The punch-bowl is half-empty (or half-full) and it's only eight o'clock. What's the fairest way to divide the remaining booze to eke it out until, say, midnight?
The naïve answer might be that everyone could have an equal share. The problem is this is not going to please heavy drinkers like Tex, who don't want to slow down now they've gotten jolly. The more abstemious party-goers were presumably satisfied up to now, so why should they want to change their habits now?
Well, there are two problems. First, a couple of hefty late-comers have just arrived and they look willing to drink Tex under the table. Tex thinks they look like fun-loving guys and can drink as much as they like, so long as they don't infringe on Tex's portion. No problem, except for the smaller guys and gals who get squeezed out by the big men---and that's not Tex's problem.
The second problem is that the punch will be exhausted long before the end of the party unless everyone slows down. Tex insists that there is probably more liquor hidden about the place for them to find if only they search hard enough, and he as no interest in stopping enjoying himself until this is proven false. It doesn't help that he has a history of bullying and access to the world's largest nuclear arsenal.
Enough with the Feeble Allegory
The issue at hand is the reliance of the modern economy on oil and gas (both for energy and for fertilizers used in food production, plastics, and other chemical), the projected sharp increase as China and India industrialize, and the decline in discovery of new reserves and production of oil. There is a Peak Oil theory to the effect that around about the present decade we will have sucked about half of the oil out of the ground, and oil will in the medium-to-long term become rarer and more expensive as it has to be extracted from less-economic wells or more politically unstable countries.
Political stability is something that can in theory be tackled through spontaneous increases in human enlightenment, but having to resort to extracting oil from tar sands or low-yield fields is more expensive in energy terms as well as money terms. The ratio of energy extracted to energy expended extracting it has fallen from 50:1 to 5:1 over the twentieth century. If it takes more than a barrel of oil to prospect for, extract, and refine a barrel of oil, then no amount of money, no increase in investment, and no amount of 'confidence' will be able to make oil cost-effective.
How do we share out the remaining half of the oil supply? Do we allow the USA to continue to burn 25% of it just because they are richer than we are? If we rely on $$$ to control supply and demand, this relies on economists and city traders understanding the realities of the science of energy extraction. Also, relying on tax rates and subsidies to 'encourage' more efficient use of a resource gives priority to rich people's desires over poor people's real needs.
One science-fictional approach I can imagine is oil rationing, where a share of carbon credits is assigned to every person: filling your tank at the filling station might cost £145 plus 40 carbon credits. Obviously this relies on some smart-card solution. The system would be set up so that total consumption is fixed, or perhaps even slowly reduced so as to give city bankers a chance to jump in to alternative technologies (assuming they exist).
If credits are non-transferable then they squeeze rich car drivers exactly as much as poor ones. Ballooning and yachting might become popular holiday activities with people whose carbon debt does not permit jet travel. Or it might be that cycling to work is worth it to be able to fly to Ibiza once in a while. Upgrading computers every couple of years would also begin to look foolish compared with the alternative of writing better software.
Not sure how important it is to avoid or encourage trading in carbon credits. Passengers should be allowed to buy petrol for their host's car (the criterion being that they are there when the tank is filled), because I want to support circles of friends sharing a car rather than owning one each. Whether a full-scale market in carbon-credit futures is desirable I don't know: I worry that it would provide too easy a way for rich people to circumvent the system. On the other hand, if every person on earth had equal rights to carbon (same number of credits added to their account each month), then dirt farmers in what are now poor countries could make a packet selling their credits to Americans who can't afford to live within walking distance of a food store.
I say science-fictional because it would never be contemplated in the real world (leaving aside the technical challenge and privacy concerns of tracking every single transaction involving non-renewables). After decades of promoting unfettered trade as the solution to all problems, it would be unthinkable to force consumers to face up to the real cost of food miles (charging consumers carbon credits for imported goods in proportion to the fuel used in transportation would make air-freighted salad garnishes unfeasible), plastic packaging (made from oil) and fertilizers (also synthesized from fossil fuels). As for constraints on driving cars back and forth up and down the country, the fuss over the London congenstion charge and high petrol prices would be as nothing compared to the opposition to any rationing system tight enough to reduce overall consuption of oil. And of course, such a system would be useless without international consensus, which could never arrive because the USA would be hardest hit.
Apparently the US government is subsidising ethanol produced from the crops the Americans love to grow. This is fine, so long as the oil consumed in making the soy beans or corn and then harvesting it for energy adds up to more energy than the oil itself would have provided.
Since I started writing this essay, Slashdot has discussed the most recent study by David Pimentel of Cornell and Tad Patzek of UC-Berkeley (Natural Resources Research, Vol. 14:1, 65–76) claiming this is not the case (an article in the Nebraska State Paper has more links). A goverment study says ethanol has an output:input ratio of 1·34 in terms of energy if you use the most modern methods available. Basically they have a table of the assumptions made in various studies, and it all comes down to how much you estimate fertilizer production costs, etc., and pro-ethanol-subsidy pundits claim that advances in the last five years make Pimentel and Patzek's figures obsolete. Who's right?
Ethanol and biodiesel will be more convincing long-term when they are grown organically without fertilizers synthesized from petroleum, and converted with ethanol-powered factories...
The Eating Oil essay makes for frightening reading, but I don't know enough about the industry to judge its accuracy. I also wonder to what extent organic farming addresses the issues of overuse of synthetic fertilizers and pesticides, overuse of water, and the degregation of topsoil it describes: maybe Europe is in better shape than the USA.
If fuel prices do spiral out of control, what are the solutions? Will organic foods suddenly become the cheap option? Will we have to start turning oil-seed rape fields in to organic biodiesel factories? The Museletter article discusses how oil-starved Cuba is leading the way in relocalization of agriculture, growing food in city parks and keeping chickens on your roof (think the Good Life, but with cigars). Will we be knocking our back gardens together to grow community crops? Taking time off work to cycle to Tescos on behalf of house-bound former car-owners? The mind boggles.
(Dated 4 July because that's when I started writing; even getting this note in to its present incomplete form has taken me long enough and I have other duties.)