The Approaching Great Transformation: Toward a Livable Post Carbon Economy

Overview

The Approaching Great Transformation is about the coming shift in how we act and think in the world economically as the era of cheap oil comes to an end. The purpose of this book is to provide inspiration for those seeking to be part of the ongoing global effort to move away from our dependency on fossil fuels and ceaseless growth and toward a more sustainable, stable, and just system.

The central theme of The Approaching Great Transformation is that with vision and deliberate ...

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The Approaching Great Transformation: Toward a Livable Post Carbon Economy

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Overview

The Approaching Great Transformation is about the coming shift in how we act and think in the world economically as the era of cheap oil comes to an end. The purpose of this book is to provide inspiration for those seeking to be part of the ongoing global effort to move away from our dependency on fossil fuels and ceaseless growth and toward a more sustainable, stable, and just system.

The central theme of The Approaching Great Transformation is that with vision and deliberate action communities around the world can break out of habitual ways of producing and consuming things and move optimistically toward something better. It provides a philosophical basis and guidelines for citizens we are working to develop new and very different economic institutions that are centered on self-reliance, ecological permanence, stability, and a celebration of human creativity.

In time, these institutional developments will lead to the positive evolution of economic systems and human culture. This book documents examples and stories of this work that is already being done. The Approaching Great Transformation extends the ideas put forth in his previous book, Mindful Economics, and like the first book it is written primarily for American readers.

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Editorial Reviews

Publishers Weekly
03/25/2013
Soon, fossil fuels will run out—or become ridiculously complicated and expensive to extract—and the global economy will be in a real pickle, says Magnuson, an economist "specializing in non-orthodox approaches to political economy." These days, no one is safe from rhetoric about "going green"; Magnusson argues that this is mostly a "marketing ploy," a way for huge corporations to have and eat their cakes—labeling their products "green" while relentlessly pursuing "endless growth" and ignoring the reality of a finite planet with limited resources. While "green" and "sustainable" have become catchwords, material consumption in the last 25 years has increased. A "deeper transformation of our core economic institutions" is necessary, he argues; i.e. capitalism must go. While eloquently argued, the book's central message will be difficult to hear for many, though he effectively skewers the mantras of those who hope to ignore the problem: "at least it won't happen in our life time" and "technology will come through." This is a brave book by a smart person with a masterful command of economic theory; unfortunately, for these reasons its reach is probably limited: most people will balk at its central message: that we will "have to get by with much, much less production and consumption." (Mar)
From the Publisher
"The Approaching Great Transformation is a breath of fresh air in a world of hackneyed nonsolutions to our social and economic problems. Professor Magnuson pulls no punches regarding the coming collapse of the corporate-commercial-consumer society, or the inability of technological fixes and 'green capitalism' to bail us out of the historical crunch that is virtually upon us. Rather, as we start to run out of energy (read: oil) and are forced to abandon obsolete notions of 'growth' and 'progress', we shall have to confront the question we have collectively been avoiding for roughly 500 years: If money is not the purpose of life, what is? Whether the alternative models discussed in this book prove to be viable or not, the author makes it clear that what we are living with now is no choice at all. His message is simple: change or die." —Morris Berman, author of Why America Failed

“A challenging and engaging exploration of what it will take to make the transition to an ecologically sustainable future.  Magnuson exposes the false promises of green-wash capitalism—and in the tradition of E.F. Schumacher puts the hopeful shoots of real alternatives squarely on the map for ongoing development.”—Gar Alperovitz, Lionel R. Bauman Professor of Political Economy at the University of Maryland and author of America Beyond Capitalism

"We are literally in the midst of reshaping the world and as a result, this is the time to make the new economy in a way that is redefining, as economist Joel Magnuson writes, “what is good, beautiful, fair, or wholesome, and making sure that our economic system allows us to live according to these beliefs.”—Truthout

"Soon, fossil fuels will run out—or become ridiculously complicated and expensive to extract—and the global economy will be in a real pickle, says Magnuson, an economist "specializing in non-orthodox approaches to political economy." These days, no one is safe from rhetoric about "going green"; Magnusson argues that this is mostly a "marketing ploy," a way for huge corporations to have and eat their cakes—labeling their products "green" while relentlessly pursuing "endless growth" and ignoring the reality of a finite planet with limited resources. While "green" and "sustainable" have become catchwords, material consumption in the last 25 years has increased. A "deeper transformation of our core economic institutions" is necessary, he argues; i.e. capitalism must go. While eloquently argued, the book's central message will be difficult to hear for many, though he effectively skewers the mantras of those who hope to ignore the problem: "at least it won't happen in our life time" and "technology will come through." This is a brave book by a smart person with a masterful command of economic theory; unfortunately, for these reasons its reach is probably limited: most people will balk at its central message: that we will have to get by with much, much less production and consumption."—Publishers Weekly

Library Journal
According to Portland, OR-based independent economist and international strategic advisor Magnuson (visiting fellow, Ashcroft International Business Sch. at Anglia Ruskin Univ., Cambridge, England; Mindful Economics: How the US Economy Works, Why It Matters, and How It Could Be Different), the world is ready for a great transformation. As the Oil Age comes to an end, living in the post-carbon economy will require a shift in thinking and consumption, and Magnuson proposes both theoretical and practical ideas for how that might happen. He places his analysis at the intersection of economic and ecological concerns to create a picture of how the world will change in the coming years, focusing on the institutional changes that will have to take place in order for real progress to be possible. He addresses the issues of education, health care, banks, and more to show how these institutions will transform as values shift and we move from a consumption-driven society to a more sustainable one. VERDICT Magnuson's text is extremely readable, and his style is intended to bring these big ideas to a general audience, while his chapter on meta-economics, in which he discusses the ideas of John Ruskin and E.F. Schumacher, may be of greater interest to students of the field.—Elizabeth Nelson, UOP Lib., Des Plaines, IL
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Product Details

