Life On The Slippery Slope

Two scenarios for what a world with a declining resource and energy availability could look like

Photo by Trevin Rudy on Unsplash

We, the lucky 1 billion living affluent lives, are completely technology-blind. We take all what has been discovered, developed and scaled up in the past as a given for eons to come. Electricity. Food in the supermarket. Gas at the pump. Everything just magically pops up in a veritable cornucopia of choices. ‘Hey, we’ve got plenty of resources, food and energy. It’s just not evenly distributed!’ — the modern sentiment goes. Neither the more historically minded, nor the live for the day types realize, however, that all this relative abundance was made entirely possible by the drawdown of a set of finite, easy-to-access mineral resources — fossil fuels chief among them. All of our technologies are built from this one-off burst of resource extraction, without exception. The issue, however, is that extracting non-renewable resources cannot go on indefinitely — they’re called non-renewable for a reason… (And we haven’t even talked about a similarly unsustainable drawdown of natural resources, consuming them way beyond their ability to regenerate, and polluting ecosystems surpassing their ability to cope.)

Whenever this topic comes up, however, there will be at least one person shouting at the top of their lungs: ‘Malthusian thinking!’ — as if vehemently rejecting the idea of biophysical limits could make them go away. Sure, we have proved to be extremely resourceful in the past when it came to kicking the can down the road, but now there are just way too many warning signs to ignore. And if what we as a civilization do cannot go on for much too long, it means that we must start seriously thinking about what happens when we find ourselves on the slippery slope of ecological, resource, energy and economic decline. We must move past both short term outlooks generated by economists based solely on the amount of dollars invested, and views based on historical cycles. Let us thus draw up two scenarios out of the many possibilities — two potential future histories if you like. This time, however, by placing biophysical realities into the center as opposed to human ambitions.

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Global outlook

World oil production peaks, then begins to decline in the coming years (1). As ageing fields take more and more energy to maintain production from, and as the US shale revolution fizzles out due to oil companies running out of sweet spots that can be drilled at a low cost, global crude oil extraction begins it’s final, long decline. This worsening situation remains hidden in plain sight, however, as more and more hydrocarbon “liquids” get added to the mix from other sources, even though less and less actual fuel can be made out of them. World oil production from all sources reaches a high point at 110 million barrels a day around 2030.

Global diesel fuel production, however, is on the decline already. Lacking enough conventional crude oil to make diesel from, refineries resort to ever costlier (and energy intensive) methods to produce the fuel on which trucks, agriculture, mining, long distance transport and construction depends. These increased costs, however, get reflected in prices companies pay for transport, or people pay for food. Price inflation of essential items — the making of which happen to take up at least a third of the world’s diesel consumption — continue unabated. The rest of the world economy, producing all the non-essential consumer goods, on the other hand, experience a deflationary crisis due to a lack of demand, linking back to the cost of living crisis now becoming widespread among the once most affluent people of the world.

Towards 2030 diesel output falls further still, with no hope of returning to previous levels — making the shortage of this essential fuel a chronic predicament. Growth in the extraction of coal and other minerals stall, then begin to fall as a result, as more and more mines become unable to pay for ever increasing fuel costs, while struggling with depleting rich deposits at the same time. The same goes to many agricultural regions: the diesel shortage begins to hamper grain output as well, making the world even more reliant on what remains of the world’s biggest bread basket regions. Food shortages — especially in the Global South — become increasingly challenging to overcome.

On a positive note, world CO2 emissions peak at last, then begin their terminal decline. Environmental organizations declare victory over fossil fuels, as power generation from carbon based fuels begin to fall and electricity from “renewables” continue to rise. As oil and mineral extraction embarks on their long decline, though, the manufacturing (let alone recycling) of wind turbines and solar panels becomes even more challenging. Raw material shortages, price spikes, skyrocketing logistic costs and bankruptcies slowly put an end to the green energy transition. The continued reliance on fossil fuels results in a peak in “clean energy” output as well, albeit with a few years delay.

