Could an economic collapse be in our near future?

Climate scientists and others have in the past few years issued a steady stream of analyses showing that without immediate remedial actions, a disastrous future is headed our way. But is it a four-decade-old study that will prove prescient?

That study, issued in the 1972 book The Limits to Growth, forecast that industrial output would decline early in the 21st century, followed quickly by a rise in death rates due to reduced provision of services and food that would lead to a dramatic decline in world population. To be specific, per capita industrial output was forecast to decline “precipitously” starting in about 2015.

Well, here we are. Despite years of stagnation following the worst economic crash since the Great Depression, things have not gotten that bad. At least not yet. Although the original authors of The Limits to Growth, led by Donella Meadows, caution against tying their predictions too tightly to a specific year, the actual trends of the past four decades are not far off from the what was predicted by the study’s models. A recent paper examining the original 1972 study goes so far as to say that the study’s predictions are well on course to being borne out.

Sunset at a cement factory (photo by Stefan Wernli)

Sunset at a cement factory (photo by Stefan Wernli)

That research paper, prepared by a University of Melbourne scientist, Graham Turner, is unambiguously titled “Is Global Collapse Imminent?” As you might guess from the title, Dr. Turner is not terribly optimistic.

He is merely the latest researcher to sound alarm bells. Just last month, a revised paper by 19 climate scientists led by James Hansen demonstrates that continued greenhouse-gas emissions will lead to a sea-level rise of several meters in as few as 50 years, increasingly powerful storms and rapid cooling in Europe. Two other recent papers calculate that humanity has already committed itself to a six-meter rise in sea level and a separate group of 18 scientists demonstrated in their study that Earth is crossing multiple points of no return. All the while, governments cling to the idea that “green capitalism” will magically pull humanity out of the frying pan.

Four decades of ‘business as usual’

At least global warming is acknowledged today, even if the world’s governments prescriptions thus far are woefully inadequate. In 1972, the message of The Limits to Growth was far from welcome and widely ridiculed. Adjusting parameters to test various possibilities, the authors ran a dozen scenarios in a global model of the environment and economy, and found that “overshoot and collapse” was inevitable with continued “business as usual”; that is, without significant changes to economic activity. Needless to say, such changes have not occurred.

In the “business as usual” model, the capital needed to extract harder-to-reach resources becomes sufficiently high that other needs for investment are starved at the same time that resources begin to become depleted. Industrial output would begin to decline about 2015, but pollution would continue to increase and fewer inputs would be available for agriculture, resulting in declining food production. Coupled with declines in services such as health and education due to insufficient capital, the death rate begins to rise in 2020 and world population declines at a rate of about half a billion per decade from 2030. According to Dr. Turner:

“The World3 model simulated a stock of non-renewable as well as renewable resources. The function of renewable resources in World3, such as agricultural land and the trees, could erode as a result of economic activity, but they could also recover their function if deliberate action was taken or harmful activity reduced. The rate of recovery relative to rates of degradation affects when thresholds or limits are exceeded as well as the magnitude of any potential collapse.”

The World3 computer model simulated interactions within and between population, industrial capital, pollution, agricultural systems and non-renewable resources, set up to capture positive and negative feedback loops. Dr. Turner writes that changing parameters merely delays collapse. The current boom in fracking natural gas and the extraction of petroleum products from tar sands weren’t anticipated in the 1970s, but the expansion of new technologies to exploit resources pushes back the collapse “one to two decades” but “when it occurs the speed of decline is even greater.”

Turner collapse chartSo how much stock should we put in a study more than 40 years old? Dr. Turner asserts that actual environmental, economic and population measurements in the intervening years “aligns strongly” to what the Limits to Growth model expected from its “business as usual” run. He writes:

“[T]he observed industrial output per capita illustrates a slowing rate of growth that is consistent with the [business as usual scenario] reaching a peak. In this scenario, the industrial output per capita begins a substantial reversal and decline at about 2015. Observed food per capita is broadly in keeping with the [Limits to Growth business as usual scenario], with food supply increasing only marginally faster than population. Literacy rates show a saturating growth trend, while electricity generation per capita … grows more rapidly and in better agreement with the [Limits to Growth] model.”

