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The Great Transition
Policy news & blueprints for the transition to a new Sustainable and Social Economy
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We Could Be Witnessing the Death of the Fossil Fuel Industry—Will It Take the Rest of the Economy Down With It?

We Could Be Witnessing the Death of the Fossil Fuel Industry—Will It Take the Rest of the Economy Down With It? | The Great Transition | Scoop.it
In just two decades, the total value of the energy being produced via fossil fuel extraction has plummeted by more than half. Now $3 trillion of debt is at risk.
Willy De Backer's insight:
Another brilliant must-read analysis by Nafeez Ahmed of the financial collapse of the global oil industry and how it will bring down the capitalist economy.
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Stephane Bilodeau's curator insight, April 24, 11:14 AM
"In February, the financial services firm Deloitte predicted that over 35 percent of independent oil companies worldwide are likely to declare bankruptcy, potentially followed by a further 30 percent next year—a total of 65 percent of oil firms around the world. Since early last year, already 50 North American oil and gas producers have filed bankruptcy. 

The cause of the crisis is the dramatic drop in oil prices—down by two-thirds since 2014—which are so low that oil companies are finding it difficult to generate enough revenue to cover the high costs of production, while also repaying their loans. Oil and gas companies most at risk are those with the largest debt burden. And that burden is huge—as much as $2.5 trillion, according to The Economist. The real figure is probably higher.
(...) the total value of the energy being produced via fossil fuel extraction has plummeted by more than half. And it continues to decline. 

This is because the more fossil fuel resources that we exploit, the more we have used up those resources that are easiest and cheapest to extract. This compels the industry to rely increasingly on resources that are more difficult and expensive to get out of the ground, and bring to market."
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Satyajit Das: Age of Stagnation or Something Worse?

The world is entering a period of stagnation, the new mediocre. The end of growth and fragile, volatile economic conditions are now the sometimes silent background to all social and political debates. For individuals, this is about the destruction of human hopes and dreams.
Willy De Backer's insight:

Brilliant extract of the latest book of former banker Satyajit Das; The Age of Stagnation.

'Authorities have been increasingly forced to resort to untested policies including QE forever and negative interest rates. It was an attempt to buy time, to let economies achieve a self-sustaining recovery, as they had done before. Unfortunately the policies have not succeeded. The expensively purchased time has been wasted. The necessary changes have not been made.'

 

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Degrowth – A Vocabulary for a New Era: Review

Degrowth – A Vocabulary for a New Era: Review | The Great Transition | Scoop.it
To the extent that degrowth is an involuntary process then another set of issues arise – will the society and economy withstand the process without catastrophic breakdowns and what can the many kinds of projects and policies described in this book do to make energy descent a survivable process for the population? A great many people will be finding that their lifestyle packages are severely stressed and breaking apart and this will generate a great deal of fear and ‘negative’ emotions.
Willy De Backer's insight:

Fascinating, must-read debate between Feasta's Brian Davey and  Giorgios Kallis on the framing of #degrowth. Can we manage degrowth or do we prepare for collapse?

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Eurozone stagnation is a greater threat than debt

Eurozone stagnation is a greater threat than debt | The Great Transition | Scoop.it
It would be wrong to think last week’s global market gyrations signal a return of the eurozone debt crisis. Sovereign bond spreads in the eurozone did not move by much, except in Greece. What happened last week is something rather different.
Willy De Backer's insight:

Interesting that the 'secular stagnation' narrative is convincing more economists and pundits. How long before they will recognise that we have entered the post-growth era?

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France rebels against austerity as Europe's recovery collapses

France rebels against austerity as Europe's recovery collapses | The Great Transition | Scoop.it
France’s finance minister sends tremors through European capitals with a defiant warning that his country would no longer try to meet deficit targets
Willy De Backer's insight:

Is this the end of Europe's austerity fundamentalism? Don't count on it. European elites don't have a real alternative as they refuse to see that we have entered the post-growth era.

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Scientists vindicate 'Limits to Growth' – urge investment in 'circular economy'

Scientists vindicate 'Limits to Growth' – urge investment in 'circular economy' | The Great Transition | Scoop.it
Nafeez Ahmed: Early warning of civilisational collapse by early to mid 21st century startlingly prescient - but opportunity for transition open
Willy De Backer's insight:

Good review of the latest study by Prof. Ugo Bardi for the Club of Rome on how climate change and resource constraints will force us to rethink our way of life.

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Daniel LaLiberte's curator insight, July 31, 2014 10:00 PM

Zero Footprint means not just lowering our environmental impact, but eliminating it, and eliminating waste by recycling 100% of the resources we use, powered by 100% renewable energy.

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Well-being is more than a side-show to neoliberal economics

Well-being is more than a side-show to neoliberal economics | The Great Transition | Scoop.it

"A post-growth agenda is not necessarily about making sacrifices, but about superceding a broken economic model that is failing to make us better off. 

