European Debt Crisis and Sustainability

What would humans have to do to really live sustainability with the world’s ecosystems?

I got a shock when I read about the pattern of species extinctions which is taking place that form a part of what is called the “Sixth Mass Extinction.” It turns out that man’s adverse influence on ecosystems didn’t start a few hundred years ago, when we started using fossil fuels. Instead it started way back, when man was still a hunter-gatherer, and there were fewer than 100,000 people on earth.

According to Niles Eldridge, in describing the Sixth Extinction:

  • Phase One began when the first modern humans began to disperse to different parts of the world about 100,000 years ago.
  • Phase Two began about 10,000 years ago when humans turned to agriculture.

In this post, I’ll explain a little more about the Sixth Mass Extinction, and how fossil fuel use has contributed to it in recent years.

I’ll also talk about a new bottleneck that humans seem to be reaching related to oil limits and financial crises that grow out of these oil limits, with the current example being the European Debt Crisis. Depending how this and other debt crises work out, it seems possible that human population will decline. If this should happen, it could lead to a reduced problem with species extinction.

But the whole situation illustrates just how difficult attaining sustainability with world ecosystems is likely to be. Humans by their nature seem not to mesh well with world ecosystems. Unless humans become completely extinct, it seems likely that humans will always have difficulty living in a truly sustainable way.

The Sixth Mass Extinction

In the last 500 million years, there have been five mass extinctions, removing varying percentages of animal species. The last happened 65 million years ago, when dinosaurs became extinct. Biologist (including Michael Soulè and E. O. Wilson) have calculated that the current rate of extinctions is 100 to 10,000 times the background rate.

Niles Eldredge describes the Sixth Extinction as follows:

Everywhere, shortly after modern humans arrived, many (especially, though by no means exclusively, the larger) native species typically became extinct. Humans were like bulls in a China shop:

  • They disrupted ecosystems by overhunting game species, which never experienced contact with humans before.
  • And perhaps they spread microbial disease-causing organisms as well.

Regarding agriculture, Eldredge states:

Agriculture represents the single most profound ecological change in the entire 3.5 billion-year history of life. With its invention:

  • humans did not have to interact with other species for survival, and so could manipulate other species for their own use
  • humans did not have to adhere to the ecosystem’s carrying capacity, and so could overpopulate
Homo sapiens became the first species to stop living inside local ecosystems. All other species, including our ancestral hominid ancestors, all pre-agricultural humans, and remnant hunter-gatherer societies still extant exist as semi-isolated populations playing specific roles (i.e., have “niches”) in local ecosystems. This is not so with post-agricultural revolution humans, who in effect have stepped outside local ecosystems. Indeed, to develop agriculture is essentially to declare war on ecosystems – converting land to produce one or two food crops, with all other native plant species all now classified as unwanted “weeds” — and all but a few domesticated species of animals now considered as pests.

Now, with the advent of fossil fuels, we have been able to take our attack on ecosystems to a new higher level. I have previously shown how population greatly expanded, as the use of fossil fuels expanded in the last 200 years.

Figure 1. World population from US Census Bureau, overlaid with fossil fuel use (red) by Vaclav Smil from Energy Transitions: History, Requirements, Prospects.

It is difficult to even show population growth and fuel use on the same graph. They exploded at the same time, so the amounts overlay each other.

The New Bottle Neck

Fossil fuels in general, and oil in particular, enabled a great increase in food production. It is this increase in food production that has allowed world population to grow to nearly 7 billion.

Recently, however, we have started experiencing a change. World oil production has not grown nearly as quickly as demand since 2005, leading to high oil prices. These high oil prices (and the high food prices that go with them) lead to recessions, and layoffs, especially in oil-importing nations. Governments try to fix these problems, by bailing out banks that have failed and by stimulating the economy, but find themselves in increasingly unacceptable debt positions. I have described these issues in previous posts.

The current situation is brittle. If there are severe financial dislocations, they could feed back and disrupt other systems, such as international trade and industrial agriculture. We could see political upheavals and reduced oil production, and because of all of these issues, reduced human food supply. The changes that may happen could be quite sudden, much faster than one might expect, if the Hubbert Curve were the only factor influencing the amount of oil available to society.

