As EROI of fossil fuels continues to fall an increasing amount of energy will be needed simply to provide energy and food to society. Leaving less energy over for other sectors of the economy such as education, health care etc. The only way to get out of this trap is to switch to renewable energy sources and promote small-scale, local, agroecological food production that can generate high yields but in a more diffused manner. Just like renewable energy technologies. Thus there needs to be a transition from centralised to decentralised energy and food production. Very few believe we can replace all fossil fuels with biofuels or electricity, especially in the agricultural industry that is very reliant on diesel as transport fuel. Furthermore, even if some farms could make such a shift in fuel use they would still be unsustainable if they continue to erode soils, eradicate biodiversity, deplete freshwater sources and pollute the environment. Even FAO recognizes this dilemma and now promotes agricultural practices in line with ecosystem-based management. 

Hansen and colleagues conclude that humanity faces near certainty of eventual sea level rise of at least Eeemian proportions, some 5-9 meters, if fossil fuel emissions continue on current trajectory. This would mean that coastal cities and low-lying areas such as Bangladesh, European lowlands, and large portions of the United States eastern coast and northeast China plains could be completely lost or almost impossible to protect. If reinforcing feedbacks kick in then rapid sea level rise could beigin sooner than most models assume. If the Southern Ocean subsurface warming of the Antarctic ice sheets continues to grow we will probably not be able to avoid sea level rise of several meters. And it could happen over decades, not centuries. But this is highly uncertain. What we do know is that we are on a very dangerous climate trajectory and time is running out to change course.

Emotions are produced and experienced in the brain's limbic system (middle). Emotional impulses travel from the limbic system to the frontal cortex (front) where rational, logical thinking can take place. Neuroscientist have found that its the emotional part of our brain that moves us into action. Understandably, since we have evolved to respond to immediate threats that requires a quick response or single action. However, this is a major hindrance when it comes to solving problems such as climate change, that are complex, "invisible" and happen over long timescales. Environmental scientist have tried for decades to engage people in the climate change problem, but much indicate that they have not been very successful. On the other hand, many people probably understand the central problem of pollution but in this case there is no silver bullet and we have to cooperate on a global scale. That makes us feel like we have no agency. So we need leadership and good examples. 

In most action movies there is always someone who comes to the rescue. But in this case, it is not so. Poor leadership, too little civil society engagement, entrenched business interests and daily distractions keep us on the path of “business-as-usual”, despite our better judgement. We cannot wait any longer, we need to make our voices heard.

In Sweden, 3 out of 5 top worries among the public are related to environmental problems. Yet, last election no political party really talked about their vision of a more sustainable society or how to get there. We have to make some crucial decisions regarding: nuclear power, emergency response capacity, climate adaptation funding, transportation, flood protection, supply chain security and more. Planning for and adapting to changes takes time and replacing infrastructure or energy supply sources takes decades. If politicians are serious about reforming immigration policy they should focus on our climate dilemma, since if we fail to take action, there will be millions of climate refugees from poorer nations and perhaps even war and conflict. This fact is seldom talked about. We can only hope that the re-election engages people more than the last election, which was very dry and lacked clear topics.

We have known for a long time that there are physical limits to population and economic growth in terms of what the Biosphere can provide. The Limits to Growth (1972) “business-as-usual” (BAU) scenario produced about forty years ago now aligns well with historical data that has been updated (Figure 1, Turner, 2014). Showing that we are headed in the wrong direction, away from achieving sustainable development. The BAU scenario results in collapse of the global economy and environment, subsequently forcing population down. A collapse in this context simply refers to the fact that standard of living will fall at rates faster than they have historically risen, due to disruption of economic functions. According to the model, a fall in population only occurs after about 2030 but the general onset of collapse first appears at about 2015 when per capita industrial output begins a sharp decline (Turner, 2014). Given the imminent timing, we ought to raise the question whether the current economic difficulties are related to dwindling resources and an end to growth.

Most people assume that the major global difficulties will occur after the end to growth. According to Dennis Meadows, one of the original authors of the book limits to growth, this is not correct. Instead, the global population will experience the most stress prior to the peak, as pressures mount high enough to neutralize the enormous political, demographic, and economic forces that now sustains growth. Pressures building up can take many forms, for example, rising energy and resource costs (A), growing debt (B), climate change (C) and growing population dependency ratio (D).

The history of commodity prices has generally been one of steadily decline for most of the last century. However, the average price fall of some 1.2% a year (inflation adjusted) met it’s low point in 2002. Since 2002 we have seen a remarkable price rise in most commodities (Figure 2). Rising energy and food prices, for example, seems to be the new normal. Unless there is a global economic contraction, prices will likely continue to rise.

2. Commodity indices (1900-2010) - Paradigm shift Source: GMO (2011)

B) Growing Debt

3. Public debt in % of GDP in 2013 (left) 4. Private debt in % of GDP in 2012 (right). Source: Eurostat

C) Climate Change

The world is aging at a rapid rate and by 2030 there will be 34 nations where more than 20% of the population is over 65 (figure 6). This has broad implications for economic growth and immigration trends. While Sweden's dependency rate will rise we still have a rise in population both from births and from immigration (SCB, 2014). Given today's immigration policy the potential to meet the growing needs of an aging population is better than other countries such as Japan or Austria.