  • ISBN-13: 9781609804800
  • Publisher: Seven Stories Press
  • Publication date: 4/16/2013
  • Pages: 240
  • Sales rank: 1,234,013
  • Product dimensions: 5.70 (w) x 8.60 (h) x 0.60 (d)

Meet the Author

JOEL MAGNUSON, PhD is an independent economist based in Portland, Oregon, USA. He is a visiting fellow at the Ashcroft International Business School at Anglia Ruskin University in Cambridge, England, serves as an international advisor to Anglia's journal Interconnections, and is on the faculty at the East West Sanctuary in Nagykovácsi, Hungary. He is the author of Mindful Economics: How the US Economy Works, Why It Matters, and How It Could Be Different (Seven Stories Press, 2008) as well numerous articles in journals and anthologies in the US, Europe, and Japan.
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Read an Excerpt

The Approaching Great Transformation

Toward a Livable Post Carbon Economy
By Joel Magnuson

Seven Stories Press

Copyright © 2013 Joel Magnuson
All right reserved.

ISBN: 9781609804800

Introduction
ANOTHER SEA CHANGE
 
Every epic historical transformation began with economic turbulence and collapse. As a general rule, when the economic foundation of a society is significantly disrupted, it destabilizes everything else. Everything begins to change. The Roman Empire finally crumbled when its Mediterranean system of conquest, slavery, and trade was thrown into chaos by the Saracens who launched their invasions from northern Africa. And the feudal system of the Middle Ages was brought down when its agrarian economy was ruined by plague epidemics and wars over religion. Today another historic sea change is beginning to take form and the underlying cause, again, is a major economic disruption. Though this time it will not be caused by invading and conquering armies or plague epidemics, the disruption will be a global decline in the availability of oil—the paramount and finite energy source that has supported all the major industrial systems for the last century. As resource limitation and climate change are beginning to shake the foundation of our entire way of life, another historic sea change is in the making.
Our current global system of production and commerce is driven by an imperative for endless growth and expansion. But limited supplies of oil and virtually all other resources are binding this expansion like a rope tightening around every economy in the world. Yet in a kind of blind and desperate attempt to keep charging forward with more economic growth, governments nearly everywhere are plunging themselves into massive and unsustainable debt. Whether it smashes into the wall of resource limitations and debt fatigue, or makes a shift away from business as usual, our global economy is going to change.
As we begin to feel these changes we will be forced to reexamine what we consider to be the good life. Many of us in the so-called developed world have high expectations for our career choices, our levels of income, the things we want to buy, and all the other accoutrements of a plentiful lifestyle. But this is all beginning to change. The cause of this change is a fairly simple but sobering reality: the resource base of our planet can no longer sustain it. When I refer to a declining resource base here, I am not only talking about oil, though oil is the big one. Other fossil fuels, water, topsoil, basic metals, and virtually every other resource available to us are being consumed to exhaustion. We often say that our desire for high material standards of living is to provide for our families—our children. The cruel irony is that our children and grandchildren will be the first generations to experience the full brunt of the economic and ecological damage we are doing now. That is, unless we do something now to change that.
In his book, Collapse: How Societies Choose to Fail or Succeed (2004, 2011), evolutionary psychologist Jared Diamond chronicles an impressive list of examples of how humans have a penchant for self-destruction. Though his examples are taken from different places and at different times in history, they all basically follow a consistent pattern in which entire societies collapse as a result of their destruction of the environmental habitat that would have otherwise sustained them. But we don’t have to follow this pattern. We are an evolving species and we can learn from the lessons of history. We have conscious awareness and the ability to be proactive and possibly shape the direction of this historic sea change toward something better. This would be our lasting contribution—our great transformation.
The choices we make today as we adapt to mounting scarcity may be the most important historical events of the 21st century. We can choose to be forward thinking and work actively toward positive changes in a spirit of celebration and make this transformation in ways that are healthy, ecologically sound, economically stable, and just. or, we can choose to be complacent, to continue treating our world as an infinite resource pipeline and an infinite waste dump, to brace ourselves for endless wars over resources, and to trudge through one debilitating crisis after another, pushing all of humanity through a long historical period of decline—a descent into a kind of Dark Ages of the third millennium. This would be a tragic downfall for humankind, but the ultimate cause of our downfall would not be the crises themselves. The cause would be our refusal to deal with the obvious fact that the oil Age—the age of seemingly infinite abundance—is coming to an end.
The Twilight of the Oil Age
The Oil Age is basically the 20th century. future historians, if there will be any, may consider it as one of those meta-historical epochs like the stone Age or the iron Age, though on the historical timeline it will be comparatively very short. On a chart of geological time, the oil Age would appear as nothing more than a hair thin blip. Nonetheless, its significance in human history is profound.
Up to the end 19th century, industrialization and economic growth were powered by coal and the steam engine. Oil, or petroleum, was used mainly to refine into kerosene for lamps. That changed rapidly by the early 20th century. Coal was used to power external combustion steam engines, which use water boiled by an external heat source for power. Steam engines had their day, but soon were rendered obsolete as inefficient and cumbersome technology compared to the internal combustion engine powered by petroleum-based liquid fuels.
The oil age got its debut with the simultaneous development of two important technologies: the internal combustion engine and the commercial refining and production of oil. The internal combustion engine uses high-energy liquid fuels refined from oil, such as gasoline, that are combusted directly inside the engine for power. Like water, gasoline is lightweight, can be stored in a compact tank, and can easily be pumped directly into the engine. This allowed mechanical engineers to do away with the heavy baggage of the steam engine’s pile of coal, boiler tank, and steam turbine. And while the design of the internal combustion engine was being perfected, the oil industry also quickly expanded its drilling and pumping operations and engineered hydrogen gas technology to efficiently refine or “crack” oil into gasoline. These simultaneous developments revolutionized the transportation and agricultural industries. The development of gas-powered cars, trucks, boats, aircraft, train locomotives, and tractors and other farm implements caused a productivity boom that led to subsequent waves of economic growth and development. The ascent of the oil Age was all but preordained.
