Not only will global economic depression and rising unemployment plague 2009, but intensifying geo-political tensions will lead to new trade protectionism and (very likely) new wars (Middle East, Pakistan-India, US-Iran?). Collapse will be on everyone’s lips as, at the same time, the long-term threats of resource scarcity and global warming intensify. Happy New Year!
It will be difficult to do as well as with my predictions for the previous year (“2008: Annus Horibilis?”) but here are my gloomy forecasts for 2009. (BTW: I got most of my inspiration for this post from James Howard Kunstler’s excellent “Forecast for 2009“)
- “It’s the economy AND the ecology, stupid“:
- The economic storm will hit even harder than it did last year and the specter of unemployment will raise memories of the seventies. More money will be pumped into the economy but this will only postpone the necessary start of the transition to a more sustainable society. The new Keynesian revival risks to be no more than an effort to “rescue the Status Quo” (James Howard Kunstler) and will lead to new inflation pressures by end of 2009. What is really needed is not even a “Green New Deal” but a complete re-think and re-engineering of our current economic goals and instruments. A good starting point for EU policy makers would be to read Herman Daly’s “Big Idea: Steady-State Economy” in the AdBusters online journal.
- “Maybe we can or can’t we?”
- Climate change will be the biggest game in diplomat town but very little will be gained at the end of the ride. Copenhagen will unfortunately find a weak compromise which will give political “leaders” an excuse for continuing business as usual. Like in 2008, we will get more insight into the energy descent but our societies will keep closing their eyes. That said, defence and intelligence circles will start sending out more worrying reports, but can we handle the truth? The media will start publishing more climate-sceptic stories again.
- Oil prices will remain unpredictably volatile. Contrary to what some critics are saying this is exactly what peak oil analysts have predicted. Nevertheless I think there is a high probability of a price range between 40 and 60 dollars for the first half of the year unless the Middle East blows up or new terrorist attacks hit. In that case, oil prices will rise to 150 dollars again. More important than the oil price is the real demand-supply situation (the oil price volatility is one of the best examples that the market is NOT the best instrument to allocate resources). The current demand destruction (as a result of the economic downturn) is already leading to supply destruction as investments in new developments are no longer profitable. In the long run, this will only speed up our future energy descent.
- “The World is NOT flat”
- The economic downturn will lead to growing protectionism (read “Welcome to hell of protectionism in 2009“). Here I agree again with Kunstler when he writes: “The over-arching geopolitical theme of 2009 will be the end of robust globalism“.
- The economic crisis will intensify nationalistic reflexes and send the European project in a downward spin. The European Parliament elections in June will demonstrate (once more) the utter disconnect between EU elites and the citizens. Mr Barroso will stay on as Commission President but the position of a vice-president for communication will be scrapped. Despite all climate change rhetoric, the neo-liberal “competitiveness first” wind will prevail in the new Commission’s priority plans
- The Irish will say “NO” a second time in the new referendum on the Constitution. As usual the crisis will not be seen as an opportunity to reboot the Union. Ireland might have to vote a third time in 2010 :)
- The Czech EU Presidency will stumble over its own contradictions and the Swedish one (which will be more worried about sustainability issues) comes to early in the new cycle to have a real influence on the EU’s agenda for the next five years.
PS: another gloomy forecast for the financial world in 2009 from the peak oil community was published today on the Oil Drum blog: “Financial Forecast for 2009, Considering Resource Limitations“.