A #TALE OF TWO CITIES - #ECONOMICS AND #SCIENCE COLLIDE

 SURREAL ECONOMICS OR CONCRETE SCIENCE?

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

Charles Dickens

A Tale of Two Cities

It is fascinating to note that the profound symbolism contained in what many believe to be the greatest novel ever written can be metaphorically applied to the human condition today. The great question facing humanity centers on how to measure its state, progress, and the remaining possible extent of human activities.  Are we wisely using the planet's resources and how long can these resources last and thereby human activities be sustained? To answer these questions we need metrics and numbers to know how we're doing and to see where we're going; for how long.

CITY ONE - SURREAL ECONOMICS

Over time the two cities have evolved to provide the metrics to answer these questions. The first city we refer to as the Theories of Surreal Economics. Its primary metric is global GDP and as we can see from the chart below human progress and achievements have been utterly astounding over the past 300 years, and by the way, so has population growth. What could be better?

GLOBAL POPULATION GROWTH

CITY TWO - CONCRETE SCIENCE

Well, the second city we refer to as the Truths of Concrete Science as they use a different set of metrics that present an opposing view of the human condition and the physical state of the planet's resources and what is required to sustain human activities. The key metrics thus work to measure the overall physical climate, resources, and ecology.  In other words, the real wealth of the planet and, not the abstract surreal version used by the first city.

Here are some charts that show how we're doing using these concrete metrics.

First, here is a recent report from our contact and friend Dr. James Hansen, a world-renowned climate scientist who was the first to testify before the US congress in 1988 and warn the lawmakers about the impending warming of the planet. The chart presented in Table 1  below is deeply disturbing - as it forms a graphical hockey stick similar to the GDP and Population charts above. 

This means that there is a high correlation and good chance of causality between GDP/Population growth and global warming. Extending these variables forwards means that we are heading to ever higher temperatures unless immediate actions are taken to either mitigate or somehow reverse this terrible trend. 

But climate is not the only concern of the second city. The next is resource consumption and how long before these critical resources are practically exhausted for global economic purposes.  Some researchers have targeted the exhaustion date at 2050 based on the current known planetary supplies. We can see from the hockey stick chart below - that just our consumption of critical energy sources over the past 200-plus years also strongly correlates with charts for GDP/Population growth.

These exponential growths in human activity, population, and global warming also adversely affect the other plants and creatures living on the planet which all work together to form the ecology and thereby provide a survivable habitat for humanity. There is also always the possibility that should any small critical link in the ecology be broken, then the whole system could crash into an abyss where unknown, unknowns would prevail.  

The hockey stick chart below again shows a correlation that infers increased human activity, GDP, and population growth results in species' extinctions increasing in tandem. We know that they can survive without us - but, can we survive without them?

CONCLUSION:

So there you have it - two different cities with the two views and realities that they assert. One says don't worry everything is fine - be happy. The other says we are rapidly heading into the abyss where we face the unknown, unknowns of dire consequences. It is truly amazing that what Charles Dickens historically wrote in 1859, can also apply symbolically to our world today - however, the biggest difference today is - we are simply running out of time to get it right.  

And so it is:

'we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.' 

- Charles Dickens

Global Temperature in 2022 FULL ONLINE REPORT 12 January 2023 James Hansen, Makiko Sato, and Reto Ruedy

Global surface temperature in 2022 was +1.16°C (2.1°F) in the GISS (Goddard Institute for Space Studies) analysis[1],[2],[3] relative to 1880-1920, tied for 5th warmest year in the instrumental record. The current La Nina cool phase of the El Nino/La Nina cycle – which dominates year-to-year global temperature fluctuation – had maximum annual cooling effect in 2022 (Fig. 1). Nevertheless, 2022 was ~0.04°C warmer than 2021, likely because of the unprecedented planetary energy imbalance (more energy coming in than going out). The already long La Nina is unlikely to continue, tropical neutral conditions are expected by Northern Hemisphere spring, with continued warming as the year progresses. Thus, 2023 should be notably warmer than 2022 and global temperature in 2024 is likely to reach +1.4-1.5°C, as our first Faustian payment of approximately +0.15°C is due.

Table 1. Rank of 10 warmest years in the instrumental record, based on GISS temperature analysis.

READ MORE MORE THAN A MOVIE

CAN THE #HOUSING #AFFORDBILITY CHALLENGE BE #SOLVED?

 

https://financialpost.com/real-estate/canada-housing-affordability-government-cmhc

Canada's housing affordability problem too big for governments to solve alone: CMHC report

'The scale of the challenge is so large that the private sector must be involved'

MAJOR CRISIS IN THE MAKING

The scale of Canada’s housing affordability problem is too big for governments to solve alone, according to a new report released Monday by the Canada Mortgage and Housing Corporation.

“The scale of the challenge is so large that the private sector must be involved — governments cannot do this on their own,” the CMHC argued, suggesting solutions that vary from financial support and more construction of social and affordable housing for those with lower incomes, as well as increased supply of housing aimed at the market.