Henry ford’s company mass produced about 250,000 cars in 1913, and by 1929 the number jumped to 23 million. About the same time the Wright brothers developed various models of the Wright flyer aircraft also powered by internal combustion motors. Between 1892 and 1903, gasoline powered tractors were also being developed, and by 1917 henry ford began mass producing the Fordson tractor. Tractors replaced oxen, horses, and human labor in the fields and food became much more abundant and much less expensive. The pace of economic production and daily life accelerated dramatically, and when the jet aircraft engine was developed in 1945 the world suddenly became a much smaller place. In the decades that followed, auto manufacturing, industrial agriculture, and air travel became leading industries and they were all based on the steady and abundant supply of cheap oil.
Cheap oil has been more than the basis for fuels to power industrial growth. As engineers in the 1960s developed chemical fertilizers and pesticides synthesized from oil, agricultural output experienced another major productivity boom known as the green revolution. The technology was applied everywhere, but its impact was felt particularly in developing countries that were experiencing severe problems of hunger. As a result of applying synthetic chemicals to wheat production, wheat output increased in developing countries from 750 kilograms per hectare in 1950 to well over 2,500 kilograms per hectare in 2000. Global food production increased exponentially, but the green revolution rendered much of the world’s population dependent on oil, mechanization, and prodigious amounts of irrigation for survival.
By the 1970s, however, a global oil crisis and an emerging environmental consciousness prompted concerns about becoming overly dependent on oil. Physicist and mathematician Albert Bartlett issued grave warnings about allowing our entire economic system, including food production, to become so heavily reliant on oil. Among the many notable aphorisms by Bartlett is this one from his 1978 article, “Forgotten fundamentals of the energy crisis”: “modern agriculture is the use of land to convert petroleum into food.”1 Bartlett cautioned that the approaching decline in oil would seriously impair food production. he warned, “it is clear that agriculture as we know it will experience major changes within the life expectancy of most of us, and with these changes should come a further major deterioration of world-wide levels of nutrition.” in other words, Bartlett was telling us that over the last several decades shortages in our global food supply have been temporarily and artificially kept at bay with petrochemicals. His warnings were largely ignored, but now they are coming back to haunt us.
About the same time, David Pimentel of Cornell University issued the following warning:
As a result of overpopulation and resource limitations, the world is fast losing its capacity to feed itself . . . more alarming is the fact that while the world population doubled its numbers in about 30 years the world doubled its energy consumption within the past decade. Moreover, the use of energy in food production has been increasing faster than its use in many other sectors of the economy.
His warnings were largely ignored as well, and since then our use of oil has not slowed down. In fact it has increased.
Oil has become the very foundation of the global economy. Although the bulk of it is used for transportation fuel, it still supports multiple layers of industry. in the transportation industry, oil is not only used to move goods around the planet, it is also, by association, used to sustain car and truck manufacturing, auto parts and repair industries, tire manufacturing and tire shops, auto insurance, interstate freeway construction, and the list goes on. Oil is the primary ingredient for making other products including plastics, synthetic fibers, cosmetics, and again, food. These industries that are either directly or indirectly dependent on oil constitute the very spine, heart, and lifeblood of the entire global economic system. They spawned massive flagship corporations like Exxon, Ford Motor Company, and General Motors. They also created millions of steady, well-paying jobs that contributed to the ascent of a solid middle class and the suburbanization of American communities, which further entrenched our oil dependency. None of this has really changed and oil remains a paramount and ubiquitous resource, and there is nothing in the universe to replace it.
As the oil Age comes to an end, these industries will begin to fade and it’s unclear what will follow. It’s unclear because where we go from here will depend on the choices we make and the steps we take now, and those choices and steps are yet to be determined. I emphasize here and now because we are currently in the peak oil moment. That is, the supply of oil, this amazing finite and one-time resource is now making its inevitable turn from growth to decline. That puts us on a veritable cusp of a historical transformation.
A Brief Update on Peaking and Warming
Much has been written on peak oil and global warming over the last several years, yet virtually nothing beyond symbolic gestures has been done about them. It is not necessary to rehash another painful litany of the world’s environmental woes as we have become quite familiar with the problems of melting ice caps and receding glaciers, species extinction, unstable climate, and resource depletion. The data keep streaming in and serve only to reinforce the warnings that scientists and analysts have been issuing for decades. Twenty years ago leaders from around the world met in Rio de Janeiro and pledged to protect and restore the health of the planet’s ecosystem. In this effort we have failed miserably as conditions have worsened and the rate of resource depletion has accelerated. As long as we cling to business as usual, these problems are not going to go away and, painful as it may be, it is important for us to keep the dialog alive. it would be unwise of us to raise the discourse on oil depletion only when another horrific event occurs like another massive oil spill, nuclear power plant meltdown, or the damage and fury unleashed by hurricane sandy.
