The Aviva “Building Future Communities 2025” report is a well-structured analysis of how the UK must prepare for the escalating impacts of climate change—especially flooding, subsidence, and heat—by mid-century. Although written from a corporate and national policy perspective, it contains significant implications for localism that go well beyond its surface message.
Aviva is a major UK-based insurance and financial services company. It’s one of the largest insurers in Britain.
Aviva warns that by 2050:
Flood-risk homes in England could rise by 25–27%, reaching about 8 million properties.
1.4 million more properties could face subsidence risk.
Extreme heat will endanger health, infrastructure, and habitability.
The report proposes six “calls for change”:
Tougher planning rules to stop building in flood zones.
Compulsory low-cost flood-resilience measures in all new homes.
Mandatory Sustainable Urban Drainage Systems (SuDS).
Government-backed Natural Flood Management (NFM) and private-sector investment.
A Resilient Buildings Taskforce to unite housing, finance, and planning policy.
More innovation and regulation to protect homes from heat.
Case studies (York, Cardiff Bay, Edinburgh Castle, etc.) show practical responses already underway.
Implications for localism
Although the report’s framing is largely top-down, its findings implicitly confirm the necessity of a bottom-up, community-led transition—the essence of localism.
1. The failure of centralised systems
The report highlights how national flood defences, urban drainage, and central planning cannot cope with climate-driven pressures.
Surface water flooding, now the biggest rising risk, is inherently local and unpredictable.
Many defences are owned privately or by local authorities, not by the Environment Agency.
Maintenance and funding backlogs show that central government control is overstretched.
→ Localism implication: resilience must increasingly be managed at the community level—through neighbourhood flood groups, local adaptation plans, and locally funded or self-organised works.
2. Community resilience and neighbour networks
Aviva praises the Pontcanna (Cardiff) initiative, where residents created a local flood plan, registered vulnerable people, and rehearsed emergency procedures. This is an explicit demonstration of social capital in action—the very network of informal relationships on which localism depends.
→ Localism implication: the most successful adaptation is social, not technical. It arises from relationships of trust, cooperation, and shared responsibility—core principles of an informal economy.
3. Nature-based solutions as local land stewardship
Natural Flood Management (tree planting, leaky dams, wetland restoration) relies on small-scale, distributed action across catchments. Such systems cannot be delivered solely by national agencies; they require local landholders, farmers, and communities to collaborate.
→ Localism implication: environmental resilience becomes a shared landscape duty, giving rural communities a new civic and economic role as custodians of their ecosystems.
4. Adaptation of the built environment
The report calls for widespread retrofit of flood and heat-resilience features. This aligns with the idea of re-localised construction trades—craftsmen, small builders, and voluntary repair groups—replacing large corporate developers. Local adaptation will depend on distributed skills and small-scale enterprise, not remote regulation.
5. From formal control to informal initiative
Although Aviva recommends new national regulations, the underlying data point to a future where:
Insurance cover becomes increasingly conditional or unaffordable.
National defence budgets cannot protect all communities.
Individuals and local groups must act pre-emptively.
→ Localism implication: a gradual withdrawal of the formal system (insurance, national infrastructure, planning control) will push resilience functions into informal systems of mutual aid, self-protection, and local investment—hallmarks of a shrinking, post-growth economy.
6. Restoring natural and social capital
Aviva’s support for nature-based flood management and local resilience groups unintentionally endorses local economic self-reliance—where communities invest time and effort in collective maintenance rather than financial growth. This is consistent with your argument that as discretionary markets decline, social and ecological repair will become the new economy.
Critical reflection
While the report’s tone remains corporate and technocratic, it reveals an unavoidable truth: the formal, centralised model of climate governance cannot secure the nation’s resilience. Communities must become self-organising, ecologically literate, and mutually supportive. In short, climate adaptation is the practical route by which localism will emerge from necessity.
concluding observation
The “Building Future Communities 2025” report, though framed as a call for national coordination, actually illustrates the limits of that coordination. In practice, resilience will depend on thousands of local initiatives—socially embedded, place-based, and self-managed. Climate change is not only a threat but a catalyst for the transformation from a formal industrial society to an informal, localist one.
This article forms part of an ongoing series exploring the transition from the industrial economy to a new age of localism. It examines the decline of 1960s and 70s concrete structures as symbols of the industrial era, drawing on insights from the recent Consciousness of Sheep article ‘Thermodynamic drag’ to illustrate the wider shift from mass mobility to local living.
In a perceptive recent article titled “Thermodynamic drag” (Consciousness of Sheep, 7 October 2025), the author draws attention to the accelerating failures of mid-20th-century concrete infrastructure and the economic paradox of debt repayment built on decaying physical capital. (Read it here: https://consciousnessofsheep.co.uk/2025/10/07/thermodynamic-drag/)
The article highlights the closure of key bridges and roads across the UK — from the Severn Bridge (opened 1966) to local crossings now deemed unsafe — as examples of how “permanent” assets from the 1960s and 70s are approaching the limits of their design lives. These structures, built for an industrial society based on expansion and mass mobility, were never expected to last more than 40 to 60 years without major renewal. That time has arrived.
Concrete as the Architecture of the Industrial Age
The great concrete programmes of the post-war decades were more than engineering projects. They were the physical expression of the industrial age — an age built on fossil energy, cheap transport, and the belief that growth was both inevitable and desirable.
Multi-storey car parks, motorway flyovers, office towers, and elevated walkways embodied a confidence in permanent mobility. The concrete bridge or civic centre was a declaration that humanity had mastered materials and space; that cities would continue to expand, and that cars, lorries, and buses would circulate forever.
Those assumptions are now failing. The industrial economy that justified this infrastructure is itself contracting. As the Thermodynamic drag article notes, maintenance has become prohibitively expensive and technically complex, and the fiscal capacity of the state is shrinking. What were once symbols of progress have become liabilities — both physically and financially.
The End of the 40-Year Illusion
Most reinforced concrete structures from that era were designed with a working life of 40 to 60 years. Engineers knew corrosion, carbonation, and freeze–thaw cycles would eventually take their toll, but few imagined that the world would change so completely in the same timeframe.
Now, the debts incurred to build them are long paid — but the structures themselves are deteriorating, often invisibly, until failure becomes imminent. Governments face a cruel choice: spend heavily to keep them standing, or accept decay and the risk of collapse.
Yet the deeper question may be whether they need to be replaced at all.
A New Context: From Industrial Expansion to Local Living
The age of localism that is now emerging will depend less on high-speed travel and more on proximity, resilience, and self-sufficiency. As energy costs rise and discretionary travel declines, people will live, work, and trade closer to home. The physical infrastructure of this new society will look very different from that of the industrial age.
Many of the concrete structures now crumbling — motorway interchanges, flyovers, urban ring roads, car parks, and concrete office blocks — were designed to serve a pattern of life that may no longer continue. In a localised economy, the movement of goods and people will be shorter, slower, and more purposeful. Large-scale transport architecture may simply be redundant.
Thus, the decay of these structures is not only an engineering failure but also a sign of cultural transition: the old framework of mass mobility giving way to the emerging pattern of local life.
The Strategic Choices: Sustain, Abandon, or Repurpose
Decision-makers now face three broad options:
1. Extend their life through expensive repairs and reinforcement — a path that sustains the illusion of permanence but commits scarce resources to an outdated model.
2. Abandon or decommission structures whose functions are no longer essential, allowing decay to proceed safely or replacing them with green corridors, cycle routes, or community uses.
3. Repurpose locally — adapting former car parks, viaducts, or civic complexes for smaller-scale, community-based activities consistent with a lower-energy, localised future.
The third path aligns most closely with localism: rather than fighting decay, it accepts the passing of an age and seeks to reuse what remains.
Rethinking Permanence
The Thermodynamic drag article argues that debt-based systems presume permanence — yet all material structures are subject to entropy. This insight is crucial for the years ahead. When the economy slows and energy availability declines, the concept of “asset life” must be reinterpreted. Instead of investing to maintain obsolete structures, we may need to focus on new forms of permanence — living systems, productive landscapes, and small-scale infrastructures that can be sustained locally.
The collapse of post-war concrete is therefore not only a warning but an opportunity: to move beyond the industrial ideal of endless growth and towards a more grounded, durable relationship between people, place, and material.
Conclusion: Letting the Old Age Crumble
The decaying concrete of the 1960s and ’70s is a fitting metaphor for the end of the industrial era. What was once the embodiment of modernity is now the visible residue of an age of excess energy and centralised ambition.
We can either struggle to preserve it — pouring more money, materials, and emissions into failing structures — or accept its decline as part of a natural transition.
In the age of localism, we will need fewer vast bridges and car parks, and more modest, human-scaled infrastructure that supports local production and limited travel.
The article “Thermodynamic drag” captures this turning point powerfully. Its warning about the collapse of 1960s concrete is not merely technical — it is symbolic. The old industrial foundations are giving way.
What rises next will depend on our willingness to live within imits and rebuild life locally.
Every economy depends on energy. In the fossil age, that energy came from coal, oil, and gas — fuels so powerful and portable that they shaped the whole structure of industrial life. But as those fuels fade, we will once again draw heat and power from wood. The question is how to do it cleanly, fairly, and in a way that strengthens the land rather than exhausting it.
The Return of Charcoal
Charcoal has always been the craftsman’s fuel — dense, light, and steady. It burns hotter than wood, and with far less smoke. In a wood economy it becomes both energy and culture. Charcoal burners return to the coppice, tending slow fires under turf, producing the black fuel that feeds forges, kilns, and cookhouses. Their work is seasonal and skilled, and the village depends on it.
Biochar: Carbon That Stays Put
Out of charcoal-making comes a second gift: biochar. When wood is burned in a kiln with little oxygen, part of its carbon becomes stable, refusing to return to the air. That char can then be:
Used as fuel in stoves and workshops.
Buried in soil, where it improves fertility and locks carbon away for centuries.
Mixed into building materials and roads, turning the built environment itself into a carbon store.
This idea, developed by Albert Bates and Kathleen Draper in Burn: Using Fire to Cool the Earth, turns an old craft into modern climate care. Instead of spending carbon, we begin to bank it.
The Carbon Cascade
Bates and Draper describe a “carbon cascade” — a chain of uses where carbon is stabilised a little more at each step.
A tree draws carbon from the air.
Some of its wood is burned cleanly for heat.
Some becomes biochar and is locked into soil or walls.
A portion stays in standing timber or coppice, growing again.
Each step keeps more carbon in useful form and less in the atmosphere.
Smoke and Health
The old image of smoky chimneys belongs to the past. In a managed system, wood fuel is well-seasoned, kilns are airtight, and masonry stoves replace open fires. Communal bakehouses and bathhouses concentrate combustion in efficient hearths, run by trained stokers. Biochar kilns produce far less smoke than open burning, making clean air a community achievement.
The Energy Ledger
Energy in a wood economy is measured as carefully as money.
