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Global capitalism is facing three tipping points


In this article, Sagar Dhara examines Capitalism’s crucial tipping points: The first, the impending energy and natural resource crisis, related to the sourcing of raw materials. The second, inequality, related to the production of goods and services. The third, global warming, which is related to greenhouse gas emissions (GHGs) in excess of the earth’s sink capacity.

Sagar Dhara, Frontier Weekly

Spaces in the economy

Humans draw raw materials and energy from the environment (source space), produce goods and services in work spaces, and dump wastes back into the environment (sink space). A crimp in material or energy flowing through these spaces may lead to civilizational regress or collapse. Societal collapses have happened in the past, and may happen again in the near future as we are on the edge of three tipping points today.

The first tipping point, the impending energy and natural resource crisis, is related to the sourcing of raw materials. Fossil fuels will exhaust in this century and none of alternative energy sources show promise of being able to replace them adequately. The second, related to the production of goods and services, is inequality—in entitlements over raw materials, finished products, human rights enjoyed by different people and the risks they face due to natural and manmade hazards. The third, global warming is related to greenhouse gas (GHG) emissions in excess of earth’s sink capacity.

Environmental degradation, another consequence of energy overdraw, is a tilting point that has led to rapid deterioration land, water, air and biodiversity, the four vital life-support systems. It has the potential to cause severe hardship to society but lacks the potential to tip society over.

Tipping point 1–Natural resource depletion

The first tipping point, the impending energy crisis is popularly called peak oil (oil production peaking, followed by a decline as new oil resources have not been discovered in large quantities).  A review of 500 studies (Sorrell, et al, 2009) indicates that peak oil will occur between 2010-30, very likely before 2020. Some experts believe that peak oil has already happened (Nafeez, 2013). Peak gas will follow shortly after. Conventional oil and gas will exhaust in about 50 years and coal in 100 years.

Fossil fuel availability

FuelOriginal resource[i]Remaining reservesCurrent annual consumptionR/P ratio[ii]
GtZJ[iii]%  usedGtZJGtZJYears
Coal1,19026.23182218.17.80.17~106
Conventional oil327.313.7541506.34.10.17~37
Conventional gas1889.829134.37.02.430.13~54
Unconventional oil103.84.51885.23.70.50.02
Unconventional gas14820.41.4145.720.1[iv]0.190.01

Source: Compiled based on data from Johansson, et al, 2012.

Civilazational collapses: Energy shortages were responsible for many civilizational collapses in the past; but such collapses remained local. One of the best known civilizational collapses is that of the Mayans, who had colonized South Mexico, Guatemala and Belize in the first millennium BC. By the first millennium AD, large city states with vast public works, temples and palaces were built and decorated. Forests in the hinterlands were replaced by farms, and a sophisticated irrigation was developed. Arts and astronomy flourished.

The sudden collapse of the Mayan Civilization in the 10th Century AD is attributed to the overuse of natural resources, and consequently their inability to feed their burgeoning population. Agricultural intensification led to catastrophic soil erosion and failure of their irrigation systems; and forest overuse (Hughes, 2009) led to shortage of fuel wood. They lost their agricultural system and energy source for their society. The Mayan population thinned out, leaving behind their ornate monuments to tell the tale that even a flourishing civilization fades out if its energy resources exhaust.

The collapse of the Western Roman Empire is often attributed to conflict and bad governance. But the primary reason for its fall was an energy collapse. In the last two centuries BC, the Roman Empire extended over Italy, the Mediterranean and Northwestern Europe. In the 2nd and 3rd Centuries AD, plague invaders and weakened the empire, and by the end of the 4th Century, it was divided into the western and the eastern halves. The collapse of western empire is due to food shortages caused by deforestation, soil erosion, and overgrazing (Tainter, 1988).

Depletion of other natural resources: Fossil fuels are not the only natural resources that are exhausting. Eighty nine important non-renewable minerals, including cadmium, cobalt, gold, lead, mercury, molybdenum, phosphate rock, silver, tellurium, titanium, tungsten and zinc will become scarce in 15 years (Clugston, 2012). By 2025, a third of the world’s population will face severe water scarcity and the other two thirds will be water stressed. Marine fish catch have declined due to ocean desertification. Global forest area shrink is estimated to be 0.2% annually. Loss of biodiversity and ecosystem services is more rapid today than at any other time in human history. Rates of species extinction are increasing and genetic diversity is on the decline. The impact of biodiversity loss is not adequately understood.

