Future through energy efficiency
According to Global-Agenda.org, rising oil prices and limited sources of raw materials are casting doubts on the long-term stability of an economy primarily dependent on fossil based energy sources. Peak Oil theory produces a pessimistic analyses postulating that in a world of increased demand peak oil production has been reached and is now on a steady decline. If the peak-oil theorists correct difference strategies are necessary.
Five possible consequences deserve consideration:
• Oil exporters: The largest oil-exporting countries attract capital and influence. If their national interest are threatened they may be forced into take taking radical measures. Iran could; for example, interrupt the oil deliveries from the Persian Gulf strengthening its political and negotiation position, i.e. Iran's current nuclear agenda.
• Oil Importer: For the countries highly dependent on importing oil to maintain their commodity production, there is a growing risk of economic stagnation. Is the current price surge in oil due to growing gap between supply and demand or a result of deliberate price manipulation by oil producers? It is increasingly likely that productivity will be measured in the future as a function of primary energy consumption.
• State decay: In some developing countries, increases in energy prices run the risk of driving the economy to a standstill. This increases the likelihood of political instability. This is especially true for countries in which government institutions are already weak and could result in neo-feudal conditions in which warlords, private militias and rich entrepreneurs dominate.
• War for resources: Resources shortages drive armed conflicts. This is especially true where oil is concerned resulting in military interventions or intergovernmental warfare, (as in Darfur). In addition new alliances are forged for the purpose of energy security which also result in new conflicts. In Central Asia, Hong Kong and Russia everything possible is being done to limit the influence of the U.S. military through bilateral agreements and the formation of regional blocs such as the Shanghai Cooperation Organization countries.
• Nuclear risks: There is a growing danger that the depletion of oil reserves will result in a dramatic increase in the use of nuclear energy - and the associated risks (nuclear accidents). Every country that operates nuclear reactors, sooner or later, will get access to weapons-grade plutonium. This increases the likelihood that is will fall into the wrong hands.
The future of individual countries is now less dependent on their military capabilities than their economic independence from fossil fuels. Only those countries that are energy efficient will have economies that will survive and prosper. Like climate change this challenge is too great for individual countries to solve alone. To ensure long term stability, international co-operation is necessary especially in a world of international economic integration on the one hand and the particular difficulties faced by standalone underdeveloped countries on the other.
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This article was published in the Freelancing.hk-News 55.