At its best, the well-being agenda is not just a sideshow to neoliberal economics: it points towards a new economics, one which values equality, stability and community rather than simply growth for growth’s sake."

Willy De Backer's insight:

Good Open Democracy article on the growth versus well-being debate.

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Spring forecast 2013 - The EU economy: degrowth

Spring forecast 2013 - The EU economy: degrowth | The Great Transition | Scoop.it
European Economic Forecast - spring 2013 - The EU economy: adjustment continues
Willy De Backer's insight:

Despite or maybe because of the austerity mania, EU leaders have achieved what all the sustainability fans can only dream about: degrowth. Time to move from the growth obsession to a new development model based on well-being beyond growth and radical redistribution.

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Japan as the new normal: Living in a constrained economy

If the end of economic growth is approaching, Japan can offer insight into the new forms of economic and societal behaviour required.
Willy De Backer's insight:

Very good article by Brendan Barrett of the United Nations University. Could Japan become the model for the difficult transition to a post-growth society?

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US Elections: what no candidate says about energy and the economy

US Elections: what no candidate says about energy and the economy | The Great Transition | Scoop.it

"What if tools of the past no longer fit the economy of the future? Economic growth, as we have known it, is being constrained by an unprecedented slowing of growth in world oil supply. America’s path to future prosperity needs to recognize and confront this new energy reality, and adapt our economy to run on a lot less oil."

 

 

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The end of recession is good for postgrowth theorists too

The end of recession is good for postgrowth theorists too | The Great Transition | Scoop.it

"... a postgrowth economy isn’t just an economy that isn’t growing – it’s an economy that doesn’t require growth. You can’t create a sustainable economy by switching growth off and hoping for the best. It has to be designed, including new forms of finance and new institutions to manage them, action on inequality and debt, new tax systems and much more besides. It’s a proactive, strategic, and long term project. A sustainable economy will take decades to evolve, and will involve every sector of society."

 

Good article on the recession and the post-growth society on the MakeWealthHistory blog.

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"Neither a borrower nor a lender be"

"The EMU will eventually (that is, within the next few months) either have to endure a monumentally costly break-up, or forge a tighter fiscal union with “debt-pooling,” joint budgets and tax systems, and guarantees against default. The domestic political resistance to the latter would be prohibitive in several nations—and even a single country might be able to torpedo collective efforts to centralize and shore up the euro system. It’s just remotely possible that European political and financial leaders might be able to cobble together one short-term fix after another until some sort of workable long-term solution can be agreed upon—but that’s only possible if there is enough economic growth in the interim to keep all wheels on the tracks. Without growth, it’s difficult to see how a train wreck can be averted."

 

Richard Heinberg provides a different and much more convincing narrative of the European debt crisis from the perspective of Europe being the first continent to taste the bitter pil of a post-growth society.

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How Establishments Fall — Leadership in the Age of Rage

How Establishments Fall - Leadership in the Age of Rage - Medium

'intelligentsias manufacture unrealities in eras of decline because their position at the top of the heap depends on doing so. If they are to validate decline as real, then they undermine the very order in which they are at the top. Who knows what might happen then? People might begin to blame them for having been agents of decline in the first place. Thus, their first and greatest incentive is to push the myth that there is no decline. Whatever the intelligentsia in an age of decline does, it cannot validate, prove, even often discuss, the possibility of decline as real, actual, happening, true.'

Willy De Backer's insight:
excellent analysis, very applicable to what is happening at EU level these days
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Things Are Unraveling At An Accelerating Rate

Things Are Unraveling At An Accelerating Rate | The Great Transition | Scoop.it
This vast expansion of debt on the backs of marginal borrowers and the expansion of risky investments has greatly increased the systemic risk of losses from defaults arising from over-extended borrowers.

No wonder every attempt to further expand debt-based consumption is yielding diminishing returns: net income is stagnant virtually everywhere in the bottom 95% of the populace, and further declines in interest rates are increasingly marginal as rates are near-zero everywhere that isn’t suffering a collapse in its currency.

The diminishing returns manifest in three ways: the gains from each round of central-bank tricks are declining, the periods of stability following the latest “save” are shrinking and the amplitude of each episode of debt crisis is expanding
Willy De Backer's insight:

How the growth of global debt is fueling the zero-growth economy - good article from Peak Prosperity

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Job Growth, but No Raises

Job Growth, but No Raises | The Great Transition | Scoop.it
Since the recovery began in mid-2009, inflation-adjusted figures show that the economy has grown by 12 percent; corporate profits, by 46 percent; and the broad stock market, by 92 percent. Median household income has contracted by 3 percent
Willy De Backer's insight:

Economic growth has become uneconomic and antisocial. Not to mention the ecological impacts.