Impact of energy crisis on society’s sustainability: Declining energy resources have grave implications for the future of human society. As the global economy’s EROEI[v] (a composite measure for sustainability), drops to <10, supporting an industrial civilization will become difficult (Murphy, 2014). The global EROEI is around 16-17 today, and dropping. In a globalized economy, collapse will be global; and we do not seem to be far from there.

Tipping point 2–Inequality

Inequality, the oldest of the three tipping points, is a consequence of uneven distribution of energy. The many dimensions of inequality—entitlements, income, asset ownership, decision making, identity, risks faced—have been manifest since slavery, the first form of an unequal class societies.

Slave revolts: The Haitian Revolution (1791-1804) was one of the most successful slave revolts. African slaves in the French colony of Saint Domingue revolted in 1791 to eliminate slavery and this paved the way for an independent Haiti. However, the successor state retained all the elements of an unequal capitalist society. A class of rich mixed-blood Haitians and white planters became the elite whereas the majority of the African-origin subsistence farmers remained poor. Haiti was forced to pay the erstwhile slave lords reparation of 150 million Francs till 1947 in return for recognition of the new state by France. This left Haiti impoverished and destabilized.

In 1839, newly captured Mende people being transported from Sierra Leone to the Caribbeans to be sold as slaves, revolted and captured the ship Amistad from its Spanish masters. They ordered their Spanish captives to turn the ship back to Sierra Leone. But the Spanish secretly steered the ship towards the North American coast, where it was captured by a US Navy brig. The US courts, federal to Supreme Court, took two years to rule that the Mende were not slaves but free men. This ruling was one of the precursors for the American civil war that was fought on the issue of abolition of slavery.

Serf revolts: The 1381 English peasants revolted against high taxes resulting from England’s 100 year war with France, an end to serfdom and the removal of the King’s senior officials and law courts. Other contributing causes for the revolt were the increase in the wealth gap between serfs and feudal lords, famine and acute labour shortage the Black Plague caused in the 14th century, and instability of the Roman Catholic Church. The revolt quickly spread to rural England and was supported by serfs, artisans and village officials. After the revolt the Crown found it difficult to raise additional taxes for the war against France.

The Cossack Rebellion was a series of Russian peasant revolts that happened after Catherine the Great seized power in Russia in 1762 soon after her husband, Tsar Peter III, was assassinated. She reversed the Tsar’s proclamation to end serfdom, increased taxes and enhanced compulsory service to the crown. Widespread peasant unrest led by a disaffected ex-lieutenant, Yemelyan Pugachev, took control of the area between the Volga River and the Ural mountains until it was put down in 1774. Subsequently, a series of 500 peasant revolts shook Russia until 1861, when Tsar Alexander II declared new reforms.

Revolts against capitalism: Since the advent of capitalism working people’s uprisings have happened in most parts of the world. Their demands were primarily for better wages, employment terms and working conditions. Of the revolts that attempted to change society to make it more equal, only a handful succeeded, notably in Russia, China, Vietnam, Cuba. In the last 50 years, governments with socialist agendas were elected to power in Chile, Nicaragua, and Venezuela.

High inequality and the misery that World War 1 made the Russian people revolt. In 1917 two uprisings centered in Petrograd, where workers took over factories and community neighbourhoods, swept away the old order. When the Tsar abdicated in February 1917 a provisional government took over, but six months later a popular people’s surge brought the Bolsheviks to power. A war-weakened Russian army was in no position to oppose this move. A modicum of equality was put into place in the USSR for 70 years, but finally USSR collapsed in 1991 as socialism could not be implemented in one country and Russia and other successor states reverted back to capitalism.

After Salvador Allende’s was elected to power in 1970 in Chile, he attempted to implement a socialist programme to usher greater equality and people’s participation in the country’s governance. But a military coup supported by the United States overthrew Allende in 1973.

Socialism that ushers equality, democracy peace and sustainability is yet to happen. Moreover, none of the countries that swung towards socialism, barring Cuba, attempted to become sustainable. Cuba’s move to become sustainable was not by design but by circumstance. With the 1991 collapse of USSR, Cuba lost its oil source and had to learn to do without oil yet maintain its standard of living or collapse.