World population begins to shrink as the fertility crisis gets even worse throughout developed nations (mostly due to the now pervasive cost of living and housing crisis), and to food shortages and healthcare issues in the global south. All major economies are now in a state of permanent decline — even though heavily massaged and sometimes doctored GDP figures suggest otherwise. A global financial crisis, due to many private companies and households going bust and defaulting on their debt, slowly becomes inevitable.

The optimistic scenario

Realizing the severity of the crisis — after a few years of mumbling and fumbling — world leaders finally take proactive measures to slow resource and ecological decline, ease social tensions, redistribute wealth and grant access to food in an equitable manner. Governance boards and citizen assemblies are set up to direct resource flows at a local and national economy level, prioritizing access to healthcare, food and housing to all. New infrastructure development and expansion halts to save energy and raw materials for infrastructure conservation and repair. Sorry, no more new data centers, highways or airports. Existing mines, oil fields, the electric grid, water and sewage systems, as well as agricultural lands are treated as a common good, operated on a strictly non-profit basis and in full knowledge of the fact that eventually all of our easy-to-get, non-renewable resources will deplete one day. Commodities are no longer traded on the “market” but bought and sold based on long term contracts, providing much needed stability and predictability.

A free public debate about resource decline, governance and power structures are encouraged. The louder and more vehement the debate gets the better: let all emotions come out, let fears be addressed and hopes contrasted with reality. Deniers are called out and confronted in public. Companies and astroturfed campaigns are excluded from the discourse, their financing is exposed and shown to voters. Political debates are taken back where they belong: citizen assemblies, town halls and every place people meet. Corporations, hedge funds, billionaires etc. are now entirely excluded from politics. Their wealth, profits and dividends are taxed to the hilt — effectively killing the stock market and putting an end to the obscene levels of wealth inequality so pervasive nowadays. (Think of it as a controlled demolition, as opposed to letting the everything bubble burst violently and abruptly with consequences to match.) Campaign donations, lobbying, special interest groups are banned. Political campaigns become modest, and get financed entirely from taxes. Electing a government is a public good and must be paid for from a public budget.

Militaries and their budgets are also scaled back drastically, after having their primary purpose reduced to protecting boarders and helping citizens during natural disasters. Foreign missions and interventions are called off; bases and command centers are given back to their respective owners. The geopolitical chess-game is over: international treaties now treat each nation as equals, limiting the size of their armies and nuclear arsenals to the bare minimum. Disputes are handled through negotiations and low cost concessions — as opposed to costly military adventures abroad.

Nationwide re-skilling and training programs begin to enroll millions, teaching them basic technical skills necessary for growing food, repairing broken equipment, re- and upcycling consumer goods, repurposing industrial machinery and handling plastic waste. Rural communities are actively prepared to become self-sufficient, off-grid, self-contained local economies to save energy for keeping cities livable. Plans for moving out people from large metropolises is being prepared and implemented, entirely on a voluntarily basis. The transition back to a more modest lifestyle is accepted for what it is: an absolute necessity… A marathon, not a sprint.

Automation in the industrial and agricultural sector is reversed, encouraging more and more people to participate in the production process of real goods satisfying real demand… Not pent up desires for the latest smartphone, but answering needs for things which help people thrive in a radically shifting, new world. Solar water heaters, easy to repair farm machinery, low voltage backup household electricity systems. Large corporations are broken up, and small businesses are encouraged to innovate low-tech, resource and energy saving products. Supply chains get increasingly re-localized, which might raise costs, but prevent abrupt shortages and breakdowns. The world is slowly becoming a smaller, more prudent place. Economic growth and world spanning corporate empires are now things of the past.

Many previous industrial workers now find jobs in caring for children and the elderly. Medical services are now prioritizing prevention, screening and keeping people as healthy as possible — not extending human life to 90+ years via costly procedures. Junk (ultra-processed, high fat, high sugar, high salt) food gets banned entirely (sorry) together with smoking. Birth control and education for women is made free. People are encouraged to have kids, but not three, four or five. The ongoing population decline is increasingly seen as a way back to a more sustainable human society, not as an enemy to fight. The social safety net, together with benefit programs and the pension system gets completely redesigned around granting access to food, housing, clothing and basic services.

