412. THE MYSTERY OF CHINESE GROWTH
This morning, I was looking at the Nikkei Shimbun (Japan's leading economics daily), and noticed the following graph of China's GDP growth since 2000:
This is very interesting if you reflect on it. After all, we are told by many popular peak oilers that:
- High oil prices always cause recession.
- The current recession was caused by the run-up in oil prices prior to July 2008.
How is that possible? If cheap oil is so critical to economic functioning, why doesn't an oil crunch stop growth in China?
by JD
posted by JD @ 5:24 PM
68 comments
68 Comments:
Perhaps it's growth which drives oil prices and not the other way around?
DB
sort of off topic but nonetheless another defeat for the doomers.
Retail titan Wal-Mart launches 'sustainability index'
http://news.yahoo.com/s/afp/20090716/bs_afp/usretailenvironmentwalmart;_ylt=AvLRiPAcl7_77OGsK738U66yBhIF;_ylu=X3oDMTMxZWI2MzllBGFzc2V0A2FmcC8yMDA5MDcxNi91c3JldGFpbGVudmlyb25tZW50d2FsbWFydARwb3MDMTIEc2VjA3luX2FydGljbGVfc3VtbWFyeV9saXN0BHNsawNyZXRhaWx0aXRhbnc-
remember, the popular doomer cry is that the wal-marts of the world won't survive.
http://www.businessweek.com/globalbiz/content/jan2009/gb20090122_354571.htm
"This is the worst that anyone can remember." Qu Hongbing, China economist at HSBC (HBC) says China could see growth dipping as low as 6%, dangerously short of 8%, widely regarded as the level needed to generate enough jobs to absorb new entrants into the workforce.
You are using the US definition or recession for China. Anything less than 8% growth for China is recession.
Bored Doomer
"If cheap oil is so critical to economic functioning, why doesn't an oil crunch stop growth in China?"
For one thing, China has savings. It is not saddled with the kind of crushing debt that afflicts the US and other debtor nations.
HDT
totally agree some graph with the number 6% on it and a title I can't even read must debunk the myth that peak oil hasn't peaked. Lets hope that when more than 5% of Chinese households own cars that they only use their own oil and don't have to burn ours.
Murk
Answer is obviously because the holy relationship is not valid everywhere, all the time. A country with China's factor endowment (lots of labour relative to capital) and low oil consumption per capita is expected to grow faster than developed countries as it adds capital and to be less affected by oil shocks.
The short-term impact of oil shocks on growth for the US economy, is well documented and statistically significant. The doomer error is assuming these relationships hold forever when, in the long run, prices induce behaviour change and change structural attributes of the economy (for example what JD has referred to as the big glitch).
So what the Chinese example proves is once again the point that not everybody will be affected equally by peak oil, and that other countries (maybe even including "future US", which will be different from "present US") will adapt/cope with the event.
Or maybe not, we will all resort to cannibalism and the eco-sustainable doomer tribes will rule the world. DOOOOOM!
-petronomics
the 6-8% growth is to keep unemployment from rising due to the massive amounts of migration. The most surprising part of Chinese growth is that it has sustained itself with the runup in all commodity prices, considering the large amounts of construction being undertaken.
As mentioned above, China uses fuel subsidies and has large amounts of reserves on hand due to its current account surplus. Really, its been incredibly effective socialism with Chinese characteristics that has made this possible.
Hmmm... did high oil prices cause the depression of 1807 in America, or the panics of 1819, 1837, 1857, 1873, 1893 or 1907? Were high oil prices the cause of the Great Depression (10 cents a barrel in '31, chumps), the post-WWI recession, or America's recessions of 1958, 1960, the '69 or early nineties? No? Hmmm... then what's oil got to do with subprime mortages and credit default swap markets?
Bored doomer,
'Fraid the article your citing is from January this year. Yes, China was struggling back then, but they've bounced back since, and are on track to meet the 8% growth they prefer.
Well, Maybe, Juuust Maybe one should not entirely trust the statistics produced by a centralised command-driven economy controlled by a dictatorship?
Chinese officials will deliver the targets figures commanded in the latest five-year plan or their organs is up on eBay!
That's Incentive for ya!
Really, its been incredibly effective socialism with Chinese characteristics that has made this possible.
Yes the Chineese seem to be hardwired for cut-throat socialism.
"...then what's oil got to do with subprime mortages and credit default swap markets?"
Would you rather have subprime "mortgages and credit default swaps" (a major recession) with $20 oil or $60 oil? Would you rather go the depression with cheap oil or expensive oil? That's what oil's got to do with it.
HDT
Bloggin' Brewskie
'Fraid the article your citing is from January this year. Yes, China was struggling back then, but they've bounced back since, and are on track to meet the 8% growth they prefer.
I was only quoting the article to point out that anything less than 8% growth in China is considered a recession.
But yes, china's growth has rebounded back to the break even point for now. But that's only after oil prices have dropped from their record highs and a massive stimulus plan
http://www.theaustralian.news.com.au/story/0,24897,25790948-643,00.html
But China’s National Bureau of Statistics and a number of economists remained cautious about the vulnerability of the recovery.
"The base for recovery is still weak,” the bureau said. “Growth momentum is unstable. The recovery pattern is unbalanced and thus there are still uncertain and volatile factors in the recovery process.”
-Bored Doomer
I don't find the subsidy explanation very convincing. First of all, numerous countries in the world have oil subsidies, like Venezuela and Iran, and those countries are economic basket cases. Clearly, China has other advantages besides subsidies which are the decisive factor.
And even to the degree that subsidies do help,
China's subsidies were only estimated to be $40 billion/year before they cut subsidies in June 2008. That seems like an awfully cheap price to pay for 8% growth -- considering that the US is spending a few hundred times that much trying to get any growth at all.
The explanation that 6-8% growth in China is not a recession does not hold water. 6-8% growth is torrid growth; a recession is defined as negative growth. It's pretty dopey for doomers to claim, on the one hand, that we're screwed because China is growing at 8% and will suck down all our oil, and drive commodity prices through the roof; and, on the other hand, that China is actually in a recession with 6-8% growth, and that the stats are fudged and China isn't growing at all.