Peak oil and difficult economics

Rising energy costs following global peak oil will make much of the remaining stock uneconomical to exploit. This is a critical forcing point in the collapse scenario. And as more energy is required to extract resources that are more difficult to exploit, the net energy from production continues to fall. John Michael Greer, a writer on peak oil, observes that, just as it takes more energy to produce a steel product than it did a century ago due to the lower quality of iron ore today, more energy is required to produce energy today.

Net energy from oil production has vastly shrunken over the years, Mr. Greer writes:

“[T]the sort of shallow wells that built the US oil industry has a net energy of anything up to 200 to 1: in other words, less than a quart out of each 42-gallon barrel of oil goes to paying off the energy cost of extraction, and the rest is pure profit. … As you slide down the grades of hydrocarbon goo, though, that pleasant equation gets replaced by figures considerably less genial. Your average barrel of oil from a conventional US oilfield today has a net energy around 30 to 1. … The surge of new petroleum that hit the oil market just in time to help drive the current crash of oil prices, though, didn’t come from 30-to-1 conventional oil wells. … What produced the surge this time was a mix of tar sands and hydrofractured shales, which are a very, very long way down the goo curve. …

“The real difficulty with the goo you get from tar sands and hydrofractured shales is that you have to put a lot more energy into getting each [barrel of oil equivalent] of energy out of the ground and into usable condition than you do with conventional crude oil. The exact figures are a matter of dispute, and factoring in every energy input is a fiendishly difficult process, but it’s certainly much less than 30 to 1—and credible estimates put the net energy of tar sands and hydrofractured shales well down into single digits. Now ask yourself this: where is the energy that has to be put into the extraction process coming from? The answer, of course, is that it’s coming out of the same global energy supply to which tar sands and hydrofractured shales are supposedly contributing.”

It is that declining energy availability and greater expense that is the tipping point, Dr. Turner argues:

“Contemporary research into the energy required to extract and supply a unit of energy from oil shows that the inputs have increased by almost an order of magnitude. It does not matter how big the resource stock is if it cannot be extracted fast enough or other scarce inputs needed elsewhere in the economy are consumed in the extraction. Oil and gas optimists note that extracting unconventional fuels is only economic above an oil price somewhere in the vicinity of US$70 per barrel. They readily acknowledge that the age of cheap oil is over, without apparently realising that expensive fuels are a sign of constraints on extraction rates and inputs needed. It is these constraints which lead to the collapse in the [Limits to Growth] modelling of the [business as usual] scenario.”

New oil is dirty oil

The current plunge in oil and gas prices will not be permanent. Speculation on why Saudi Arabia, by far the world’s biggest oil exporter, continues to furiously pump out oil as fast as it can despite the collapse in pricing frequently centers on speculation that the Saudis’ pumping costs are lower than elsewhere and thus can sustain low prices while driving out competitors who must operate in the red at such prices.

If this scenario pans out, a shortage of oil will eventually materialize, driving the price up again. But the difficult economics will not have disappeared; all the easy sources of petroleum have long since been tapped. And the sources for the recent boom — tar sands and fracking — are heavy contributors to global warming, another looming danger. The case for catastrophic climate disruption due to global warming is far better understood today than it was in 1972 — and we are already experiencing its effects.

Dr. Turner, noting with understatement that these gigantic global problems “have been met with considerable resistance from powerful societal forces,” concludes:

“A challenging lesson from the [Limits to Growth] scenarios is that global environmental issues are typically intertwined and should not be treated as isolated problems. Another lesson is the importance of taking pre-emptive action well ahead of problems becoming entrenched. Regrettably, the alignment of data trends with the [Limits to Growth] dynamics indicates that the early stages of collapse could occur within a decade, or might even be underway. This suggests, from a rational risk-based perspective, that we have squandered the past decades, and that preparing for a collapsing global system could be even more important than trying to avoid collapse.”