Thanks to these measures the supply and demand of natural resources and energy remains in balance, even as both continues to decline in the decades ahead. When the steepest phase of the bell-shaped decline curve is over (around the end of this century) humanity arrives at an eco-technic future, a low-tech, low-energy, low-consumption lifestyle. Renewable energy is no longer harnessed by complex and resource intensive, totally non-renewable devices, but locally sourced low-tech equipment: wind and water mills made from wood and recycled machine parts. Fossil fuels are now completely abandoned, together with high-rise buildings and large metropolises. Transportation is done mostly by barges on rivers and canals. Railroad tracks see very little traffic, just like highways, used mostly by horse drawn carts made out of used vehicle parts.

World population stabilizes around 1 billion, living in small towns and villages. Electricity and the internet — together with what remains of this blog — disappears entirely. Knowledge is only available in printed format, placing libraries again at the center of human civilization. Nuclear weapons — no longer usable in the absence of technology — all end up buried under mountains, alongside spent fuel rods and other dangerous waste. Nature begins to reclaim abandoned cities and agricultural land alike, resulting in a rapid plant material growth, soaking up much of the carbon released to the atmosphere and limiting the extent of climate change. Wildlife begins to regenerate and reclaim lost habitats. The world becomes a quiet, peaceful place.

While perhaps a little too over-optimistic, the above scenario at least paints a viable-looking pathway to a more sustainable future. Not through more technology, domination and destruction, but through collaboration and allowing the human enterprise to contract and shrink below biophysical limits. If you want a happy ending, though, stop reading here and feel free to jump to the Conclusion of this essay.

The not-so-optimistic scenario

What follows is a scenario based on our present cultural, political and economic realities, dominated by institutional inertia, elite infighting and a general inability to comprehend the reality of civilizational decline — both from the elites, and the voting public in general. Shall we call this the realist’s vision then? Or a pessimistic outlook? I leave it up to you to decide. Either way, let’s see how the slow moving train wreck of societal disintegration might unfold against the backdrop of modernity hitting biophysical limits.

Europe, the birthplace of industrial civilization, now turns into it’s first casualty. Having used up all of their cheap coal, metal ores and oil from the North Sea, and after waging an economic war on their biggest supplier of raw materials and energy for years, European economies have found themselves in a state of permanent decline. A cost of living crisis, combined with de-industrialization, and a self-inflicted security dilemma on its border (and increasingly within its member states) results in a series of government failures and rising tensions. Unable to procure enough cheap energy to sustain its economic output — let alone that of a war economy — and incapable to chart its own way, the EU becomes a non-entity in both economic and geopolitical terms, used merely as a tool in great power competition.

As a result of chronically high energy prices, tariffs, part shortages and lost market shares, once famous European corporations go bankrupt, or get sold to outside competitors one-by-one. Lacking adequate tax revenues to maintain them, social and welfare programs are cut back to bare bones, even as unemployment and the number of pensioners grow — together with the risk of a major government and private debt crisis. In order to retain control, the economic block turns itself into an Orwellian surveillance state, attempting to monitor and censor dissent in an effort to quell violence and to prevent political chaos from erupting.

As pressures continue to mount, the fabled attack on NATO countries fail to materialize, and as the radical right grabs power in a number of its core member states, the EU itself becomes ungovernable — turning into a bunch of bickering nations, unable to arrest their decline. Organized crime and minority groups take over the role of government in many areas. The once proud nations of Europe are now in the process of rapidly becoming third world countries with intermittent electricity, dilapidated infrastructure and failing services. And while this might look implausible today, no one in the Soviet Union would have thought in the mid-1980’s either that their entire block could fall into ruins in less than a decade.