Most common solutions to increased welfare costs depend on growth. For example through encouraging higher birth rates, raising immigration rates, increasing labor productivity, raising the retirement age and increasing taxation. Effective responses, however, are different. Especially if one is serious about creating a more resilient society. There will probably have to be a restructuring of the economy, a reorienting of capital and labor structure of society, from production toward maintenance, to serve an aging population and lower resource consumption. Priority has to shift from GDP per person toward maximizing human welfare directly i.e. using different metrics for national targets. Expenditures have to be reduced by developing non-market methods of social support (e.g. volunteer work, time-banking). The benefit of an aging population is that construction rates goes down, so does the need for police, prisons and military, while the need for health care increases. Shorter work time can give more jobs while allowing more leisure time. Shifting taxes from labor towards heavy industries and resource extraction is another interesting idea.

Several stresses are converging, creating difficulties for the welfare state. Especially in countries with demographic trends of having to care for a larger number of pensioneers. Dependency ratio will increase at the same time as GNP declines. Resource prices have reverted from their long-term downward trend, to increasing prices, but falling again in times of economic contraction.We have unsustainable levels of debt, especially unproductive debt (consumption and speculation), putting downward pressure on the economy. No government has yet tried to increase taxes a lot on the financial sphere or other efforts to get debt levels down, this is mainly because much of our growth today depends on ever increasing debt. Climate change will have many impacts e.g. increasing yields in the north and lower yields in the south of Europe. Scandinavia is in a better position than southern Europe to handle coming heatwaves and floods since temperatures are lower from the beginning. There is plenty of human capital and much work needed to be done (e.g. elderly care) but misalignment of incentives has led to massive unemployment and a generation of lost youths who can't get a job, even with a university degree. Potential solutions should involve changed goals, redirected investment and initiatives to engage the neglected work force. Sweden is in a better position than most other countries to achieve a more resilient society but radical thinking and a clear vision is needed if we wish to maintain our social welfare.

There seems to be a lot of confusion regarding the recent behavior of the world oil market. After five years of relatively stable oil prices, a barrel of WTI crude has dropped from around 110 to 81 dollar (see chart below). I have been following a discussion in the opinion-pages of Svenska Dagbladet clearly displaying this confusion. The discussion started with an article from Kjell Aleklett, a physics professor in global energy systems at Uppsala University, arguing that falling oil prices may signal the start of a global economic downturn. After which Magnus Grill, a political representative of the Peoples Liberal Party (Fp) and energy businessman, replied by arguing that Aleklett did not understand economic theory and that we instead more likely will see an economic upswing in the close future. So how come these two prominent people get to totally different conclusions? While this is a very complicated subject, fraught with international politics, there are some key points I would like to make from the natural resource dynamics and economics perspective.

First of, Grill makes a fundamental mistake when he writes that the concept of peak oil is about running out of oil resources. Peak oil simply refers to the peak in production of oil, as opposed to demand which is generally assumed to increase. The concept is mainly useful for understanding that there are geological conditions/limits to oil extraction which makes oil increasingly expensive and harder to extract, leading to higher capital expenditures (i.e. diminishing economic returns). Peak conventional oil is according to many system scientists not some fuzzy academic concern but a reality, for the US in 1970 and for the world since about 2005-2008 (e.g. Hall, 2010; Turner 2014). Even the conservative IEA has warned about peak oil. The issue is not really about how much oil there is in the world, since there are surely untapped reservoirs, but rather how much effort we can afford spending trying to get to those oil resources. The harder we have to work for getting more oil (e.g. tar sands, fracking, and deepwater drilling) the less net energy we produce for society. In the 1970s every one barrel of conventional oil in form of energy input yielded about 30 barrels of energy in output (i.e. 30:1). Today that relationship is somewhere around 18:1 (Hall, Lambert and Balogh, 2014). Since oil is still the largest source for global energy use (~33%) this has significant implications for the overall economy. 

Whether or not you buy in to the fact that non-renewable resources are finite and has a depletion function, or maximum yield curve, there are simple economic factors connected to oil which impacts growth. We also have to think about that oil is subject to supply and demand. So while Saudiarabia may have released some reserves, as they are the price setters, there are other more long-term trends influencing the market. Conventional oil production has been stagnating while the production of unconventional oil, especially shale oil in the US, has compensated for the decline and allowed for a small production increase. However, at the same time, many of the major economies are in recession and reducing their energy demand. For example, Italy has lost 25% of its oil consumption over the last five years (Bardi, 2014). And many other economies are in trouble, now even perhaps Germany. So if there is a increase in supply while demand is falling the market may eventually determine that oil prices should go down. Here, the role of financial operators perceptions play an important role. How low prices will go depends on several factors, but short-term the markets confidence in oil can influence large swings, such as the drastic drop witnessed in 2008-2009. And Saudi oil policy also matters. In the long term, however, oil prices are likely to rise. Secondly, Grill argues that lower oil prices is a good thing that could lead to economic upswing. That depends, if you are an importer or exporter. Sweden is dependent on oil imports, mainly for transportation. So for us it is perhaps beneficial but may also deter our society to shift from oil to other liquid fuels. But, lower oil prices hurts economies dependent on oil exports and non-conventional oil drillers dependent on a high oil price (around 75-90/barrel) to break even (Forbes). If oil prices stay low for any longer period industry will probably produce less oil. Thus, lower oil prices in a resource constrained world does not necessarily imply increases in global growth. 

This is in essence what peak oil means. Peaking does not mean running out of oil but rather that producing more oil becomes much harder/expensive than before. It is therefore possible that oil will cost less in the future, but that we won't have the money to pay for it. So the real question is, up to when are we able to afford further production? And the crucial point is that when a society's economy is based upon non-renewable energy resources there are limits to growth. It is just how nature works, the laws of thermodynamics, and there is no point in trying to argue with nature. There is however a point in arguing with Magnus Grill since he doesn't seem to understand the complex relationships between ecological and social factors influencing resource extraction and energy availability.