going there for coffee was not forbidden, but also was not bright idea. If you entered there (probably) nobody would kick you out, but atmosphere and faces there clearly would tell you that you are outsider.

In short he was something like “tough guy” in city talks. Weapons, secret gambling, prostitution etc. Guy with his crew.

On first rumors of troubles he started to sell his cafes I guess in order to leave the area, but he was too late. When SHTF, and groups and gangs started to form, he simply gave his cafe to the leader of one group in exchange for protection.

Later when that leader and group were destroyed he found himself imprisoned for some time. Lot of people around were robbed and tortured or killed.

He immediately agree to write statement that he is “selling“ all his cafes to the leader of new group, of course in exchange for the life and freedom.
They had it anyway, but they needed that piece of paper for time after war.

After that he was something like “lone crazy dude” through the rest of the SHTF period. He was nobody.

He survived everything and after that he needed quite some time, few years to prove that he was forced to “sell” his cafes.

Court gave everything back to him. Soon after that he sold everything and emigrated somewhere, probably to place with less chance for another SHTF event.

My friend talked with him before he left the country, and after some time they touched the subject that lot of people wanted to know.

Why did he go down so easy? Why did he not resist at the beginning with his crew? Why did he not had his own strong group during SHTF? Things like that.
He had original answer: “Every time they were stronger than me, I simply had to let it go”.

His story is not so unique, but I know much more stories about how folks got killed because they refused to leave their home (and run) when under attack by several people armed with firearms, while they were unarmed, or armed with pistol or knife, clearly outnumbered.

I read every day on web sentences like “having this gun will save you when SHTF” or “with this BOB you can not lose when SHTF”. Of course this is marketing crap from people who want to sell you something.

Please do not get yourself killed, or allow your family to die when SHTF just because you put your “perfect” BOB on, your “zombie survival” rifle in your hands and went out to save the world.

Or to get killed because you “draw line and here you stand your ground” for example when they attack your home or your storage. Do you really want to die just to hold onto things?

In world of survival number of people who are gonna blindly believe in their equipment, or just blindly stay where is impossible to stay are much higher from folks who are gonna take the smartest option (however bad it could look). This is why many preppers will die. Regular folks will run but some preppers take so great pride in their plan or equipment they do not make right decisions when it matters because of their ego.

You can hear me being not hero and just doing what I had to do for 8 hours in my course.

I am not the dude who is living on tree armed only with kitchen knife and big mouth. I also have BOB, BOL, equipment, weapons and plans.

But if I see that my SURVIVAL is in question I am ready to say f..k it to everything.

Sometimes to survive means not to win but to give up, and wait for next chance. Do not expect to be winner all the time.

You can follow Selco’s story at SHTF School and learn how he survived one year in hell. 

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