Meanwhile America keeps struggling with its own internal contradictions. No longer being able to impose its will on India, China and Russia, while feeling increasingly threatened by the rise of alternative payment systems (outside the dollar), not to mention the profound shock from the loss of its energy independence as the shale revolution fizzles out, it lashes out on allies and enemies alike. In an effort to maintain its energy security and internal stability the US shifts from fighting just a handful of forever wars to fighting everyone, everywhere; attriting not only its external but internal enemies as well. Waging war, “killing all the right people” and destroying as much of its rivals’ economic and military capacity as possible, becomes its sole reason of existence (2).

Seeing US insecurity, combined with a deepening economic recession throughout the entire West and the rise of rivals, trust in the Eurodollar system (3) evaporates. First slowly, then all at once. The system which granted the efficiency of lending needed to facilitate international trade in dollars so far, seizes up. Disappearing collateral and liquidity quickly leads to an abrupt halt in international trade. This event finally bursts the everything bubble (spearheaded by the AI mania), and plunges the stock and housing markets to record lows. However, since many of these assets were used as collateral for domestic loans, this event also triggers a banking crisis rapidly spreading around the world. The western financial system collapses in a rapid cascade of events.

The rift between the West and Asia, initiated by the trade war earlier in the 2010’s and intensified in the mid 2020’s, helps to protect Asian markets from the worst effects of this financial collapse. However, it still leads to a number of business failures and bankruptcies, pushing even the Chinese economy into recession and many South-East Asian nations into deep crisis. The world enters an economic depression not seen since 1930. Demand for industrial products, and therefore energy and mineral resources, plummets — leading to a collapse in oil prices and a bankruptcy of many oil companies. Oil production falls further still, as ever costlier (and energy intensive) to maintain fields are abandoned for good. The resulting rebound in oil prices, however — together with a lack of credit and a general impoverishment of customers — prevents an economic recovery from happening, and leads to a further fall in oil demand, as well as production. The world economy transitions into an advanced stage of decline.

The recession, turning into a depression, heightens political tensions fueled by rampant inequality in the US (and elsewhere) and results in a complete loss of faith in the federal government. Riots, burning cars, looting become everyday sights on both sides of the Atlantic. “Developed” nations plunge into a state of permanent civil war. States secede from both the US and EU one after the other, only to form unstable blocks subject to the same pressures. China uses its military to quell civic unrest, but struggles mightily to remain stable. Local currencies appear to replace the failed dollar and Euro, but the world remains without a universally accepted and widely available reserve currency. Local wars break out over ethnic tensions, and to gain control of freshwater supplies, energy, viable agricultural land and mineral resources. The damage to infrastructure caused by these conflicts and the ever worsening effects of climate change, takes forever to repair, and in many cases, do not get repaired at all. World industrial and agricultural output continues to fall, together with population.

As we get closer to the middle of this century, solar panels and wind turbines, manufactured at the height of industrial civilization in the 2020’s, start to reach the end of their lifecycle and fail in droves, presenting the local population with a large amount of industrial waste. Due to the lack of industrial capacity and an adequate level of fossil fuel supply, their recycling (let alone replacement) has by now become impossible. The same goes — to an even greater extent — to nuclear power plants. As global mining and manufacturing grinds to a screeching halt, and as the easy-to-get portion of uranium resources deplete, more and more NPP-s remain without fuel to burn. And while many of these reactors were shut down some time already, spent fuel ponds still must be refilled and cooled constantly, even as electricity supply becomes increasingly spotty and unpredictable. How this predicament can be “managed” in failed states lacking energy to provide even basic services is yet to be seen.

As global trade fades into distant memory, well into the second half of this century, the amount of goods traversing the globe has now been reduced to a mere trickle. Those societies who could not localize their economies (becoming more or less self-sufficient within a ~10 km radius) by now, disintegrate. Members of formerly highly organized societies join the ranks of the millions of refugees wandering around the planet in search for food and shelter. Some join bands of raiders while others try to settle in the far North. Global population continues to fall.

