The Great Transition
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Policy news & blueprints for the transition to a new Sustainable and Social Economy
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Energy and the Financial System: What Everyone Needs to Know… and Work Darn Hard to Avoid

Energy and the Financial System: What Everyone Needs to Know… and Work Darn Hard to Avoid | The Great Transition | Scoop.it

"Our economic and financial system is based on assumptions of continued growth. Currently growth is highly dependent on energy and a surplus thereof as provided by high EROI energy sources. Our available energy sources, however, are providing less and less energy returns on the amount of energy we put into them. Therefore the amount of surplus energy available is declining. Thus, given the dependence of growth on energy, growth will decline too. The little remaining health of our financial systems, however, relies heavily on assumptions of continued growth and rather high ones at that, but those assumptions will increasingly turn out to be false if Boyd’s prediction of declining EROI is true".

Willy De Backer's insight:

Great article on the link between society's diminishing energy return on energy investment and the current economic and financial crisis. A must-read for all austerians and post-Keynesians. This time it IS really different.

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Eli Levine's curator insight, April 13, 2014 6:35 PM

Indeed, our ability to "grow" economically and socially is bound by the environment, our population size, cosmological conditions, food production and our state of technology.  Should we honestly "grow" for the sake of "growing", if it comes at long term as well as short term harm?

 

Things that Capitalism under its current logic, does not answer and does not wish to answer.

 

Think about it.

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The Rise of Anti-Capitalism

The Rise of Anti-Capitalism | The Great Transition | Scoop.it

"A formidable new technology infrastructure — the Internet of Things — is emerging with the potential to push much of economic life to near zero marginal cost over the course of the next two decades."

Willy De Backer's insight:

As always, super-optimist Rifkin is great at analysing new trends in the global economy, but totally misjudges the negative implications. This is the guy who predicted the age of the "European Dream". Look where Europe is now! So by all means, read this NY Times article but put off your rosy glasses.

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Eli Levine's curator insight, March 16, 2014 1:31 PM

Perhaps this era of free manufacture will break the current economic system (assuming that the businesses don't attempt to break it).

 

It still won't change the attitude with regards to money, society and the environment that's proving so caustic to our whole world.

 

This will be interesting to watch.

 

Think about it.

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The Fracking of “The Limits to Growth”

The Fracking of “The Limits to Growth” | The Great Transition | Scoop.it
Does a new extractive technology arrive before or after limits to growth in resource throughput are in place?
Willy De Backer's insight:

Interesting article by Herman Daly on the death of a American proponent of 'limits to growth' who went over to the fracking side - Darth Vader?

 

"If we were to first enact limits to growth in resource throughput, then even a violent extractive technology such as fracking would be constrained in its ability to wreck the planet on a large scale. The lower carbon content of natural gas might reduce global warming enough to make up for additional extraction damage to the environment. However, if we insist that unlimited growth must remain our first goal, then fracking will just increase total greenhouse gas emissions, not to mention groundwater depletion and pollution. With growth in first place, even soft technologies, those that increase efficiency of resource usage, are likely (thanks to the Jevons Paradox) to promote growth in resource throughput to a scale that is on balance harmful."

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Bioeconomics: The Hidden Megascience

Bioeconomics: The Hidden Megascience | The Great Transition | Scoop.it
Willy De Backer's insight:

Brilliant must-read article on the ideological dominance of neo-Darwinism and neo-Liberalism and the need for new thinking about man and nature.

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Broke, crowded & hot: Top 3 reasons to flee big cities

Broke, crowded & hot: Top 3 reasons to flee big cities | The Great Transition | Scoop.it

As a weakened economy starts to rub up against the natural limits of life on Earth — such as peak oil and climate change — the biggest cities may become less and less attractive places to live."

Willy De Backer's insight:

More realistic assessment of the role of cities in the Great Transition. The 'green cities' dream will turn out to be a fantasy.

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Menschheit droht Rückfall in vorindustrielle Zeiten

Menschheit droht Rückfall in vorindustrielle Zeiten | The Great Transition | Scoop.it
Vor vier Jahrzehnten schreckte der Club of Rome mit dem Report „Die Grenzen des Wachstums“ die industrialisierte Welt auf. Jetzt zeichnen die Forscher ein noch düstereres Bild von der Zukunft.
Willy De Backer's insight:

This new Club of Rome report 'The plundered planet' (only in German) warns that we are on track for a pre-industrial future. Much more realistic than what the official institutions and think tanks dare to say.

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Time for some optimism about the climate crisis

Time for some optimism about the climate crisis | The Great Transition | Scoop.it

"There are strong grounds for believing that the climate crisis can be overcome and that many people’s lives, particularly in the poorer countries, could be materially better than they are now because of the work the production of biofuels and biochemicals to replace their fossil equivalents should bring, coupled with the additional fertility that biochar should create. Since the alternative is industrial and societal decline and, after increasing unrest, an eventual collapse, there’s every reason to think the system will incline the right way. But one thing is necessary first: the twin myths that there’s plenty of energy and that economic growth can continue must be exposed."

