Is Business-As-Usual Likely In A Peak Oil Scenario? :: ASPO-USA: Association for the Study of Peak Oil and Gas
2010-2020 — The Decisive Decade
If the peak oil hypothesis is correct, world oil production will likely be in decline well before 2020. During this same period, the United States may (or may not) implement a cap & trade system to rein in CO2 emissions. The proposed legislation aims to cut emissions 17% below 2005 levels by 2020. Emissions declined in 2008 following on the oil shock of 2007. The financial meltdown in 2008:Q3 guarantees a similar emissions decline in 2009.
As I described in The Reign of Error, Europe already has a cap & trade system in place. Europe’s carbon market, created under the Kyoto Protocol, has not actually resulted in reduced emissions in the Eurozone. This sleight-of-hand is due to allowable offsets whereby a putative reduction outside of Europe (e.g. in Asia, or Africa) is counted as a reduction within Europe. At best, Europe has reduced the carbon intensity of any economic growth that took place since the formation of the carbon market. The proposed cap & trade system in the United States contains the same loophole.
Assuming that peak oil occurs early in the next decade, and the currently envisioned cap & trade system, which goes into effect in 2012, is actually implemented, we can expect an overall decline in carbon emissions in the United States during the period 2010-2020. If growing emissions are a necessary condition for economic growth, as I have argued here and in The Radical Hypothesis, it follows that the American economy will shrink, not grow, in the coming decade.
If world oil production peaks, I predict most people will forget about terrifying business-as-usual climate scenarios. Instead, they will get down to the hard business of replacing oil by any means possible. If the economy is shrinking, any means necessary will be used to jump start growth. I am not so much interested in what should happen. I am interested in what will happen.
Thus, the years 2010-2020 will likely be the decisive decade of the 21st century. We should know by 2020 whether economies can grow as emissions decline. The result will define our response to anthropogenic climate change in all the decades to follow. We will know whether the consensus view espoused by Joe Romm, John Holdren and many others, as I have believed all along, is merely a politically expedient, faith-based “green jobs” guess about how things will turn out. Should that guess be proved wrong, our political leaders will run the other way.
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