Bare Bones Biology 106 – Richard Heinberg

Bare Bones Biology for this coming week is entirely taken up with an interview with Richard Heinberg, who also gave the keynote introductory lecture at the conference of The Economics of Happiness. I’m pretty sure that talk will be posted on the web site of The Economics of Happiness. If not, I can give you my personal copy, just let me know. Later that day, Richard took five minutes out of his busy schedule to give an interview for us in Texans and former Texans. Because he introduced himself so well, I have given the entire program to his words.

“My name is Richard Heinberg. I’m Senior Fellow at the PostCarbon Institute and the author of a recent book called The End of Growth: Adapting to our New Economic Reality.

“The book is based on quite a lot of recent research that shows that we’re really entering into a new economic era, particularly in the US but I think around the world as well, and that new economic era is one where growth in GDP, growth in the total amount of money we’re spending in the economy on an annual basis, is going to be a lot harder to achieve. There are a number of reasons for that.

“One reason is that we are reaching a number of limits to debt. We’ve used debt to grow consumption and to grow GDP for the last several decades. And here I’m not just talking about government debt. I’m talking about consumer debt. Debt has grown faster than GDP in just about every year. People want bigger homes, and bigger cars, and we’re constantly being advertised at and talked into wanting this stuff, but real inflation-adjusted hourly wages for American workers haven’t been going up for three decades or so. So how we financed all this consumption is with more debt. You can only do that so long, because people get loaned up to their eyeballs, and they can’t afford to make payments on the debt they have, and banks don’t want to lend them even more money, so we’ve reached the end of that particular strategy for increasing the scale of our economic activity.

“Another problem that’s impinging on economic growth is energy costs, and of course here we’re talking primarily about the price of oil. That’s being driven by speculation and other things, but a lot of it is that we’ve already harvested the low-hanging fruit. I’m not suggesting that we’re running out of oil. Obviously, in this country, our real oil production has actually increased in the last few years, but where it’s increased is in the production of much lower quality resources. We’re talking about the shale deposits in North Dakota, and the Eagle Ford Play in Texas” (you can download maps of the Eagle Ford Shale and the Texas Aquifers from the lower right side of this page) “shale gas. The costs of production are higher, and with gas of course, we had very high natural gas prices a few years ago, and that drove up a glut of supply. We look at that and say: “Oh, well now we’ll have natural gas for 100 years and it’s always going to be cheap.” But actually most of the producers are losing money on production right now, because their production costs are so high and the natural gas prices are so low. The same thing will happen with the shale industry, if price of the oil goes down, if we do get gas prices down, well that’ll just mean that the industry will have to consolidate, and instead of seeing increasing rates of production in the US it will go back down again.

“So once again, the problem is not that we’re running out, the problem is that we’ve used all the low-hanging fruit, and that means we will be paying more for energy. We’ve got to get used to that. That will be a drag on economic growth.

“The third factor is increased incidence of weird weather. You can call that climate change, you can call it anything you want. You can attribute it to cow farts or volcanoes, or to CO2 emissions. If you’re an insurance company and you’re looking at the costs of what you are having to pay out for droughts, floods, fires, and other events like that, the costs are increasing. There’s no getting around it, and they’re increasing exponentially. So that is another drag on growth.

“So take the drought situation in Texas as an example of that. That kind of thing is happening around the world, and it’s getting worse. So economic growth as we’ve known it is coming to an end. Well, how do we adapt to that? What do we do instead?

“Well it turns out that actually we could make life better for people and for communities without necessarily having to have the kind of economic growth we’ve had in the past. But we will have to pay attention to different things. We’ll have to pay attention to what really makes our communities work better; we’ll have to pay attention to what makes our environment more livable.

“If we do that, I think we can have a better quality of life even as our economy changes. We live in a time of rapid change, and the intelligent path is to see where that change is going and adapt sooner than later.”

Bare Bones Biology 106 – Richard Heinberg
KEOS 89.1 FM, Bryan, Texas
You can download the audio here or at:
http://BareBonesBiology.com

Recommended Reference: The End of Growth: Adapting to our New Economic Reality

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