Sobering indeed. Left unsaid (and, as always, there is no criticism intended in noting a research paper not going outside its parameters) is why so little has been done to head off a looming global catastrophe. Free of constraints, it is not difficult to quantify those “powerful societal forces” as the biggest industrialists and financiers in the world capitalist system. As long as we have an economic system that allows private capital to accumulate without limit on a finite planet, and externalize the costs, in a system that requires endless growth, there is no real prospect of making the drastic changes necessary to head off a very painful future.

Just because a study was conducted decades in the past does not mean we can’t learn from it, even with a measure of skepticism toward peak-oil fast-collapse scenarios. If we reach still further back in time, Rosa Luxemburg’s words haunt us still: Socialism or barbarism.

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21 comments on “Could an economic collapse be in our near future?

  1. DemolishingBS says:

    I can’t comment much on “peak oil” itself though from what I’ve read, I’m skeptical we’re going to face it in our lifetimes, but John Michael Greer isn’t a source I’d use, someone who dabbles in magic mystical woo-woo and says a lot of cranky things. Randi.org actually debunked a lot of his stuff in a thread long ago in fact. I can’t take the guy seriously at all.

    • I also have some skepticism when it comes to peak oil, nor am I convinced that an economic collapse will come as quickly as suggested by Limits to Growth, even with a delay of a decade or two. I did find the paper discussing its record interesting enough to discuss.

      In my opinion, in the absence of our getting rid of capitalism, the more likely scenario is periods of stagnation punctuated by downturns, with short-lived upticks here and there as new bubbles inflate or a backlog of unfulfilled demand is partially supplied. Global warming is likely to be more of a factor than peak oil.

      As to Greer, I had not encountered his works before. However cranky he may be on other topics, his discussion of the consequences of falling reserves of energy is reasonable. Whether we agree with a particular time frame is another matter; personally I believe most peak-oil advocates forecast energy crashes too soon and too dramatically, and I certainly disagree with those who say global warming won’t be a problem because the economy will crash soon from a lack of energy.

      The overall picture, however, that the world can not long go on as it has is true enough however much we might debate the specifics.

      • DemolishingBS says:

        As for peak oil, this blog has some pretty interesting articles that seemingly refute many of the common peak oil claims and gurus: http://peakoildebunked.blogspot.com/ I’m not a geologist, just a lowly history major, so obviously I can’t speak as an authority, just from what I’ve read.

        As for Greer, I’m automatically skeptical of anything he says because of the methodology he uses to come to conclusions, but I’m not saying to not use him, just be skeptical.

  2. Alcuin says:

    Trump will make America great again!! Go, Trump!

    Seriously, John Michael Greer has been writing his blog for quite a long time. I used to read it, but he was preaching to the choir and since I was in the choir, I really didn’t want to listen to the sermons any longer. For some reason that has always been unknown to me, humans, particularly those on the Left, think that by writing an “important analysis” or speaking on a “sobering problem” that the problem will be (or start to be) solved. I think the rise of Trump and his adoring low-information voters should put the Left on notice. But I doubt that those trapped in their heads will take notice.

    I’ve said this before, but few people seem to read or understand it. Humans, like every other species of life on this planet, are doing what the need to do to comply with what Nietzsche’s said was the Will to Power. Do deer stop breeding when their populations grow too large to be supported? No. Do they then suffer a mass die-off when a severe winter strikes? Yes. This phenomenon occurs in every species, not just deer. Sometimes, if humans haven’t changed the ecosystem so that predators for a given species have not been eliminated, mass die-offs don’t occur. But that’s increasingly rare, as humans foolishly think they are God. We are not. The Greek goddess Nemesis exacted divine retribution against humans guilty of hubris, which was arrogance before the gods. Nothing has changed since the days of the Greeks except an increasingly willful ignorance of the gods. Greer, who is a Druid, writes extensively about this theme. Despite the fact that DemolishingBS wallows in the hubris of saying that Greer “dabbles in magical mystic woo-woo,” Greer is right. DemolishingBS, along with billions of others, will face the wrath of Nemesis, disguised as resource wars, population decline, and global warming.