The European Debt Situation and Beyond

Clearly Greece has severe financial problems, and is near default, but European financial problems extend beyond Greece. Banks in other countries hold Greek debt. If Greece should default,  banks outside Greece that hold Greek debt would stand to lose money, and would likely need to be bailed out. Otherwise, the many individuals with deposits in the banks would find themselves without the funds they had deposited. Businesses might not be able to pay their employees, if their funds are in a “bad bank”.

If there is a default, countries vary in their ability to deal with it. If a country is outside the Euro, such as the UK or Switzerland, it can “print” more money, and can use these additional funds to recapitalize the banks in financial difficulty with freshly issued money. Thus they have a way around the problem, although it may result in some inflation.

Countries that are part of the Euro have a bigger problem because they are more like an individual state of the United States. They use a common currency, so cannot themselves issue more currency. Unless they have a lot of funds available from other sources, it is difficult for them to recapitalize banks when there are defaults.

EU countries have been arguing for months about how to solve the problem, but there is no easy solution, in part because the problem easily spreads from country to country, so it is a much larger problem than simply paying for defaults on Greek debt. It is likely that there would be defaults related to the debt of other PIIGS (Portugal, Ireland, Italy, Greece, Spain) countries as well. Some banks in France would also need recapitalization, because of loans they made.  The EU itself is limited in the amount it has available to bail out countries with problems, and individual members object to spending huge amounts to bail out governments that are likely not to be able to pay back the debt.

The European situation may eventually bring about the end of the Euro. If this should happen, we don’t know what the indirect impacts of this would be. A recent UBS publication talks this issue and  mentions the possibility of civil disorder, saying:

Past instances of monetary union break-ups have tended to produce one of two results. Either there was a more authoritarian government response to contain or repress the social disorder (a scenario that tended to require a change from democratic to authoritarian or military government), or alternatively, the social disorder worked with existing fault lines in society to divide the country, spilling over into civil war. These are not inevitable conclusions, but indicate that monetary union break-up is not something that can be treated as a casual issue of exchange rate policy.

Whether or not the Euro situation leads to disorder, there are innumerable other debt problems around the world that are likely to  get worse, as world oil supply gets tighter. Countries are likely to go back into recession, or see anemic job growth, and their governments will try to fix the situation. Eventually, the “borrow your way to prosperity” approach will have to end, either though debt defaults or through unwillingness of investors to purchase more debt.

Over time, the debt “unwind” I have talked about since early 2008 is likely to grow and gather steam. As more states, cities, businesses, and individuals default on their debt, recession is likely to worsen.

One of the questions in all of this is whether the international financial system withstand all of this disruption. If Greece defaults, and then pulls several larger European countries with it, how will this affect international trade? Even if this hurdle is passed, can debtors such as the United States and the United Kingdom continue with their high level of imports, if their financial condition continues to deteriorate? Perhaps the value of all of the OECD currencies will drop greatly, relative to non-OECD currencies, or countries will choose to trade only with trusted partners.

If any of these things happen, trying to maintain the world’s current level of oil production and food production will become more and more of a challenge. Countries with debt problems are likely to find themselves unable to afford their prior level of oil imports, or will find trading partners unwilling to trade with them.

What Happens when the Current System Stops Working?

In a “normal” ecological situation, humans would have co-evolved with the plants and animals around them, so that stopping parts of the fossil fuel system would be no problem. Our current situation isn’t normal, though. We have found any number of ways to make our current way of life dependent on fossil fuels. At the same time, our way of life does not fit with our local ecosystems:

  • Population has been allowed to grow far beyond what carrying capacity would support without fossil fuels.
  • Big cities have been developed which allow germs to spread. Without fossil-fuel dependent pharmaceuticals and immunizations, diseases would greatly reduce populations.
  • Land has been planted with large monocultures of plants. Animals have been specially bred for industrial agriculture. Special seed hybrids have been developed, and many varieties of crops that were grown in the past are no longer available. We have grown dependent on fertilizer and sprays for our crops.
  • Modern medicine has effectively stopped “selection of the fittest.” Many people alive today depend on today’s medicines for their continued health.
  • People have resettled to parts of the world where their genetics do not match up with the climate. For example, I am a blue-eyed blond, because my ancestors were Norwegian, but I live in Georgia (USA), which is a warm location.
  • We have become dependent on our financial system, our international trade system, our electrical system, industrialized agriculture, the automobile, computers, and many other inventions and systems that depend on fossil fuels.