An even better illustration of the point I'm making here can be seen in my previous post on The Big Glitch. Despite all the oil shocks of the 70s, 80s and 90s, there has never been one case where an oil shock caused global growth to drop below zero. It's true that high oil prices have a very negative effect on the US economy. But the flipside is that high oil prices have a very positive effect on many other countries, and a negligible effect on many others. In total, oil prices have never caused a *global* recession.
totally agree some graph with the number 6% on it and a title I can't even read must debunk the myth that peak oil hasn't peaked. Lets hope that when more than 5% of Chinese households own cars that they only use their own oil and don't have to burn ours.
Thanks murk, for the classic Americana. "Yup, we're to dumb to read that gook shit. That's the No. 1 reason why we're gonna outperform the chinks and get the oil cause its ours goddamit." Woo-hoo. Rev your monster trucks. Maybe you can psych out the Chinese with your tattoos.
HDT,
Oil is irrelevant in this situation, just like it's with the peakers' proclamation that it sparked the downturn; especially when we had an unsustainable subprime mortgage mess, especially when we had a credit default swap market that was worth FIVE times the mortgage market. The market run-up proceeding the crash wasn't sustainable.
Bored Doomer,
Economic recovery is always weak in the beginning - this a well known economic fact. Perhaps you should consider the fact China has surpassed the US in new car sales, Chinese stocks hit an 11-month high in June; or things like infrastructure, metal imports and property investment.
JD,
Lol! So true, and I'm yank! I read comments by some dumbass warmongers the other day about Cuba, saying we should claim the waters with their offshore oil, or invade the country outright. Some people never learn.
JD,
No recession, eh?
"Officials estimate that more than 10 million migrant laborers have already returned to the countryside as thousands of companies have been dragged under by weak global demand for everything from clothes to cars."
http://money.cnn.com/2008/12/30/news/international/china_migration.reut/index.htm
Note that this mass urban exodus is occurring precisely where you say it isn't.
Before taking the Chinese media at face value you may want to fact check a bit.
Lenny
@Murk,
"Lets hope that when more than 5% of Chinese households own cars that they only use their own oil and don't have to burn ours."
How do you define 'ours'? Middle Eastern? North African?
Nice sense of self-entitlement there.
Lenny
JD,
After a month of oil price declines the trend may be starting upwards, you may want to start putting some thought into your next ‘vacation’ once more.
"That's the No. 1 reason why we're gonna outperform the chinks and get the oil cause its ours goddamit."
You're ridiculing the very people who might accept your 'why worry?' philosophy, JD. You and Ari are always pointing out that oil is a "freely traded commodity" and that importing oil is as normal and healthy as eating your delivery pizza. It IS our oil as long as we can borrow the money to pay for it, isn't it?
HDT
Why pick two countries, Venezuela and Iran, whose economies are largely dependent on income for oil? China has a much more diversified economy than either of them, so your wariness of the subsidy explanation isn't justified by your example. In any case, both Iran and Venezuela have had fairly healthy GDP growth up to this year (don't know about this year).
I think subsidies is likely part of the explanation but China's growth has moderated during the recession, and factories were being closed almost weekly.
JD,
Why won't you post my comment about millions of migrant workers leaving the cities?
Don't like the truth?
Here's more. ""The grim economic situation poses an unprecedented challenge for college graduates to get a proper job," the ministry of education warned yesterday." http://www.guardian.co.uk/world/2008/dec/04/china-higher-education-graduate-jobs
Dem's de facts Jack. Why don't you go ahead and post them?
Lenny
How weird, their ratio of GDP to oil consumption is twice as large as someone like the U.S. but their economy is growing. It couldn't be that they're building infrastructure instead of fueling SUVs by getting around on electric bikes (four e-bikes for every car) for the most part, that would make too much sense! ;)
P.S. I think you should look at the EROEI comparisons between oil and renewables. You know, the ones where the EROEI of oil extraction alone, ignoring refining/transportation/etc costs, are compared to the EROEI of renewables over their entire lifespan. ;)
Anonemouse
Hell, I'm impressed JD reads the Nikkei. I never got past the mainichi or Asahi.
I can't imagine why energy subsidies would help economic growth. I think they would distort consumption, and allocate things improperly. Any business that depends on subsidized energy to exist...shouldn't exist.
This is just another element of the "magic essential oil" myth: that subsidizing oil to make it economic would help anything, because oil is so essential.
"Officials estimate that more than 10 million migrant laborers have already returned to the countryside as thousands of companies have been dragged under by weak global demand for everything from clothes to cars."
I guess that means dieoff is starting then? RUN FOR THE HILLS
Jeez.
Recessions happen regardless of oil. They have happened repeatedly throughout history and will continue to happen.
They have nothing to do with EROEI or any other useless metrics invented to shore up weak theories like dieoff and are instead NECESSARY so that the old stodgy ways of doing things can be replaced by the new and better in a continual process of birth, growth, maturation and decline.
But domers think any downwards blips are the sign of the impending apocalypse.
Idiots.
Heh doomers I have access to a supply of MREs real cheap. Better stock up before the EROEI of canned foods declines to zero.
WTF?? I was turning into savinar there....
DB
I don't know why you can't imagine how subsidised energy could help economic growth. Of course it distorts consumption, relative to where it would be without subsidies but, within the subsidising nation, consumers will act as though prices are where prices are - i.e. no distortion internally.
High energy prices have hit businesses, and feeds into the whole chain of production, distribution and retail. If Chinese businesses and consumers have lower costs, why would that not benefit those businesses and consumers?
"How do you define 'ours'? Middle Eastern? North African?
Nice sense of self-entitlement there."
