The crisis: There is something wrong! by Gert van Velzen

Gert van Velzen, Dordrecht

Gert van Velzen, Dordrecht

The current system of parliamentary democracy is showing deep cracks. These cracks have become visible through the global financial crisis in 2008.

It is now possible for governments to behave totally irresponsible and thereby sending the globe into economic crisis.  But the crisis also has another important aspect, the violation of confidence.  This first occurred when banks could not trust each other anymore, so all lending stopped. This caused total paralysis of the financial system, which as a result has caused substantial damage to the economy.

Professionals in the financial sector have been warning since 2006 of the high probability of the event of a financial crisis to take place, caused by the growing real estate bubble, e.g. George Soros, an established fund manager.  However, nobody listened to him, since nobody believed his underlying theory.  If the US government would indeed have listened, the financial crisis could have been avoided altogether by timely improving regulations and oversight.

This now poses the question of confidence in parliamentary politics: can we trust the government to act in the best interest of the country. How can we prove that a politician “doesn’t know” about something or “couldn’t do anything” about it. In a parliamentary or representative democracy the parliament has a role to control the government, but how can that be done when its members do not have sufficient knowledge of– or information on the matters, so they wouldn’t even notice if there was something wrong?

What is more to the point, if economic relations are global, can we allow a single country to destabilize the global economy?

Extrapolating this event to an even more disastrous event that looms, what will happen if the climate crisis is going to start damaging the global economy.  Because nobody seems to be willing to take responsibility for this, in the face of an already struggling economy. Right now everyone wants to save the economy first and then ask questions.  Of course the economy can only be saved quickly by “working by the same book” and so causing yet more damage to the climate. The climate crisis is also a crisis that can still be avoided, but only if we change our ways now.

At the heart of all this is the concept of risk. How much risk are we willing to take that things will go badly wrong. It is a metric that can be calculated and fully known.  It is not a matter of luck or blessing.

And in case we can not quantify the risk, why take it anyway?

More importantly, if governments will not quantify or even dismiss the risk at hand, we will have to do this as citizens. Because damage to the world economy will certainly not be solved by borrowing money from our own future, that is a serious misconception in the global context. Individual countries may be able to do this, but not the global economic system as a whole.  At the global scale this would always cause someone to suffer somewhere.

Citizens and responsibility

Just like the economy, the climate is also a global affair.  Nobody can solve the problem of climate change on their own.  But as responsible citizens we can all do our part and reconsider our way of life. The earth used to be a beautiful place and now there is only about 60% of the forests left, worsening the problem even more.  The oceans cannot take much more CO2 without damaging the life inside; we are slowly killing it. Our planet is already in deep trouble and if we do nothing, the situation will definitely go critical, to the tipping point where we can no longer stop the deterioration.

We could begin by dropping the notion that nature’s services to humans are free. We have a mutual relationship with our planet and our task is to preserve it and take good care of it and not waste more than we need.

Since 2006 and the report of the UN, we know that the climate change is caused by humans. It is caused by the burning of carbon fuels and releasing CO2 into the air.  We have to stop doing this and we can, without causing any more damage.  But it will be a big and complex and difficult operation.

The “bubble” that we are dealing with here, is the energy bubble.  It started inflating from the industrial revolution on about 1900. We had been burning wood before that.  Burning stuff to power our economy, any stuff.  Wood was too difficult to collect and there wouldn’t be enough of it anyway to power large factories. So we resorted to digging up fossil fuels, cole, oil, natural gas.  We have been doing this trick for a hundred years and what a progress mankind has made.  And now we will have to find other ways to power our economy.

In the process we may have to look closer at our economy itself in order to accommodate this change, because many economic elements like the scarcity and distribution of fossil fuels would have to be remodeled or removed from the energy equations altogether.  Regulation on balance restoration should require that the damage caused by burning fossil fuels is to be fully recuperated from the price of it.  This inevitably means that all fossil fuel prices have to be adjusted upward and that the resulting tax revenue is directly applied to the reduction of the need of it.  In the global context this means that compensation schemes may be necessary for countries that would suffer under higher prices.

If we look back to the beginning of the industrial revolution, it occurs that large factories were built in places where there were either natural resources of kinetic energy, like water flows or wind or where there were waterways to transport the fossil fuels.  This changed were we started using roads and rails to transport the fossil fuels.  Then we could build even bigger factories in irrespective places. In fact this started the economy of large scale and industrial concentration.  Little later we found ways to transport electricity anywhere, to push oil and natural gas through pipelines between countries and we were home free!

We may have to look back to this beginning again for energy.  Instead of burning anything, we have to find every ecologically responsible way to capture local sources of energy.  Once we have the energy, we’ll transport it anywhere. Generation of electric energy becomes decentralized, contrary to the current scheme of large scale central facilities. However, it not feasible to put up power lines everywhere, so the distribution of the energy will also have to change.  In some places it will be preferable and possible to generate the energy locally by means of solar or wind or geothermal power, but in addition, a new transport scheme will be required.  This may possibly be done by way of water electrolysis and transportation of the hydrogen.  The hydrogen can be fed to a fuel cell on site to generate electricity.  This scheme is also viable for use in cars, ships and other transport.

Power lines lose some of the power, just like electrolysis does. Solar panels exhaust in time. Therefore the most important aspect of the transition will still be energy conservation.  More work needs to be done making buildings and vehicles more energy efficient.  Trains will always be more effective transport than cars that are 75% empty. New buildings could even be designed to generate electricity from solar power.  Mag-lev trains without moving parts could be more efficient.  But in all these areas more research is needed that has been funded for by governments so far.  The climate clock is ticking.

Politicians may not be able to tell you that this is where we are heading, perhaps because they have their own agenda, or their agendas start in 2020.  Don’t wait for the politicians.

Gert van Velzen, Dordrecht, 14 dec 2008

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