One coin might equal a sack of wood worth about 100 kilowatt-hours of heat.
A household might use 60–80 coins a year for heating and cooking.
Coppice yield decides how many coins can be minted.
This keeps heat within the limits of the forest. Waste becomes expensive; thrift becomes virtue.
Heat, Light, and Motion
Beyond household fires, energy is shared:
Masonry heaters store warmth for community halls.
Waterwheels and hand-cranked flywheels power workshops.
Biochar kilns provide heat for drying food or timber.
The goal is not endless power, but enough — reliable, renewable, and rooted in the land.
Using Fire to Cool the Earth
The paradox is real: by burning wood in the right way, we can cool the planet. Each kilo of carbon locked in biochar is carbon taken from the sky. Each cottage that burns seasoned wood instead of coal avoids adding new carbon. The coppice that regrows next year closes the loop.
A wood economy does not fear fire. It learns to use it with precision and respect — to warm homes, to forge tools, to enrich the soil, and to steady the climate.
In the first part of this series we asked how we might escape the Iron Age, this part asks what might replace it.
Steel and timber offer two very different pathways into the future. One depends on vast global systems; the other draws strength from locality and renewal.
1. The making of materials
Steel begins its life in the ground. Iron ore is mined, transported, smelted in blast furnaces, mixed with coke made from coal, and then rolled, forged, and shipped across continents. Each stage demands heavy machinery, high temperatures, and long supply chains. A tonne of new steel typically produces around 1.8 tonnes of CO₂ before it reaches a construction site.
Note: One tonne = about one metric ton
Timber starts with sunlight, rain, and soil. Its energy source is the sun itself. The conversion from raw tree to beam or panel requires cutting, drying, and shaping, but the energy inputs are a fraction of those of steel. A cubic metre of sawn timber can store roughly one tonne of CO₂ absorbed during growth. Properly managed, forests can provide a renewable feedstock rather than a mined one.
2. Durability and repair
Steel’s great virtue is strength and predictability. It resists bending, carries high loads, and lasts for decades. Yet it rusts, fatigues, and fails if maintenance lapses. Protective coatings and paint systems require periodic renewal, often using petrochemical products. Once corrosion takes hold, repair can be costly or impossible.
Timber decays in damp conditions but can be protected naturally—through design, ventilation, and maintenance rather than chemicals. Traditional carpentry allowed parts to be replaced, patched, or scarfed in. A timber bridge or hall can last centuries, provided its joints stay dry. In a shrinking economy where labour is plentiful but energy is scarce, repairable materials gain new value.
3. Embodied energy and recycling
Steel can be recycled almost indefinitely, but recycling itself requires heat—usually from electricity or gas. The world already recycles about 30–40% of its steel, but as De Decker notes, there isn’t enough scrap to meet ongoing demand. Recycling is useful but cannot expand faster than old structures wear out.
Timber recycling is simpler. Offcuts can be re-milled, reused, or burned for heat. In an informal economy, where waste and fuel merge, every scrap can serve a second purpose. And because timber’s embodied energy is low, even one reuse cycle dramatically improves its lifetime carbon profile.
4. Scale and land
Timber has one serious limitation: it grows slowly and needs land. Converting the entire industrial system to wood would be impossible. But that is not the point. A shrinking economy does not require steel and timber on equal industrial scale. It requires balance—small wooden structures locally made, with the remaining steel reserved for essential heavy tasks: railways, tools, and key machinery.
In this way, contraction becomes an ally. As material demand falls, the renewable capacity of woodlands can begin to match human need. Forestry becomes a cornerstone of local resilience rather than a global commodity.
5. Localism as a lifecycle
In industrial thinking, a material’s lifecycle ends at the scrap yard.
In a local economy, the cycle loops within walking distance: trees become beams, beams become buildings, offcuts heat the workshop, and ash returns to the soil. Each step feeds the next.
Steel belongs to the age of extraction. Timber belongs to the age of regeneration.
6. Living well within limits
Steel’s story is one of power: how humans mastered fire and ore. Timber’s story is one of relationship: how we work with what grows around us.
As the economy contracts, the balance shifts from extraction to stewardship. The materials we choose will shape not only our buildings, but our way of life.
A timber economy will not replace steel in every task. But it can replace the mindset that built the Iron Age in the first place.
Kris De Decker’s article How to Escape from the Iron Age? casts a stark light on one of modern society’s hidden constraints: steel. Every bridge, vehicle, wind turbine, and machine depends on it. Steel is the backbone of the industrial economy – and one of the most carbon-intensive materials we produce.
De Decker highlights a painful contradiction. To build the renewable energy systems that might decarbonise industry, we need vast amounts of steel. Yet producing that steel today depends on fossil fuels. Recycling cannot close the loop: there isn’t enough scrap, and different grades don’t easily match.
His conclusion is firm. Use lighter vehicles. Build smaller, simpler structures. Prevent corrosion. Make more use of recycled steel. Scale our systems down to fit what can be sustained.
The industrial mindset
This is sensible, but it still assumes an industrial mindset. De Decker writes as though the economy will keep on growing – just with fewer tonnes of steel. The vision is essentially industrial society, only slimmer.
But what if that assumption is wrong? What if the age of growth is over?
Steel in a shrinking economy
A shrinking economy changes the terms of the question. Instead of asking how to sustain expansion, we ask how to live well with contraction. That means fewer mega-projects, less long-distance trade, and less reliance on global steel plants tied to fossil fuels.
It is in this context that wood and other biological materials come to the fore.
The case for wood
Wood is not a perfect substitute. It has limitations in terms of scale, durability, and land use. However, those limits appear differently in a downsizing world. We will not need endless skyscrapers, superhighways, or sprawling steel-framed warehouses. What we will need are homes, workshops, halls, small bridges, and local infrastructure.
Here, wood, straw, hemp, earth, and carpentry excel. Timber structures, when well-maintained, can last for centuries. Engineered wood can carry heavy loads and span wide spaces. Local forests and sawmills can provide building materials without relying on global supply chains or fossil-fuel-based blast furnaces.
Local skills and trades
A shift toward a wood-based economy would also be consistent with localism. Carpenters, joiners, lime-plasterers, sawyers, and forestry workers would become essential trades again. Each community could use the resources of its surrounding land. Waste cycles would be shorter. Skills would be preserved and shared locally rather than outsourced to distant steel complexes.
Living well with less
The real lesson is not simply to ration steel within the old industrial frame. It is to accept contraction – and design a smaller, lighter, more local economy. In that future, wood and other plant-based materials are not just substitutes. They are central to living well within limits.
The industrial age was built on fossil fuels. Coal, oil and gas powered machines, lit homes, and drove global trade. But that age is passing. Fossil reserves are finite, and their use drives climate collapse.
What comes next may not be an economy of expansion, but an economy of contraction — smaller in scale, more local, and grounded in renewable resources close at hand. One such possibility would be a wood economy.
Wood has always been more than fuel. It has been money, shelter, transport, and culture. In Hardy’s book TheWoodlanders, the forest shaped everyday life. Today, as fossil fuel energy ebbs, the coppice may again become the measure of value.
This post marks the beginning of a series exploring what a wood-based local economy could look like. Each part of town and village localist life — from coins to cricket — can be seen through the lens of the coppice.
What We Will Explore
Currency and Trade
Wood coins minted from a parish copse.
Equal issue to every adult, tied to the amount of fuel in store.
Local use only, with surpluses exported for national currency.
Cottagers and Homes
Modest timber-framed cottages, built for repair not discard.
Shade trees to cool in summer, wood coins to pay for upkeep.
Energy and Biochar
Charcoal and biochar as fuel and carbon store.
Masonry stoves, communal bakehouses, and clean kilns.
The “carbon cascade” — using fire not to waste carbon, but to bank it.
Transport Without Fossil Fuels
Horse-drawn tramways linking coppice and village.
Chinese-style wheelbarrows on narrow single wheel-width paths.
Barges on rivers for national loads.
Health and Care
Reducing smoke through technology and rules.
Equal coin issue to support those who cannot work.
Community book-work for those with mental capacity but poor strength.
Work and Guilds
Charcoal burners, carpenters, coopers, bodgers.
Apprenticeships to pass on skills.
Ledgers and rotas as part of community management.
Food and Water
Woodland grazing, nuts, mushrooms, smoked and preserved foods.
Charcoal for filtering water.
Wooden pipes, troughs, and aqueducts.
Culture and Sport
Cricket on the green, hockey in the field, walking.
Festivals tied to coppice cutting, charcoal burning, and coin minting.
Songs, stories, and rituals rooted in the woodland cycle.
Living Within Limits
A wood economy is not fast or expansive. The slow growth of trees would measure it. Coins, fuel, houses, and food depend on that cycle. Yet within those limits lies resilience.
This series will sketch a future where coppice and biochar, not coal and oil, anchor community life. It will not be a return to the past, but a different way forward: slower, fairer, and more enduring.
The conclusion of this piece, in relation to the future of diesel for freight transport, is that “The future will be increasingly localized, with much less product variants and with much simple lifestyles.” Yet another reason for a future of localism.
The world economy is grappling with a gradually worsening diesel shortage. In fact we might have already passed peak diesel in 2023, already. Despite claims to the contrary the world is still fed, moved, mined and built using this extremely energy dense fuel, thus its increasingly tight availability is starting to become a limiting factor to the growth of the world economy. The question poses itself: can the electrification of transport and mining ease the pain somewhat, or is it yet another myth?
World oil and natural gas supply is about to peak, then begin its long decline in the years ahead. While this statement stirred great controversy two decades ago, today it seems to be normal news. Almost too normal — as if the world no longer needed oil. Looking at the prices alone West Texas Intermediate at $65 per barrel seems to be a bargain, especially when compared to the price of gold or other commodities. Surely, if we needed more petroleum its price would be much higher, right? Well, as usual, things are a bit more complicated than that. In fact, I argue, the collapse of oil prices foreshadow a much greater than expected fall in oil supply, but let’s not get ahead ourselves just yet.
Oil is not just another commodity. It is still the lifeblood of this civilization thanks to its immense energy density, portability, low weight and widespread availability. Despite the fact that its use is a major contributor to climate change, we still heavily depend on it for agriculture, mining, long distance transport and construction. Yet, as the image below (taken from the same Ember document we discussed last week) shows: transitioning to an electricity driven transport system takes longer than expected. To be on the optimistic side I could say we just have to wait another century. Or two.
I’m not here to spread unwarranted optimism, though. We simply don’t have time till the end of this century to make a dent on fossil fuel use in road transport — and not primarily because of climate concerns. Diesel fuel availability worldwide is already on a high plateau, even as we add more and more unconventional oil and natural gas liquids to the mix we euphemistically call ‘oil’. Before 2014 every barrel of oil added to world supply resulted in a proportionate increase in diesel fuel consumption: the conversion ratio hovered around 30% (i.e.: one third of each barrel of oil was turned into gasoil). After 2014, however, this tight correlation started to break down: diesel consumption could no longer keep up with growth in oil supply. While prior to 2014 diesel supply grew at a steady 2% year-over-year, after 2014 that annual growth rate virtually collapsed by an order of magnitude to 0.28%. What’s that all about?