Kenneth Deffeyes, geology professor at Princeton University and oil industry expert, nominated Thanksgiving Day, November 24, 2005, as Peak Oil Day. his nomination came with the caveat that the peak is more like a plateau that will sustain a series of peaks before showing a clear and definite descent. As of this writing, the most recent Energy Information Administration (EIA) data shows global oil production reached its highest peak in October 2010, at about 86.8 million barrels per day. But this is only slightly higher than the previous peak of 86.7 million in July 2008. Since 2005, global production has been suspended in a peak plateau ranging between 83 and 87 million barrels per day. Moreover, geologists have made it clear that in 2005 conventional oil production had peaked.4 conventional oil is the stuff that basically just squirts out of the ground. So most of any new oil resources will be cooked out of tar sand, mined from under porous rock, or will have to be pumped from miles beneath ocean and sea beds. This makes oil increasingly hard to get and therefore costly.
Aside from EIA data, there are other ways to see that global oil production is peaking. One is the approximate forty-year lag between oil discovery and oil production. Global oil discovery peaked in 1965. By this measure, global oil production would be peaking on Deffeyes’s peak oil Day. Further evidence of peak oil can be gleaned from the financial decisions made by the large oil companies. As with any other industry that reaches the climax of its expansion, the oil industry has fallen into a cannibalistic merger wave. Feeling the relentless pressure from their shareholders, they are devouring the oil reserves of other companies through a series of corporate mergers so that they can boast of steady future revenues. As oil companies find it impossible to find new oil reserves, their share prices begin to fall. Fruitless exploration, massive capital requirements for offshore drilling, and small returns are putting oil company stocks at risk. The companies have been using the massive cash they have accumulated to buy back outstanding shares in a desperate attempt to boost their share prices.
When oil companies try drilling and pumping oil from 4 miles beneath the ocean, or cook it from tar sands, this is pretty good evidence that the easy-to-get oil is close to depletion. Standard economic theory argues that as oil prices rise due to scarcity, it becomes cost effective to develop less conventional ways of extracting and processing oil. This is true to an extent, but you can only take this argument so far because unconventional oil production has finite limitations. Geologists predict that those sources would be unlikely to produce more than 4 or 5 million barrels per day, a small fraction of the total demand. While world production remains currently suspended between 83 and 87 million barrels per day, consumption is expected to climb to as high as 120 million barrels a day. This implies that we are not only using up current production, we must also deplete current reserves and inventories just to keep up with demand.
Critics of the peak oil argument will want to squabble over this or that detail about when oil production will or did actually peak. But pinpointing the exact month of peak production is largely a trivial academic argument. Whether we call it a peak or plateau depends on how closely we choose to look. Since we are looking at this in a broader historical context, we’ll take the longer view. From that view the moment of peak oil is now. How we define “now” could be last year, today, or five years from now, but all of that will be decided by future historians. What is more important is that the upshot of all of this is the critical inflection toward energy descent. geologists anticipate that by 2040, us oil supplies will have descended to 90 percent below its production peak that occurred in 1970, and world oil production will have descended to at least 63 percent below its current production peak. There is no question that oil will get scarcer and much more expensive. It is a finite resource and we don’t have to wait until it hits $300 per barrel to draw that conclusion. As the price of oil is a benchmark for energy prices overall, energy in general is going to get much more expensive. The higher the price of energy, the greater the shock waves it will send through the global economy and therefore the more significant disruption it will be.
If we slide into energy descent while continuing with business as usual, nations everywhere will embark on a mad scramble to find other sources of energy to power economic growth. The most likely scenario will be to ramp up the use of the more abundant fossils: coal and natural gas. But as we increase our consumption of these fuels, we will truncate their lifespans and cause them to peak within a few decades or sooner. Energy-hungry eyes have also turned, once again, to nuclear power despite the ominous disaster at the Fukushima Daiichi nuclear facility in Japan. Like turning into another dead end in a maze, ramping up nuclear power will only hasten the condition of peak uranium. The pollution created by burning coal and gas and the dangers associated with nuclear power will also increase proportionally. And once we have finished with all this madness, we will end up right back where we started: facing energy descent. Only by then the world will be a far more toxic and dangerous place to live.
In his 2008 campaign for the presidency, Barack Obama talked a great deal about “clean coal.” This is another term for carbon, capture, and storage (CCS) processes or “coal scrubbing.” clean coal has been championed by both the coal industry and by some environmental organizations as a means by which carbon emissions can be reduced from coal-burning power plants. The process involves separating out carbon from the plant’s effluents and then pumping the sequestered carbon deep into the crust of the earth where it can be reabsorbed. This is almost literally a process of sweeping the problem of carbon pollution under the rug. Obama spoke of government plans to help the industry develop this technology and to mitigate the effects of global warming. But shortly into its first term, the administration abandoned the idea because of the enormous expense that would be involved compared to the minimal benefits it could provide. Another concern raised by the critics of clean coal is that with carbon scrubbing and government subsidization we cement our dependency on coal for energy.
Because of its tremendous importance oil is like the barometer or leading indicator for the depletion of resources in general. What happens to oil basically happens to all resources. To keep track of our use of a broader spectrum of our resource base, economists do what they call “material flows analysis.” This is basically the process of tracking and measuring the flows of actual material things that go with economic production and distribution. This includes the final products, but also includes iron, copper, aluminum, wood fiber, topsoil, fossil fuels, vegetation, fresh water, and pretty much everything else that is used to make things. Though our technology is supposed to be making us more efficient, the material flows analysis data shows that the rate with which we burn through materials has increased despite the wonders of technology.
