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BOOM! Fossil Fuel Combustion and the Mother of All Economic Busts

Photograph Source: Eric Kounce TexasRaiser – Public Domain

William Catton focussed on what follows a boom in the human population. He spelled out the scenario in his 1980 book, Overshoot: The Ecological Basis of Revolutionary Change. As one reviewer put it, “Catton believed that industrial civilization had sown the seeds of its own demise and that humanity’s seeming dominance of the biosphere is only a prelude to decline.”

Catton hasn’t been alone. Many others have warned or at least implied an inevitable human population bust. But that inevitability is no longer likely to hit solely from overshoot alone, and not in some far-distant future. Instead, with the added pressure from our booming combustion of fossil fuels, a human population bust could plausibly be kicked into gear sometime “by” — a.k.a. before — 2050, or within the next 30 years.

This could be the mother of all economic busts.

The human population boom has been the bedrock of economic boom in sector after sector. It’s been the bedrock foundation of a profit boom for the fossil fuel combustion industries that now put it at risk. In the US alone, the booming human population has been the wellspring for surging numbers of visitors to the likes of Yellowstone National Park, city managers bent on promoting growth, the basis of soaring demand for logging to supply housing for a growing human herd.

Booms thus enjoy considerable public approval and political popularity. Over and over again, the long-ongoing human population boom has afforded the political elites and local boosters an opportunity to boast of a booming economy, sometimes raising local and even national concerns that they tout growth at any cost.

Bust, on the other hand, is a dirty four-letter word.

The mother all economic busts

In the preface to his 1992 book on the economic history of the United States, James Grant reminded readers that, “Booms have consequences.” Politicians and local boosters who boast of booms seldom if ever mention consequences, but they’re no secret. In July, 2001, The Economist advised its readers that “It is no coincidence that the deepest and most protracted recessions in recent decades have taken hold in countries that experienced booms.”

Climate scientist Kevin Anderson has advised anyone willing to listen that, if we fire up the fossil fuels enough to hike atmospheric heat by 4C, only around half a billion people will survive. Anderson says, “I think it’s extremely unlikely that we wouldn’t have mass death at 4C. If you have got a population of nine billion by” — a.k.a. before — “2050 and you hit 4C, 5C or 6C, you might have half a billion people surviving.”

The consequences of human die off at that scale would sprawl widely across both ecological and economic realms. Just in economic terms alone, it would trigger a mass loss of customers for every business and industry across the world. The numbers of tourists flocking to US national parks like Yellowstone and Yosemite would plummet. Vast supplies of housing would be left vacant, and the demand for logging crushed. In an irony to cap all ironies, the mass consumption of fossil energy would hit the floor. All in all, Anderson’s stark scenario would add up to economic catastrophe beyond compare.

It doesn’t have to be that extreme to be extreme

Anderson’s reference to reaching 4C added heat is within the realm of possibility. But his scenario of mass death doesn’t have to reach the extent he indicates in order to be extreme. For example, if 4C won’t wipe out all but half a billion people, it would still have profound effect if it wiped out all but a billion, or two billion.

Even if it only wiped out all but 3.5 billion, it would wipe out half of today’s human population. Human die off at even this less extreme scale would put the politically popular cause of economic growth in sharp reverse.

And recent research has turned up signals of economic damage even without mass death. The June 30 2017 issue of Science published a densely detailed article under the title, Estimating economic damage from climate change in the United States. The authors found that the mid-Atlantic and southern states would be hit hard by the heat forced on the region by continued combustion of fossil fuels.

But the impact wouldn’t stop there. Instead, the impact would ripple across the nation, partly just because of mass migration away from the hardest hit states. When Time magazine interviewed the lead author, he told Time that “Conflict and political instability — those kinds of things we don’t see today, but could be baked into the future.” He said, “If we continue to emit, you go into this recession and you get stuck in it forever.”

Avoid change, and get change

The first sentence of the executive summary of the IPCC Special Report on 1.5C advises policymakers that, “Limiting global warming to 1.5°C would require rapid, far-reaching and unprecedented changes in all aspects of society.”  In a nutshell, if we avoid making the sacrifices necessary to that particular set of far-reaching and unprecedented changes, we’ll get another — and plausibly nastier — set of far-reaching and unprecedented sacrifices in all aspects of society. We’ll give up a lot to get a soft-as-still-possible landing, or give up a lot more in a crash.

There’s a lot of money at stake

The moneyed world has recently come wide awake to the economic damage made likely by continuing the combustion of fossil fuels. In an article under the headline, Climate change threatens to wreak havoc on the global economy,” the January 25 2019 issue of World Finance magazine advised its readers that, “It is becoming more and more apparent that the developing threat of climate change is not simply damaging the earth’s natural ecosystem, but is also harming the world economy .”

More specifically, the Institutional Investors Group on Climate Change, reportedly managing climate-vulnerable assets worth more than twice the value of the entire Chinese economy, has launched a campaign of lobbying governments to get away from thermal coal, and put an end to subsidizing all the fossil fuels, and to get on with putting a price on carbon emissions from fossil fuel combustion.” This amounts to a direct pushback against policy touted by Trump and the Republicans and, since pushing back, the Institutional Investors Group on Climate Change ranks have grown from 415 to 477.

Plainly enough then, the moneyed world’s worries are beginning to sound a lot like those voiced by advocates of the Green New Deal and campaigners of Fridays for the Future and the Extinction Rebellion.

Where do the politicians stand?

Democrats on the Senate Banking Committee recently grilled Fed Chairman Jerome Powell on the Fed’s response to a changing climate. They made no reference to Kevin Anderson’s dire scenario, or to risk of a recession that goes on forever. They may even have been unaware of either scenario. They did, however, succeed in getting Powell’s opinion that human-caused climate change does pose financial risk.

Republicans, meanwhile, launched a conservation caucus aimed, according to The Hill, at battling the perception that their party doesn’t care about climate change. Like the Democrats, they made no reference to Kevin Anderson’s dire scenario, or to risk of a recession that goes on forever. They too may even have been unaware of either scenario. They did, however, have something to say. Sen. Lindsey Graham said the Green New Deal is “crazy economics,” adding that “We believe our friends on the other side care about the environment, but they care so much they’re going to destroy the economy in the name of saving the environment.”

In an editorial on July 13, 2019, the right-leaning Washington Examiner picked up that accusation with a headline declaring that, “The Green New Deal was never about climate change; it’s just AOC’s excuse to destroy America’s economy.”

Interestingly, according to The Hill, the Republican “caucus members on Wednesday stressed that traditional energy sources like coal, oil and gas would remain a part of the mix.” In an irony of all ironies, the Republicans, who have long claimed the role of guardians of the economy and defenders of capital, now push the world closer to 4C ? Huh?

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