You need to recalibrate your sarcasm detector, Len. In a world where oil is a "freely traded commodity," all the oil belongs to those who can afford it. Since the dollar is the preferred currency, the oil is essentially ours. It's JD and Ari and their fellow armchair imperialists who share the real sense of entitlement to the oil underneath the OPEC countries.
HDT
Some points that need some clarifying:
1.) At this point in time gas prices in China are 50% higher than what it is in the US.
2.) It is possible to not have a recession even though many migrant workers are being laid off. In fact they seem to be the only ones laid off, because they worked for factories that operated just to export products to the western countries (which aren't buying as much now because of the crisis, hence the need for layoffs), but in the cities no one seems to be getting laid off. Although in the cities it is harder to find jobs now than before, which is inficative of a slowed economy, not a recession. Say whatever you want about Chinese statistics, I trust what I can see with my own eyes in the real world.
3.) China is now the number one car market in the world.
4.) China's economy is expected to overtake Japan's either this year or next year, can't recall which.
-Outcast
JD,
Thanks!
Lenny
(No need to publish this one...)
Hey JD
This is my first ever post on this forum board, though I have been reading it for years now.
Like many of your orginal readers (pleasent people) I too was once trapped in a spiral of depression regarding Peak-oil and its proposed consequences, to the point where my every thought centered around it, which is understandable considering the "end of the world" conclutions which are often the centerpiece of Peak-oil theroy.
My personal story is a long one, and should not be posted in a comment like this one (out of respect for the theme of the current discussion) though I would gladly post it if you (and others) are interested. What I can say however is that your blog was fundamental in pulling me back fron the pit of dispair, very much in fact)
it is with this central role in mind (the one your blog had and stil has) that I decided to finally make myself known to your and your readers (the rational ones that is) since the current surge in doomer activity here is, to say the least, worrying me to a great extent. Their language, often rude, gets to me and find the way that they often exploit your lack of commenting (which could be due to your lack of time) as a sign that they are right and you are wrong.
Even yesterday I found myself browsing the older sections of the blog, where readers were offering their own links to advansements in alternative fuels and electic cars, the point of this act was that the comments were more rational back then, less aggressive.
The point of this post (which is premature since I wanted to make a profile first) is to inform you that you have my full support in the face of the doomers on this site and that you also have my graditude for helping me out of my past depression.
Many regards
Sp00ky
Denmark
Ps: I know you have made your views on peak oil clear on countless occations, but some newcommers have claimed that your views have changed over the years, (from peak oil denier to optimist)somthing which is, I would like to say, a fantasy, when the very title of this blocking site maintains that oil will peak at some point in the future, the difference between you and the dommers is that unlike them, you predict a post-oil age of advancement and growth (unlike the never ending depression, hunger crisis and nuclear war which the doomers tend to dream about)
- making this clear for people who have obviously not been reading this blog from day one
Hmm was my post posted? somthing seems wrong :(
- Sp00ky
I don't think the relationship between oil prices/supply and economic growth is quite as straightforward as some would claim. The simple answer in the case of China is that China's economy is not a pure capitalist economy. In fact, it is far from it. And as a result, just as some corporations can goose earnings, China's politicians can goose growth.
I found an article that sums it up pretty well:
China's Economic Bubble
"Recessions happen regardless of oil. They have happened repeatedly throughout history and will continue to happen."
Anonymous, what is the proportion of recessions where oil has not been a factor, versus those where it has been?
SpOOky,
I'm surprised that JD's arguments would turn your life around. Do you think that there are now no limits to growth for us almighty humans?
"Even yesterday I found myself browsing the older sections of the blog, where readers were offering their own links to advansements in alternative fuels and electic cars, the point of this act was that the comments were more rational back then, less aggressive."
I don't know about other posters but I am sick to the back teeth of the "holier than thou" attitude of the most diehard doomers who have a position rather than a belief.
It is impossible to argue with them since they just continue to repeat their crap.
The way it works is this: they are idiot savants. Capable of learning by rote but not capable of thinking. They can learn so well they have the appearance of being smart since they have an "answer for everything" but they are in fact zealots. Worse than zealots. They are zealot automatons.
Once they have learned dieoff theory there's no need to learn anything else because it is heresy to their ears and must be shouted down.
So... to cut a long stroy short I friggen ENJOY flaming doomers. They deserve it for the years and years of my life they wasted before I woke up and checked the facts.
SURE there's a possibility that things could be hard for a while, particularly if we all sit on our collective asses and make no chances but there's no rational excuse for denying that solutions exists. Unless that is you are fully commited to the doomer religion.
And that my friend is what it is: a religion.
I'm no longer a believer and they can shut the hell up with their crappy monotonous one liner evangelistic "woe unto you the end of the world is nigh (for you) but not me" crap.
Ah... That was good to get that off my chest.
Rant over.
DB
To the last anonymous poster (I thought anonymous posts would not get published, JD), exactly the same post could have been written of the diehard cornucopians.
When it comes down to it, do you think this is a finite planet or not? If you do, then, clearly, population growth has to stop, the consumption of resources beyond their renewal rates has to stop and the damaging of the environment has to stop. If you think the planet is infinite then you are, of course, sadly deluded.
Do you think that there are now no limits to growth for us almighty humans?
That is one of the oldest of the doomer's logical fallacies - the fallacy of the excluded middle. The only two choices presented are the extremes of boom or bust.
Obviously there are an infinite number of levels between boom and bust, and you can't prove all of those are impossible. In fact, the most probable scenario is somewhere in the middle.
The other sneaky rhetorical trick is to accuse the skeptic of extreme hubris - assuming godlike powers. You don't need delusions of grandeur to realise that humans are capable of dealing with difficult problems. That does not mean they will inevitably be solved, but we will have a damned good go.
I don't believe in gods anyway, that sort of superstitious thinking is what does get us into trouble.
The way it works is this: they are idiot savants.
That is a pretty good description of the way I felt arguing with the likes of MonteQuest. He sure knows a lot of stuff, and claims to be an authority, but dig deeper and discover his actual understanding is way off. Stuff is just made to fit his worldview, regardless. He is incapable of accepting anything outside that.