Throughout the years between 1980 and 2005 there was a general assumption that technology was going to transform economic production in ways that would require fewer resources. This included the so-called “new economy” years of the 1990s in which the us economy was supposed to be shifting to a resource-light “information economy.” computers and the internet were supposed to make us efficient and help us save on material resources, but the result was the opposite. During that twenty-five-year period, the consumption of materials in North America increased by 54 percent: from 6.6 to 10.1 billion metric tons. As this region’s population only increased by 35 percent during those same years, it is clear that material consumption per person has steadily risen. Information technology served to pick up the pace of globalization and economic expansion such that consumers were able to wolf down pieces of our planet in unusually large chunks. As we continue to do this we have charged headlong into a condition that Richard Heinberg succinctly calls, “peak everything” (Peak Everything: Waking Up to the Century of Declines, 2010). And this would include peak water.
Fresh water is in peril. In most places in the world fresh ground water usage is at its maximum. Though it is a renewable resource, we are using or damaging it at a rate faster than it can be replenished. Most of the water is used for food, drinking, and sanitation for an ever-enlarging population of consumers. Water tables are also falling at an alarming rate. In china and parts of India, the world’s most populous regions, the water tables are dropping at a rate of about three feet per year. The water table in the vicinity of Mexico City, again an area of large human population density, has dropped by over seventy feet in fifty years, and in Saudi Arabia, aquifers are down 50 percent from their levels in the 1990s. Saudis, particularly in the east, are struggling with their difficulties in growing food because of scarce water. In response they are turning more and more to desalinization plants to create more freshwater. Their Shuaibah 3 desalination plant is the largest and most technologically advanced in the world, and it is also extremely energy intensive. Saudi Arabia depletes its fresh water supply by about 700 billion cubic feet every year, and in order to compensate for this with desalinized water, it would take about 300,000 barrels of oil or the equivalent in natural gas. Along with energy descent so goes the desalinization option of obtaining fresh water.
As water tables are dropping and aquifers are being depleted in the us, complex and intractable problems are surfacing in multiple sectors of the economy. Much of the nation’s water supply is supported by public utilities that rely on municipal bonds for credit. As water shortages become increasingly severe, conflicts over water usage arise. Because public utilities have to pay their own legal fees, they become vulnerable to legal battles over water supplies. This has spurred credit rating agencies to downgrade the municipal bonds in areas where water shortages are becoming chronic problems. One of the most stable and risk-free investments, municipal bonds, is now coming under attack as water gets scarcer. In other sectors high tech companies such as semiconductor manufacturers are rapacious consumers of fresh water and are being pitted against farmers for water rights. Farmers are also pitted against developers, and developers against sports fishermen, and so on. These conflicts will get much worse as drought conditions in some areas force human migration to other areas where water supplies are still available.
Water depletion is only part of the story. Industrial, chemical-based agriculture is destroying more than 10 million hectares, or 23 billion tons, of arable land each year as the rate of topsoil ruination exceeds the rate at which soil can be regenerated. Industrial agriculture is also damaging water supplies with contamination. mercury, fertilizer runoff, industrial chemicals, sewage and human waste, animal fecal matter, storm drains, mining chemicals, rust inhibitors, heavy metals, pesticides, herbicides—all contribute to the damage and contamination of fresh water. Natural processes can and do clean water supplies by breaking down waste material and chemicals and returning them to the crust of the earth. But these processes, like the processes of hydrologic cycle of replenishment, are very slow compared to the rate at which we damage and pollute.
Some gains can be made with water conservation efforts and efficient usage and water recycling. But these gains are being eclipsed by growing demand from population increase and by damage done by industry. Like peak oil, the easy-to-get water supplies are already being taken and what is left is the hard-to-get water, or no water at all. To get a sense of magnitude of this problem, Sandra Postel wrote in Last Oasis (1997):
. . . If 40 percent of the water required to produce an acceptable diet for the 2.4 billion people expected to be added to the planet over the next 30 years has to come from irrigation, agricultural water supplies would have to expand by about 1,750 cubic kilometers—equivalent to roughly 20 Nile rivers, or 97 Colorado rivers. It is not at all clear where this water is to come from.
Aside from the loss of fresh water and arable soil, another problem affecting our food supply is climate change. In 2010 and 2011, agricultural regions around the world have been experiencing extreme irregularities. Blistering temperatures in Russia resulted in drought while the normally drier wheat producing areas of Saskatchewan and Australia were pummeled with dangerously heavy rainfall, and close to half of china’s winter wheat crop has been crushed by an unusual dry spell. When farmers can’t produce, scarcity follows and prices take off.
Prices of basic food staple items like wheat and corn have soared to record levels. According to prices set by commodities markets in Chicago, wheat rose by 74 percent in 2010 and corn prices increased by 87 percent in 2011. The world’s poorest families are the most severely affected by high food prices as they typically spend over half of their meager incomes on food. With oil prices climbing back over $100 per barrel, this will only worsen the situation for the poor. One of the most at-risk places in the world is the arid region stretching from sub-Saharan Africa to northern Africa and to the Middle East. Food riots and political protests quickly spread to Algeria, Yemen, Bahrain, and then to the deadly fight in Libya. The political instability that followed may come to be seen as the first large-scale and undeniable social crisis stemming from global warming.
That these things are happening should not come as a great surprise. The intergovernmental panel on climate change (IPCC) has issued a number of warnings that this would happen with rising temperatures and that we would have to deal with the global warming crisis on multiple fronts. The IPCC reports outline a possible sequence of events such as seawater levels rising by anywhere between seven and twenty-three inches and flooding of coastal regions including many highly populated urban areas, changing weather patterns, warmer ocean temperatures, arctic conditions developing in some temperate climates, drying trends, floods, falling crop yields, and drought. Government institutions are already making preparations for dealing with an onslaught of problems that will unfold as a result of changing climate conditions. The US Department of Defense has raised concerns that these could easily develop into national security problems as they escalate into food riots, mass population migrations, and eventually violent conflict.