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Secular stagnation: Facts, causes, and cures

"Six years after the Crisis and the recovery is still anaemic despite years of zero interest rates. Is ‘secular stagnation’ to blame? This column introduces an eBook that gathers the views of leading economists including Summers, Krugman, Gordon, Blanchard, Koo, Eichengreen, Caballero, Glaeser, and a dozen others. It is too early to tell whether secular stagnation is really secular, but if it is, current policy tools will be obsolete. Policymakers should start thinking about potential solutions."

Willy De Backer's insight:

Very interesting piece in Vox.eu about the new economic reality: slow growth. Fascinating to see how these economists keep ducking the real tough question: is it possible that we have entered the post-growth era?

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Boom or bust time for critical thinking?

Following the massive bailouts, stimulus spending and quantitative easing of recent years, everyone breathed a sigh of relief and went back to sleep, says Richard Heinberg. But the coming global energy crisis will likely provide the jolt that wakes everyone up again.

Willy De Backer's insight:

Very good interview with Richard Heinberg in Eurozine - the problem with economics and limits to growth

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Public consultation on the Europe 2020 strategy: towards a post-crisis growth strategy for Europe

Public consultation on the Europe 2020 strategy: towards a post-crisis growth strategy for Europe | The Great Transition | Scoop.it

"...the Commission has launched a public consultation on the Europe 2020 strategy, the EU's long-term growth and jobs plan"

Willy De Backer's insight:

Interesting title for this Europe 2020 strategy consultation. With a bit of reshuffling, you get what it should REALLY be about: towards a post-growth crisis strategy. The reality of the 'end of growth' still escapes EU leaders.

Read this Green European Foundation publication to know about Europe's real challenge: http://gef.eu/gnd/new-publication-a-post-growth-society-for-the-21st-century-an-executive-summary/

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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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Deficit Reduction = Recession

Deficit Reduction = Recession | The Great Transition | Scoop.it

"The best way forward would be, yes, to continue deficit spending, with the Federal Reserve buying up most new Treasury debt and rebating the interest to the government (as it has been doing with its QE programs) . . . but—crucially—to shift that spending toward supporting a transition to a post-growth economy. Downsize the financial industry with re-regulation and a tax on financial transactions. Organize a massive debt jubilee. Provide incentives for the development of local cooperative enterprises geared toward import substitution. Create make-work programs building low-energy public transit, constructing renewable energy infrastructure, and insulating homes. Train a generation of young ecologically savvy farmers and provide them with the land and tools they’ll need to succeed."

Willy De Backer's insight:

This new must-read article by Richard Heinberg contrasts policies for the post-growth economy with the current austerity chaos in Europe and the US

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You can't say that!

You can't say that! | The Great Transition | Scoop.it

"So the real trade-off, the real choice we face, is not between climate protection on one hand and economic growth on the other. It’s between planned economic contraction (with government managing the post-carbon transition through infrastructure investment and useful make-work programs) as a possible but unlikely strategy, and unplanned, unmanaged economic and environmental collapse as our default scenario."

 

Richard Heinberg on why neither President Obama nor influential NGOs to tell citizens the inconvenient truth. Without that courage, the transition will be chaotic and will cost the world.

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Don’t Sell Economic Stability to Buy Economic Growth

Don’t Sell Economic Stability to Buy Economic Growth | The Great Transition | Scoop.it

“Our problem is not lack of growth but too much of it,” Sedláček said. An economy that uses debt to grow must continue to do so by taking on more and more debt or, alternatively, face a slowdown that will lead to bankruptcy. It is like owning a car that explodes when it stops, argued Sedláček."

 

Brilliant presentation at the Fifth Annual European Investment Conference in Prague by Czech economist Tomáš Sedláček, who was an advisor to Vaclav Havel in the past.

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Radical Simplicity and the Middle-Class - Exploring the Lifestyle Implications of a ‘Great Disruption’

Radical Simplicity and the Middle-Class - Exploring the Lifestyle Implications of a ‘Great Disruption’ | The Great Transition | Scoop.it

"How would the ordinary middle-class consumer – I should say middle-class citizen – deal with a lifestyle of radical simplicity? By radical simplicity I essentially mean a very low but biophysically sufficient material standard of living, a form of life that will be described in more detail below. In this essay I want to suggest that radical simplicity would not be as bad as it might first seem, provided we were ready for it and wisely negotiated its arrival, both as individuals and as communities. Indeed, I am tempted to suggest that radical simplicity is exactly what consumer cultures need to shake themselves awake from their comfortable slumber; that radical simplicity would be in our own, immediate, self-interests."

 

Gloomy analysis of our consumer society after post-growth collapse. Forbidden reading for anyone who believes "our way of life is non-negotiable". Truth is, nature will not negotiate and things are likely to be a bit less "nice" than described in this article.

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