For example, he asserts that steel can only be made with fossil fuels. A least one knowledgeable poster demonstrated that was not the case, but he resolutely refuses to accept this fact.
If you do, then, clearly, population growth has to stop,
Good, can we start with you then? It's always funny to me that when doomers call for reducing population growth (or just population in general, hi Richard Duncan), they are referring to others doing so and not themselves.
"The Olduvai theory states that the life-expectancy of Industrial Civilization, defined in terms of world energy use per capita ("e"), is less than or equal to 100 years. History: We know that the peak of "e" occurred in 1979 and that "e" declined from 1979 to 1999 (the 'slope'). Future: The Olduvai theory predicts that "e" will decline even faster from 2000 to the so-named 'cliff event' (the 'slide'). A previous study put the 'cliff event' in year 2012 (Duncan, 2001). However, it no appears that 2012 was too optimistic. The following study indicates that the 'cliff event' will occur about 5 years earlier than 2012 due an epidemic of 'rolling blackouts' that have already begun in the US. This 'electrical epidemic' spreads nationwide, then worldwide, and by ca. 2007 most of the blackouts are permanent. The 'modern way of life' is history by ca. 2025."
-"Olduvai" Duncan. What a downer :(
JD,
"Recession Slams Chinese Exports Again
China exports dropped an "ugly" 25.7% in February ('09) after January's ('09) 17.5% fall. The government is trying to boost domestic spending to alleviate the pain."
http://www.businessweek.com/globalbiz/content/mar2009/gb20090311_129382.htm
Wow! A two month 43% drop in exports but there's no recession?
It seems time for a retraction JD.
Lenny
"When it comes down to it, do you think this is a finite planet or not? If you do, then, clearly, population growth has to stop, the consumption of resources beyond their renewal rates has to stop and the damaging of the environment has to stop. If you think the planet is infinite then you are, of course, sadly deluded."
As usual with doomers, your assumptions are glaring but you are of course not aware of them.
Is it a finite planet?
Yes
Are there limits to growth?
Probably
Is the planet infinite?
No
Then how, pray tell, is it possible that anybody would not argue for stopping population growth and argue for the continual extraction of resources?
Answer: We are nowhere NEAR the limits.
And I'm NOT anonymous.
I am DB.
Lenny,
The recent post reports the Chinese proclamation of 8% growth; if you feel there needs to be a retraction, you need to consult the author of the article and economists who’ve proclaimed this, not the blogger
It' true exports have been slammed, but the Chinese - with their recognition of the need to de-couple their economy from the US, to become less dependant on exports and more self-sufficient with their own economy - have made inroads with their domestic arena by increasing domestic demand, concentrating on building infrastructure (via government stimulation), and settling energy needs. The recent 8% growth mark the turn-around for their economy, so expect more quarterly-growth in the months to come.
Tony,
You could fit every man, woman and child in the state of Texas and still have a lower population density than NYC. The reason behind hunger is the same now as its often been: it's not so much propelled by lack of land or resources, but rather, by greed and corruption that's festered by a corrupt elite who fear not having enough.
There's an abundance of unused arable land just waiting for food production. Russia has a huge abundance of unused land; Africa, alone, has been hypothesized by some as being capable of feeding the world; South America has its lots, too.
Besides, most developed countries, the nations that consume the most resources, will be confronted with population declines in the decades to come.
bc,
That is one of the oldest of the doomer's logical fallacies - the fallacy of the excluded middle. The only two choices presented are the extremes of boom or bust.
I didn't present two choices. I asked whether there are limits to growth. If you don't think so, then you believe in infinite resources, produced at whatever rate is required, and in an infinite capacity of the environment to render our pollution harmless and to repair itself. If you do think there are limits then there are many possibilities at how to live within those limits but, ultimately, we have to live within those limits. What I seem to see JD and his supporters doing is trying to pretend there is a solution to any problem that does not require the end of growth.
So, do you think there are any limits that can't be breached?
Good, can we start with you then? It's always funny to me that when doomers call for reducing population growth (or just population in general, hi Richard Duncan), they are referring to others doing so and not themselves.
What nonsense. I was talking of population growth. Do you, Anonymous, not understand the difference between population growth and population?
DB,
What assumptions do you think I've made, and why are they wrong?
However, your answer to the question "are there limits to growth" is telling. Although it's clear that the answer is yes (clearly, no growth can continue indefinitely, unless it has an infinite space and resources in which to grow), you hedge your bets and say "probably", as though you hope that the answer is no (perhaps in some crazy virtual reality).
Your statement that we are nowhere near limits is the biggest assumption in our two posts combined. There is no way you could know that we are a long way from any number of limits that could severely impact our way of life. This is simply your belief. I also don't know how close we are to any of the limits but there are some worrying signs that suggest some essential resource will become scarce, or environmental damage will become catastrophic within my lifetime. I can't possibly know for certain if that is the case, just as you can't possibly know for certain that it isn't. Surely, the only answer is to move towards living within the earth's limits. Some generation will have to get to grips with that and the longer we leave it, the harder it gets.
"When it comes down to it, do you think this is a finite planet or not? If you do, then, clearly, population growth has to stop, the consumption of resources beyond their renewal rates has to stop and the damaging of the environment has to stop. If you think the planet is infinite then you are, of course, sadly deluded."
The world population growth rate has been declining for several decades, and has actually fallen below replacement rates in some industrialized countries.
http://en.wikipedia.org/wiki/World_population
The economic and educational opportunities that are provided by urbanization and industrialization (along with modern contraception) appear to have a way of reducing human fertility rates.
According to UN projections total world population is likely to stabilize between 9 and 10 billion people by 2050-2075.
http://www.un.org/esa/population/publications/longrange2/WorldPop2300final.pdf
Regarding resource availability, what counts as a resource has a history of changing as new technologies are developed.
Uranium, for example, could not be considered an available energy resource until the 1940s at the earliest.
.