The evidence that climate change is caused by global warming and that it is caused by human emissions of carbon dioxide into the atmosphere as presented by the IPCC is abundant and clear. The science of it really isn’t that complicated. Given the earth’s distance from the sun, it should be colder than it is. The reason the planet can stay warmer is that its own atmosphere is like a blanket of insulation trapping heat that has made the long journey from the sun. The elements in that insulation are greenhouse gases, principally carbon dioxide. As solar heat enters the atmosphere, the planet absorbs some of that energy like a sponge and the rest is reflected back out into space as infrared radiation. Carbon dioxide traps that infrared heat and prevents it from leaving the atmosphere. The more carbon dioxide we release into the air, the thicker that blanket of insulation becomes, and the planet gets increasingly warmer.
What is more complicated is trying to discern the impact warming ambient temperatures will have on our climate, weather patterns, and ocean levels. Nonetheless, in March 2009, the scientists who gathered in Copenhagen, Denmark, for the UN conference on climate change issued their “synthesis report—climate change: global risks, challenges and Decisions.” in their report, they drew the following conclusion:
The climate system is already moving beyond the patterns of natural variability within which our society and economy have developed and thrived. These parameters include global mean surface temperature, sea-level rise, ocean and ice sheet dynamics, ocean acidification, and extreme climatic events. There is a significant risk that many of the trends will accelerate, leading to an increasing risk of abrupt or irreversible climatic shifts.
Sadly, the issue has been politicized and mangled by the political right wing of the US Republican Party. Their refusal to acknowledge the existence of global warming is absurd theater and blocks our ability to have sound public discourse on the subject—though there are signs that the political mangling might be changing. In December 2011, the United Nations conference in Durban, South Africa, put forward the “Durban platform” which, if ratified by a UN quorum, will create an international legal agreement to reduce carbon emissions and to begin implementation in 2020. Just beneath the surface of climate change politics, however, are the powerful oil and coal industry lobbyists who are framing the discourse—arbitrarily creating controversy to keep the issue trapped in a debate rather than achieving a consensus. But the issue of global warming runs much deeper than national politics.
In order to raise awareness about climate change, the award-winning documentary, An Inconvenient Truth, directed by David Guggenheim, was released in the spring of 2006. The film is based on the work of former Vice president Al gore as he sought to draw attention to the harsh realities of global warming. The film and gore’s companion book were enormously popular and seemingly overnight global warming shifted in the popular media from an obscure science topic mired in controversy to an alarming scientific reality. Widespread concern about global warming was felt in Washington and prompted the federal government to respond.
Yet only a couple of years after the movie was released the topic of global warming was pushed aside to make room for the media’s new obsession—the economic recession—and global warming all but vanished from the public eye. The need to restore the economy to growth clearly became the nation’s top priority and all other concerns were ordered to the back of the bus. This was not a coincidence or a random event; this is a recurring theme. The needs of the economic system for growth and expansion always takes a front seat, while environmental concerns consistently remain marginalized as controversial or ephemeral.
Meanwhile greenhouse gases continue to build in the earth’s atmosphere and are rising above worst case scenario projections. The US Department of Energy released a report in October 2011, that indicates the heat-trapping gases jumped by a record amount in 2010 to levels much higher than those forecast by climate experts just a few years earlier.8 even though awareness of climate change has been firmly established, the global economy spewed an additional 512 metric tons of carbon over 2009 levels. As always, the United States and China, the world’s two largest economies, topped the polluters list as they accounted for more than half of the additional emissions.
Our Great Transformation
The twin crises of resource depletion and climate change are the feet of clay of our economic system. Sustained disruptions in economic production and distribution will eventually destabilize the system and, as we know from history, this will precipitate a much larger sea change. An economy that is driven by powerful corporate and government institutions to continue growing will eventually hit the wall of physical limitations. And the most significant physical limitation is the decline of oil. As the oil Age comes to its inevitable end, our habitual ways of behaving economically and ecologically will undergo a transformation.
The words “economy” and “ecology” both have a prefix derived from the classical Greek, oecos, meaning “household.” This common linguistic origin implies that how we pursue our livelihoods and how we interact with our natural environment are one and the same. Economic activity will always have an environmental impact and environmental changes will always alter the conditions of our economy. For decades scientists have been warning that both of these are going to change. Either the threat of climate hell that will arise from global warming will compel us to change our economic habits, or changes in our habits will be forced on us by energy descent. Or perhaps it will be a combination of both. However it plays out, large scale changes are on their way.
Much attention has already been paid to the twin problems of peak oil and climate change. Mountains of articles, books, and documentaries have been published on these subjects. From this work it appears that a consensus is forming around what investment banker and oil industry analyst Jeff Rubin said: that for each of us our world is about to get a whole lot smaller (Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization, 2009). All indications show that the growth-driven, globalized economic system that is powered by fossil fuels is finally hitting the wall and that this will force us to redirect our attention to economic re-localization. And a positive adaptation to changing resources and environmental conditions hinges on our ability to develop vibrant local economic alternatives that are ecologically sound and more democratically governed.