Thus, if something like the financial crises that we are now seeing causes any of our major systems to fail, we are in danger of finding ourselves poorly adapted to the world around us, because we depend on fossil fuels in so many ways, and because we have spent so many years not evolving with the ecosystems around us.

Exactly how things will work out is unclear, but there seems to be a possibility of a substantial reduction in human population. This change seems possible, because we are so poorly adapted to living in the areas around ourselves, if we lose any of our major systems, such as industrial agriculture. The fact that other systems (ocean acidification, climate change, water tables) are currently undergoing adverse change makes the situation worse.

The timing is not clear. Theoretically, a decline in human population could come as soon as  an  indirect result of European Debt Crisis. But governments may be able to find ways around this crisis, and the next several that follow. And financial crises don’t necessarily translate to food crises, but they may.

If there is a reduction in human numbers, it may actually help other species survive, and make the sixth mass extinction “less bad” in terms of the percentage of species lost. The world is resilient, and will eventually recover.

Our Response

All of this discussion makes it clear how very difficult it is to fix our current predicament, and how difficult it is to truly live in a sustainable way.

It seems to me that, in spite of our current predicament, we need to go on with our lives, and appreciate what we have now. Some of us may be able come up with partial mitigations, such as finding ways to better live within our local ecosystems.

Any change will take some time.  Perhaps we will have several years, before major changes take place.  We need to take each day as it comes.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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100 Responses to European Debt Crisis and Sustainability

  1. Pingback: European Debt Crisis and Sustainability | The Great Transition |

  2. kealolo says:

    I haven’t commented here before, but will in the future now that I see the active commenting going on here. The following comment was posted to this same article on “Energy Bulletin” this morning)..

    It could be that a human-systems collapse sooner than later is the only realistic hope of amelioriating the depth of the mass extinction. It’ll be brutal either way, of course. An economic depression which throttles back the metabolism of human extractive/distributive systems will do far more than a Kyodo treaty or any other ‘voluntary sacrifice for the future’ plan.

    This sort of discussion is a touchy subject, for who wants their friends and family to be unemployed? If framed exclusively in terms of saving other species, other species will always lose out. But if we step back and look at slightly longer time scales – say the next thousand or ten thousand years – it becomes pretty clear that what minimizes the mass extinction also maximizes human prospects. Once the fossil fuels are effectively out of reach and the metal ores played out, we’ll be largely back to what the natural world and ecosystems will sustain.

    Thus, a collapse of current highly-leveraged infrastructure is almost certainly the best thing for life on earth, and to maximize human experience and happiness. Indeed, if some of the more dire positive-feedback scenarios on greenhouse heat-forcing are as credible as they seem, a relatively fast crash relatively soon might be an existential necessity, despite it’s high bummer factor.

    Thus among peak oil activists, a slight difference in temporal focus may lead to two very different rationales and courses of action: to attempt ameliorating suffering by humans in the near future by trying for an extended powerdown, or to encourage the abrupt cascade to simpler systems on behalf of future humans and other species. It feels right to do the former, and is probably wiser to do the latter.

    The future will, inexorably, arrive. It’d be nice if it included humans and a livable planet for the next million years.

    • That is an interesting comment.

      We probably can’t put off collapse very long. About the most we can do is burn a lot of coal and natural gas to supplement the oil and natural gas to supplement the oil we produce, and produce the oil from increasingly risky sources. The way accounting is now done, increasing coal and gas use, as by switching to plug-in autos is counted as a sustainable solution by some.