The assumption many doomers make that environmental damage always increases with economic growth is also questionable:
“Many environmental health indicators, such as water and air pollution, show the inverted U-shaped curve. The argument for the environmental Kuznet's curve is based on the following argument. In a developing industrial economy, little weight is given to environmental concerns, raising environmental pollution byproducts. After attaining a certain standard of living from the industrial production system and when environmental pollution is at its greatest, the focus changes from self-interest to social interest. The interests give greater weight to a clean environment by reducing and reversing the environmental pollution trend from industrialization. This parabolic trend occurs in the level of many of the environmental pollutants, such as sulfur dioxide, nitrogen oxide, lead, DDT, chlorofluorocarbons, sewage, and other chemicals previously released directly into the air or water.”
http://en.wikipedia.org/wiki/Kuznets_curve
bc,
He really argued that steel requires fossil fuels to be made?
http://en.wikipedia.org/wiki/Electric_arc_furnace
The electric arc furnace has been used since the late-19th, early-20th centuries... This is not really not rare knowledge.
Lenny,
Interesting how you neither really discussed whether or not China is in the midst of a recession with your link, nor what the figures currently look like (your article was dated to March of this year.)
In any case, here's how it goes:
Chinese exports have fallen for the past 8 months, year-on-year. Nonetheless:
"Economic growth will top the government’s 8 percent target for the year as lending and investment surge, according to Goldman Sachs Group Inc. and BNP Paribas SA.
Export growth may return to “normal” by the end of this year or early 2010, central bank adviser Fan Gang said July 1, as a government-backed manufacturing index showed export orders expanded for a second month."
So, what does this tell us?
First of all, that Chinese economic growth is less dependent on exports than perhaps previously stated by various "pundits." That, and that the Chinese economy has been humming along, though at lower rates than perhaps desired, despite the doldrums everywhere else.
Now, I can't say that I'm a cheerleader for the PRC's entire economic policy, but to argue that China is not faring relatively better than pretty much the entirety of the OECD is pretty silly.
When it comes down to it, do you think this is a finite planet or not? If you do, then, clearly, population growth has to stop, the consumption of resources beyond their renewal rates has to stop and the damaging of the environment has to stop. If you think the planet is infinite then you are, of course, sadly deluded.
Ah, more rhetorical trickery. Clearly, no one believes the Earth is infinite, so that is just a silly strawman, a favourite target amongst doomers. Obviously, consumption of non-renewable resources will stop, because they run out. In principle, population growth could continue for a while, but in practice it is slowing down anyway.
Damaging of the environment is a little more dubious. While quality of life will probably decline due to pollution, we are far from the point where the whole Earth is a toxic wasteland. A lot of countries are at least making some effort in reducing pollution.
The implied non-sequitur here is that without "infinite growth" civilisation is doomed.
Sure, civilisation has been given a steroid shot from fossil fuels. Some of it good, some not so good. But JD has comprehensively shown that life is easily survivable after FF, and in some cases actually better.
Part I
"What assumptions do you think I've made, and why are they wrong?"
That you don't even know what your assumptions speaks volumes on how brainwashed you are. Hook line and sinker. It's kind of funny really if it weren't so sad.
"However, your answer to the question "are there limits to growth" is telling. Although it's clear that the answer is yes"
No it isn't clear. Not by any stretch of the imaginiation. The universe is infinite and anyone with any mathematical ability can conclude that it's possible to fill up the galaxy in less than a million years even if traveling very slowly. If you agree with the SCIENCE that says the universe is inifinite then clearly resources are unlimited too. The only question remaining is whether we are capable of utilizing the resources. I personally don't know the answer to that and this is why I wrote "probably".
"Your statement that we are nowhere near limits is the biggest assumption in our two posts combined."
It isn't an assumption. It's based on a back of the envelope calculation. What you have written is an assumption (we are hitting the limits to growth and very soon).
"There is no way you could know that we are a long way from any number of limits that could severely impact our way of life. This is simply your belief."
No it isn't. Human beings have invented solutions to population vs resource bottlenecks almost continously since even before they became fully human. I'd argue that is what makes us human rather than merely primate.
"I also don't know how close we are to any of the limits but there are some worrying signs that suggest some essential resource will become scarce"
It's only worrying if you don't understand economics and deny things like "substitution" and conveniently ignore the many hundreds of incremental improvements in technology taking place over the last ten years. A disruptive technology would be good but as it is we have several right now that work just fine even without a massive technical breakthrough.
"environmental damage will become catastrophic within my lifetime."
We have been dealing with this for eons. Forests turning to grassland led to overpopulation in the forest which led to expansion into the grassland. Desertification of the grassland led to the colonization of the coasts. The colonization of the coasts led to the first boats which led to the colonization of the planet. Overpopulation of the planet led to the destruction of the vast herds of animals which hunter gatherers depended on which led to agriculture. Over population because of agriculture meant there was a limited supply of land for growing food for everybody. So cities were invented and human beings started to live purely from trade. And so we are here now, where we are.
DB
Part II
But in answer to your question Tony:
It doesn't really matter what I say to you because it's obvious that you believe the "limits to growth" crap anyway and you think we're all doomed. Do you have enough MREs to survive the zombine apocalypse?
But for those that are interested in some scientific reasons why we're NOT doomed and NOT at the "limits to growth"...
On some of the more malthusian peak oil sites there is the theme that not only are we facing peak oil, but also peak fertilizer, peak gas, peak coal etc, along with peak mineral extraction. Others rant about the "limits to growth". I started wondering exactly how much resource we really have extracted.
One way of looking at this would be to ask some questions.
For example: Is the Earths crust uniform or are there nodes where minerals or useful resources are concentrated?
In fact, history shows that we have concentrations of minerals and they are mined or extracted by wells such as is the case with oil or gas.
Which gets me to thinking? Is it reasonable to assume that even if we use up a lot of the oil and gas which cannot form at lower depths, is this true for other resources?