I agree with this general conclusion, but I must also point out these conclusions are nothing new. For decades people have been talking about going local and going green as an alternative to the global economic juggernaut. Farmers markets and efforts to produce sustainable or environmentally friendly products go back to the 1960s and today organics have grown into a multi-billion dollar industry. Yet our track record on resource depletion and carbon pollution has indicated little improvement; in fact, if the Energy Department’s report is a reliable indicator, it is getting worse. part of the reason little is changing is that what was once considered “green” or “sustainable” has been co-opted and is looking more conventional all the time. It is now an all-too-familiar story of what h\Heather Rogers calls “green gone wrong” (Green Gone Wrong: How Our Economy Is Undermining the Environmental Revolution, 2010)—that going green is more of a marketing ploy to tap into the pricier organic or fair trade markets. And the cheering squad for the “going local” movement boasts how local small businesses are growing, generating profits, and expanding markets. Yet these are the standard measures of success according to conventional business models, and are the same measures of success that compel businesses to burn through more energy and to find more consumers with money to spend.
Granted, such efforts to go green and local may lighten the burden we place on our resources, but they are ultimately driven by the same conviction that profit, growth, and fiduciary responsibility to shareholders are of paramount importance. As such, this overrides virtually every genuine attempt to take a different path and, at best, leaves us with half-hearted attempts at finding real solutions.
Others still argue that the solutions are to be found in new technology and government policies. The widespread belief in a technological answer to environmental problems has been elevated to a kind of secular religion. It instills a sense of blind faith and serves as a comforting palliative for those who choose not to look too closely. “Don’t worry,” as the familiar old chestnut goes, “if we can put a man on the moon . . .” Yet the irony of our technological sophistication is that it has accelerated the pace at which we are depleting resources. The more efficient we become at producing and consuming things, the less costly they become and therefore the more we produce and consume.
And when we look to federal government policies for solutions, we are sadly barking up the wrong tree. In September 2011, President Barack Obama issued an executive order to not enforce the ozone national Ambient Air Quality standards set in 2008. Obama’s reason was the same as that of the previous George W. Bush administration’s refusal to join the international efforts to reduce carbon emissions—it’s bad for the economy. The federal government is reluctant to pass or enforce any legislation that could genuinely address the problems of environmental damage or resource depletion because, to be more precise, it is bad for business as usual.
In my view, the seemingly intractable problem in all these situations is institutional. I see nothing inherently wrong with going local, organic, or green; nor is there anything inherently wrong with trying to create better technology or government policy. What renders virtually all of these efforts nonsolutions or half measures is that they are built on an assumption that the same business and government institutions that brought us to this point of resource exhaustion and climate horror are somehow going to solve the problems. This is as contradictory and self-defeating as trusting a class of slave owners to make something humanitarian out of the institution of slavery. Large corporate and government institutions are just not equipped to deal with these problems, programmed as they are to build their empires and conquer and such.
The central message of this book is this: if the problem is institutional, then institutional transformation has to be the solution. As we will see in a later chapter, institutions are social structures that script social behavior with rules, norms, and shared strategies. If we seek to truly adapt to the profound changes that will accompany the end of the Oil Age, we will have no choice but to create new social structures that will script our social behavior with entirely different rules, norms, and codes. If done with insight, wisdom, and a wholesome set of beliefs about our relationships with nature and each other, then this will be our great transformation. Citizens can develop new and very different economic institutions that are centered not on endless growth and expansion, but on self-reliance, ecological permanence, stability, and a celebration of human creativity. In time these institutional developments will help guide us to the positive evolution of economic systems and human culture. This will also require a transformation of our mindset, expectations, and what we consider to be the good life. This is a tall order, but, as Paul Rogat Loeb reminds us, “the impossible will take a little while” (The Impossible Will Take a Little While: A Citizen’s Guide to Hope in a Time of Fear, 2004). And, in fact, the process has already begun.
The groundwork for this great transformation is being laid by the transition movement. In “chapter one: from Transition to Transformation,” I tell the story of the transition movement with some background of the movement and its philosophical underpinnings. Its main goal is to foster community-based projects called “transition initiatives.” These initiatives are structured around a transition model for community action developed by Rob Hopkins and other transition pioneers. Most of the ingredients in the model are directed toward creating vision, raising awareness, organizing, training and reskilling, democratic participation, and planning. The most substantive part of the model is a community-centered Energy Descent Action Plan (EDAP) for reducing fossil fuel consumption and carbon emissions. By their own admission, however, Hopkins and others who developed the model acknowledge the model needs to be developed further with a more comprehensive vision of economic systems and how they function. They have left it an open-ended question as to what kinds of business models and economic institutions need to be developed to implement the EDAP  and complete the transition to a whole, stable, resilient, post carbon local economy. But this is not a minor question. In fact, it is perhaps the biggest and most difficult question because successfully making this transition will require more than just coming up with new business models or technologies. That is, effectively dealing with problems of global warming and peak oil will require more than a transition, it will require a transformation.
In “Chapter Two: Economies in Transition—A Systems View” I flesh out a broader understanding of economics by taking a systems or holistic view. Observing the actions taken by a particular business or choices made by individuals in isolation is not enough to grasp how we have arrived where we are or what we can do about it. A genuine understanding of economic transformation requires a broader, systems view of the interconnectedness of people, economic institutions, and their habitats. It also requires an understanding of the importance of culture. Consumer culture and the choices we make in it are as much driven by our economic system and the corporate institutions that dominate it as by choices individual make within it. I encourage citizens to become active agents for change by transforming themselves inwardly and transforming their communities outwardly.