Diesel fuel consumption worldwide is already at a high plateau, even as we add more and more unconventional oil and natural gas liquids to the mix. R values represent correlation between diesel consumption growth and increases in world oil supply. The closer this correlation is to 1 the better the match between the two data sets are. Data source: Energy Institute / Chart: own work
As we have seen from the ratio of electricity use in road transport, that abrupt slow-down in diesel consumption growth could not come from truck drivers switching to batteries all of a sudden. If we take a good hard look at the source of “oil” supply growth since 2014, however, we might quickly realize that not all that glitters is gold — i.e. not everything is “oil” in that ever growing mix. Production growth of conventional onshore and shallow water crude — the best inputs to make diesel fuel from — began to stall in the middle of the 2000’s already, with almost all new sources of oil coming from unconventional wells ever since 2015. These new sources of petroleum, especially tight oil (oil trapped in low-permeability rocks like shale and limestone) and natural gas liquids (hydrocarbons extracted from raw natural gas during processing, including components like ethane, propane, butanes, and pentanes), however, contain very little if any diesel compounds (1). Sure, refineries could and did make a lot of plastic and gasoline out of this new found “oil”, but very little truck fuel. You see, this is the problem with trying to “replace” conventional oil with all kinds of liquids produced by the petroleum industry: most of it is unsuitable for use in trucks, excavators, ships, locomotives, combined harvesters and the rest (2).
Note how the peak oil movement in the early 2000’s was right: conventional onshore plus shallow water crude oil did peak in 2005. Adding deepwater oil into the mix pushed out this peak by two years only. These conventional oil sources are on the decline ever since, with natural gas liquids, extra-heavy and tight oil being the sole sources of growth these days. Source: IEA
What does the future hold, then? Well, not more conventional oil, that is for sure. According to the forecasts prepared by Rystad Energy and used by the IEA, we have 2–3 years till both oil and natural gas production peaks worldwide, then begins to decline. And if you take a look at the chart below, you can see that conventional oil production will experience an especially steep decline, despite additions from investments in existing and approved projects. Unconventional oil production will continue to expand into the future, but it will be unable to offset the decline from traditional oil fields, let alone make up for the fall in diesel fuel production.
Diesel availability can thus be expected to drop precipitously in the decades ahead, foreshadowing serious problems in road transport, mining, shipping and mechanized agriculture.
Oil companies will not sit idle, and watch their market collapse, though. They will do everything to at least mitigate that catastrophe ahead. According to the IEA analysis linked above:
“After a primary recovery period, during which oil and gas is produced via natural reservoir drive mechanisms, operators can deploy a variety of measures to boost production or to slow decline. This includes infill drilling of both vertical and horizontal wells, pumping and lifting, large-scale injections such as water flooding, and enhanced recovery techniques. In practice, these activities can occur in sequence or in combination according to suitability, availability and economics of the technology, and in accordance with a company’s reservoir management practices.”
However, these techniques are not without their own risks:
“Once well density is maximised and infill drilling slows, production decline may accelerate above the rates observed before the new drilling was undertaken.”
To put it bluntly: enhanced oil recovery can buy us a little time, but at the cost of an abrupt decline in the end. Not the most reassuring news, if you ask me. Switching fuels sources will be of little help either. Encouraging home owners to change to electric or gas heating from oil, will not solve anything since both are dependent on a non-renewable resource equally prone to peak and decline just like oil (40% of US electricity is still generated by natural gas). The same goes to trucks, buses and agricultural machinery powered by CNG or LNG: since worldwide gas production is about to peak together with oil, switching between the two energy sources will not improve the situation the slightest.
Electrons to the rescue!
That leaves us with one thing to pin our “hopes” on: the rapid electrification of road transport and mining. And why not agriculture or container and bulk shipping? — one might ask. Well, weight is already a huge issue when it comes to agricultural machinery. Soil compacted by tractors can absorb less moisture and plant roots do not develop properly in them. Ocean shipping, often covering thousands of miles, is also “hard” (read: impossible) to electrify — no battery would last a month long journey across the Pacific. And while wind sails and solar panels could reduce fuel consumption by a couple of percentage points, they cannot completely eliminate it. That leaves us with using batteries in road transport, thereby saving fuel for agricultural use and shipping where heavy batteries and electrification is still not an option.
So what are the trends in heavy-duty electric vehicles? According to the EIA’s Global EV Outlook 2025 electric bus sales have already reached an invisible ceiling (around 60% of all units sold) in China, while other regions are still dominated by diesel bus sales. Demand for electric trucks, on the other hand, is still in the 1–5% range — even in China. No wonder, despite the optimistic sentiment shared by the EIA and some other organizations, long distance (500 km range) battery electric trucks are still two to three times more expensive than regular ones, and require multi-hour long stops to recharge. Using a fast charger, on the other hand, would degrade the battery much faster than regular charge, so the cost of replacing batteries much more often would quickly negate the benefits of not having to wait several hours for each recharge. And while battery swapping could be an option, building continent wide networks of standardized battery swapping stations is still a pipe dream. Consequently electric trucks seem to remain stuck in the niche of short distance milk runs, parcel deliveries, or drayage (the transport of shipping containers over a short distance to their final destination).
Battery electric trucks are ideal for cycles with combinations of lower daily mileage, lower speeds, and predictable routes, not for long distance delivery consuming the vast majority of diesel fuel worldwide.
Then what about electric vehicle trends in mining? Well, apart from some promising experiments, the market for battery electric mining equipment is virtually non-existent at the moment. Even the most optimistic analysts admit, that there are serious productivity concerns when it comes to switching to battery electric mining trucks: “Currently, electric trucks cannot match the uptime of diesel trucks, which require only about 10 minutes of refueling per day compared to the 1 to 2 hours battery charging.” And not only that. “Battery technology remains a key obstacle, with current advancements from suppliers like CATL, ABB, and Northvolt only recently meeting the high demands of haul trucks. The lack of a unified standard in battery designs and chemistries complicates the selection of the optimal solution for mining applications.” From where a 32% compound annual growth rate (unprecedented in any other business) would come from then, remains a mystery for me. And remember, if Rystad’s calculations are correct, we are looking at a nosedive in conventional oil production in the years ahead. We don’t have decades to develop and to ramp up new battery technologies.
The little time left to ramp up electrified mining and road transport is not the only limitation, though. While battery technologies could and most probably will improve in the future, generating the megawatts of electricity needed to fast charge these huge batteries will require a massive expansion of the electric grid, or necessitate a similar scale power generation on site. Since grids are overloaded already — and because most major mines are far away from civilization — this latter, however, could only mean natural gas turbines. “Renewables” could only provide some auxiliary support, as a mine cannot be shut down just because its overcast outside or the wind isn’t blowing. (The same goes to long distance trucking, just sayin’.) This continued reliance on fossil fuels begs the question, though: what’s the point of electrification if we just swap one fast depleting fuel (diesel) to another one (natural gas), or in the case of China: coal?
Economic reality
Finally this takes us back to the economics of extracting and making these fuels. As we have seen above, demand for diesel was not dented by electrification or alternative fuels. As a result the world is already grappling with a serious diesel shortage, evidenced by record high refinery margins made on making and selling this type of fuel. Ever since 2022 (the failed return to growth after the pandemic and Western sanctions completely upsetting diesel supply in the EU) there is a chronic shortage of the right kind of oil to make diesel from. And with relentless attacks on Russian refineries, diesel export capacities are dwindling as well. Adding all sorts of liquids from unconventional sources, on the other hand, have only resulted in a decline in oil prices, and a widening gap between desires and reality. After ten years of struggling conventional oil (and consequently diesel) supply, the penny has dropped: real, productive economic growth could no longer continue. Something got to give: the Chinese building boom had to end, and Europe’s prosperity had to be sacrificed on the altar of continued financial expansion — lest we wanted to risk tipping the entire system over.
Perhaps the best indicator of this combination of demand destruction, mounting recession fears and flight to safety is the gold to oil ratio, representing how many barrels of oil you can buy with one ounce of gold. You see, the price of oil is the first to plummet during a recession, while gold is seen as a safe haven to protect “wealth”. Whenever this ratio blows out, it indicates a flight to safety and prevailing market caution. As shown on the chart below, we are well past anything we have seen in the past — except for the 2020 health crisis, which resulted in negative oil prices. Such low prices, however, virtually guarantee the outcome laid out by Rystad and the EIA above: oil at $65 or below is simply too cheap for most of the drilling companies to go after. The material costs of drilling ever deeper, less and less productive and ever faster depleting wells simply does not worth the expenditure at these low prices. And soon, not even at $95 a barrel.
Gold to Oil Ratio — Historical Chart. Source: Macrotrends
Conclusion
Based on these premises electrification can only slow the decline in transport and mining volumes somewhat, but not considerably. As the looming diesel crisis becomes acute, the price of this fuel could skyrocket — but only for a very short time. Since our entire world economy with its six continent supply chains and high material intensity relies on cheap fuel to operate, should such a price spike occur businesses would go bankrupt in droves. A slow but steady rise in the price of diesel, on the other hand, could make anything mined, transported or built by oil so expensive, that people could no longer afford them, leading to a deflationary crisis. Either way demand for diesel would fall in tandem with supply, leaving us with less and less stuff manufactured then brought in from far away. Eventually all the benefits of globalization would be eliminated: no more cheap clothes made available by cheap labor in Cambodia, or battery minerals mined in the Congo, copper in Chile and nickel in Indonesia.
The future will be increasingly localized, with much less product variants and with much simple lifestyles. Remaining diesel supplies will be diverted entirely to maintain agriculture and food delivery, focusing on plant based foods (animal husbandry requires a lot more fuel than growing peas and beans). For the average citizen this will translate into higher food and skyrocketing meat prices, leaving little to no budget to buy anything else than a shirt or a pair of shoes every now and then. (Especially so, if you consider the effect of forced localization raising the cost of doing anything as opposed to just importing stuff from the cheapest source.) Infrastructure projects will be abandoned, just like major housing developments as these activities take a lot of fuel to complete.
How our complex, self-adaptive world economy would react to such a shock as a withdrawal of its prime source of energy, is anyone’s guess. We are looking at a highly volatile situation ahead, lasting decades into the future. Currency crash, inflation, deflation, stagnation and decline are all in the cards. Once the initial part of the crisis is over, we will be looking at a totally different economy though. Many companies will go bankrupt, and the workforce hence released would have to find jobs in agriculture and local workshops, as the demand for cheap labor could only increase with less and less affordable fuel to drive machinery. Adopting a much less materially intensive lifestyle could, however, match the availability of diesel supply, and together with a persistent fall in birth rates could ensure a smooth landing towards the end of this century when oil finally runs out. Yes, I know this might sound messy and pessimistic for those pinning their hopes on this technological civilization going on forever and a day… I have to ask, though, how exactly did you expect ‘infinite growth on a finite planet’ to play out then?