      I am afraid the intelligence of humans is part of the problem. It puts them at an unfair disadvantage relative to other animals, and leads to species extinction. If we could all change our ways to living outside without clothing; eating things that are close at hand, without cooking them; and not hunting anything with anything other than our bare hands, then we could live in a sustainable way with other species. Unfortunately, we have evolved to need cooked food (Cooking releases nutrients from food), and we are not about to give up our advantages, so it is not clear that this can be done.

      • Bicycle Dave says:

        We probably can’t put off collapse very long.

        Unfortunately, you are probably right that some degree of collapse will happen within the next decade or so. However, academic as it may be, I have a question: is it technically possible to avoid or limit the scope of a collapse scenario (like a 5-10 year process that halves the global population and leaves the remainder impoverished)?

        Putting aside politics, nationalism, religion, jingoism and other such human artifacts, is it possible that certain significant power-down measures could greatly mitigate such a scenario? For example: licensing child birth to one in a group of 50; elimination of all private cars in 3-5 years; elimination of most global transportation for unnecessary items like food, clothing and electronic gadgets that could be produced locally; elimination of all non-medical A/C; strict budgets for building heating using FF; prohibiting international vacationing; elimination of all non-essential plastic items; de-commissioning of 2/3 of all roadways, parking lots and airports; criminal fines for all forms of motor racing; greatly restricting power boating. And many other such measures. Totally putting aside the unwillingness of almost every human on the planet to adopt these measures, my question is: could this work to avoid or greatly diminish collapse? If the answer is that even these measures would be insufficient, then we should probably focus on simple survival strategies or how to end our lives with the least amount of pain. If the answer is that these measures would work, then we have a whole new set of questions about the value of this belief.

        • All of those cutbacks would put a huge number of people out of work and would reduce government tax revenue greatly. The people who are out of work won’t be able to eat (or will send up unemployments/welfare costs). The result would be a financial collapse, regardless of what it does energy-wise. If you don’t get the whole world “on board,” it is very easy for the ones who are not on board to soak up the resources that the ones who are saving, save. I think as a practical matter, it is impossible to do very much. Things are too interconnected.

          • Bicycle Dave says:

            Hi Gail,

            As I said, it is an academic not practical question. I just wonder if the motivation was there (like history has shown with nations under attack) is it possible to moderate collapse? I discount the financial argument because fiat money, who is saving and who is not, who has wealth and who doesn’t, all become irrelevant in a very real crisis. Other things become much more important.

            I agree with “whole world on board” factor being the real show stopper. But, ask the same questions if a huge asteroid was on a date-certain collision path with earth – how would we respond (aside from the Rick Perry crowd)?

            • The world can only make small incremental changes, pretty much in a direction that individual people view as good for them. There are many other changes that have to take place at the same time–alternate ways of doing things, new ways of employing the people left out of work, new belief systems (religions or economic beliefs) to support the changes, etc. That is why changes are so difficult.

    • Brian says:

      I don’t want to beat a dead horse, but consider when you think of the Sahara, Iraq, Syria, and Greece. I am sure the first thing that comes to mind is lush forests or vegetation. No? The East Coast of North America is more forested than 400 years ago. This is great, right? Fossil fuels have allowed us to shift away from using the incident sunlight collected from our trees and use buried sunlight, tough we still create deserts in some pretty awesome ways in places with less access to fossil fuels. Places like Africa and West China are great place to look if you want to see what post PO will look like. Just enough fossil fuels to kill the environment, but not enough to care for it. Cuba might be an exception to the rule with their heavy use of permaculture, though they have few native species left on the island. The truth is that humans have shown a consistent ability over the past 10,000 years to create massive deserts that are both physical and of the genetic information variety and that was with a population that was tiny compared to today’s population. And some earlier commenters think humans may go extinct. We are exceptional in that we occupy more ecological niches (even before fossil fuels) than any other single species that I can think of, especially for mega fauna. We will only have a high chance of extinction if nearly the entire terrestrial global ecosystem is wiped out by some externality and then who cares about the extinction rate. I just want our ancestors of the future not to have to wait 10 million years (E.O. Wilson’s words) for this much complexity to arise again. The only true response to PO is to plant trees and almost never cut them down. Collect the nuts and fruits if you must, but almost anything else humans can do about PO is habitat destruction that leads to deserts of one kind or another. This sadly is too radical for most. Maybe even myself.