Global inequality—a tipping point today: In 2009, the richest 1% in the world held 44% of the world’s assets, and by 2014 that grew to 46%. By 2016, the asset holding (eMergy[vi]) of the richest 1% will equal the asset holding as the remaining 99% (Oxfam, 2015). The Gini index for the world as a whole is now at 70, i.e., inequality across the world is very high. Almost a billion people live on less than $1.25 a day, without enough to eat or a proper shelter, and it will take them over 100 years to move above the poverty line (Woodward, 2015). Other inequalities—between caste, gender, colour, nationalities—are deep rooted.

Despite its long history, inequality became a tipping only in the 20th Century. The success of a revolt depends on the energy[vii] that those who fight inequality are able to muster against the dominant class and the state. Slave and serf revolts never mustered sufficient energy to overthrow slavery and feudalism. Capitalist states that collapsed, e.g., Tsarist Russia and Kuomingtang China, were depleted of their surplus energy reserves because of their involvement in the First and Second World Wars, respectively, hence failed to muster the energy required to defend themselves (Nafziger and Lindert, 2013).

Tipping point 3—Global warming

The third tipping point, global warming, is a consequence of fossil fuel overuse. It is a consequence of fossil fuel overdraw that has disturbed the carbon cycle. Only half the CO2 emissions are sequestered back to earth, the other half  accumulates in the atmosphere to cause global warming. It will take centuries for the carbon cycle to regain its equilibrium.

Humans have used 35% of the known 1,700 Gt[viii] (Johansson, 2012) of conventional fossil fuel reserves, and cut a third of the ~60 million km2 of forests that existed in 1700, emitting 2,000 GtCO2e  of greenhouse gases (GHGs)  since the industrial revolution began (IPCC, 2014). Only another 1,000 GtCO2 can be emitted if the world is to remain below an average 2oC temperature rise that is widely regarded as a no-to-be-crossed redline, beyond which global warming impacts on the environment and human society will be severe.

Prior to the United Nations Framework Convention on Climate Change (UNFCCC) inter-governmental meeting held in Paris in December 2015, 184 countries submitted voluntary pledges to tackle global warming. The pledges, covering ~95% of global emissions and population, have been incorporated in the Paris agreement. The UNFCCC (2015), the UN Environment Programme (UNEP, 2015) and several researchers in their recently published assessments indicate that even if all pledges are fully implemented, temperature rise by 2100 will definitely exceed 2oC, and may be in the range 3-4oC. Some researchers put the temperature rise as being closer to 5-6oC. An article published in Frontier in February 2016 (Dhara, 2016) explains global warming in greater detail.

Impact of 4oC temperature rise: The impact of an average global 4°C temperature rise would cause  extreme heat waves over land in the range 4-10°C above normal; make many dry areas to become drier, and many wet areas to receive more precipitation; increase the frequency and intensity of extreme weather events (these impacts will be unevenly distributed); raise sea levels by about ~1 m by 2100 and flood many coastal cities, particularly on the east coasts of Asia, Africa and the Americas and cause climate refugees of coastal and small island nation populations; shrink glaciers and reduce the Arctic Sea’s ice extent; a 20-60% yield reduction of the world’s primary crops and consequent food shortage, hunger, deprivation, malnutrition, disease and poverty; severely impact water resources and availability, human health, biodiversity and ecosystem services; large-scale displacement of populations and consequences for human security and economic and trade systems.

Global warming will impact developing countries and vulnerable populations the most, particularly in the tropics, sub-tropics and towards the poles. Many small islands will not be able to sustain their populations.

There are no precedents to the global warming impacts on human society as warming on the scale described above has never happened in human history. A 4oC temperature rise will impact human society sufficiently to cause societal regress and possibly collapse.

Tilting point—Environmental degradation

Earth’s resources are finite.  With the phenomenal growth of the global economy in the 20th Century,  natural resources have depleted. Consequently, the environment has frayed and its ability to support life, and human society has diminished. Life support systems of the environment–air, water and land–are badly degraded.

Per the World Health Organization, local air pollution causes over 2.5 million excess mortalities and more than 300 million excess morbidities annually. Air pollution causes extensive injury to other sensitive receptors such as crops, water bodies, forests and monuments. While no estimates for the injury caused by air pollution to these receptors exist, studies indicate that crop yield losses in a 60-70 km radius around major Indian cities may range 15-40%.

Contaminated water causes as high a burden of disease as polluted air. Unsustainable land use has caused unprecedented land degradation–deforestation, desertification, soil erosion, nutrient depletion, soil salinity, soil moisture reduction, chemical contamination and biological cycle disruption. Drylands, 90% of which are in developing countries, cover 40% of earth’s land surface and support a third of the world’s population, are at great risk of desertification.