Cooperatives as the Path Through Economic Contraction
Copied from a piece by Ludovic Viger with his permission.
Canada’s economy is at a turning point. For decades, we’ve relied on the promise of perpetual growth to fuel prosperity, but the foundations of that growth are crumbling. According to Dr. Tim Morgan’s Surplus Energy Economics, the global economy, including Canada’s, is inflecting from growth to contraction, driven by the rising Energy Cost of Energy (ECoE). This shift challenges our assumptions about progress and demands new approaches to secure a resilient future.
In this post, I’ll outline three likely outcomes of Canada’s economic contraction and argue why cooperative businesses—democratic, community-driven enterprises—are uniquely suited to address this predicament. Drawing on data from Surplus Energy Economics and Canada’s own economic context, we’ll explore how cooperatives can transform challenges into opportunities for a sustainable, equitable future.
The End of Growth: Understanding Canada’s Economic Contraction
Dr. Tim Morgan’s Surplus Energy Economics provides a critical lens for understanding why economic growth is faltering. Morgan argues that the economy is an energy system, not a financial one. All goods and services depend on energy, and the surplus energy available after the cost of accessing it (ECoE) determines prosperity.
Historically, low ECoEs from fossil fuels drove exponential growth, enabling Canada’s resource-rich economy to thrive. However, as Morgan notes, global ECoEs have risen from around 2% in 1980 to now well over 10%, eroding the surplus energy that fuels economic output. For Canada, a nation with high energy consumption and reliance on exports like oil and gas, this trend is particularly acute.
Morgan’s SEEDS (Surplus Energy Economics Data System) model projects that global material prosperity could decline by 1% annually through 2050, reducing aggregate prosperity by around 22%. For Canada, this translates to shrinking real GDP, strained public finances, and reduced household purchasing power. Evidence from Statistics Canada increasingly points to this reality: real household disposable income growth has stagnated since the 2008 financial crisis, and inflation-adjusted costs for essentials like housing and food have risen sharply, consuming a greater share of our budgets.
The era of “solutions of quantity”—building more, extracting more, borrowing more—is ending. Instead, we must embrace “solutions of quality,” prioritize cooperation over individualism, and adapt to shrinking discretionary funds. Cooperatives, with their focus on community ownership and resilience, are the ideal vehicle for this transition.
From Quantity to Quality: Reprioritizing for Resilience
As economic contraction takes hold, governments and businesses can no longer rely on growth-based strategies. Morgan highlights that rising ECoEs reduce the surplus energy available for non-essential activities, forcing a shift toward efficiency and value. For Canada, this means rethinking how public services and businesses operate. Governments, facing declining tax revenues, will need to optimize spending on essential services like healthcare, education, and infrastructure. Businesses, meanwhile, must focus on delivering high-quality, sustainable goods and services rather than chasing volume.
Cooperatives are uniquely positioned to lead this shift. Unlike corporations driven by shareholder profit, cooperatives prioritize member needs and community well-being.
Take Coast Capital Savings, a federally regulated credit union based in British Columbia with over 600,000 members. By reinvesting profits locally and offering affordable financial services, it strengthens communities while maintaining stability in tough economic times.
Similarly, agricultural producer cooperatives, like those forming the backbone of Canada’s dairy and grain industries, enable farmers to achieve economies of scale and market their produce efficiently, ensuring quality and fair returns without the exploitative pressures of purely profit-driven intermediaries.
In a contracting economy, cooperatives can deliver “solutions of quality” by focusing on durability, local needs, and equitable distribution. For example, housing cooperatives across Canada, such as those within the Co-operative Housing Federation of Canada, provide affordable, stable homes without the speculative price spikes of private markets. By pooling resources and prioritizing long-term value over short-term profit, cooperatives align with Morgan’s call to adapt to a less energy-intensive, more resilient economy.
Governments could amplify this by redirecting subsidies from corporations to democratic businesses, as envisioned in my upcoming book, The Great Canadian Reset (September 2025), which advocates for a Democratic Business Development Agency to support cooperative growth.
From Individualism to Cooperation: Building Community Resilience
Economic contraction often exposes the fragility of hyper-individualistic systems. Morgan warns that as prosperity declines, competition for dwindling resources intensifies, potentially fueling social and geopolitical tensions. In Canada, we’ve seen this in rising inequality and housing unaffordability, with the top 1% owning a disproportionate share of wealth while many struggle to afford basics. In such times, individualism—chasing personal gain at the expense of others—becomes unsustainable. Cooperation, however, offers a path forward.
Cooperatives embody cooperation by design. Owned and governed by their members, they distribute benefits equitably and foster collective problem-solving.
Historical movements like the Antigonish Movement in Nova Scotia during the Great Depression demonstrated how community-driven cooperatives could provide essential services and build economic self-reliance when traditional markets failed.
In Canada today, consumer cooperatives like the Saskatoon Co-op, part of the larger Federated Co-operatives Limited (FCL) system, demonstrate this resilience by providing affordable food and services and reinvesting profits into local jobs and community initiatives.
During the 2008 recession, Canadian credit unions, with over $400 billion in assets today, weathered the storm better than many banks due to their conservative, member-focused models.
In an energy-constrained future, cooperatives can mitigate resource competition by localizing economies. For instance, SolarShare, a Toronto-based renewable energy cooperative, allows members to invest in solar projects, reducing reliance on high-ECoE fossil fuels while keeping energy dollars local. This cooperative model counters the divisive effects of scarcity, fostering trust and mutual support.
As you’ve discussed on various forums, Canada’s values of fairness and belonging align perfectly with cooperatives, making them a natural fit for navigating economic decline. By scaling up cooperative networks, Canada can build resilient communities that share resources rather than compete for them.
Shrinking Discretionary Funds: Cooperatives as a Buffer
As ECoEs rise, the cost of essentials—housing, food, energy—consumes a larger share of household budgets, leaving less for discretionary spending. Morgan’s SEEDS data shows that discretionary sectors, like luxury goods and entertainment, could contract by 30% or more as prosperity declines. In Canada, this is already evident: a 2023 Statistics Canada report noted that 40% of households cut back on non-essential spending due to rising costs. This squeeze threatens economic stability, as discretionary sectors employ millions and drive tax revenue.
Cooperatives offer a buffer against this trend. By pooling resources, they reduce costs for members while maintaining access to essential goods and services.
For example, Organic Meadow Co-operative, a Canadian dairy cooperative, provides affordable, sustainable food by cutting out corporate middlemen and ensuring fair prices for both producers and consumers.
Similarly, education cooperatives can offer low-cost, community-driven schooling tailored to local needs, providing vital services without the high overheads of private institutions. These models ensure that essentials remain accessible even as discretionary funds dwindle.
Moreover, cooperatives can stabilize local economies by keeping money circulating within communities. The T’Sou-ke Nation Solar Co-op on Vancouver Island generates clean energy and local jobs, reducing dependence on expensive, high-ECoE fossil fuels. By contrast, corporate models often extract wealth to distant shareholders, exacerbating economic leakage in tough times.
Cooperatives’ focus on reinvestment and affordability aligns with Morgan’s warning that we must “own our mistakes and misfortunes” without the “elixir” of growth to bail us out. Through collective ownership, Canadians can stretch limited resources further, ensuring stability in a contracting economy.
Why Cooperatives Are the Answer
Cooperatives are not just a stopgap; they’re a transformative model for Canada’s future. Morgan’s work underscores that economic contraction is inevitable as ECoEs rise and surplus energy shrinks. Traditional growth strategies—borrowing, deregulation, globalization—have failed to address this reality, leaving Canada vulnerable to financialization and systemic risks.
Cooperatives, however, offer a proven alternative. With over 8,000 cooperatives employing 100,000 Canadians and contributing $50 billion to GDP annually (Co-operatives and Mutuals Canada), they’re already a cornerstone of our economy.
Their democratic structure ensures accountability and fairness, countering the exploitative tendencies of neoliberalism. Unlike corporations, which prioritize profit over people, cooperatives reinvest in communities, fostering belonging and resilience. They’re also adaptable to local contexts, whether it’s a fishing cooperative in Atlantic Canada or a solar co-op in Ontario. As my book, The Great Canadian Reset, argues, redirecting support to cooperatives—through loans, training, and policy reform—can democratize our economy and ease the pain of contraction.
Canada stands at a crossroads. Economic contraction, driven by rising ECoEs, demands a shift from growth to resilience, from individualism to cooperation, and from excess to sufficiency. Cooperatives are not a utopian dream but a practical, proven solution. They’ve thrived in crises before, from the Great Depression to the 2008 recession, and they can do so again.
In Part One, we saw that the decline of surplus energy will steadily shrink prosperity and reduce the capacity of our current economic system to deliver the lifestyle we have come to expect. In Part Two, we explored why localism — shorter supply chains, stronger community economies, and decisions made closer to home — is the only sustainable response. Part Three described how localism could take shape in practical terms: in food, housing, energy, work, and governance.
Part Four brings these threads together with one critical insight: real change will not start at the top. It will begin in the streets, the villages, the households, and the informal networks where people live their daily lives. The evolution to localism will be led from the bottom up.
1. Why Change Starts with People
Centralised systems, built on abundant cheap energy, are already struggling to respond to today’s challenges. As prosperity contracts, national institutions will find it harder to maintain the breadth of services, infrastructure, and supply chains we once relied on.
People and communities will adapt first because they have to. When supermarket ranges shrink, people will grow food. When heating bills rise, they will share resources. When public services become unreliable, they will build informal networks of care and exchange.
This is not rebellion — it is necessity. Localism will grow because it works when larger systems falter.
2. The Role of Grassroots Action
We are already seeing the early signs of this shift:
Community gardens, allotments, and shared kitchens emerging in towns and villages.
Repair workshops replacing throwaway consumption.
Informal service exchanges — neighbour helping neighbour, often outside the formal economy.
Local food networks and direct farm-to-household schemes bypassing centralised distribution.
Small-scale renewable energy projects designed and owned by communities.
These are not waiting for government permission. They happen because people see gaps and fill them. Each small step strengthens resilience. Each success inspires others. Localism spreads not by decree, but by demonstration.
3. A New Role for Top-Down Institutions
As grassroots initiatives grow, the role of central and local authorities changes fundamentally:
From control to support.
From planning first to responding first.
From enforcing uniformity to enabling diversity.
Communities will develop solutions suited to their own resources, geography, and needs. The task of councils, planners, and national government is not to dictate those solutions but to remove barriers, offer practical help, and connect good ideas so they can spread.
This is the revolution: a shift from top-down control to grassroots evolution.