The report, authored by the agency’s deputy chief economist, Aled ab Iorwerth, cited statistics showing Canada has experienced the second-highest rate of growth in house prices among a range of developed countries over the last decade.

Since 2010, the price of housing in Canada has skyrocketed by 105 per cent — just behind New Zealand’s 111 per cent growth — the report released Monday said. By comparison, prices in the United States have grown 47 per cent over the same period.

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RBC AFFORDABILITY GETTING WORSE

HIGHER #INTEREST #RATES LEADS TO GREATER #ENERGY AND #RENT COSTS

 

'Most people do not understand that the world economy is a physics-based system, powered by energy.'

OUR FINITE WORLD

Why raising interest rates to reduce inflation may work out very badly

by Gail Tverberg

Are we headed for very high energy prices? Or, are we headed for a financial system that starts falling apart? The whole economic system may change remarkably. For example, what many people thought was money, or a promised pension plan, may not really be there when the time comes to get value from it. Shelves in stores may be empty when it comes time to make a purchase.

Most people do not understand that the world economy is a physics-based system, powered by energy. If the energy is suddenly much less available, there will be a huge problem. The world economy has been powered by a rapidly growing supply of energy for over 200 years.

Figure 1. World energy consumption by fuel based on Vaclav Smil’s estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with data from BP’s 2011 Statistical Review of World Energy for 1965 and subsequent. Wind and solar are included in Biofuels.

My concern is that the current attempt to bring inflation down will lead to falling energy supply and a world economy that is rapidly changing for the worse.

Figure 2. Energy amounts for 2010 and prior equal to those in Figure 1, with a corresponding amount for 2020. Future energy for 2030, 2040 and 2050 are rough estimates based on the observation that the world is now reaching extraction limits for both coal and oil.

OH MY! WHAT IF WE RUN OUT OF OIL?

Everything I can see says that world leaders are not able to face the possibility that the world is already running seriously short of oil and coal. Future supplies are likely to be much lower, and much more expensive, if they are available at all. Other energy types (including natural gas, nuclear, hydroelectric, wind and solar) are simply add-ons to a system built using coal and oil.

Current world leaders do not realize that the energy situation is very much like the water level in Lake Mead. Looking at it from the top, there still seems to be water there but, in fact, the required depth is lacking. Water for watering crops will soon be exhausted. The world’s energy supply is not a whole lot different. The supposedly proven reserves do not tell us anything at all. It is the amount of fossil fuels that can be affordably extracted that is important. We have already exceeded the amount that can be affordably extracted. If central banks cut back future energy supplies using higher interest rates, we can expect to encounter major problems going forward.

THIS ANALOGY TO LAKE MEAD IS BEYOND BELIEF

In this post, I will try to explain some of the issues involved.

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THESE ARE THE KEY TAKEAWAYS

[1] The amount of energy the economy requires depends very much on population. The greater the world population, the more oil is needed for food production and transportation. Non-oil energy is a bit more flexible in quantity than oil, but the total quantity of energy per capita needs to keep rising to prevent very adverse outcomes.

[2] Recently published data through 2021 indicates that energy consumption growth is not keeping up with population growth, similar to the situation of the 1930s. This says that the economy is doing poorly. Supply lines are broken; most jobs don’t pay well; many goods that normally would be available aren’t available.

[3] We can look back and see how rising interest rates were used to slow the world economy in the 2004 to 2006 period, and how different the economic situation was then compared to now. Even with the rapid growth the economy was making at the time of the interest rates increases, the result was still a deep recession in 2008-2009.

[4] The trend in fossil fuel supplies is concerning. Both oil and coal are past peak, on a per capita basis. World coal supply has been lagging population growth since at least 2011. While natural gas production is rising, the price tends to be high and the cost of transport is very high.

[5] Governments and academic institutions have gone out of their way to avoid telling the world how important energy of the right types and in the right quantities is to the economy.

[6] Once the economy starts heading downward, it is not clear that the economy can ever “catch itself” and start back on an upward path again, even for a short while.

ARE WE NEARING THE END GAME?

RESOURCE WARS...

#RENTAL #CRISIS AFFECTS MANY LARGE GLOBAL #URBAN CENTRES

Editor's Comments:

 There is little doubt that the current housing crisis is global; thus the underlying causes must logically relate to world-wide variables. Too often local governments will take simplistic approaches that are not well thought- out and focus policy and actions on regional symptoms. These band aids may have short-term benefits for a few folks and political ambitions, but will fail terribly at addressing the key long-term variables behind the crisis. Consequently, the crisis will never be resolved using short-sighted measures based on any self-serving political agenda with no basis in mathematics or evidence-based science. 

So what are some of these key global variables? Well, here is a summary of critical global factors that can be tied to the fact that the planet is reaching its limits to growth. Meaning that we have reached the tipping point that cannot be reversed with local band aid approaches. If we do not address these global factors - then the outlook for global society beyond a few more years is highly speculative, at best.  

KEY GLOBAL FACTORS

RAPID DEPLETION OF ENERGY AND RESOURCES,

RISING INTEREST RATES, LEADING TO ASSET VALUE DEPRECIATION, CURRENCY/ECONOMIC COLLAPSES

UNSUSTAINABLE EXPONENTIAL POPULATION GROWTH- DOUBLES IN 50 YEARS?