The answer to that is no. Other minerals and especially metals (such as for example, lithium or manganese) do not require special temperature and pressure gradients to exist. They will be found all through the Earth's crust.
So: How deep is the deepest mine we have yet drilled?
Our friend google returns the answer of 3800 meters.
That, I should point out is not the average depth of mines, it is the DEEPEST YET DUG.
So what is the depth of the Earth's crust?
40,000 meters.
If we assume that we can only access minerals in the Earths crust (and the mantle and the core is inaccessible, and we forget about extracting minerals from seawater by the application of renewable energy) then...
Seems we haven't even reached 10% of the Earths "limits to growth".
It's quite possible that you can't have infinite growth on a finite world, but we're nowhere near the limits.
DB
Yogi,
"The world population growth rate has been declining for several decades, and has actually fallen below replacement rates in some industrialized countries."
Actually, this is not entirely correct. Recently, the growth rate has levelled out or increased. Here are the estimates from the CIA World Fact Book, since 2000:
2000 1.3%
2001 1.25%
2002 1.23%
2003 1.17%
2004 1.14%
2005 1.14%
2006 1.14%
2007 1.167%
2008 1.188%
2009 1.167%
That doesn't look like a continuing fall in world population.
Look at the current growth rate for some of the most populous regions:
European Union: 0.108%
China: 0.667%
India: 1.548%
USA: 0.975%
So the major population centres are still increasing their populations, some at a fairly high rate. Globally, there is little indication that the decline in growth rate will continue down to zero, at least with business as usual.
"Regarding resource availability, what counts as a resource has a history of changing as new technologies are developed."
This is an argument for infinite resources. Do you believe in infinite resources, Yogi? Let's say you don't but believe that all resources can be substituted by comparable resources at the same (or better) levels of utility and scale (remembering that world population is continuing to increase), isn't that the same as believing in infinite resources?
"The assumption many doomers make that environmental damage always increases with economic growth is also questionable"
Really? So let's say the economy doubles in 20 years. Would that take more resources, do you think, than now and is there any evidence for you answer? How about quadrupling in 40 years? How about an eight fold increase in 60 years? Where do resources come from and are habitats changed by acquiring those resources? The economy is a subset of the planet, not the other way round. How could the environment not be harmed by continued economic growth. Efficiencies have limits and so does the earth.
Here is a recent post by David Cohen about the current mass extinction.
bc,
"Clearly, no one believes the Earth is infinite, so that is just a silly strawman, a favourite target amongst doomers. Obviously, consumption of non-renewable resources will stop, because they run out. In principle, population growth could continue for a while, but in practice it is slowing down anyway."
One would have thought it was clear but so many posts on this site appear to echo the line that resources are infinite. No one believes that the earth is infinite and yet people here believe that there will never be any problem with resources. These are incompatible positions.
Population growth is not slowing now, at least not between 2004 and 2008. The estimate for 2009 is slightly down on 2008, so maybe we're on a decline (in growth) again but it's too early to say.
"we are far from the point where the whole Earth is a toxic wasteland."
It doesn't have to be a toxic wasteland to be very bad for us humans, does it, bc? So long as we continue to damage our environment, we are living unsustainably. That means such behaviour will have to stop, one way or another.
"The implied non-sequitur here is that without "infinite growth" civilisation is doomed. ... But JD has comprehensively shown that life is easily survivable after FF, and in some cases actually better."
I've yet to see a convincing argument for that but I'm talking more generally than just FF, though as FF decline, I don't think "easy" will be quite the right word.
Civilization as we know it (i.e. capitalism and economic growth) is certainly doomed, though I'm sure some form of civilization is possible without economic growth. If you don't think it is doomed, how do you propose that it continue indefinitely on a finite planet?
DB,
You still haven't specified any assumptions I've made, though you invented one. I'm not assuming some limit is close, I'm saying that, from what I've read, some vital limit could be reached soon. That is not an assumption, it's a statement of opinion.
Do you not read articles about fresh water problems, soil erosion problems, climate problems, biodiversity problems, how our economy is killing the earth, resource issues, and so on?
A simple calculation based on the volume of the earth's crust and percentage of some resource doesn't tell the whole story. All natural resources require extraction and the low hanging fruit will be collected first, thereafter, it becomes harder and more expensive (kind of like oil) as poorer quality reserves have to be produced. And resource production damages habitats.
So your whole argument appears to be based on wishful thinking, including inhabiting the whole universe (I don't think humans are likely to get very far by "traveling very slowly").
It seems that many people want to base their future, and the future of their children, on wishful thinking. No-one admits to a belief in the infinite and yet that belief is manifest in their posts.
"The electric arc furnace has been used since the late-19th, early-20th centuries... This is not really not rare knowledge."
Incredible. Where do you think the electricity for those 19th century furnaces came from? You kids never cease to amaze with your Tom Swift fantasy world.
HDT
”Actually, this is not entirely correct. Recently, the growth rate has leveled out or increased. Here are the estimates from the CIA World Fact Book, since 2000”
The estimates you present appear to show the annual world population growth rate in a generally declining trend from1.300% in 2000 and 1.167% in 2009, with two slight increases from 1.140% in 2006 to 1.167% in 2007 and 1.188% in 2008.
They are all certainly lower than the 2.2% annual world population growth rate in 1963, so the long term trend appears to be toward lower growth rates.
(http://en.wikipedia.org/wiki/World_population).
“Globally, there is little indication that the decline in growth rate will continue down to zero, at least with business as usual.”
If it can fall from 2.2% per year in 1963 to about 1.2% in 2009, then I see no reason why it cannot continue falling to 0% annual growth in the next 50 or 60 years.
“This is an argument for infinite resources”
No, it was merely a statement that what counts as an available resource has a history of changing over time.
“Let's say you don't but believe that all resources can be substituted by comparable resources at the same (or better) levels of utility and scale (remembering that world population is continuing to increase), isn't that the same as believing in infinite resources?”
If it were true, it would have the same practical consequences as having access to infinite resources. Whether or not it is true remains to be seen.