Lacking shipping fuel, or at least wood to build large sailboats from, there is not much sea trade either. (All suitable trees were cut down to provide heat in the winter and fuel for cooking a long time ago.) All of our high tech gimmicks, including refrigeration, telecommunication networks, the electric grid etc. fall into ruins; providing plenty of raw materials for local blacksmiths and tinkerers to make ploughs and small hand tools from. The vast treasure trove of data stored on hard drives around the world is now either completely useless or lost. Books printed throughout the 20th and early 21st century disintegrate into dust, as the combined effect of air pollution and age destroys the paper on which they were printed. Literacy rates fall, and a new dark age sets in. World population dwindles below 1 billion.

Following the fall of industrial societies around the world, the chance of re-building a global high-tech economy is now reduced to zero. All the easy to mine, smelt and use minerals and fossil fuels are now gone, together with the technology and knowledge how to work with them. So as long as resources salvaged from the lost metropolises of a bygone age last, there will be at least some metallurgy (powered by charcoal) possible, but lacking a cheap and abundant energy resource as coal or oil, restarting modernity will be out of the question. On the other hand, and if pollution and temperature levels allow, there will be plenty of opportunities to build small cities connected by roads and canals, ripe with opportunities for re-establishing regional trade over time. These re-emerging city states will be, however, scattered around a narrow habitable belt between the North Pole and the expanding deserts to the South, separated by vast oceans. Save for small clusters of towns around them, people of the future will barely know a thing about each other. The world, once more, will become huge… and empty.

Conclusion

You see, this is the difference between a controlled, managed simplification of the economy, and uncontrolled chaos, aka collapse fueled by the denial of reality and a lack of trust. And while both takes decades to fully unfold, the first option minimizes suffering and the loss of lives, while the latter results in the diametric opposite. Although neither of the two scenarios are likely to come true in their entirety or as described above, they can at least help us get a grip on the situation. Always keep in mind that the future is unlikely to turn out to be as bad as we fear, nor as good as we hope.

Nothing is set in stone at the moment. Who knows? Our future might hold some pleasant surprises as well. In order to seize opportunities to turn things for the better, however, we need to form “islands of coherence” first — as complexity scientist Ilya Prigogine put it. We need a lively civic discourse around the topic of civilizational decline (as much as it’s possible in our fragmented world) to develop a world view rooted in reality together. We are entering uncharted territory here as global growth tips into decline. The world will become even more chaotic than today, but instead of falling into despair over what might be ahead of us, let’s actively seek opportunities to turn things for the better instead — no matter how small their effect may seem to be.

Until next time,

B

Thank you for reading The Honest Sorcerer. If you value this article or any others please share and consider a subscription, or perhaps buying a virtual coffee. At the same time allow me to express my eternal gratitude to those who already support my work — without you this site could not exist.

Notes:

(1) While crude plus condensate extraction (the strictest category of oil) has peaked in November 2018 already, and fell off sharply in 2020, it briefly returned to 2019 levels by 2025. That doesn’t mean that it can stay up for much too long: mature oil fields require an increasing amount of energy to offset natural depletion as they age, making extraction ever costlier with every passing year.

(2) If you are interested in the power dynamics behind forever wars merging into one big, global, networked war, I highly recommend the exceptional blog of fellow writer Nel, “a PhD candidate exploring the fascinating intersections of Migration Sociology, Social Geography, and Conflict Studies.” Start with her two part series: Weaponizing Time (Part 1 and Part 2).

(3) The eurodollar system is a global network of US dollar-denominated bank deposits held at banks located outside the United States, which are therefore free from US federal regulation. In practice, these non-US banks can then provide loans to other non-financial institutions (such as car leasing companies) using their dollar reserves. While highly cost efficient (compared to regular US onshore banking due to the fewer regulatory reserve requirements), this system also increases the risk for excess credit, as these loans might not be as well secured as if the loan was extended by domestic banks. Since none of the institutions involved are subject to federal oversight, and due to the trillions of dollars involved, this practice creates a systemic risk to the entire world economy.