Conclusions

Resource depletion and inequality are perceived as issues pertaining to specific societies or nations. The upheavals they have caused in the past have largely remained within the bounds of specific societies or nations. In today’s globalized world, this may no longer hold. On the other hand, global warming is perceived as a global issue. If any one of the three tipping points kicks in, human society will hurt, and unlike in the past, the impact will be global.

To tackle these tipping points capitalism is attempting to re-package itself to appear sustainable and inclusive. The next three articles will assess capitalism will succeed in doing this.

The author belongs to the most rapacious predator species that ever stalked the earth – humans, and to a net destructive discipline – engineering, that has to take more than a fair share of the responsibility for bringing earth and human society to tipping points. You can write to him at: sagdhara@gmail.com

Notes

[i] Estimates of resources and reserves are closely guarded information, hence figures for original resources and current reserves are approximations.

[ii] Reserve to current production ratio.

[iii] Zeta (1021) Joules.

[iv] Without gas hydrates, i.e., coal bed methane + shale gas + deep gas + tight gas. Recoverable gas hydrates are estimated to be 12.6 ZJ.

[v] EROEI: Energy return on energy invested. It is the ratio of usable energy obtained to energy invested to obtain it.

[vi] eMergy: embodied energy – energy used to produce a good or service. It is a concept similar to congealed labour. Wealth represents eMergy.

[vii] Energy in the form of both direct energy such as fuels, animate energy, etc, and eMergy in the form of people, arms and other wherewithals such as infrastructure.

[viii] Gt: Giga (109) tonnes

References

Clugston, C O, 2012. Scarcity: Humanity’s Final Chapter, Booklocker.com

Dhara, S. Beyond The Paris Agreement: The Battle for Atmospheric Space, Frontier, Vol. 48, No. 32, Feb 14 – 20, 2016, http://www.frontierweekly.com/articles/vol-48/48-32/48-32-The%20Battle%20for%20Atmospheric%20Space.html

Hughes, J D, 2009. An Environmental History of the World. Routledge, Abingdon.

Johansson, T B, Nakicenovic, N, Patwardhan, A, Gomez-Echeverri, L, 2012 (Eds). Global Energy Assessment, International Institute for Applied Systems Analysis, Laxenburg, Austria.

Inergovernmental Panel on Climate Change (IPCC), Climate Change 2014, Assessment Report 5, Synthesis Report. http://www.ipcc.ch/pdf/assessment-report/ar5/syr/AR5_SYR_FINAL_SPM.pdf

Murphy D J, 2014. The implications of the declining energy return on investment of oil production.Phil. Trans. R. Soc. A 372: 20130126. http://dx.doi.org/10.1098/rsta.2013.0126

Nafeez, A, 2013. Former BP geologist: Peak oil is here and it will break economies, The Guardian, 23 December 2013, http://www.theguardian.com/environment/earth-insight/2013/dec/23/british-petroleum-geologist-peak-oil-break-economy-recession

Nafziger, S, Lindert, P, 2013. Russian Inequality on the Eve of Revolution, http://web.williams.edu/ Economics/wp/Nafziger_Lindert_Inequality_Sept2013.pdf

Oxfam, 2015. Wealth: Having it All and Wanting More, Oxfam International, Oxford. https://www.oxfam.org/ sites/www.oxfam.org/files/file_attachments/ib-wealth-having-all-wanting-more-190115-en.pdf

Sorrell, S, Speirs, J, Bentley, R, Brandt, A, Miller, R, 2009. Global Oil Depletion: An assessment of the evidence for a near-term peak in global oil production, UK Energy Research Centre. http://www.ukerc.ac.uk/publications/global-oil-depletion-an-assessment-of-the-evidence-for-a-near-term-peak-in-global-oil-production.html#sthash.glLtk3kf.dpuf

Tainter, J A, 1988, The Collapse of Complex Societies, Cmbridge University Press, New York.