4. Why Ownership Matters
People are far more likely to support and sustain changes that they believe are theirs. Top-down plans, however well intentioned, often fail because they feel imposed. Bottom-up action succeeds because:
It grows from lived experience and local knowledge.
It builds trust within communities.
It encourages creativity and flexibility.
It develops informal systems that complement, not compete with, formal systems.
Localism works because it places control where people already live, work, and care — close to home.
5. A Grassroots Evolution, Not a Crisis Response
The danger, as outlined in Part One, is that we delay until breakdown forces sudden, chaotic change. But there is another path: early, steady grassroots evolution.
If communities take the lead now:
Food systems can localise before supermarket shortages make it urgent.
Shared energy schemes can be in place before blackouts become common.
Repair and reuse networks can grow before replacement costs become unbearable.
Skills can be built while there is still time to prepare the next generation.
This is about being ahead of the curve, not behind it.
6. The Shape of the Future
If we succeed, the UK of the future will feel smaller, slower, and closer to home. But it will also feel more secure, more connected, and more meaningful:
More food grown and processed locally.
More energy generated and managed by communities.
More informal economies where people trade time, skills, and care.
Less dependency on fragile global systems.
Stronger local identity and greater trust between neighbours.
Top-down systems will still exist, but they will become servants rather than masters — responding to, supporting, and amplifying the innovations of grassroots communities.
Conclusion
Parts One to Three showed why localism is inevitable: declining surplus energy, shrinking prosperity, and the need for shorter supply chains and stronger communities.
Part Four shows how it will happen:
Change begins with people, not planners.
Localism spreads by action, not instruction.
Authorities succeed when they enable rather than control.
This is not a managed transition imposed from above. It is an evolution driven by households, neighbourhoods, and communities taking ownership of their future — step by step, choice by choice.
The question is not whether this happens, but how smoothly. If we encourage grassroots action and allow people to lead, we can make the shift to localism steadily, creatively, and together.
In Part One, we saw how the decline of surplus energy will steadily reduce prosperity and strain the UK’s current economic model. In Part Two, we explored why localism — shorter supply chains, more self-reliant communities, and decentralised decision-making — is the only realistic way forward.
Part Three sets out a practical vision of how localism could emerge. This is not a prediction of government policy but a reasoned projection of how the UK might adapt under pressure. It combines what is likely to happen naturally with what could happen deliberately if we prepare for the change.
1. Food: Relocalising Supply and Production
Food is the foundation of localism. As surplus energy declines, the cost of transporting food over long distances rises sharply. Supermarkets, designed for large centralised distribution, will struggle to maintain the range and volume we are used to.
How localism changes food systems:
More local farms and gardens – Small-scale, labour-intensive farms, allotments, and community gardens re-emerge as key suppliers. These farms prioritise resilience and reliability over maximising yield.
Village and Suburban-based processing – Local bakeries, dairies, butchers, and breweries return, reducing dependence on distant factories.
Reduced imports – With energy prices rising and global supply chains under strain, the UK will need to replace imported food with local production wherever possible.
Shared community storage – Small-scale cold stores, grain banks, and co-operative food hubs appear to smooth seasonal supply.
Instead of a supermarket economy dominated by 10,000-mile supply chains, food returns closer to home. This doesn’t mean empty shelves — it means fewer choices, simpler diets, and a stronger local food economy.
2. Housing: A Shift Toward Informal Development
In Part One, we saw how falling prosperity will make conventional housing models increasingly unsustainable. The formal planning system, built on continuous expansion, becomes unworkable in an energy-constrained economy.
Localism reshapes housing in three ways:
Using existing space better – Empty shops, unused offices, and older housing stock are repurposed into affordable dwellings.
Loosening planning restrictions – Over time, centralised planning loses control as people create informal housing solutions: small extensions, garden dwellings, caravans, and converted sheds.
Integration with nature – Trees and shade become part of new housing layouts, responding to rising temperatures caused by climate change.
Local communities will have more say in land use, encouraging small-scale, low-energy development rather than vast centralised estates. This marks a break from the rigid, top-down planning model of the past.
3. Energy: From Centralised Supply to Local Control
In Part One, we saw that the core challenge is not the disappearance of energy but the loss of cheap surplus energy. Centralised national grids, designed for abundant fossil fuels, will increasingly struggle to cope with volatility and cost.
Local energy strategies emerge:
Community renewables – Villages, towns, and city districts invest in their own solar, wind, and micro-hydro schemes.
Energy co-operatives – Ownership shifts from national corporations to local partnerships, giving residents a stake in generation and pricing.
Lower energy lifestyles – Localism naturally leads to less demand: fewer car journeys, more efficient homes, and smaller-scale workspaces reduce energy needs.
Energy security becomes less about maximising supply and more about minimising vulnerability. Local control brings stability where centralised systems falter.
4. Work and Employment: Rebuilding Local Economies
In Part One, we noted that discretionary sectors — retail, entertainment, and tourism — will contract as households prioritise essentials. This opens the door for a new structure of employment rooted in local production and services.
Work under localism focuses on:
Food and farming – A significant increase in agricultural and food-processing jobs, similar to the 1930s but supported by modern tools.
Repair and reuse – From clothing and furniture to electronics, repair trades grow rapidly as replacing goods becomes less affordable.
Care and services – With ageing populations and weaker central funding, communities build local care networks supported by volunteers and informal economies.
Small manufacturing – Digital tools, 3D printing, and small-scale workshops enable local production of everyday items.
Employment shifts from servicing mass consumption to maintaining essential needs. The informal economy — cash jobs, skill swaps, co-ops — becomes a core part of daily life.
5. Governance: Power Moving Closer to People
Localism is not just about production — it is about decision-making. As central government struggles to fund services, more authority inevitably moves downward.
Key governance changes:
Decentralised decision-making – Councils, parishes, and community assemblies gain real powers over land use, energy, and food systems.
Community resource management – Shared assets like local woodlands, allotments, energy grids, and water supplies are managed collectively.
Integrated informal systems – Authorities increasingly work alongside informal networks — community kitchens, co-ops, and micro-enterprises — recognising them as essential contributors.
Instead of control being concentrated in Whitehall, governance gradually becomes more distributed and adaptive.
6. The Pace of Change
Localism will not arrive overnight. It will unfold unevenly:
By necessity – In many places, it will begin when central systems fail to deliver, forcing communities to improvise.
By opportunity – In other areas, forward-looking councils and groups will plan ahead, redesigning services and supply chains in anticipation of energy constraints.
By crisis – Shocks — a spike in energy prices, food shortages, or a financial downturn — will accelerate transitions already underway.
Some communities will adapt early and thrive. Others will struggle until breakdown forces change.
The Transition Ahead
Localism is not about turning back the clock, nor is it about rejecting technology or progress. It is about aligning society with the realities of declining surplus energy. A smaller-scale, less energy-intensive economy can be fairer, more resilient, and closer to the needs of its people.
The alternative — clinging to the old model described in Part One — leads to deeper shocks, harsher inequalities, and greater instability. By embracing the principles outlined in Part Two, localism becomes a pathway to adapt deliberately rather than react desperately.
The future will be smaller, slower, and closer to home. Whether that future feels secure and liveable depends on how soon we begin shaping it.
Here’s Part Two, written as a natural continuation of Part One. It refers back to the energy constraints and declining prosperity explained earlier and sets out a clear, reasoned argument that localism is the only realistic path forward:
Part Two
Why Localism is the Only Feasible Way Forward
In Part One, we saw that the decline of surplus energy is reshaping the foundations of our economy and society. As energy becomes harder to obtain, more expensive, and less abundant, the prosperity that we once took for granted inevitably contracts. If the UK continues with its present economic system, the result will be a gradual narrowing of daily life, with communities forced to adapt to lower levels of choice, mobility, and material consumption.
The key lesson from this is clear: the old model of a highly centralised, high-energy, growth-driven economy cannot survive in a world where cheap surplus energy no longer exists. The question is not whether we return to the systems of the past, but how we design the systems of the future.
This is where localism emerges, not as an option, but as a necessity.
The Logic of Localism
Localism means shifting more of our essential production, exchange, and decision-making closer to where people live. In a shrinking economy, this is not ideological — it is practical. Transporting food, goods, and energy over long distances becomes less viable when energy is expensive and supplies are fragile. Maintaining giant national systems built for perpetual expansion drains resources that are increasingly scarce.
Localism addresses this by shortening supply chains, reducing dependence on vulnerable global markets, and allowing communities to organise around what really matters: food, shelter, energy, care, and skills.
The Three Pressures Driving Localism
1. Rising Costs of Distance In Part One, we saw how falling surplus energy makes everything costlier. This pressure will steadily undermine the business models built on moving vast quantities of goods across the country and the world. Local production — whether in food, repair, energy, or services — becomes competitive again when transport costs rise and reliability falters.
2. Fragile National Systems Highly centralised systems depend on scale and efficiency to function. When energy and tax revenues fall, these systems weaken. Hospitals, supply chains, and even utilities will struggle to meet demand under the current model. Local networks, by contrast, can act faster, make decisions that reflect local realities, and build resilience where it matters most.
3. The Growth of the Informal Economy As discretionary spending shrinks, more people will turn to informal exchange — trading skills, time, and produce outside the formal money system. This trend is already visible in second-hand markets, community gardens, repair workshops, and local service exchanges. Localism strengthens and legitimises these patterns rather than resisting them.
Localism as a Managed Transition
If policymakers accept the reality set out in Part One, they can prepare for a managed shift to a localised economy rather than allowing a chaotic breakdown. This means:
Planning for shorter supply chains – Giving priority to local producers and small businesses in procurement, licensing, and tax policy.
Supporting food security – Expanding local farming, market gardening, allotments, and small-scale food processing, reducing dependency on fragile imports.
Redesigning energy systems – Developing small, distributed renewable energy schemes owned and managed locally.
Restoring practical skills – Prioritising training in trades, repair, growing, and low-energy technologies to prepare people for a less centralised economy.
Shifting decision-making power – Giving communities greater authority over land use, resource allocation, and infrastructure priorities, ensuring they can respond directly to local conditions.
This is not a nostalgic retreat into the past but a deliberate redesign for a future where resilience matters more than scale.
The Alternative: Denial and Disorder
If we ignore these realities and cling to the old model, the pressures outlined in Part One will not disappear. Instead, they will break the system from below. Food and energy insecurity will increase, central services will fail under strain, and informal economies will grow anyway — but without structure, support, or fairness. Inequality will deepen as some adapt while others fall behind. Social cohesion will erode as trust in national institutions collapses.
This is the difference between shaping the transition and having it forced upon us.
The Inevitable Direction of Change
The end of cheap surplus energy means the UK must rethink the scale at which it operates. Communities will need to rely more on themselves, and solutions will have to fit local resources and conditions. Localism is not a political choice but a response to physics, geography, and affordability.