    Eldridge Cleaver famously said in the 60s that if you weren’t part of the solution, you were part of the problem. 99% of us are part of the problem. Some of us on this blog see the solution, but not many and certainly none who support Trump do. It’s a tragedy that those who can see clearly will have to suffer the same fate as those who think that life is just one big party.

    Sometimes, I wish that I could find my rose-colored glasses … they sure beat cynicism!

    • If we are to have any chance of turning away from the cliff, some of us had better be paying attention. Deer don’t have science and can’t help it. Humans do, and ought to use it.

    • DemolishingBS says:

      Um…Greer being a “Druid” is proof enough of the quote of mine you’re trying for whatever reason to mock, alongside his writings on how werewolves and other magical beings are real and that there is a conspiracy among scientists to suppress them, alongside a bunch of other nutty bullshit. No offense, but he’s a multiple case fruitcake. I’ll take him as seriously as Alex Jones, which is to say not at all.

      As for the “wrath of Nemesis”, it’ll have to wait in line for the wrath of Jesus, Muhammad and every other vengeful boogeyman out to get the “unbelievers”. This hyper soon porn surrounding global warming is just a repeat of Christian end of the world fantasies.

  3. I think you are correct that the crisis will be drawn out and punctuated. I believe change will result from a crisis of legitimacy, when people reach a psychic Limit of exhaustion over accelerated cycles of boom and bust. The “limits to growth” seem to always be on a forever receding horizon because Capital has proven adept at maintaining the illusion of growth- “green capitalism” will be one seductive form, possibly geo-engineering, techno-growth is especially intoxicating. As for CO2 tipping points, someone said “it is easier to imagine the end of the world than the end of capitalism.” Again, this all plays out in the imaginary.

    • It was Fredric Jameson who said that line about the end of the world. Oh so true, isn’t it?

      I would agree with you about a crisis of legitimacy — a move to transcend capitalism and the associated madness that is driving us to an eventual catastrophe won’t come until people are fed up with capitalism, see it as reaching a dead end and are feeling so miserable that they are ready for a real change. I wish that weren’t so, but history is consistent on this.

      Paradigm shifts do occur quickly, however — over the top nationalism at the start of World War I and four years later Europe was on the brink of revolution. Still, I’d rather not have to do it the hard way. So let us keep laying down a foundation now.

  4. xraymike79 says:

    Funded mostly by governments which have a vested interest in downplaying “alarmist” findings to maintain BAU, mainstream climate science has consistently underestimated the effects of anthropogenic climate change. The 2°C limit was just a number pulled out of thin air to keep BAU going while environmental warning signs and impending tipping points were brushed aside:

    Checking 20 years worth of projections shows that the Intergovernmental Panel on Climate Change has consistently underestimated the pace and impacts of global warming.
    How the IPCC is more likely to underestimate the climate response
    Climate Scientists Erring on the Side of Least Drama

    As ever dire studies continue to reaffirm worst case scenarios, it should be clear to anyone paying attention that in the next century the Earth will be unrecognizable from its current state. Basic planetary geography and atmospheric conditions will be altered through warming oceans and rising sea levels which are now increasing faster than at any time in the past 2800 years. On average, sea levels were between 50 and 82 feet higher the last time CO2 levels were at 400ppm. CO2 levels are now increasing around 3ppm per year, a twentyfold increase since pre-industrial times when the highest recorded increase was 0.15 ppm per year. In our warming world, the hydrologic cycle is changing and creating extreme weather; crop-destroying droughts and floods are becoming more frequent. Rising winter temperatures are beginning to destroy the “winter chill” needed for many fruit and nut trees to properly blossom and produce maximally. Climate change is also disrupting flower pollination. We’ve long since passed the tipping point of melting Arctic summer sea ice; 300-350 ppm of CO2 was the threshold for many parts of the climate. These changes are irreversible on a timescale of human civilizations. Even if all human industrial activity magically ceased today, the footprint man has already left will be felt for eons.