United Nations Environment Programme (UNEP), 2015. Emissions Gap Report 2015: Executive Summary. http://uneplive.unep.org/media/docs/theme/13/EGR_2015_ES_English_Embargoed.pdf

United Nations Framework Convention on Climate Change, 2015. Synthesis Report on the Aggregate Effect of Intended Nationally Determined Contributions

Woodward, D, 2015. Incrementum ad Absurdum: Global Growth, Inequality and Poverty Eradication in a Carbon-Constrained World, World Economic Review 4: 43-62, 2015. http://wer.worldeconomicsassociation.org/files/WEA-WER-4-Woodward.pdf

 

Notes

[i] Estimates of resources and reserves are closely guarded information, hence figures for original resources and current reserves are approximations.

[ii] Reserve to current production ratio.

[iii] Zeta (1021) Joules.

[iv] Without gas hydrates, i.e., coal bed methane + shale gas + deep gas + tight gas. Recoverable gas hydrates are estimated to be 12.6 ZJ.

[v] EROEI: Energy return on energy invested. It is the ratio of usable energy obtained to energy invested to obtain it.

[vi] eMergy: embodied energy – energy used to produce a good or service. It is a concept similar to congealed labour. Wealth represents eMergy.

[vii] Energy in the form of both direct energy such as fuels, animate energy, etc, and eMergy in the form of people, arms and other wherewithals such as infrastructure.

[viii] Gt: Giga (109) tonnes

References

Clugston, C O, 2012. Scarcity: Humanity’s Final Chapter, Booklocker.com
Dhara, S. Beyond The Paris Agreement: The Battle for Atmospheric Space, Frontier, Vol. 48, No. 32, Feb 14 – 20, 2016, http://www.frontierweekly.com/articles/vol-48/48-32/48-32-The%20Battle%20for%20Atmospheric%20Space.html
Hughes, J D, 2009. An Environmental History of the World. Routledge, Abingdon.
Johansson, T B, Nakicenovic, N, Patwardhan, A, Gomez-Echeverri, L, 2012 (Eds). Global Energy Assessment, International Institute for Applied Systems Analysis, Laxenburg, Austria.
Inergovernmental Panel on Climate Change (IPCC), Climate Change 2014, Assessment Report 5, Synthesis Report. http://www.ipcc.ch/pdf/assessment-report/ar5/syr/AR5_SYR_FINAL_SPM.pdf
Murphy D J, 2014. The implications of the declining energy return on investment of oil production.Phil. Trans. R. Soc. A 372: 20130126. http://dx.doi.org/10.1098/rsta.2013.0126
Nafeez, A, 2013. Former BP geologist: Peak oil is here and it will break economies, The Guardian, 23 December 2013, http://www.theguardian.com/environment/earth-insight/2013/dec/23/british-petroleum-geologist-peak-oil-break-economy-recession
Nafziger, S, Lindert, P, 2013. Russian Inequality on the Eve of Revolution, http://web.williams.edu/ Economics/wp/Nafziger_Lindert_Inequality_Sept2013.pdf
Oxfam, 2015. Wealth: Having it All and Wanting More, Oxfam International, Oxford. https://www.oxfam.org/ sites/www.oxfam.org/files/file_attachments/ib-wealth-having-all-wanting-more-190115-en.pdf
Sorrell, S, Speirs, J, Bentley, R, Brandt, A, Miller, R, 2009. Global Oil Depletion: An assessment of the evidence for a near-term peak in global oil production, UK Energy Research Centre. http://www.ukerc.ac.uk/publications/global-oil-depletion-an-assessment-of-the-evidence-for-a-near-term-peak-in-global-oil-production.html#sthash.glLtk3kf.dpuf
Tainter, J A, 1988, The Collapse of Complex Societies, Cmbridge University Press, New York.
United Nations Environment Programme (UNEP), 2015. Emissions Gap Report 2015: Executive Summary. http://uneplive.unep.org/media/docs/theme/13/EGR_2015_ES_English_Embargoed.pdf
United Nations Framework Convention on Climate Change, 2015. Synthesis Report on the Aggregate Effect of Intended Nationally Determined Contributions
Woodward, D, 2015. Incrementum ad Absurdum: Global Growth, Inequality and Poverty Eradication in a Carbon-Constrained World, World Economic Review 4: 43-62, 2015. http://wer.worldeconomicsassociation.org/files/WEA-WER-4-Woodward.pdf

Apr 02, 2016


Sagar Dhara may be contacted at sagdhara@gmail.com

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About Sagar Dhara,

The author belongs to the most rapacious predator species that ever stalked the earth—humans, and to a net destructive discipline—engineering, that has to take more than a fair share of the responsibility for bringing earth and human society to tipping points. His email id is sagdhara@yahoo.com