Abstract
The chapter focuses first on the link between emissions of greenhouse gases, evolving climate change, and the crises of the world economy in recent decades. In mainstream economics it is frequent the notion that recessions are connected with “oil shocks”, that is, disruptions of the supply of oil due to wars, revolutions, or embargoes of oil sales. Evidence shows however that the international market of oil, as that of other raw materials, is largely dependent on the conditions of the world economy, so that the peaks in oil price that precede global downturns are fully explained by the large demand of oil that is generated by a quickly expanding world economy. The chapter concludes with a discussion of the notion of peak oil in the context of a general consideration on how a variety of raw materials, particularly metals, are in the process of reaching peaks of production as they are non-renewable resources whose price fluctuations exert a major influence on profitability and the macroeconomic conditions of the money economy.
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Notes
- 1.
Leal (2014), “Un gran reinado” [“A great reign”], El País, June 15, 2014, Negocios, 18.
- 2.
Hamilton (1988), “A neoclassical model of unemployment and the business cycle”, Journal of Political Economy 96(3), 593–617; Hamilton (2011), “Historical oil shocks”, NBER Working Paper 16790. A view from a major oil company in ExxonMobil, “Oil Crises”, June 2014.
- 3.
Both the level of emissions and the rate of growth of atmospheric concentrations of CO2 are significantly correlated with the rate of growth of the world economy. See Tapia, Ionides & Carpintero (2012), “Climate change and the world economy: Short-run determinants of atmospheric CO2”, Environmental Science & Policy 21, 50–62; Tapia & Carpintero (2013), “Dynamics and economic aspects of climate change”, in Kang & Banga, eds., Combating climate change: An agricultural perspective, 29–58.
- 4.
Moore (2011), “Ecology, capital, and the nature of our times: Accumulation and crisis in the capitalist world-ecology”, Journal of World-Systems Research 17(1), 107–146.
- 5.
Hamilton (2008), “Oil and the macroeconomy”, in Durlauf & Blume, eds., The New Palgrave dictionary of economics, 2nd ed.; Hamilton (2011), “Historical oil shocks”, NBER Working Paper No. 16790.
- 6.
Hamilton (1988), “A neoclassical model…”. See also the interview with Hamilton in Parker, ed. (2007), The economics of the great depression, 80–81.
- 7.
Kose & Terrones (2015), Collapse and revival, 30, fn. 13, 44–47.
- 8.
Blanchard (2001), “Close encounters with recessions of the third kind”, Project Syndicate, March 12.
- 9.
Mitchell (1913), Business cycles, 109.
- 10.
Marx (2017), Economic manuscript of 1864–1865 (ed. by F. Moseley), 215. A different translation but with identical meaning in Marx [1894] (1981), Capital, Volume 3, edited by F. Engels, 206.
- 11.
Marx [1894] (1981), Capital, Volume 3, edited by F. Engels, Ch. 6, particularly, 214. There is a translation error: it says “overproduction of plant and animal raw materials” when it should say underproduction; see the correct translation in Marx (2017), Economic manuscript of 1864–1865 (ed. by F. Moseley), 227.
- 12.
Stuermer (2018), “150 years of boom and bust: What drives mineral commodity prices?”, Macroeconomic Dynamics 22(3), 702–717.
- 13.
Barsky and Kilian (2004), “Oil and the macroeconomy since the 1970s”, Journal of Economic Perspectives 18(4): 115–34; Kilian (2009), “Not all oil price shocks are alike: Disentangling demand and supply shocks in the crude oil market”, American Economic Review 99(3): 1053–1069.
- 14.
Moore (2011), “Ecology, capital, and the nature of our times: Accumulation and crisis in the capitalist world-ecology”, Journal of World-Systems Research 17(1), 107–146.
- 15.
Heinberg (2011), The end of growth, 1. This book by Richard Heinberg is one of the most elaborated presentations of this view.
- 16.
Wrigley (2004), Poverty, progress, and population, ch. 3 “Two kinds of capitalism, two kinds of growth”, 68–86.
- 17.
Hubbert (1997), “Exponential growth as a transient phenomenon in human history”, in Strom, ed., Societal issues, scientific viewpoints, 75–84. In The entropy law and the economic process, Georgescu-Roegen (1971) kicked off this perspective into mainstream economics, where it was immediately ignored.
- 18.
Kerr (2014), “The coming copper peak”, Science 343, 722–724.
- 19.
Kerr (2012), “Is the world tottering on the precipice of peak gold?”, Science 335, 1038–1039.
- 20.
For further details on this issue see Appendix C and my unpublished paper on this issue: Tapia (2016), “Oil prices and the world business cycle: A causal investigation”.
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Tapia, J.A. (2023). Nature, Oil, Crises. In: Six Crises of the World Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-38735-7_7
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