Willy De Backer's insight:

Long but brilliant analysis connecting the ecological, economic and energy crises. Maybe a bit too optimistic in their belief that our elites and institutions will be smart enough to prevent collapse but worth reading.

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The power to 'create money out of thin air'

The power to 'create money out of thin air' | The Great Transition | Scoop.it

"If we can move on from Adam Smith’s 300 year-old flawed analytical system to a proper understanding of the powers and public goods we have, due to ignorance, outsourced to the private banking sector – then perhaps as both economists and citizens we might finally be able to understand the creation of money – by both central and private banks - ‘out of thin air’. Only with this understanding will it be possible to devise policies, regulation and strategies to tackle and once again subordinate global finance to the interests of society and the ecosystem."

Willy De Backer's insight:

Brilliant but sometimes a bit technical review by Ann Pettifor of the role of money and credit in the current economic crisis. Must-read article for anyone interested in how to tame the financial sector.

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System Innovation and a New ‘Great Transformation’: Re-embedding Economic Life in the Context of ‘De-Growth’

System Innovation and a New ‘Great Transformation’: Re-embedding Economic Life in the Context of ‘De-Growth’ | The Great Transition | Scoop.it

"the parameters of a post-growth welfare regime might be expected to include a new social compact between ‘mutualized’ capital and partially de-commodified labour along with a greater role for bottom-up, communitarian forms of welfare provision. It is more likely than has been the case under conditions of growth that the selection environment may favour more ‘embedded’ forms of economic activity, insulating both social and ecological capital from the predations of unregulated markets.."

Willy De Backer's insight:

One of the best articles of 2012, not always easy to read but a great analysis of how the new limits to growth needs fundamental rethinking of the role of the state, communities, and social innovators fighting for social and ecological protection.

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think2share's curator insight, September 7, 2014 10:43 AM

Just showing Thomas this interesting material ....

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Prosperity with growth: economic growth, climate change and environmental limits

This interesting working paper written by the Grantham Research Institute on Climate Change and the Environment concludes that "

continued economic growth is feasible and desirable, although not without significant changes in its characteristics.

 

These changes need to involve ultimately the reduction of the rate of material output, with continued growth in value being generated by expansion in the ‘intellectual economy’."

 

The Achilles heel of this thought-provoking paper lies in the fact that it starts from the fallacy that the "intellectuel economy" (the knowledge economy) has little or no material and resource implications.

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Could Economic Growth Kill Us?

Could Economic Growth Kill Us? | The Great Transition | Scoop.it
Now that the U.S. presidential election is over, attention has turned to the challenge of keeping the world’s largest economy growing. The underlying assumption is that growth is always the proper goal.

 

Good opinion piece questioning the economy growth is good paradigm, this time on Bloomberg. Another crack in the growth hegemony?

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Rapid and deep emissions reductions may not be easy, but 4°C to 6°C will be much worse”

Rapid and deep emissions reductions may not be easy, but 4°C to 6°C will be much worse” | The Great Transition | Scoop.it

"So we have no historical precedents for anything greater than 1% per annum reduction in emissions. We’re saying we need nearer 10% per annum, and this is something we need to be doing today. And therefore, we can draw a very clear conclusion from this, that in the short to medium term, the way for the Annex 1, the wealthy parts of the world to meet their obligations to 2°C, is to cut back very significantly on consumption. And that would therefore mean in the short to medium term a reduction in our economic activity i.e. we could not have economic growth."

 

Good interview of Kevin Anderson of the UK's Tyndall Centre. Main message: effectively tackling climate change and economic growth are NOT compatible.

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Is climate change a euphemism for growth?

Is climate change a euphemism for growth? | The Great Transition | Scoop.it

"One question that stops conversations cold is, 'What if our greatest societal challenge is not climate but growth?'"

 

Climate change is really just an ambiguous term or understatement for the problem at the root of our energy production and consumption, which is growth in energy use, economic/population expansion, and environmental degradation resulting in overshoot that is vulnerable to collapse.

 

Interesting reflections on how all the energy spent on dealing with climate change distracts us from the real root cause of our "great disruption".

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Why green growth won’t transform the economy | openDemocracy

Why green growth won’t transform the economy | openDemocracy | The Great Transition | Scoop.it

"Green growth is a myth. Because it ignores the social, political and personal dimensions of sustainability, it can never cut deep enough into the structures of self and society to secure solutions to the crises that we face."

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When Wealth Disappears

When Wealth Disappears | The Great Transition | Scoop.it
We are reaching end times for Western affluence. We must accept economic honesty and recognize that promises made during good times can no longer be easily kept.
Willy De Backer's insight:

Brilliant must-read article from NY Times.

"In his “Future of an Illusion,” Sigmund Freud argued that the faithful clung to God’s existence in the absence of evidence because the alternative — an empty void — was so much worse. Modern beliefs about economic prospects are not so different. Policy makers simply pray for a strong recovery. They opt for the illusion because the reality is too bleak to bear. But as the current fiscal crisis demonstrates, facing the pain will not be easy. And the waking up from our collective illusions has barely begun."