In time, the shape of the economy will reflect the constraints of energy. The longer we delay, the harder the adjustment becomes. But if we start now — using the logic set out in Part One — we can build a society that is smaller in scale, slower in pace, and closer to home, but also fairer, more resilient, and better able to meet the needs of its people.
Conclusion
Part One showed us the unavoidable challenge: falling surplus energy drives falling surplus prosperity. Part Two shows us the solution: localism is the only sustainable response. We either embrace it deliberately, with planning and foresight, or we stumble into it through breakdown and necessity.
The energy reality is fixed. The choice lies in how we respond.
A one million feet view. Photo by NASA on Unsplash
According to prevailing economic theory we live, in the West at least, in a “post-industrial”, knowledge-based, high income economy where industrial output matters very little. Watching financial metrics alone, one could easily agree with that: GDP per capita just keeps on rising, despite polluting low value-added businesses (metallurgy, raw material extraction and processing etc.) being moved into “developing” nations. While the recent ‘rare earth’ craze — and the realization that without certain raw materials and components high-tech post-industrial products can no longer be made — has thrown some sand into the gears of this theory, so far it has failed to shake the West’s entrenched belief in financial capitalism. However, and as usual, the rabbit hole goes much deeper than what the absence of a few magnets and special components might indicate.
This week my interview with Nandita and Alan from Population Balance went live on YouTube. Be sure to check out their website, too, for show notes, links and updates.
Thank you for reading The Honest Sorcerer. If you value this article or any others please share and consider a subscription, or perhaps buying a virtual coffee. At the same time allow me to express my eternal gratitude to those who already support my work — without you this site could not exist.
Blindspots everywhere
In their recent study PricewaterhouseCoopers shed some light on the role of commodities in growth — stating that ‘Minerals will catalyse value creation in the new domains of growth.’ And what minerals have they placed on the top of the chart? Neodymium? Silicon? Nah, good old coal, iron and copper. You see, while the availability of small magnets can and do disturb supply chains, the vast majority of industrial materials still come from “low value-add”, polluting businesses. In other words: the coal and iron age has never ended. Just take a look for yourself:
The world, in both of its Eastern and Western hemispheres, is still built and moved by these old materials. And we haven’t even mentioned the master resource — sorely missing from the PwC chart above — crude oil… Without these material and energy inputs even the most advanced economy of the world would cease to function in a matter of weeks or at best months, depending on their stock levels. Controlling the flow of these key inputs thus always was and always will be of strategic importance — at least as long as industrial civilization lasts. And while neoliberal economic theory suggests that these raw materials could always be imported at low cost from somewhere else, that presupposes that people “somewhere else” will always agree to sell them at a low enough price. The question thus poses itself: if these materials are so crucial then why are they so cheap? You see, as Nate Hagens pointed out so vividly, there is a fundamental mismatch between the cost, the real value and of course the price of these commodities. Put more bluntly: price does not equal value and has very little to do with cost.:
Let’s take crude oil for example. Without this substance we would not be able to move our cars, trucks, dumpers, cranes, combined harvesters, excavators, ships, locomotives, planes etc. — nor produce essential lubricants, paint, plastic, asphalt and a thousand other products. Yet, at the time of this writing, one barrel (42 gallons) of crude sells for a mere $63, while providing society with 1.7 megawatt-hours of energy — equivalent to four and a half years of human labor. It’s more than just a question of equivalency, though. Due to its incredible energy density, portability and versatility oil can easily power container ships the size of a skyscraper, while no amount of people could peddle such a boat across the Pacific ocean, let alone launch a SpaceX rocket into space (1). Should the flow of oil stop for just a month, the entire world economy would grind to a screeching halt, and societies would collapse soon thereafter. (This is why even a moderate depletion scenario calculating with a modest 4–5% production loss a year is a very big deal.) In this sense, oil is priceless.
The real value of commodities
The entire world economy was built on the price of energy and raw materials being ultra-low compared to the value they provide to society. Every economic activity, from making a car to legal and financial services involves the burning of vast quantities of energy and consuming enormous amounts of minerals and food. What we call value-added activity is, in fact, owed largely to the vast difference between the value of commodities and the price we pay for those. Just think of the yawning gap between the price of a barrel of oil ($63) and the price of the 4.5 years of physical labor (worth $225,000) it replaces. Almost every cent we earn in society is financed from that gap.
Let’s take legal services for example. That surely doesn’t take much oil to provide right? Still, how do lawyers earn so much by burning so little? They must be super-productive, at least economically speaking, right? Well, no. Imagine for a moment that you are a partner at a law-firm in America. You drive to work, burning a few gallons of fuel every day and think: well, that’s about it. But then you arrive at a building built mostly from steel and glass — taking enormous amounts of coal, diesel fuel, natural gas, iron ore, silica-sand, plastics, copper etc. to build. Still remember the chart I shared above? (I guess I don’t have to emphasize the fact that should your company be headquartered in a plywood shack at the edge of town no one would take you seriously.)
Later that day you decide to organize a business lunch with an important client in a fancy restaurant, where the food — grown and harvested by diesel guzzling tractors and combined harvesters — was delivered on trucks and prepared by burning natural gas and using kilowatts of electricity. Not your business, right? Well, next time organize that lunch on a bench in the park, eating home made sandwiches. I’m sure, your client would be thrilled! In the evening, after a productive day, you drive by a supermarket and decide to do some shopping. Again, the food there wasn’t produced by farmers pulling their plows with oxen, nor that beef patty was kept cool by ladies with fans… Instead, gallons of diesel fuel and untold amounts of natural gas was burned in every step of their production and transportation. (Just close your eyes and replace that meat-stand with the tanks of fuel it took to produce and deliver those products to the store.)
In the evening you arrive home and park your car in front of the garage… I guess I don’t have to repeat at this point how that house and vehicle was made and from what. Sure, you could be living in a homeless encampment built from the refuse of this techno-industrial society, but that’s highly unlikely. At the end of the day, you, as a partner at a law firm, have just consumed a ton of fossil fuels and hundreds of pounds of raw materials — mostly made “somewhere else”. How is your activity less material and energy intensive than smelting iron or making glass in a low value added factory then? I bet you know the answer…
Law firms, banks and a gazillion other materially non-productive economic entities are in fact free-riders on this system built entirely on the availability of cheap fossil fuels and minerals. These businesses represent an enormous “high value added” overhead on top of a crumbling base of loads of “low value added” work. This so called “low value added work,” such as that of a steel worker, is just terribly under-payed work, compared to the real value provided to the economy. Should corporations compensate these workers more fairly, or pay a higher price for these inputs, though, the whole inverted pyramid of value would come crumbling down — and therefore its unlikely to happen.
So while the gap between the price of a barrel of oil and the price of 4.5 years of physical labor seems to be huge, almost every single economic activity on this planet draws its profits from this immense difference. Since we still need oil, natural gas and other essential inputs to almost every single economic activity, any substantial price increase sends waves across the economy, ruining businesses and greatly reducing the purchasing power of money. The chart, depicting commodity price indices below tells it all: after the stability of the 1990’s prices started to rise steadily leading up to the 2008 financial crisis. It is a roller coaster ride ever since with the commodity price index climbing higher and higher, pushing Western economies into stagnation, then (since 2020) into decline.
The third and final element in this picture, after understanding the gap between price and value, is the cost of extraction. In the early to middle 20th century, returns on oil and gas investment, mines, factories and infrastructure (such as dams) were enormous. Thanks to the abundant, high quality, easy-to-get resources — such as crude oil found in Texas, or copper from the Bringham Canyon mine — the economy could experience explosive growth. The relatively low investment costs needed to access these vast treasure troves of resources meant that a lot less money was needed to be paid for extracting them, leaving enormous profits in the pockets of mining and oil companies, even as the economy enjoyed low commodity prices. This also meant that very little energy and raw materials had to be reinvested into their continued production, leaving more materials and energy to build infrastructure and products from. A win-win, right?
As years passed by, though, and as these once prodigious sites became slowly depleted, new modes of resource production had to be found. Fracking shale formations to find more hydrocarbons or opening mines in less favorable locations, on the other hand, meant a much higher energy and material investment for a lot lower return — in other words: higher costs for the entire society. (And we haven’t even mentioned the environmental harm caused by these operations and the use of these resources, conveniently called externalities.) The resulting cost increases began to erode the profitability of the extraction business, though. Since the economy have a limited tolerance towards price increases (due to its need for a large enough gap between prices paid and value provided by these commodities), mining and drilling companies have increasingly came under pressure. As the Pwc report found, their EBITs are falling even as they would need more money than ever to open new mines and drill more wells to keep up with the depletion of their more productive assets. The following image courtesy of BHP, one of the world’s largest mining companies, tells us so:
Major copper discoveries show a downward trend: both in size and resource depth. Source: Visual Capitalist
Opening new ever deeper mines, or having to remove an ever larger rock overburden increases costs disproportionally. Again, not only in monetary but also in energy and material terms. And if this increased investment yields less and less copper per mine (as indicated by the size of the circles on the chart above) this means that we are facing an exponential increase in material and energy investment needed per ton of metal retrieved. Not a winning combination, if you ask me… Resource depletion is thus not a purely geological phenomenon — even though it’s clearly driven by it — but a complex interplay between price, value and cost. And while extractive businesses are constantly trying to reduce their costs, they are ultimately waging a losing battle. Throwing more technology at the “problem” does not solve it either. Newer methods add complexity and usually come with an increased energy demand. In a world, where energy from fossil fuels have started to become increasingly limited, another “solution” had to be found to this predicament.
The geopolitical context
The ever increasing energy and material cost of resource extraction has slowly begun to cannibalize the rest of the economy. As more and more diesel, electricity, and natural gas got re-invested into mining and drilling, less and less energy and metals were left for the rest of the economy to build houses, factories, products and infrastructure from. The economy, as a result, began to adapt by sending the most energy and resource hungry parts of it abroad where labor costs, environmental standards and energy was cheaper… Up to a point where essentially everything was produced elsewhere, leaving post-industrial nations totally dependent on imports. The original idea behind this policy was that “third world” nations would never develop an industry of their own, never reach an income level where internal consumption becomes a factor, never demand higher wages, clean air and water for their workers, and of course never run out of stuff. In other words: the assumption behind offshoring was that the “third world” would never manage to shake off their colonial status.
As the global south slowly began to decolonize itself by looking for alternatives to Western financial systems designed around their exploitation, and as global energy and raw material extraction approached planetary limits, the post-industrial, high value added model of the West began to crumble. Emerging economies have realized that once the basic industries are secured — providing these nations with the iron, coal, copper etc. needed for their development — they can start training the engineers and scientists of their own, turning these resources into bridges, railways, dams, factories and the like. The industrialization of many global south countries have naturally created a competition for resources between these rapidly developing and the already developed nations. (Unfortunately, meanwhile the size of this planets natural reserves didn’t grow in line with the ambitions of its inhabitants.) So far the global race for energy and raw materials was held back by IMF and World Bank policies demanding wages to be suppressed and austerity measures introduced in targeted nations, and thereby preventing competing markets from being built up. With the weakening of the dollar’s status and the development of an alternative system (BRICS) the picture has started to change substantially.
