Peak Oil, Market Crash, and the Quest for Sustainability: Economic Consequences of Declining EROI
Much of what traditional economics believes “works” because of clever technology, substitutions, and intelligent investments, in fact does so only because we have had huge amounts of cheap energy to throw at the problem . Our present situation is perhaps most readily captured by the phrases “the end of cheap oil” and “the second half of the age of oil,” created by petroleum geologists Colin Campbell and Jean Laherrère. These concepts also apply to a very much broader suite of the basic resources and environmental conditions required to fuel our economy (Fig. 18.1). Although many people are taught and believe that technology has made natural resources increasingly irrelevant, this book contains a great deal of evidence to show the contrary. Our national and global society is becoming more, not less, dependent upon natural resources, as oil, for example, underlies essentially everything we do economically. Second, many of the things that are treated as externalities in conventional economics, that is, as supposedly secondary issues not properly included in prices, are instead what we believe to be often the main issues of economics. Depletion of highest quality fuels is one such issue. More generally, understanding and protecting the basic systems of the Earth, such as the atmosphere, far from being a luxury or an externality as is indicated in conventional economic analysis, are the critical issues for economics.
KeywordsEnergy Price Discretionary Income Discretionary Spending Financial Crash Conventional Economic Analysis
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