    Homo sapiens have only been on the planet for the equivalent of a few seconds in geologic time but have managed to overwhelm and foul up all of earth’s natural processes and interdependencies, leaving a distinct layer in the sedimentary record. There is nothing modern humans do that is truly sustainable. Here are a few glaring examples:

    Techno-fixes are built into the IPCC’s projections for maintaining a habitable planet for humans.
    Remember this headline from 2013?: Arctic methane release could cost economy $60 trillion -study. Our response was to go on a fracking binge which increased our methane emissions by some 30%.
    While the resource intensity of GDP may be falling (less resources needed to produce 1$ worth of goods/services), the absolute decoupling of resource use, emissions, pollution, etc from GDP growth is the only thing that matters and that is not happening. If the world’s population continues to grow as projected and current lifestyles do not change, global resource consumption will increase anywhere from 2 to 5 times by 2050. It defies logic that a continually growing economy would be able to reduce its resource intensity down to near-zero to achieve a sustainable ecological footprint.
    According to recent research, even if we converted 100% of farmland to reforestation projects it would only lower temperatures 0.45C by the end of the century. Converting half of global farmland to reforestation would result in just a 0.25C drop. Other recent studies have come to the same conclusion:

    “No amount of reafforestation or growing of new trees will ultimately off-set continuing CO2 emissions due to environmental constraints on plant growth and the large amounts of remaining fossil fuel reserves,” Mackey says. “Unfortunately there is no option but to cut fossil fuel emissions deeply as about a third of the CO2 stays in the atmosphere for 2 to 20 millennia.”Link

    Relying on machines for answers to the existential problems of a species run amok with planet-destroying tools and weaponry is rather ironic and tragic. We’re locked-up inside a complexity trap of our own making. The human propensity for tool-building coupled with our discovery of fossil fuels has created a set of living arrangements in which we are now enslaved to those machines and tools. The globalized capitalist economy externalizes its destruction and atrocities, keeping the masses in a state of ignorance and denial. Despite the best efforts of scientists, environmentalists, and activists, the wealthy countries most able to do something won’t “get it” until famine, disease, and war come to their country. And this is all being left for the ‘free market’ to sort out at the same time that climate change, a conflict multiplier, ramps up.

    • There was a tacit acknowledgment of the 2-degree target being inadequate at the Paris Climate Summit when a new 1.5-degree target was announced. Unfortunately, what was agreed to at the summit would allow a rise of more than 3 degrees, and it is highly unlikely those targets will be met. I wish I had an argument against the evidence you present, but I don’t.

  5. witsendnj says:

    Greer and the Limits to Growth study, along with virtually all climate scientists, underestimate the pernicious influence of pollution. The PETM is the usual analog for our current 6th mass extinction, but a closer one would be the Permian, the Great Dying, the only such event when insects and plants went extinct on a wide scale. Then it was due to toxins acidifying the rain and soil from trap emissions; not it is from toxins emitted by cars, trucks, planes, power plants and other industrial processes. Stopping capitalism won’t help with any of that. The problem is far deeper and more intractable than a political system or culture. http://witsendnj.blogspot.com/2016/04/earth-embalmed.html

    • The only chance humanity has is to develop an economy that consumes much less, takes the environment into its cost calculations and has no need for growth. None of those are possible under capitalism, so without a switch to a rational economy, under which we consume far less, there is no hope. Transcending capitalism is no guarantee, true, but at least we have the possibility of staving off catastrophe.

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  7. Joel Meyers says:

    The implications of Limits to Growth, the paper and more important the concept, are enormous.
    But to locate them historically, they are among the many, continual resurfacing of Malthusian historic pessimism.

    Karl Marx was positing that socialism was moving from a utopia to a science, based on growth of production supporting universal abundance. Malthus was one of the main, if not THE man opponents: Not so fast. The perspective of scientific socialism was, he said, impossible, because it was beyond the limits of the earth’s resources.
    Instead, Malthus insisted that extreme poverty and narrow restrictions on consumption were to be near universal standards. Only a small minority were to be permitted to live in comfort, or luxury as the planet could tolerate, so that the well-to-do layer could exercise social supervision and creativity.

