Let's keep feeding the fat man...

At the moment the world economy is like a fat man who keeps being fed. Governments worldwide seem to have one thing at the heart of their economics; the target of economic growth. In another introductory post I will outline some key issues which I'll go further into at a later time.

If we work on the assumption that: 1. resources are finite and 2. world population will stop growing at around 10 billion people (when the birth rate plateaus at 2 children per woman); then it seems hard to understand why every economic action which governments take is to facilitate growth.

The first rule of economics is that human's have infinite wants and needs and that the world has finite resources. The assumption of endless growth therefore relies on an infinite supply of energy. We could give the fat man some green renewable energy to calm his rumbling stomach but that stuff costs money. Large energy corporations don't want to properly invest in it... but what's a couple hundred million when they make billions in profit? The governments know this as well but why would they, in a time of austerity want to lose a lucrative income stream in the form of fuel duty.
It's not as if the oil companies are completely blind to this reality either.

In its energy scenario, Shell outlines two outcomes: Scramble and Blueprints.

Scramble is essentially, as the name suggests a 'scramble' for energy:

• The focus here by legislators and decision makers is to make their energy supply in the short term secure. Bilateral agreements see the rise of local development incentives. 
• Politicians give into the electoral imperative. They use supply side policy because stunting energy demand and therefore indirectly limiting economic growth is simply too unpopular.
• Lack of cooperation means that governments aren't united. This leads to a number of local initiatives which aren't effective. 
• They don't want to damage their economic growth...
• The bilateral nature of these deals means that there is competition between governments to get good deals with energy companies
• As a result the resource holders become the rule makers

• Developing nations scramble for energy to try and 'climb the economic ladder'
• On the other hand rich countries don't manage their energy plans in an effort to sustain their lifestyles
• However, economic development globally doesn't change much because of the switch from oil to coal...kind of like switching to KFC when McDonald's closes down

• All the while there is the same old rhetoric being put out by those in power saying that they need to combat climate change. 
• The reality is that they wait until supply of these fuels is low until they start to develop policy which addresses demand. 
• Nothing really happens in terms of environmental regulation until 'major climate events' take place. 
• This causes volatility in the energy market and a decrease in economic growth (surprise surprise).

In short, governments and economies favour growth over initiatives that actually solve problems.

Blueprint is the opposite is essentially where governments cooperate and form legislation together to combat this insatiable appetite for energy.

Shell have said that of the two, Scramble is the likelier scenario. We must stop offsetting the problem so that we don't go down the route of Scramble. It shows the need for a change in mentality of the law makers to stop with the short sighted aim of economic growth at all costs.

To find out more info about Blueprints and Scramble watch the video:

Or read them for yourself:
Shell Energy Scenario