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Economists forecast the end of growth

Economists forecast the end of growth | The Great Transition | Scoop.it
Nafeez Ahmed: Unlimited GDP growth is over as we enter a new age of resource scarcity - we must transition to a new economy
Willy De Backer's insight:

While Europe's economists fight over more austerity or neo-Keynesianism, the  end of growth will have huge societal impacts.

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GDP Growth and Diminishing Returns

Tighten your belts. A new paper suggests the optimum gross domestic product (GDP) may be only $7,000 per person.
Willy De Backer's insight:

good article on 'beyond GDP' inspired by new paper in Ecological Economics.

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Que faire du capitalisme dans la « transition écologique » ?

Que faire du capitalisme dans la « transition écologique » ? | The Great Transition | Scoop.it

En résumé, et sachant que des arguments non écologiques que je ne mentionne pas ici sont aussi décisifs, je rejoins Edgar Morin : « On ne va pas le remplacer par un coup de baguette magique mais on peut REFOULER SA ZONE DE DOMINATION ABSOLUE ». Je complète ainsi : « en mettant hors de portée de sa logique de surprofits et de rente les biens communs vitaux, écologiques mais aussi sociaux (protection sociale, égalité des sexes…) ».

Willy De Backer's insight:

Very good analysis by Jean Gadrey of the tension between the socio-ecological transition and capitalism.

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New Lens Scenarios - Shell Global

New Lens Scenarios - Shell Global | The Great Transition | Scoop.it

"With the world’s population headed toward 9 billion at mid-century and millions of people climbing out of poverty, global energy demand could increase by as much as 80% by 2050. That’s according to Shell’s latest scenarios, which look at trends in the economy, politics and energy in considering developments over the next half a century."

Willy De Backer's insight:

In its latest New Lens scenarios, Shell recognises the existence of "ecological limits" to growth and confirms 2 degrees warming target is unreachable.

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Jørgen Randers: Should paid work be rationed?

Jørgen Randers: Should paid work be rationed? | The Great Transition | Scoop.it
Shorter working weeks with more time spent pursuing hobbies, would help stabilise the use of planetary resources, suggests Jørgen Randers, co-author of 1972 book The Limits to Growth
Willy De Backer's insight:

Interesting proposal in theory but what if people used their mandatory vacation for more consumption and more footprint-heavy traveling?

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The Really, Really Big Picture

The Really, Really Big Picture | The Great Transition | Scoop.it

"Steadily rising energy costs and decreasing net energy yields will simply not be able to fund the future economic growth and consumptive lifestyles that developed nations are depending on (and that developing nations are aspiring to). In fact, the persistent global economic weakness we've been experiencing over the past years is an expected symptom of the throttling constraint decreasing net energy places on growth."

Willy De Backer's insight:

Chris Martenson's excellent analysis of why there is not going to be enough net energy for the economic growth we want.

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Stephane Bilodeau's curator insight, January 18, 2013 7:03 AM

"There has been a very strong and concerted public-relations effort to spin the recent shale energy plays of the U.S. as complete game-changers for the world energy outlook.  These efforts do not square up well with the data and are creating a vast misperception about the current risks and future opportunities among the general populace and energy organizations alike.  The world remains quite hopelessly addicted to petroleum, and the future will be shaped by scarcity – not abundance, as some have claimed.

 

If you care about the future of the economy, your standard of living (or that of your children), and/or your quality of life, you need to fully understand this relationship between growth and net energy. Your individual future (and our collective one) depends on it."

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Zero-growth is the 'new normal'

Zero-growth is the 'new normal' | The Great Transition | Scoop.it

US economic growth will be less than 1% in the next fourty years according to a new analysis by famous American investor Jeremy Grantham. The contrarian investor sees resource scarcity and higher resource prices as well as demographic factors as the main reason why our global economies will continue to struggle for new economic growth.

 

As always the gloomy predictions of Mr Grantham's piece make a lot of sense but will be neglected by the "don't worry, be happy" myopic political and economic elites.

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The sufficiency economy: envisioning a prosperous way down

 
"I address this subject having been convinced that the growth paradigm has no future and that some alternative vision is therefore needed as humanity begins its inevitable transition to a world beyond growth. I put forward the sufficiency economy as the most promising alternative model, although it is one that I believe may ultimately be imposed upon us whether we want it or not, for reasons that will be explained. We can go the easier way or the harder way, so to speak, depending on our attitudes and actions. "

 

Absolute must-read analysis by Samuel Alexander of the real economic alternative to the crisis.

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New OECD report shows world en route to zero-growth

New OECD report shows world en route to zero-growth | The Great Transition | Scoop.it

The new OECD report "Looking to 2060: long-term growth prospects for the world" predicts that in fifty years the combined GDP of China and India will surpass the entire OECD area. Growth will continue to be anemic in most Western countries and global inequality will remain high.

 

This pessimistic report completely neglects the issue of resource constraints to growth which was the subject of a recent IMF report. If you would add the predictions of the IMF study to the outcome of this one, it is clear that we are on track for a zero-growth world. Time to start rethinking our way of life if we want to remain relatively prosperous and have a good life.

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The End of Economic Growth

Another impressive presentation by Richard Heinberg of why we have now entered the post-growth era and what will be the implications for our societies.

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