“Efficiencies have limits and so does the earth.”
Perhaps, but I have not yet seen any convincing evidence that we are anywhere near those hypothetical limits on efficiency improvements or resource substitutions.
Therefore, I would not be surprised to see more doublings in economic output (though not necessarily resource consumption – that efficiency thing again) in any remaining decades that I may have on this planet, but no one knows for certain.
Tony,
I'll take a stab at your arguments.
The notion of a "vital limit" is questionable, even within the scientific community. Though we read of the "tipping point" quite a bit, very few so-called "tipping points" seem to well-defined or agreed upon in any disciplines. I know we can head over to Joe Romm's blog and read about "runaway climate change," but plenty of other serious climatologists find those arguments spurious at best-- just to use one such example.
I remember reading a couple of years back that fisheries were, in a word, doomed. Hell, it was an entire section of my environmental policy course in grad school. Turns out that the assumptions may not come to pass:
http://www.google.com/hostednews/ap/article/ALeqM5hDkcLqQPz7h7xBTiC7WRKUFCB27AD99P837G0
Now, that is not to say that I necessarily disagree with many of the clarion calls for changes in behavior. I think there are plenty of serious environmental issues, but I disagree with assumption that it is "the economy" (itself a nebulous concept) that is the problem. Even before there was industrialization, humans were quite capable of shaping their environments in quite drastic ways. If the past 200 years should have demonstrated anything, it's that modern, developed economies (in the contemporary sense) tend to lead to better, more "sustainable" practices in the short- and long-run. It's the poor who are deforesting the world, not the rich, to use a clear example.
You use the "low-hanging fruit" example that a lot of the "doomers" apply to the case as a way to show that somehow we will be increasingly challenged. This is perhaps true, if only extremely simplistic. In the 1970s, North Sea oil was the hardest-to-get fruit. Today, North Sea oil would be considered relatively simple. "Low-hanging" should always be taken as a relative concept. What was not "low-hanging" in the past may become low-hanging today-- shale gas is increasingly presenting itself as such an example.
"And resource production damages habitats."
Yes, and no. All human behavior ALTERS habitats, but the actual long-term effect on them can vary. And not all resource production is catastrophic for any particular habitat. It's a varied issue, as are most things in reality.
The issue is not that anyone necessarily sees the Earth as infinite in fact, but that the finiteness is often overstated to such an extent that we have come to see the Earth as "tiny." It seems that no matter how many years in a row the reserves of any number of resources grow and we see increasingly better stewardship of others, the more we see the pessimists saying that the Earth shrinks more and more.
If you want to see an example of this thinking in action, read an older edition of Worldwatch and see what they said back then about China. If they were to be believed then, China should have collapsed by now, along with India. We all should have been starving, basically.
Now, don't get me wrong, I do believe there are challenges to be faced. I just tend to believe that it's the men and women who are out there doing the work who will make things better-- and I do think that they will get better. We have millions more Mike Rowes willing to do the dirty jobs than we have naysaying Matt Simmons, IMO. Do I think there will be bumps? Sure. There are always bumps along the way. But I do think that people are awesome. Just not individuals. They tend to be snots. :-)
HDT,
In the past, yes. But in case you haven't noticed we have plenty of ways to make electricity besides fossil fuels today.
Or are you going to deny that now, too? Not that I would be surprised if you would.
“Where do you think the electricity for those 19th century furnaces came from?”
Hydro perhaps?
It would have been more economical than coal fired plants, especially as early steam turbines were less efficient than modern ones.
"The estimates you present appear to show the annual world population growth rate in a generally declining trend from1.300% in 2000 and 1.167% in 2009, with two slight increases from 1.140% in 2006 to 1.167% in 2007 and 1.188% in 2008."
I suppose that's one way of looking at it. Another way is that the continuing decline up to the turn of the century, the one that fuelled all those estimates that never seem to get revised, stalled from 2004 to 2008. That's four straight years of static or increasing growth. The 2009 estimate may have resumed the decline but we won't know for a year or two. But it seems remarkable to me that a halt in the decline would not prompt much comment or prompt some re-evaluation of longer term trends. I don't think we can assume that the population problem will sort itself out (even if 9-10 billion people constitutes sorting itself out).
"I see no reason why it cannot continue falling to 0% annual growth in the next 50 or 60 years."
Oh, it can. I said that, for me, there is little indication that it will, without something changing significantly.
"Perhaps, but I have not yet seen any convincing evidence that we are anywhere near those hypothetical limits on efficiency improvements or resource substitutions."
It's odd, isn't it, that one person can see cause for concern in limits and resources, within a lifetime, whilst another sees no convincing evidence. This is presumably with both seeing much the same information.
"no one knows for certain"
I agree, but JD and many of his readers would disagree. Unfortunately, that not knowing for certain seems to translate into an assumption that no resource or environmental limit is anywhere near and so not worth doing something about - some future generation will deal with it, if necessary. We could, I suppose, keep our fingers crossed and let the markets sort it out and eventually move us to sustainable societies and economies. Somehow, I can't see that working.
Tony,
I suppose that's one way of looking at it. Another way is that the continuing decline up to the turn of the century, the one that fuelled all those estimates that never seem to get revised, stalled from 2004 to 2008. That's four straight years of static or increasing growth. The 2009 estimate may have resumed the decline but we won't know for a year or two. But it seems remarkable to me that a halt in the decline would not prompt much comment or prompt some re-evaluation of longer term trends. I don't think we can assume that the population problem will sort itself out (even if 9-10 billion people constitutes sorting itself out).
Generally speaking, we are more interested in long-term trends than a few years. We cannot yet "re-evaluate" the long-term trend because the long-term trend is still, for the most part, downward.
You're doing the same thing as people who try to use a few years of data to try to support/argue against climate change. It's silly and means little in the broader scale. Give it another decade and then it starts getting interesting. Otherwise, it's still the same old trend: down.
Oh, it can. I said that, for me, there is little indication that it will, without something changing significantly.