Europe’s sanctioning of Russian energy has acted as a release valve, though. Thanks to the deeply depleted status of the continent’s own fossil fuel and mineral resources, many companies left the EU in search for cheaper energy inputs after the 2022 price shock, lowering competition for resources on the long run by de-industrializing the economic bloc and creating a permanent cost-of-living crisis in what used to be one of the world’s wealthiest regions. The EU’s plummeting energy demand in the wake of natural gas, diesel and coal price hikes has thus not only prevented a global squeeze on energy but also ensured that the problem of high prices for the rest of the world will be avoided for some time to come. (As for the EU: falling wholesale energy prices invited a substantial increase in taxes on energy, keeping prices high for businesses no matter what.) Germany, as a result, is forecast to experience a 0.3% recession in 2025, but adjusting for state spending, the real decline could be closer to 4-5%:
Daily surveys confirm the same message: Germany is being deindustrialized, losing hundreds of thousands of core-sector jobs. The social security deficits already emerging are just the beginning. Yet both politics and business refuse to conduct an honest diagnosis. […] Large corporations can adjust or relocate production to sidestep regulation, but small and medium-sized enterprises – the Mittelstand – are being crushed.
German per capita energy consumption has fallen by 24% in the past ten years (with a 10% drop in single year between 2022 and 2023). Chemical and metallurgical businesses have fled the country in droves, leaving Germany with an ever weaker industrial base. As Thomas Kolbe writes:
The worn-out German economy will not breathe new life into an equally exhausted state through some unexpected economic miracle. If current trends continue – and all signs suggest they will – German public debt will surpass the 100%-of-GDP mark within the next decade.
A debt-to-GDP ratio exceeding 100% indicates that the total government debt is larger than the country’s annual economic output. And since we are talking about an economy which is shrinking 4–5% a year without government spending (i.e. without taking on even more debt) this also means that these loans can no longer be repaid, just re-financed. Skyrocketing debt levels, with ever higher interests paid on them, act as an additional drag on economic growth, funneling money away from productive investments and towards paying an ever higher interest to investors. In addition to that, large government borrowing tends to absorb capital that might otherwise finance private sector investment, further exacerbating Germany’s (and other highly indebted nations’) economic woes.
American tariffs, intentionally or not, pushed the brake pedal even deeper, further slowing down not just the European but the entire world economy. As part of his tariff policy US secretary of the treasury Scott Bessent outlined a new strategy, treating allied nations’ wealth as an American “sovereign wealth fund” (his words). In this scheme European, Korean and Japanese companies are encouraged to make investments, building American factories and reshoring industries at their own cost in exchange for some tariff relief.
“We have agreements in place where the Japanese, the Koreans, and to some extent the Europeans will invest in companies and industries that we direct — largely at the President’s discretion,” Bessent said. “Other countries, in essence, are providing us with a sovereign wealth fund.”
What American economic policy experts failed to realize is that you cannot profitably re-industrialize a nation which has already depleted its natural resources below the point of offshoring, whose people no longer want to work in factories (or have the skills needed to do so), whose average citizens are buying groceries on credit and whose economy is kept alive by borrowing more money the US taxpayer could ever repay. You see, de-industrialization happens for a multitude of reasons and cannot be reversed by making “clever” policy decisions.
What Bessent’s “sovereign wealth fund” can, and in fact most likely will achieve, is an acceleration of Europe’s de-industrialization, reducing global demand for energy and resources even further (and thereby keeping energy prices at a manageable level). Since Europe is the world’s largest importer of oil, this makes a lot of sense: if we cannot squeeze more juice out of this planet, we might as well start reducing consumption… Elsewhere, of course. The price of oil, as a result, has plummeted and stayed at a price level not seen since 2018 (2). As the rest of the world accelerates its transition towards a multi-polar system and away from western financial institutions and currencies, though, the pressure of resource scarcity building up under the lid can only be expected to grow again.
I am in two minds about publishing this. Is it believable? I hope not – Barry
The reversal of ocean circulation in the southern hemisphere could double current atmospheric concentrations of CO₂ / ICM-CSIC
By bne IntelliNews July 5, 2025
A major ocean current in the Southern Hemisphere has reversed direction for the first time in recorded history, in what climatologists are calling a “catastrophic” tipping point in the global climate system.
The development, which was confirmed by Spanish marine scientists at El Institut de Ciències del Mar (ICM-CSIC) in Barcelona, has triggered widespread alarm among climate scientists due to its potential to accelerate global warming and destabilise weather patterns worldwide.
“The stunning reversal of ocean circulation in the Southern Hemisphere confirms the global climate system has entered a catastrophic phase,” said climate activist Ben See in a post on social media.
The collapse involves the deep overturning circulation in the South Atlantic — part of the global conveyor belt of ocean currents, which typically pulls cold, nutrient-rich water up from the ocean floor and drives planetary heat distribution.
The study, published on July 2, identifies a collapse and reversal of the Deep Western Boundary Current (DWBC) in the South Atlantic — a key part of the Atlantic Meridional Overturning Circulation (AMOC).
This current system plays a crucial role in regulating global temperatures and storing atmospheric carbon dioxide in the deep ocean. The ICM’s data show that the flow of the DWBC current reversed from northward to southward for several consecutive months in 2023 — the first such event in 30 years of continuous monitoring.
“This is an unprecedented observation and a potential game-changer,” said physicist and lead author Dr Marilena Oltmanns, who warned the changes could “alter the Southern Ocean’s capacity to sequester heat and carbon.”
According to the ICM-CSIC, the reversal is likely linked to an ongoing weakening of the Antarctic overturning circulation, a deep-ocean process driven by the formation of cold, salty water masses near Antarctica. That system has slowed by up to 40% since the late 1990s, and the new findings suggest it may be destabilising regional ocean dynamics more rapidly than expected.
There has been a lot of speculation that the whole AMOC (otherwise known as the Gulf Stream), could come to a halt. The AMOC brings warm water to Europe from the equator, and when it stops flowing that will lead to a mini-ice age in Europe with winter temperatures dropping by 10-30C. While scientists are 98% certain that the AMOC will stop flowing by 2100, recent studies suggest that the collapse could come as soon as this year, or at least in the next few decades.
The ICM report warns that the reversal of the DWBC could also unleash vast amounts of carbon dioxide currently trapped in deep-ocean reservoirs. The reversal will undermine the ocean’s role as a carbon sink, which currently absorbs about 25% of all anthropogenic CO₂ emissions.
“This could double current atmospheric CO₂ concentrations by releasing carbon that has been stored in the deep ocean for centuries,” the report said. Such a release would likely obliterate existing climate targets, as the additional emissions would overwhelm current carbon budgets and render mitigation strategies based on gradual reductions, obsolete.
“The planet is sending us increasingly clear signals that we are crossing critical thresholds,” the ICM warned, characterising the event as a shift from “chronic climate stress” to “acute systemic breakdown.”
The reversal threatens to weaken the ocean’s crucial role as a carbon sink — one of the Earth’s key natural defences against rising atmospheric CO₂ — and will also dramatically disrupt global weather systems, sea level patterns, and marine ecosystems.
The Mediterranean is as hot as bathwater
The event coincides with an unprecedented marine heatwave in the Mediterranean. A Spanish metrological buoy recorded a sea temperature of 31C on July 4 – as hot as a lukewarm bath. The northwestern Mediterranean Sea has recorded a temperature anomaly of +6.21°C above the 1982–2015 average, part of a pattern of record marine heatwaves that scientists say are reshaping entire ecosystems.
The northwestern Mediterranean Sea is currently 6.21°C above the 1982–2015 average, creating what scientists have called “bathwater” conditions in a historically temperate basin. Warmer surface temperatures could further stall or disrupt ocean currents, feeding a dangerous feedback loop of warming and current instability.
While ocean circulations have shifted in the deep past due to glacial cycles, the current reversal is the first to occur in modern times due to anthropogenic climate change. Researchers now warn of increased risk of abrupt changes in monsoon patterns, fisheries collapse, and a rapid sea-level rise in the Southern Hemisphere. They are calling for immediate global attention and a reassessment of climate adaptation strategies in light of what may be a new and more volatile climate regime.
“The stunning reversal of ocean circulation in the Southern Hemisphere confirms the global climate system has entered a catastrophic phase,” said climatologist Ben See on social media.
The reversal of the current will bring cold water up from the deep in which is trapped CO₂. That means the reversal, “could double current atmospheric CO₂ concentrations by releasing carbon that has been stored in the deep ocean for centuries,” the El Institut de Ciencies del Mar said.
“The planet is sending us increasingly clear signals that we are crossing critical thresholds,” the Institut added.
Dr. Tim Morgan’s article asks a big question: Has economic growth come to an end? He thinks it might have—and not just because of politics, bad decisions, or short-term problems, but because of something much deeper: the limits of energy and nature itself.
What’s the article about?
Morgan believes the global economy may have hit a turning point in 2023. Up until now, we’ve kept pushing for more growth—more money, more production, more consumption. But he argues that the real economy (what we physically do and make) is no longer keeping up with the financial economy (what we imagine through loans, debts, and stock markets).
He says the gap between what we think we have and what we actually do have is getting wider, and that spells trouble.
What’s causing the slowdown?
The main issue, according to Morgan, is energy. Everything we do—building houses, growing food, running hospitals—relies on energy, especially oil, gas, and coal. However, it now requires increasingly more energy just to extract that energy from the ground. This is referred to as the Energy Cost of Energy (ECoE).
The higher the ECoE, the less energy is left over for the rest of the economy to grow. Morgan says we’ve reached the point where the energy “surplus” is shrinking. That’s why prosperity—the ability of ordinary people to live comfortably—is already falling in many countries.
What does the future look like?
If Morgan’s right, we’ll see:
A steady decline in real wealth over the next 25 years.
Fewer things people can afford beyond basic needs (what he calls a collapse in “discretionary” spending).
Financial systems are under strain because they’re based on the idea that growth will continue forever.
Is there anything we can do?
Morgan doesn’t give a lot of solutions in this piece, but he does hint that we’ll need to:
Be more realistic about what the future holds.
Stop pretending we can grow forever.
Find ways to live well with less.
Final word
Dr. Morgan’s message is profound: the era of endless economic growth is over. We now need new ways to think about prosperity—ones based on what really matters, not just money and markets. This article is a great starting point for that conversation.
The failure of the climate movement isn’t just political or scientific—it’s philosophical. At its core is a reductionist mindset: isolate one culprit, pursue one goal, rally around one fix. Fossil fuels became the villain, CO₂ emissions the metric, and renewables the savior—embraced more for narrative simplicity than system reality. Missing was any serious reckoning with energy, complexity, ecological limits, or human behavior. If fossil fuels caused the problem, then renewables must solve it. Doubt didn’t fit the script.
