Roulette wheel. Photo from Creative Commons by John Wardell/flickr
"Economic Optimism? Yes, I’ll Take That Bet" (via @nytimes)
John Tierney in his Dec. 28 New York Times column celebrates a betting victory with Matt Simmons that energy prices would not rise over five years as much as Simmons thought they would. Tierney's economic optimism won over Simmons' pessimism. Simmons, a leader in the peak oil movement, died this year, but his estate said indeed Tierney won the $5,000 at stake.
This a day after Paul Krugman in the same newspaper lays out in his column "The Finite World" the supply and demand fundamentals behind recent rapid price rises in commodities and raw materials:
"...What the commodity markets are telling us is that we're living in a finite world, in which the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices. ..."
How does Tierney's economic optimism square with Krugman's assessment? I am reminded of a 2008 paper in the journal Science, "Stationarity is Dead: Whither Water Management?," that argues the past is no longer a sufficient guide to the future.
Stationarity, relating to things like historic stream flows and flood frequency and intensity in river basins, has until now served as a sufficient guide to future watershed behavior. Regional and city planners have used stationarity -- a record of a river's past as a guide to what to expect -- as they build water storage and delivery systems, floodplain maps, and storm water drainage.
The Science paper's authors argue that "stationarity is dead," that under climate change, the past is insufficient guide to the future, that streamflows, floods and droughts of our recorded past are insufficient guides to what we can expect in a world of ever-rising carbon emissions, temperatures, and changing weather. Just this year unprecedented rainfall and damaging floods in Nashville, Milwaukee, Arkansas, and this month in southern California serve as costly examples. Record Russian drought and heat waves devastated wheat crops there.
Taking the stationarity idea to resource supplies -- not just water, but food and other raw materials like oil and coal -- one wonders if the past five years is a sufficient guide to trends ahead. Rising population and the expanding resource consumption that comes with rising aspirations pushes against Earth's ability to provide for our growing numbers, needs, and wants.
Tierney optimistically writes, "...you can always make news with doomsday predictions but you can usually make money betting against them."
Bets?
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also see: Living with Limits: Gail the Actuary on the meaning of limits in oil production (via @theoildrum)
also see: Sustainability and the Work-Spend Treadmill: How Much Stuff is Enough? (via @nytimes @revkin @storyofstuff)
also see: Dmitry Orlov on Collapse (via @johnrobb et al)
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