Though often what we mean by change is poorly understood. “Chapter Three: This Road Paved with Good Intentions” is more of a cautionary tale about our attitudes toward economic growth, money, and our expectations regarding trying to live in a truly sustainable way. Growth for growth’s sake is a systemic condition driven by the financial sector’s need to maximize returns to their investors, which creates a widespread preoccupation with sales and market expansion. It has become deeply ingrained in American culture where there is a widespread expectation that financial investments will keep growing forever. For this to happen, the production and consumption of goods must grow forever as well, but it cannot because the carrying capacity of the planet won’t allow it. Many of us are in denial about this, particularly economists, and have chosen to believe in a certain fiction. The fiction is that we can not only pursue both ongoing growth and sustainability, but that benefits of both can be shared among everyone equitably. I refer to this as “green economics.” If we are serious about ecological permanence and social equity, then green economics needs a sober and critical examination. I present a number of caveats regarding “going green” and “going local.” up to now the movements toward “local” or “sustainable” or “organic” have been profitable, but have not moved our economy toward any measure of ecological permanence or equity because they originate in conventional institutions. Again, to move toward ecological permanence would require real change, not half measures—a much deeper transformation and a clean break from business as usual.
To make such a deep transformation will require some vision and inspiration. For this, in “Chapter Four: E. F. Schumacher and the Meta-economists” I revisit the work of visionaries who for over a century and for various reasons have been making appeals for the very same kind of economic and cultural transformation. It is helpful for us to see the work of critics and visionaries who were bold and idealistic enough to share their vision of what such real changes might actually look like. This exploration will take the reader through the works of John Ruskin and William Morris, who sought to create a new intellectual force and political agenda through a revival of craft traditions; Patrick Geddes’s ideal of “civic regeneration”; Ebenezer Howard’s vision of “garden cities”; Randolph Bourne’s conception of “beloved community”; rich contributions by Lewis Mumford and the Young Americans who envisioned organic communities. They are meta-economists because they are seeing economics as something that should serve higher moral and ethical values that transcend the specifics of economic activity.
This chapter concludes with an overview of E. F. Schumacher’s work on economics and philosophy. He criticized standard economic theory for not only ignoring these problems, but actually fostering destructive attitudes by rationalizing greed and selfishness, and instilling a certain callousness to fragile ecological systems. He was particularly concerned with developing countries following Western economic models of development and instead argued for grassroots models that shift the locus of economic activity away from large corporate and national systems toward smaller, semi-autonomous systems supported by appropriate forms of technology. As a philosopher, Schumacher argued that economic activity should be guided by wisdom rather than greed, and carried out with the aim of ecological permanence rather than exploitation. He emphasized the development of the individual person through good work, wisdom found in all the great spiritual traditions, and a reverence for nature.
What is absent from both the transition literature and the works of the meta-economists is a specific discussion on how to craft new institutions. The first part of “Chapter Five: The New Monastics” is specifically about building new institutions. For this I draw on the model of institutional diversity developed by Elinor Ostrom. The basic notion is that the prescribed behavior of our established institutions has brought us to the brink of social and ecological ruin and therefore those prescriptions will have to change. The rest of the chapter is a survey of unconventional practices and business models. The idea here is to tell their stories, particularly those about what is working well, and to see their practices as the substance from which new institutions can be crafted. These models may not have a perfect scorecard, but they represent practices that can help lead us in a new direction.
My evolving list of subjects is made up of people in contemporary society who are rejecting the centralized corporate system and creating their own alternatives without government mandates, basing their work on alternative values and philosophies. I look at innovative business models such as the “B corporation”; activists in Pennsylvania who have started movements directed at revitalizing local citizenship; a brewery in Colorado that is employee owned, wind-powered, and converts gray water into electricity; an employee-owned solar power business in Colorado; city planners in Oregon who have for decades been redesigning the Portland metropolitan area specifically to reduce dependence on fossil fuels and in the process have created a Mecca for bicycling and transit enthusiasts from around the world; a network consisting of a permaculture credit union, farmers market institute, and land trusts to promote local food production in New Mexico; a network of urban cooperatives in Ohio committed to local economic development; and other examples of work consistent with the values of livability, social and ecological stability, and equitability. As we look at all these cases together, we can begin to develop a vision of an institutional “dream team” in which these institutions cohere into a system—an alternative mutual support network.
Finally, The Approaching Great Transformation concludes with “Chapter Six: Education and Our Great Transformation.” Transforming our economic system into something new and better will require the development of educational programs aligned with this effort. Moving toward a livable future will require that people develop new skills and technologies, create new cultures, foster creativity, and raise awareness. educational institutions need to develop new curricula and workshops that will provide tools and guidelines for people who seek to learn how to become citizens in their communities and to design, heal, manufacture, grow, repair, plan, rebuild, as well as to become the visionaries of their own generations. 
 

Continues...

Excerpted from The Approaching Great Transformation by Joel Magnuson Copyright © 2013 by Joel Magnuson. Excerpted by permission of Seven Stories Press, a division of Random House, Inc.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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