It’s been awhile since I’ve reviewed a book on here. Probably because I don’t have a helluva lot of time for reading these days.
I’m about half way through “The End of Growth” by Jeff Rubin, former chief economist at CIBC and author of “Why your world is about to get a whole lot smaller”, and interested enough to blog about it prior to finishing it. He’s painting a pretty dire picture of the state of the world’s economy, with very compelling arguments. The combinations of triple digit prices on oil, the quadrupling of coal prices in recent years, combined with a general anti-nuclear stance around the world (particularly after the Fukushima incident), are flatlining growth in Europe and North America. Add to this mix a voracious appetite from China and India for fossil fuels, and it’s pretty apparent that the era of cheap energy is over.
And without cheap energy, our current system of globalization falls apart. It no longer makes sense to build cheap widgets in China, if the fuel for the boat costs more than the cargo is worth.
Why are we drilling in the arctic? Levelling the boreal forest in northern Alberta and boiling sand to extract bitumen? Because “conventional oil” (the kind that erupts out of a hole in the ground in Texas) is basically tapped out. As oil companies run out of cheap oil, we have to turn to oil that’s harder and harder to find, extract, refine and ship. Which means it’s never going to be cheaper. The price will fluctuate of course, but the days of using cheap energy to shock our economies out of recession are over.
So if growth is dependant on cheap energy (which Jeff makes a pretty clear argument for), and we no longer have access to cheap energy (also pretty evident)….it’s pretty safe to assume that no-growth or very slow growth is our new reality.
There are some pretty big consequences for society, if that’s indeed the new reality. From sovereign debt loads to youth unemployment, to the performance of my RRSP…a world with no growth looks very different than the one we currently inhabit, the one that’s been propped up by cheap energy for the last 200 years. Of course, we know that GDP (Gross Domestic Product) doesn’t influence the happiness and satisfaction of society…so maybe a “no-growth” economy might actually do us some good? I’m pretty sure that’s where the book’s headed.
Either way, it’s looking like it might be time to lock down some more grease suppliers for the ol’ veggie truck…