What cheap oil and gas hath torn asunder shall expensive energy bring together?
‘We don’t know’ is the honest answer.
Expensive fossil energy might favour the local producer in future but there is the obvious question of affordability for those on low incomes. Is there a local infrastructure that can be reinstated to give such an alternative, or indeed, whether the car dependent communities we call suburbs are capable of being rejigged at all at short notice. The design of products and systems needs a serious rethink! Let’s hope these obstacles can be overcome. The ‘transition towns’ movement has a lot to say on this theme (1).
Closed materials loops, turning waste from one process into food for another or recovering useful technical materials and energy will be favoured when raw materials and energy are more expensive. Luckily these activities often demand a significant and increased proportion of human labour and thus it has a strong job creating potential. Using analogies from ecosystems we observe that Nature shops Locally. This is not the end of large businesses but just like the large trees in the forest they are likely to adopt a more symbiotic relationship with their host communities – drawing on local supply, local energy flows and more and more ‘service’. The latter is interesting. In the classic ‘cradle to cradle’ model there is talk of ‘products of service’, the leasing or renting of useful services- anything from floor covering (carpet) to cool food (fridges) to IT services (computers). This would illustrate a nested system – some components for refurbishment and new models would still be sourced globally but with redesign more elements, like cases, could be remade or reformed nationally or regionally. Once more this creates employment – the clue is in the word ‘service’. In an era of expensive (or real cost) energy the engineer, the technician won’t be travelling from too far away to sort things out. This is all very practical, the downside is that those jobs which depended on healthy surpluses created by various economies of scale or globalisation: the middle managers in large complex, centralised businesses and institutions and even schools (interestingly) may get squeezed as the relationship between producer and consumer becomes narrower and more muddied. In the digital media and slowly in the energy and education business, many consumers are also becoming producers.
This is great from a systems perspective – it looks a lot like more feedback and feedback makes a system smarter. Living systems are full of it. At the right scale feedback of this kind is another word for some form of democratic influence. The more that is provided within communities or by communities whether it is energy, efficiency, aspects of food, education and housing then the more opportunities there are to influence outcomes by commenting, joining in, creating alternatives or running a boycott! The opposite has been true until recently where ‘too cheap’ energy and materials progressively disempowered communities as the distance between producer and consumer literally became greater and the relationship was mediated and narrowed: not only food, energy, finance, products of all kinds came from afar but education, health and entertainment were deemed to be the responsibility only of professionals.
The question of the connection between the financial economy and the world of energy and materials is complex (2) but a few words are necessary.The end of cheap energy and materials potentially damages the conventional return on investment, as surplus is harder to generate and in a debt loaded economy, and one where the very availability of money depends on endless growth of debt, this will affect not just business but government. To take just one part of this: taxes As a knock on effect it will eat into the public sector, particularly what was funded from the centre. As we are discovering local communities might have to rely on their own social and natural capital more. They may have to resort to their own complimentary currencies and credit arrangements too. A closed loop is relevant here too, as money is the bloodstream of any modern economy.
Another intriguing and recent lesson in our understanding of systems (3) is that there is always a tension between being more efficient and being resilient – whether the flow is digits, electricity, tin cans or nutrients, and secondly that to be sustainable the ‘sweet spot’ on the curve reveals a bias towards resilience.
Beware too much efficiency it seems. An example: running a supply line to and from China based on just in time delivery might be very efficient but it can be very brittle, a shock anywhere on that line can mean significant problems of supply whereas a few hundred suppliers with largely local markets may be less efficient, and reveal higher costs, but disruption to a handful of them does not bring down the network – which has many viable possibilities for rerouting and repair.
It is left to the reader’s imagination as to whether the likelihood of shocks to our economic systems is increasing or decreasing as time passes.
This was a short excursion through the some of the possible implications for communities of a more ‘closed loop’ approach. In an era where energy and materials are less plentiful and being used in different ways (and reflecting their full costs) it is meant to reveal a few of the complexities of the system: far from being an just an approach by big business to deal with changing times it is a profound reorientation for society at large.
The first macroeconomic report series into the size of the prize for business in the transition to a circular economy
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