The Assumptions that Underpin this Plan
When most Councils, businesses or Governments sit down to plan for the next 20 years, they still start by assuming that in 20 years the settlement in question will have more jobs, more energy, more cars, more houses, more businesses, more economic growth and so on. In the past few months it has become clear to many people that each of those assumptions is becoming increasingly questionable.
We are moving from a time in history when our degree of economic success and personal wellbeing is directly linked to our level of oil consumption, to a time when our degree of oil dependency is our degree of vulnerability. For many people, it is increasingly clear that we cannot continue as we have been, and that three key trends are forcing our hands, making major and far-reaching change inevitable. These include:
The beginning of the end of cheap fossil fuels
Nobody yet knows for sure when the world will pass the peak in oil production, although this historic moment may well have already happened in July 20081, when the price reached $147 a barrel, which dampened demand to an extent from which it has yet to recover, and indeed may never do so. Indeed some argue that the current economic situation was, in large part, caused by the oil price spike2. Our lifestyles depend on cheap oil for virtually everything in our homes, from our food to our toothbrushes, from our carpets to our shoes. The 21st century way of living is literally built out of oil. The peak oil argument does not say that one day soon we will ‘run out’ of oil, we may well never see that day; what it says is that we will soon see that end of the age of cheap oil and all that that has made possible. It will prove to be a historic shift. During the Oil Age, we have extracted and burnt 1200 billion barrels of crude oil, nearly half of all the ancient sunlight laid down in prehistory. That is an astonishing amount of any material, never mind one that has the long-term impacts that it has had on the climate, the environment and on humanity. As the Chief Economist at the International Energy Agency now tells world government leaders, “we should leave oil before it leaves us”3.
The Impact we are having on the climate
Every day brings increasingly grim news about the speed and scale of climate change. Most of us have noticed weather patterns changing during our lifetimes; snow and cold winters are now a rarity in Devon, whereas as the oral histories section of this report will show, they used to be commonplace. The average temperature in Devon has increased 1.5°C since 19604, and is predicted to rise by the same again between now and 2030. Globally, of most concern, is the scale of the melting of the ice in the Arctic, long seen by climate scientists as one of the crucial indicators of climate change. The pace of melting is far faster than anyone expected. The last report by the Intergovernmental Panel on Climate Change, an unprecedented scientific consensus that climate change is underway, suggested that, in its worst-case scenario, the arctic ice might start to break up by 2010. If current trends continue it could all be gone by 20145. Governments are now responding, but are working to Carbon dioxide concentration targets of 450 parts per million. The latest science tells us that we need to cut to 350 parts per million6. We have already passed 387ppm. Our time for postponing action and for procrastination has long passed. The scale of the cuts we need to make in our carbon emissions is profound, yet achievable, and could be the catalyst for an extraordinary revolution for industry and commerce.
The End of the Economic Growth Bubble
Money is brought into existence by being lent to people, so money, really, equals debt. The UK has become the second most indebted nation in the world (second only to Ireland), with astonishing levels of personal credit and a total national debt 336% of GDP7. The Government has also borrowed heavily in order to carry out its objectives, and more recently, to bail out the UK banking industry, debt for which we will be liable for many years to come. The trouble with generating debt is that it is based on the assumption that the future will be wealthier than the present, in order to repay that debt. Underpinning that is the assumption that there will always be the cheap energy to enable the economic growth required. The current unravelling of international finance, and the realisation that much of that debt is ‘toxic’, i.e. un-repayable, will prove to have far deeper implications than currently realised.
Also of importance is the fact that the UK, situated at the end of many long energy pipelines, sold much of its own indigenous energy at a time when prices were very low, and has become a net importer at a time of great energy volatility. Moreover, the level of national debt incurred in the bailing out of the banks recently has necessitated deep cuts across the economy, which will put in question our ability to rely on pensions and the Welfare State in the way that we have done.
