Yesterday I picked up and read through Jeff Rubin's new book, Why your world is about to get a whole lot smaller. It's a book that discusses the realities and implications of peak oil, from a guy who's certainly got the street cred as until-recently chief economist at CIBC World Markets, and one of the people who actually predicted the run-up on oil we had before the current recession caused everything to tumble down. So not exactly someone you'd criticize as a hippie environmental wingnut.
Short review: if you care about what the future might look like, and what kind of impact it will have on you, just buy this book. It puts together a very high level integrated picture of how and why we got to where we are, and what tomorrow is going to look like, and it does so in a remarkably clear, entertaining and often humorous way. Unlike a lot of such books that tie together many loose threads, it's a very easy read.
The book makes a strong case for, among other things, the following:
- the current recession, as with those before it, was much more influenced by oil prices than is generally recognized
- the economic theory of supply-and-demand has been failing us, because while lower prices cause increased demand, we're not going to be seeing the increased supply; the amount of cheap-to-produce oil is declining rapidly; higher oil prices are going to be here to stay
- past advances in energy efficiency were (as supply and demand would predict) offset by our increased use (bigger houses, longer commutes, etc.)
- the increased costs of transportation are already putting more of a dent in global trade than any tariffs would, eroding the labour advantage of Asian outsourcing; as oil prices continue to rise, getting all our inexpensive goods (and food) from across the world makes little sense
- local production will be further boosted when we start accounting for carbon rather than leaving it as an externality; despite the perception today, we will realize that doing so is actually in our economic interest, as western countries are already more carbon efficient, and monetizing that advantage increases our competitive advantage
- the cost of oil will impact us personally in terms of where we live (the decline of outer suburbia), what we buy (local, seasonal food), daily travels (more public transit infrastructure, less cars), how we vacation (less and closer), the type of jobs (more people leaving the service industry), and so on
What I particularly like is that Rubin invites us to consider the positive aspects of these changes. While undoubtedly decreased car usage isn't a big win for a place like Windsor, on a broader scale, there are many positive aspects. The whole idea of making the world a smaller place (more local, etc.) invites us to consider what that might look like, and how that might improve our lives in different ways.
A cleaner environment, walking and exercising more, eating out less, eating more healthy food, being more involved in the community and less alienated from others all have a delightfully retro charm to them, but it's hard to argue that our current approach has been a big net win.
If we're willing to accept that certain economic factors will produce the type of world he envisions, the opportunity is really about how to most effectively transition ourselves towards that new world, investing in the things that will maximize the future benefits, and helping ease the pain of those affected as we make the transition.
Bailing out auto companies, or using infrastructure stimulus money to build roads is a pretty foolish investment when taken from that perspective; that this will happen is pretty much inevitable due to short term political considerations though).
Again, the real benefit of this book is that it ties together a highly coherent story of where we've been and where we're likely going, in sensible cause-and-effect terms rather than degenerating into moral whinging, and invites us to consider how we might all participate to make the best of that world for us all.
