3E Intelligence

There is a new general consensus that the current economic collapse can only be solved by massive injections of public money into the economy. Policymakers have rediscovered Keynes and calls for a “New Deal” can be heard from Washington to Beijing. But neither blunt Keynesian stimuli nor big infrastructure programmes let alone dramatic sector bailouts will solve this crisis if there is not recognition of the fundamental links between the “economic crisis of 2009″ and the new energy and resource scarcity of the post-oil era.

One of the best analyses of this predicament has just been published by the Post Carbon Institute of Richard Heinberg. The 24-pages plan for the Obama administration (“The Real New Deal. Energy Scarcity and the Path to Energy, Economic, and Environmental Recovery”) outlines the priorities of a future energy policy confronted with climate change and the accelerating energy descent.

The document’s main starting point is that the “financial crisis must be addressed by pursuing an energy transition“. But this transition, says the study, “must not be limited to building wind turbines and solar panels. It must include the thorough redesign of our economic and societal infrastructure, which today is utterly dependent on cheap fossil fuels. It must address not only our transportation system and electricity grid, but also our food system and building stock.”

The “Real New Deal” offers five components of the solution:

• a “massive and immediate shift to renewable energy”
• electrification of the transportation system
• rebuilding the electricity grid
• de-carbonisation and re-localisation of food production
• retrofitting the building stock for energy efficiency.