For the past three years, Transition Town Totnes has co-ordinated a programme of awareness raising on these three key issues in the town, bringing many of the world’s experts on the subject to the town. Peak oil specialists have included Richard Heinberg, Jeremy Leggett and David Strahan, climate change experts have included Aubrey Meyer, Mayer Hillman and Tony Juniper, and leading thinkers on economics have included Andrew Simms, Colin Hines, David Fleming, Molly Scot Cato, Bernard Lietaer, Richard Douthwaite, David Boyle and others. It has been an illuminating journey, and much of the wisdom that they have brought to this community is captured in this document.
Footnotes
- Oil Drum, The, 2009, World Oil Production Forecast – Update May 2009. May 19th 2009. Retrieved from www.theoildrum.com/node/5395 [↩]
- Rubin, J. ,2009, Why Your World is About to Get a Whole Lot Smaller: What the Price of Oil Means for the Way We Live. Virgin Books. [↩]
- Birol, F., 2008, Outside View: We can’t cling to crude: we should leave oil before it leaves us. The Independent on Sunday. 2nd March 2008. Retrieved from www.independent.co.uk/news/business/comment/outside-view-we-cant-cling-to-crude-we-should-leave-oil-before-it-leaves-us-790178.html [↩]
- Jenkins, G, Perry, M & Prior, J., 2008, The Climate of the United Kingdom and Recent Trends. Met Office, Exeter, 2008. [↩]
- Public Interest Research Centre, 2008, Climate Safety: in case of emergency. www.climatesafety.org [↩]
- Pilkington, E., 2008, Climate target is not radical enough – study: Nasa scientist warns the world must urgently make huge CO2 reductions. The Guardian. 7th April 2008. guardian.co.uk/environment/2008/apr/07/climatechange.carbonemissions [↩]
- CNBC. The World’s Biggest Debtor Nations. www.cnbc.com/id/30308959/ [↩]
14 comments on “The Assumptions that Underpin this Plan”
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About paragraph 4.
The peaking of oil is the time of maximum production. It was predicted as a bumpy plateau rather than a spike. Since 2005 the world oil production stays around 85 million barrels a day and we have had five years of bumpy plateau. The contribution of agricultural sources which is included in most official graphs is now close to 1 million barrels/day. If this contribution is substracted, graphs such as those released by US Energy Information Administration will suggest that the descent has already started.
Why are there no assumptions in regards to the strengths & assets that can get us through the transition? For instance the power of ICT, electrification of transport, trends in renewable energy generation & the explosion of distributed decision making & leaderful communities…
The assumptions in the appendix are those which came from the workshops which guided the development and inputs to the EDAP. These ideas came from the participants as they developed their thinking towards visions
Paragraph 8, “Money is brought into existence by being lent to people, so money, really, equals debt.”
This is a rather one-sided view of the meaning of money. Afterall, the invention of money did not lead to the invention of debt. It is the act of unsynchronised trade that leads to debt – where one party provides a service before the receiver is able to return an equally valuable service.
Before money was invented, we undoubtedly traded with our neighbours, we just did so in a rather hap-hazard way. It is reasonable to expect there were lots of arguments fought over what was ‘a fair swap’. Certainly, studies on our less advanced primate cousins have evidenced this sort of natural behaviour. Money removed the cause for much squabbling as a pound is a pound, no more and no less.
Furthermore, as we got more skilled as individuals at what we did, we became less skilled at what others did. It therefore serves everyone’s interest to maintain a common tradable good – money.
I therefore suggest that a more accurate wording would be:
“Money is brought into existence when people trade valuable services between themselves, so money, really, equals potential.”
The potential to receive from your neighbour a service that is of equal value to the service you originally provided, even if your original service was provided to someone different to your neighbour!
The point being made in the paragraph you refer to is the credit system which creates debt. This type of monetary system is unsustainable as it is based on pyramid trading, ie there is always a growing base on resources to keep the system going. The resources which once underpinned the global monetary system was the gold standard and banks were required to only lend money based on the resource of gold they owned. When the gold standard was abolished in the 1930′s money was released from being based on an amount of gold or owned money by a bank and credit was invented. We have seen the result of the credit bubble bursting and we are likely to witness this happening again as money and credit currently follows energy resources, currently based on oil.
