economics

The world will have to suffer a deep economic downturn before serious attempts are made to kick the oil habit, according to Robin West, chairman of Washington based oil consultancy PFC Energy.

The Reality Report hosts David Gardner, President of Citizen-Powered Media and producer of the documentary Hooked on Growth: Our Misguided Quest for Prosperity. We discuss what is it like to challenge a core belief of our society, and why is it more important than ever to do so.

All of a sudden coal, so long the Cinderella of fossil fuels, is not just in demand but in desperately short supply. A chance combination of crises in big producing and exporting countries has pushed the price of European imports to almost $140 per tonne – double the level of a year ago. But according to Gerard McCloskey, publisher of McCloskey's Coal Report, there is no quick fix to the coal crunch, and prices may still have a long way to go.

The real value of oil is "way, way, way above $80" according to a leading analyst. Paul Horsnell, head of commodities research for Barclays Capital, says it is hard to see the price falling below $80, even allowing for a lot of pessimism about the economy, and that the long run price is likely to be in triple digits – but not because of resource constraints. At least not immediately.

It's becoming increasingly clear that 2008 will be a catastrophic year for the US economy, and therefore probably for that of the world as a whole. The reasons boil down to two: continuing and snowballing fallout from the subprime mortgage fiasco (exacerbated by an orgy of debt-leveraging), and record-high, continuously advancing oil prices. This brief portion of the February Museletter is so topical it bears immediate posting.

In early November, 2007, the Commerce Department’s Bureau of Economic Analysis (BEA) announced the United States had achieved a third quarter Gross Domestic Product (GDP) of 3.9 percent. That number was later updated to 4.9 percent. Those numbers set off my “reasonable test” alarm. How, I wondered, with an accelerating rate of inflation and declining economic activity, could the United States turn in such a stellar performance? The BEA’s report flunked the reasonable test.

Earth needs humans to figure out our shared destiny, says Alan Seid, whose interest is both the outer and inner dimensions of sustainability. Outside there's ecology, social systems and economics (e.g., in Permaculture). Inside is the psychological dimension of personal and group values and intentions. How do we meet people where they are, engender respect, promote crucial information-sharing, and motivate change? Episode 91.

Nate Hagens returns to discuss evolution, addiction and economic demand; or, how our brains trick us to want more than we need. Nate is a former Wall Street investments manager and has an MBA from University of Chicago. He is completing his doctoral studies at the University of Vermont's Gund Institute for Ecological Economics. Nate is also an editor for The Oil Drum, an online source for news, analysis and discussions about energy and our future. Jason Bradford hosts The Reality Report, broadcast on KZYX&Z in Mendocino County, CA.

In this edition of the Reality Report, economics Professor Joshua Farley of the Gund Institute for Ecological Economics at the University of Vermont discusses the false assumptions of dominant economic theory, why this leads to problems, and what an alternative economic system might look like. During the interview, Prof. Farley explains how policies to protect the environment, stem the loss of biodiversity, conserve fossil fuels, and deal with climate change will fail without economic reform that first sets the sustainable scale of the human economy, secondly decides what is a just distribution, and finally allows the market to find the most efficient allocation. Among many publications, Prof. Farley is coauthor with Herman Daly of the college text book "Ecological Economics: Principles and Applications."

"In terms of resolving these two problems of peak fossil fuels and climate change... mitigation policies for peak oil, peak coal and peak gas should be done in tandem with mitigation policies for climate change. And I think there's no reason that that shouldn't happen. In fact it makes the most sense to me." NASA research scientist Dr. Pushker Kharecha speaks with David Room about "Implications of 'peak oil' for atmospheric CO₂ and climate," a paper Kharecha co-wrote with one of the world's foremost climate scientists, Dr. James Hansen. The paper, which has been submitted for peer-reviewed publication in a scientific journal, is one of few that consider both climate instability and oil depletion.