      • Jan Steinman says:

        I think it was David Holmgren (co-founder of Permaculture) who said, “Civilization is preceded by forests, and leaves deserts in its wake.”

        Thank you for bringing up that industrialized countries are more forested than they were before the widespread use of fossil sunlight. I fear that not a tree will be left standing, once we get off the current uneasy plateau and seriously start sliding down the backside of Hubbert’s Peak.

        (We heat with firewood, but have not yet taken a live tree. So far, we only take fallen deadwood, leaving standing deadwood for the Pileated Woodpeckers and other critters.)

        • wye says:

          Just curious. What is your source for the east coast of North America being “more forested than it was 400 years ago”? I am just about positive that the present day United States east of the Mississippi was (generally) one solid old-growth forest prior to serious westward expansion which only began around 1800, and progressed slowly. In the present day state of Mississippi for example, the Delta region was solid forest and the plantations had to be painstakingly carved out of the woods. There are few woodlands there now, it having all been converted to farmland long ago.

          Ok, looking around a bit the full story seems to be here:

          I am not wrong about my history, but I can see where the above posters’ misconception comes from – forests have made a partial recovery east of the Mississippi since 1920, but they are nothing like the solid old growth forest that occupied the territory 400 years ago.

          • Jan Steinman says:

            “400 years ago” is too far back. 150 might be better.

            Prior to the widespread use of fossil sunlight, much of the eastern hardwood forest was decimated, and has since largely recovered.

            I don’t have a reference. I read it in a tract at Catoctin State Park in western Maryland, where the remains of an old iron foundry is still there. According to that tract, much of the Mid-Atlantic forests were clear-cut for use as fuel for iron working, just as Europe was before. After coal became widely available, the forests began to recover.

            • Here are two photos of my locality (Southern Tasmania), 100 years apart.

              Typical of many places. 100 years ago, much of the local forest was cut out for domestic firewood, but also for home construction. Typical homes of those times had 4 to 6 fireplaces. Carting wood from far afield was too horse-intensive.

              I hadn’t thought of the effect of deforestation that Peak Oil will pose, until reading this thread. Yes, we’re heading back to those times.

            • Brian says:

              I am sorry I said 400 years. I perhaps went back too far and was thus wrong. I can’t find the citation for the true date, but it is more forested today than prior to fossil fuel usage. I think too many people miss the point that things like the EPA, Fish and Game, and zoning boards are only possible due to oil. Is every sherrif’s department of a post PO future going to police these regulations? I seriously doubt it. Further, we have cries from business of doing away with EPA regulations to make the diminishing returns on expensive oil more profitable. China is already knee deep in ecological disaster because they refuse to take on regulations that make business take on higher costs on top of the diminishing returns on oil, which is one of the reasons I believe (I do not have empirical evidence) businesses ship jobs to China.

          • weaseldog says:

            The railroads were another major factor in deforestation.

            Before the invention of creosote (from oil), timber cut for ties, would rot quickly and had to be replaced often.

          • Brian says:

            I went searching, though I admit I spoke out of ignorance when I said 400 years and 160 years would be more accurate, and found an article ( that talks about how the Americas may have been more forested in 1850 than 1492 because the amount of native americans killed off when the Europeans arrived. I have also been to lectures where the speakers have talked about there being few primary old growth forests in the world and, from what I remember though cannot cite, America was mostly secondary growth forests. Though, I totally agree that there is a change in forest quality.

  3. Dave says:

    A frequent topic on this blog is the subject of growth.
    In today’s Daily Reckoning ( Bill Bonner writes a story titled, “When Economic Growth is a Thing of the Past.” I enjoyed it but made me think of previous stories that Gail has done where she addressed it from different points of view.

  4. seo software says:

    ‘Eurozone ministers under pressure as debt crisis dominates IMF summit’ – what absolute nonsense. All they’re doing is extending and pretending and hoping against hope that something will come up in the meantime. They don’t have a clue!

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