CLIMATE AND ECOLOGICAL DECLINE, MELTING ARCTIC ICE

GROWING GEO-POLITICAL TENSIONS - POPULATION/RESOURCE IMBALANCE WILL LEAD TO MORE CONFLICTS

As  a consequence of this variable equation, there are 50 countries now facing severe economic difficulties breeding social unrest and shortages of living essentials. As they collapse the interdependent global economy will add more countries to the list as both supply chains and currencies disappear from existence.  Regional conflicts will therefore run the risk of quickly spreading as nations become desperate. to maintain civil order.

What is clear and self-evident - local solutions have no chance of  working and a coordinated global effort is promptly needed to act upon the equation of factors highlighted or we may all suffer the dire consequences as the resource pie shrinks against an ever-increasing population demand for more living essentials. 

Put simply, the numbers, math, sciences and physical planetary constraints just don't work...  

  Executive Committee 

December 3, 2020

They could just evict us’: the tenants hit by huge hikes in UK rents

From Manchester to London, three people tell of stress, fear and eviction as cost of private renting rockets

 Soaring rents making life ‘unaffordable’ for private UK tenants

£8,000 a year; £300 a month; 60%. These are just some of the rent rises demanded from private tenants as winter approaches. The alternative can be eviction, sofa surfing or scrambling in an overheated market for another place. With homelessness the fear, it is extremely stressful.

The already expensive housing markets of London and the south-east are worst affected but it is a national problem. In Manchester Clara Graziani, 27, a customer services worker, was paying £695 a month on a city centre flat until she was served with an eviction notice in September. Her landlord used the “no fault eviction” process the government has repeatedly pledged to abolish, but still hasn’t. Graziani had agreed to pay 8% extra, but then, without explanation, she was evicted.

PRICES WILL JUST KEEP RISING IN UK

“They didn’t have to give a reason,” she said. “I was really stressed about the situation.”

An estate agent let slip the landlord’s plan was in fact to raise the rent to £895 – a 29% hike – and get someone else in.

“It was really, really hard to find somewhere else,” Graziani said. “When you see a flat on Rightmove, it could be deleted in two minutes because someone paid a holding deposit.” Eventually she paid a deposit on a flat without seeing it in person.

When she finally got in “it smelled a bit of damp in a couple of rooms”, she said.

Ygerne Price-Davies, 24, a domestic abuse worker who shares a rented home in south London, is facing eviction unless she and her housemates agree to a 13% rent increase.

GLOBAL HOUSING CRASH WILL HAVE SERIOUS OUTCOMES

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HISTORIC #HOUSING #CRISIS AFFECTING PEOPLES' #HEALTH AND LIFE

 

Housing Breaks People’s Brains

Supply skepticism and shortage denialism are pushing against the actual solution to the housing crisis: building enough homes.

By Jerusalem Demsas

anyone who’s been in a dumb recurring fight knows that the entire problem could be cleared up if everyone could just agree on exactly what was said or done. But you can’t, so you end up stuck in a cycle of relitigation. Housing-policy discussions are like that. They descend into crushing bickering because even the basic facts are up for debate.

The most basic fact about the housing crisis is the supply shortage. Yet many people deny this reality. Before I get to the veritable library of studies, our personal experiences compel us to recognize that housing scarcity is all around us. The most dire signs of a shortage are when even rich people struggle to find homes. Viral clips of hundreds of yuppies lining up to tour a single Manhattan apartment or stories of real-estate agents acting as bouncers at open houses to keep things orderly—these vivid examples demonstrate that demand has far outstripped supply.

HOUSING ND MENTAL HEALTH

'TORONTO NEEDS MORE HOUSING THAN ANYONE CAN IMAGINE'

- Woodgreen Tenants' Association

Once you accept the existence of a housing shortage, the obvious policy response is to build a bunch of homes. Research looking at San Francisco, New York, Boston, and 52,000 residents across 12 U.S. metropolitan areas have all found that new housing brings down prices. This research makes intuitive sense: If new housing is built, most of the people who move in first vacate other units. Those units then become available to newcomers, and so on. Solving a supply problem is of course harder than making the number of homes equal the number of people—different people want different sorts of homes—but the fundamental point is that we need more homes near good jobs and schools, and that give people access to the communities and amenities that make life more enjoyable.

Despite the avalanche of agreement from experts, the general public still doubts cause and effect. A new study from a trio of professors at the University of California (Clayton Nall, Chris Elmendorf, and Stan Oklobdzija) reveals that shortage denialism is not the only missing “shared fact” plaguing housing discourse. The researchers ran two nationwide surveys of urban and suburban residents and found that 30 to 40 percent of Americans believe, “contrary to basic economic theory and robust empirical evidence,” that if a lot of new housing were built in their region, then rents and home prices would rise. This posture is referred to as “supply skepticism.”

HOUSING CRISIS: DO NOT FORGET THE IMPACT ON CHILDRENS' HEALTH

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