There is not much room left for expansion within the unlimitedresources economic framework. The roots of capitalism have run upagainst the limited nature of fossil fuel reserves, and therefore afoundational shift will have to take place to provide a mechanism forlong-term economic stability.
Looking out over 100 years, that transition to sustainable production has begun and is in its infancy despite the current lack ofcongressional support. Banks, power companies, and federal agencieshave already started figuring the cost of carbon and water into theirfuture plans for growth, a much more powerful vehicle for change thatoutlasts political term limits. But, is the shift happening fastenough?
The decade-long investment planning that is necessary for energy andagricultural shifts would transition more quickly if Congress were tolegislate energy reform, but even without immediate carbon legislationthe inevitability of comprehensive energy reform has pushed the banks to begin restricted financing to high risk investments like coal powerplants and to begin favoring natural gas, solar, and wind.
Without direct leadership from the government, the economic shifttoward sustainability simply happens more slowly. The environmentalcosts will still continue to build despite the lack of direct economicconsiderations of them. With water shortages predicted across vastgeographical swaths and agricultural output shifts due to climatechanges, both converging in the next decade or two, not to mentioncontinued forecasted volatility in the oil and energy markets ingeneral, rising healthcare and insurance costs, mass migrations, foodshortages, the question should be asked whether a global response needsto happen more quickly than the markets can usher one in.
The shift toward sustainability is happening, though it is oftenobscured by the headlines. While some coal-fired power plants have been built recently, many more coal plant proposals have been rejected bythe banks for having too many risks associated with them. This isimportant because it shows a foundational shift.
Utilities planning for a decade-long rolling switchover to gas fromcoal fired plants would like more clarity on emissions from Congress toset the bar on how far they are going to have to go, but for now, theywill make due without direct leadership.
Since gas emits half the carbon emissions of coal when burned,figuring regulations of some sort, it is a smart bet for utilities;power companies that end up closing down coal-fired plants and buildingnatural gas power plants are taking the conservative route; meaning that the markets have factored in regulations.
The more progressive utilities in states with renewable energyportfolios of 30% or higher have taken on a different set of risksassociated with trying a new technology. In California, utilities aretrying to meet increased demand by replacing more coal-fired powerplants with solar, whereas utilities in Colorado are adding more wind.
Building natural gas fired power plants does not come without its own set of risks. Natural gas most probably will just get us farther downthe line, dependent on a different limited resource with only half theemissions. Do we need to be acting faster than that? Is there morethat has to be done more quickly than simply transitioning to anotherlimited fossil fuel in the next two decades? Aren’t our sustainabilityproblems much more pressing, much bigger than that? Hasn’t the globaleconomy run up against the concept of limited resources?
Chasing after the elusive unlimited growth ghost as it ducks, bobs,and weaves its way through the decades results in environmental factorsthat ultimately limit growth. After technology for unconventionalnatural gas extraction is developed and exported globally, gas and therest of those finite resources like oil, coal, water, food will allreach the peak of their supply curves sometime in the next few decadesas their unlimited growth models run up against their respective limited realities. What happens if the water reservoirs in the Americansouthwest continue to dry up? At some point does the value of waterbecome greater than the value of oil? Can we grow agriculture withoutoil? …without water? What if both peak concurrently?
Global economies are shifting toward the reality today that allresources are limited and should be factored equally into costs ofoperation. The value of the extracted natural gas is seriouslydiminished if it compromises the water supply in the area; so goes foroil sands development. We’ve pushed up against our limits with waterand oil; one sustains our environment and the other sustains oursociety, so they both have extreme value. The lower aquifers get incertain regions of the world, the more expensive food will become; thehigher the price of oil, the more expensive food will become. In aworld of limited resources, the more expensive everything becomes.
The shift at the base of the economy whereby the banks factor in thevalue of different ecosystem services when approving large, long-termloans is a good thing; but figuring out how industries are to be heldeconomically accountable for the costs of long-term damage to theatmosphere, freshwater rivers and streams, and the oceans is an issuethe banks are not qualified to answer. At what point does thegovernment’s role become apparent as a protector of common goods? Whencommon goods like air, water, and food are at stake, legislatedauthority is the only boundary that markets have. Climate change,freshwater depletion and contamination, ocean acidification,biodiversity loss all have a cost associated with them that is notcurrently being figured into economic value under the unlimited growthmodel. At some point under that model, the environment as foundation of all economic activity, apparently begins to collapse.
The slow grind as new input data is entered into the system has started happening.
Slow or fast, the shift to sustainability will happen simply because it is a better idea.