    Marx’s idea of scientific socialism, growing out of class struggle, was based on the opposite perspective: Increased productive capacity would create a universal abundance incompatible with parasitic capitalism and private ownership of the major means of production, as well as exchange.

    The idea was that socialism only becomes possible as a reality by the production, and the productive forces, expanding to the point that the strait jacket of private property bursts, the revolution.

    In today’s world, Malthusianism is called austerity. Austerity means that the majority of the world cannot emerge from the shortages and scarcities in the emerging colonial world. The implied program is to prevent their full emergence. In the dominant central powers of imperialism, it means that any form of socialism, even that as moderate and watered-down as the Bernie Sanders variety, can be dismissed as utopian demagogy, a false flourish of campaign rhetoric, a criminal fraud, or at best unrealistic except to the most naïve mind.

    Many on the Left are advocating a perspective of cutting back on energy, and consequently on the mass standard of living, in order to save the planet. Bringing countries like China, continents like Africa, etc., into even a Twentieth Century degree of industrialization is ruled out of the question.

    There is no government or major organized movement in the planet that advocates, even through rhetorical exhortation, socialist revolution as the solution or even A solution to any set of problems.

    The “debate” is between a perspective of an ultra-imperialist New World Order global regimentation (Hillary Rodham Clinton) and a more old-fashioned autarchic, traditional nationalism (La Pen, Trump).

    In your previous column you take up the question as to whether Trump is an actual, incipient or not-quite fascist. But the frame of reference has changed. Based on and due to global scale, today’s office holders and contenders, New World Order or neo-liberal, represent a greater danger to the world than Hitler or Mussolini, the classical fascists. Even Benjamin Netanyahu is possessed of hundreds of nuclear warheads, which World War II Germany, Italy and Japan never possessed, while the USA of the “anti-fascist” “allies” opened the atomic era, setting the examples of Hiroshima and Nagasaki.

    If we have to learn to accept the permanent reality of material restriction, then all else follows: The impoverishment of the bulk of the world’s population, the uneven nature of the austerity in an imperial frame-work, and genocidal population reduction.

    The vision of socialism, or any material solution, becomes a dream that has been woken from. For any further progress, revolution, reform, or even a stable status-quo, the vision, the dream, is a prerequisite. Rosa Luxemberg’s perspectives of “social or barbarism” (I believe the quote is from Engels), are looming every closer, and it is all the more crucial that we invoke our right to historical optimism, and keep the dream alive, the dream that a united humanity can break the limits.

    • Optimism is difficult to hold on to these days, and the sad choice given to U.S. voters of Trump’s nationalism and ignorance on the one hand and Clinton’s imperialism and Wall Street perspective on the other hand is one more sign of a system unable to provide answers for increasingly difficult problems of its own makings. But what is the alternative to optimism? Giving into a future that looks ever more perilous. I agree that we should not do.

      • Joel Meyers says:

        You say optimism is difficult to hold onto *these days*, but the idea of Limits to Growth is not just conjunctural pessimism, but permanent *historical* pessimism. Then Trump’s nationalism and Clinton’s globalist neo-liberalism apply not just to the current system in crisis, but no matter what the system, Then any materialist reasoning about the future is not just perilous, but hopelessly tilted towards barbarism. I have heard that Ghandi was asked what he thought of western civilization, and he answered it sounded like a good idea, and maybe they should try it. But a limits-to-growth perspective precludes it, and reduces progressive leadership to shepherds of austerity under certain standards of social justice, and equality in sharing poverty.

        • DemolishingBS says:

          Not really too related but Ghandi was racist and pro-war and a spousal abuser so I wouldn’t take his views on barbarism too seriously.

  8. shastatodd says:

    here is another million dollar question for human cornucopians:

    when i am drinking a beverage from a container, will it eventually become empty?

  9. […] as Pete Dolack  writes at  Systemic Disorder, environmental  collapse is a major challenge to  the capitalistic system!  How dare our world […]

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