Again, there is a lot of indication that it will, and this is something that a good number of demographers have been interested in.
It's odd, isn't it, that one person can see cause for concern in limits and resources, within a lifetime, whilst another sees no convincing evidence. This is presumably with both seeing much the same information.
A lot has to do with paradigm. Many of the people who comment here, including myself, tend to see resource limitations as relative. Others, including yourself (respectfully), tend to see resource limitations as hard limits.
I don't doubt, for a moment, that resources are "finite." I just question how much that actually means relative to human well-being.
I agree, but JD and many of his readers would disagree. Unfortunately, that not knowing for certain seems to translate into an assumption that no resource or environmental limit is anywhere near and so not worth doing something about - some future generation will deal with it, if necessary. We could, I suppose, keep our fingers crossed and let the markets sort it out and eventually move us to sustainable societies and economies. Somehow, I can't see that working.
I don't think that's the majority attitude here at all. If anything, we're a fairly disparate bunch in terms of how we view "solutions" and what we should aim for in policy and social solutions.
JD, for example, hates cars (rightfully so, I might add) and wants to see people conduct business through transit and other less impactful solutions.
Benny Cole generally seems to see hybrids and plug-in hybrids as a perfectly suitable solution for cities like Los Angeles.
I for one am of the opinion that despite the proposed "hard limits" that doomers (or whatever else you want to call it) propose, resource limitations are of course relative. This is observed in human societies throughout history, as well as in non-human species. Humans are not giant pandas, that wither without one specific resource. We are resource flexible. Oil gets expensive? Well, we'll just start using electric cars!
http://greeninc.blogs.nytimes.com/2009/08/03/electric-car-maker-sees-market-heating-up/
Electricity vulnerable to hurricanes? More nuclear!
http://www.bizjournals.com/dallas/stories/2009/07/27/daily41.html
Or hell, just find a bonanza of cheap natural gas in shale. That works as well.
In any case, here's the difference between you and me. You see problems and limits. I see problems and opportunities for making solutions. Imagine if the first farmer had instead decided, "Oh man, we can't hunt and gather anymore... guess we'll just have to stop eating!"
“That's four straight years of static or increasing growth. The 2009 estimate may have resumed the decline but we won't know for a year or two. But it seems remarkable to me that a halt in the decline would not prompt much comment or prompt some re-evaluation of longer term trends.”
There is often a certain amount of random “noise” in any data, and one would really have to do a statistical analysis on the complete time series going back to the 1960s to decide whether or not this is likely to be a trend change.
Another data series worth investigating would be the fertility rate. According to Nationmaster, the weighted average number of births per woman for all countries has fallen from 5.5 in 1960 to 3.0 in their most recent data (mainly 2005), and the number of countries with 2 or fewer births per woman has increased, mostly in wealthier countries.
http://www.nationmaster.com/graph/hea_fer_rat_tot_bir_per_wom-rate-total-births-per-woman
Population growth is also being affected by declining death rates (although presumably this will run into its own “limits to growth” on the human lifespan), and migration can also affect population growth rates for individual countries and regions.
“It's odd, isn't it, that one person can see cause for concern in limits and resources, within a lifetime, whilst another sees no convincing evidence.”
Not really. See JD’s previous posts on the differences between doomers and debunkers, and on the origins of apocalyptic thinking :)
http://peakoildebunked.blogspot.com/2009/02/394-conservation-stimulates-economy.html
http://peakoildebunked.blogspot.com/2006/03/267-where-does-apocalyptic-thinking.html
“We could, I suppose, keep our fingers crossed and let the markets sort it out and eventually move us to sustainable societies and economies. Somehow, I can't see that working.”
Spreading unreasonable fears about an impending enviro-apocalypse might not be the best strategy either.
http://peakoildebunked.blogspot.com/2005/09/74-isnt-debunking-bad-for-peak-oil.html
High energy prices have hit businesses, and feeds into the whole chain of production, distribution and retail. If Chinese businesses and consumers have lower costs [due to subsidies], why would that not benefit those businesses and consumers?
Because that money has to come from somewhere. If we want to reduce business & consumer costs, why not just reduce taxes?
Chinese oil subsidies encourage wasteful, low-value activities and send money directly out of the country.
Tony,
Firstly I'm going to engage in an ad-hom (separately from my argument). You are an idiot savant tool like the rest of the doomers and you couldn't understand a coherent argument if it hit you over the head.
Again: this is not for your benefit because you are clearly autistic. It is for the benefit of the others who can understand logic.
"I'm not assuming some limit is close, I'm saying that, from what I've read, some vital limit could be reached soon."
This guy could argue with an empty room. What kind of twisted circular logic is that?
In any case it shows the quality of deduction we're dealing with.
"Do you not read articles about fresh water problems"
Do you not read articles about breakthroughs, such as the energy required for desalinatio being reduced from 20KWH for a tonne of desalinated water down to less than 2KWH?
Clearly you are only interested in doom laden articles.
"All natural resources require extraction and the low hanging fruit will be collected first, thereafter, it becomes harder and more expensive (kind of like oil) as poorer quality reserves have to be produced."
Really? Does it? Does ALL resource extraction follow a hubbert curve?
Does all resource extraction follow diminishing returns at an exponential rate? Does it really?
BWAHAHAHAHA
"And resource production damages habitats."
So you show your true colors now.
Killing some bats or squirrels is way more important than billions of human lives.
"So your whole argument appears to be based on wishful thinking, including inhabiting the whole universe (I don't think humans are likely to get very far by "traveling very slowly")."
That's it? That's the extent of your argument?
Breezy dismissals won't get you very far on here.
Produce numbers rather than opinion and maybe you'll be listened to.
DB
"Incredible. Where do you think the electricity for those 19th century furnaces came from? You kids never cease to amaze with your Tom Swift fantasy world."
That would be hydro.
Nice try though.
DB
and the deck says: quarterly basis, year on year comparison--ian
because they don't all have 2 suv's in their driveway. think about that for a while. Alton
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