The early trading systems which use coins go back to celtic times (at least) and as you suggest were probably to settle arguments about value. However I wouldn’t agree that money provided the solution then or now to such arguments as deciding a value for goods or services; trading standards and weights and measures acts over the centuries indicate people wanted to be sure of good deals back in the past and we wouldn’t have so many trade union disputes if everyone was satisfied with their pay deal.
Security in the economy is explored in various ways in this Energy Descent action Plan and diversity such as local bartering, local currency and other measures which promote local trading, local goods and services are seen as increasing local economic potential.
Friends,
A key phenomenon is missing in your arguments about money and debt: the interest rate.
Money that is remunerated has led to its reproduction not pegged to any real wealth. The global and the national economies have become cassino economies, speculation being the rule. The bubble grows, busts, grows again. In the meantime, countries become more indebted and working people are impoverished. Only those who own big capital come out richer, although they are the root of the crises.
This will continue while the international financial system is not radically changed and while peoples let their governments bail out those who are the factors of social, income and wealth inequality and financial crises. How to change the financial system? Only a revolution can do it: a peaceful one, brought about by people organized and conscious of their individual and collective rights. Declare finance a public service. Eliminate fiscal havens. Bring financial transactions under control. Change the indicators that measure development – redefine economic and technical development as only MEANS to serve social and human development.
Hail, the Transition Towns Movement!
In Brazil I am working towards making three innovative movements converge and cooperate: TT, Ecovillages and Solidarity Economy.
Best wishes,
In solidarity,
Marcos Arruda
Thank you Marcos for your comments about finances. The points you make are very apt and maybe we didn’t emphasise these issues adequately in this part of the Totnes EDAP. However if you go through the Economics and Livelihodds section in the third part of the EDAP you will find proposals under willing to change, a vision and actions in the timeline that do move society away from the destructive practice of interest based borrowing and credit based spending.
Sorry, not familiar with this term.
I have answers to ‘what is a fair swap’ and how to live together as a people without money. If you want some REAL answers meet me at: http://www.thegreencitysite.com
DJ
Folks already have debt. You can’t pay back a loan or a mortgage with chickens, corn or carrots. We have a large number of foreclosed homes in our neighborhood and we are just getting into this economic mess. Some of these homes have resold at less than half of their value. We have folks living in the woods in tents. These are the homeless. I don’t believe we can power down (although we need to) without money and without a population reduction, worldwide as well as local. People don’t read, that is, the people that require the most help. They wait to have people tell them what they should do. Sheeple! I don’t know about the U.K. but that is the way it is here in Florida. That is why I decided to screen “End of Suburbia” in a “Concerned Citizens of Citrus County” Meeting. I got involved with peak oil etc. after choosing randomly a copy of “Crude Awakenings”. I now ask everyone I meet if they have heard of peak oil. Nobody has said yes yet! Including a S.C.O.R.E. meeting. (Govt. sponsored help for small business) I am trying to do what I can, but I fear it will be too little too late!
If our national debt is 3 times GDP then if we could raise taxes by 10% without impacting GDP we could pay down the capital over 30 years but longer if you include inflation / interest & if GDP gos down with increased taxes we may not pay off our nations dept in my life time, even though I am 50 years old and plan to live to 100. Our bigest problem is rising population both in this country and oversees but at last religous groups are approving use of contraceptives though officially only to reduce infection which recognises people do have sex outside marriage.
The biggest problem is not that people have sex outside of marriage (though it is a problem), but the biggest problem is the corruption inside of Governments, and the fact that most people seek after money far to aggressively. If people would simply shrug off the thought of ‘Profit’ or ‘Wages’ and simply concentrate on feeding their families and housing them then there would be less stress, worry and anxiety. People need to learn to work together without charging each other for goods and services rendered. They need to learn how to stand up and say ‘NO!’ to a corrupt Government and to firmly stand their ground with no exceptions! This is the way to win the war that we are all in!
Para 4 (6 in your numbering) – trivial at this date I know but proof reading suggests you need ppm of SOMETHING! (Carbon dioxide?)
Thanks T.bending for spotting this omission. I’ve edited the on-line text to include “carbon dioxide concentrations” to make this clear.