Figure 1. The Reductionist Mindset–Fossil Fuels the villain, CO₂ the metric, renewables the savior. End of discussion. Source: Labyrinth Consulting Services, Inc.
But the real story is more tangled. Modern civilization was built on fossil fuels. They weren’t just a side-effect of progress—they were its engine. Especially after World War II, oil, coal, and gas fueled everything: industrial expansion, population growth, military power, and the rise of global trade. The abundance of cheap energy made complexity affordable and growth seem infinite.
Climate science emerged in this very context. In 1958, Charles Keeling began measuring atmospheric CO₂. His curve showed a steady rise, even as the world raced deeper into fossil dependency. By the 1970s, scientists were warning that doubling CO₂ could dangerously heat the planet. But at that same moment, the U.S. faced oil shocks—gas lines, school closures, inflation—and energy security, not climate, drove the agenda. Coal made a comeback. Natural gas gained favor. Renewables entered the conversation quietly, not as climate tools, but as buffers against foreign oil.
That separation never really healed. Climate change was treated as a future externality, while energy policy remained a present-tense strategy of supply and control. Fracking, for example, didn’t spread because it reduced emissions—it exploded because it reduced oil imports and trade deficits. Climate goals followed energy trends, not the other way around. And because energy itself was never understood as a system, climate-change advocates incorrectly believed we could swap renewables for fossil fuels and keep everything else the same.
Reductionist thinking led to energy blindness—and that blindness doomed the climate movement. Its advocates still don’t grasp that electricity makes up only a small slice of total energy use for a reason: its applications, while impressive, are inherently limited. Renewables were assumed to be plug-and-play replacements for fossil fuels. They ignored density, intermittency, scale, and material inputs. They ignored what energy actually does: fueling the machinery of global extraction, transport, manufacturing, construction, and trade—most of which can’t be electrified at the scale modern civilization demands. The entire industrial superorganism runs on a kind of metabolic intensity fossil fuels uniquely deliver. Subtract that, and you don’t just lose emissions—you lose capabilities.
But climate policy never really faced that. It isolated carbon as the problem, treated the atmosphere as the domain of action, and left the civilization it emerged from largely untouched. The public was promised a clean transition. The idea that we could decarbonize without decomplexifying was treated as not only possible, but inevitable.
Figure 2. Modern civilization will collapse without fossil fuels. Climate activists refuse to see this. Source: Labyrinth Consulting Services, Inc.
That’s the deeper failure. Not that the warnings weren’t loud enough. Not that the science wasn’t clear. But the framing itself was naïve and simplistic. We tried to solve climate in a way that let us avoid the real questions—about limits, about how we live, about what kind of future we’re actually powering toward.
This wasn’t just a climate mistake. It’s the same pattern we’ve seen with GDP as a proxy for wellbeing, with technological fixes for social breakdown, with laws against addiction instead of understanding its roots. We break the world into parts, fix the ones we can see, and call the system stable—until it breaks again.
The Sorcerer’s Apprentice comes to mind: a young helper stumbles onto power he doesn’t fully grasp. He sets the spell in motion—automation, acceleration—but lacks the wisdom to stop it. Every fix multiplies the problem. The castle floods.
Figure 3. The Sorcerer’s Apprentice. Power Without Wisdom. Source: Labyrinth Consulting Services, Inc.
We are that apprentice. We harnessed fossil energy, unleashed exponential growth, and built systems too complex to control. Then, faced with side effects—climate change, ecological overshoot, cascading risk—we reached for familiar tools: substitution, regulation, markets. Anything but reflection.
Climate change didn’t fail because we lacked solutions. It failed because we mistook the problem. We made it about emissions when it was always about our relationship with energy, with growth, with the natural world. We wanted to fix the atmosphere and leave the civilization intact. But that’s not how systems work.
The truth is harder. We don’t need new energy sources. We need a new relationship with energy that includes respect for Nature and our place in it, humility and restraint. One that recognizes that some thresholds, once crossed, don’t rewind. And some systems, once overbuilt, don’t transition—they unravel.
That doesn’t mean despair. It means clarity. It means seeing not just where we are, but how we got here—and learning, at last, to think about the whole rather than the parts
The Energy Cost of Energy (ECoE) is a vital but often overlooked concept. It refers to the share of energy output that must be used to extract, process, and deliver energy itself. In other words, it’s the energy we spend to get energy. The lower the ECoE, the more net energy remains to power the rest of the economy—everything from farming to hospitals to mobile phone factories.
A Brief History of ECoE
In the early days of fossil fuels, ECoEs were remarkably low. For example, early oil wells in Texas could produce 100 barrels of oil for every barrel of energy invested—an ECoE of just 1%. Coal, oil, and later natural gas allowed industrial economies to expand rapidly because they delivered massive net energy surpluses.
However, over time, the low-hanging fruit was picked. Oil reservoirs became harder to access. Deepwater drilling, tar sands, and shale fracking emerged as substitutes, but they required far more energy input. ECoEs began to rise.
Today, according to analysts such as Tim Morgan and the Surplus Energy Economics model, ECoE for fossil fuels is far higher than it was in the 20th century and continues to climb. Renewable sources like wind and solar may offer lower ECoEs in the long term, but their intermittency and reliance on complex, high-energy infrastructure mean their true ECoEs are not trivial.
ECoE and the Structure of the Economy
As ECoE rises, the surplus energy available to do everything else in society falls. This shift hits the economy in a particularly telling way: it squeezes the space available for discretionary activities.
The economy can be divided into two broad zones:
Essential sectors: food, healthcare, heating, basic transport, water, sanitation—these are the foundation of civilised life.
Discretionary sectors: tourism, high-street retail, entertainment, aviation, luxury goods—these depend on surplus wealth and energy.
When ECoE was low, there was enough energy to expand both sectors. But as ECoE rises, essential needs take priority. The discretionary sector—vulnerable to even small energy and financial shocks—begins to shrink.
This helps explain why ordinary people experience a sense of stagnation or decline even as official GDP figures show modest growth. Their access to discretionary consumption is quietly evaporating, not because they are lazy or mismanage their finances, but because there is less surplus energy to support those activities.
What Happens When There Isn’t Enough Net Energy?
If the ECoE rises so high that even essential activities cannot be fully supported, societies face a more severe crisis than a financial recession. Essential services such as food production, public health, and critical infrastructure begin to falter.
This is not theoretical. In some parts of the world today, power outages, water shortages, and food insecurity are symptoms of systems under stress, financially and energetically.
At this stage, governments are forced into triage: rationing, blackouts, collapse of discretionary sectors, and perhaps nationalisation of vital energy sources. Inflation may rage as real goods and services become scarcer, while money loses its anchoring function. Social unrest becomes likely.
A Glimpse Ahead
Unless the energy system can deliver a lower ECoE—either through new technologies, a renaissance in nuclear power, or a radical simplification of living standards—the modern, consumption-driven way of life will continue to contract. This contraction is not a policy choice; it is a physical necessity. The real economy follows the laws of thermodynamics, not economics textbooks.
In the long run, societies will need to relocalise, reduce their dependence on high-energy discretionary consumption, and prioritise basic needs through more resilient, informal systems. Communities may rediscover older, slower ways of meeting needs through shared labour, seasonal diets, and low-tech tools. The future may not be bright, but it can still be liveable—if we accept the limits imposed by energy reality.
Localism provides an evolutionary way of seeing the future.
The human world of the early 21st century is dominated by science, cities, and high technology. However, both our modern way of life and our way of thinking about the world sprang up only within the past several centuries. Today’s humans are biologically the same as people who lived 10,000 years ago; but our current habits, expectations, and beliefs are almost entirely tied to machines, infrastructure, energy sources, and artificial materials that have only recently come into existence. Compared to our hunter-gatherer forebears, we might as well be from another planet.
We take modernity for granted, as the fish presumably takes for granted the water in which it swims. But our own metaphorical water is increasingly troubled. Survival-level problems are appearing with more frequency and intensity, including climate change, resource depletion, the disappearance of wild nature, and the toxification of the biosphere. If society cannot extricate itself from this worsening turbulence, our species may not persist much longer.
What’s outside the fishbowl we call modernity? And how did we humans get into it in the first place?
Progress or Polycrisis
Most people who live in industrialized nations now believe that humans are superior to the rest of nature. It is assumed that by using science and reason, along with giant helpings of technology, we can banish scarcity and ignorance. Modernity is thought to be the implicit goal of billions of years of biological evolution. And some of us imagine techno-humans to be the seed pods resulting from this great flowering, capable of spreading life and intelligence into the rest of the universe.
There have long been critics of modernity such as Chief Seattle (“When the green hills are covered with talking wires and the wolves no longer sing, what good will the money you paid for our land be then.”). However, in the last few years a critical discourse about modernity has emerged in books, blogs, and academic literature, notably in the works of three authors—Vanessa Andreotti, Tom Murphy, and Dougald Hine (more names deserve mention, including Robin Wall Kimmerer, Daniel Quinn, Anna Lowenhaupt Tsing, Jeremy Lent, and Joanna Macy, but the aforementioned three will serve our immediate purposes).
Vanessa Andreotti, in her book Hospicing Modernity: Facing Humanity’s Wrongs and the Implications for Social Activism, focuses on the modern mindset, which she characterizes as a collection of “expired stories” from which spring racism, colonialism, and wanton destruction of nature. She contrasts this modern mindset with Indigenous ways of knowing, which not only made societies more sustainable, but gave their members a sense of organic connection with their surroundings and with one another.
Tom Murphy, author of the blog “Do the Math,” sometimes describes himself as a recovering astrophysicist. In essays dating back to 2011, he shows that techno-solutions to climate change and other survival-level predicaments aren’t working and can’t work at scale. Murphy has concluded that only a fundamental shift in how humans inhabit the planet can enable our species to continue. While his starting point differs from Andreotti’s, he has come to share the latter’s outlook on modern versus Indigenous human cultures. Note: Murphy recently shared the story of his intellectual journey on the Crazy Town podcast.
Dougald Hine is the author of At Work in the Ruins: Finding Our Place in the Time of Science, Climate Change, Pandemics, and All the Other Emergencies. In it, he explains why he has stopped focusing on climate change in his environmental writing. Although global warming is a survival-level problem, it cannot meaningfully be addressed without engaging in a deep critique of modernity. Like Andreotti and Murphy, Hine calls upon us to reawaken Indigenous attitudes toward nature.
For these authors, modernity is the cause of the current polycrisis and the impending Great Unraveling. Modernity is likely to comprise a brief and intensely destructive moment in Earth history, because the way we live is unsustainable not just in its details, but in its inherent design. Despite our pretentions and aspirations to be free of natural limits, we humans remain, and always will be, part of nature and subject to it. We pollute and deplete it at our own peril.
Are Humans Great or Terrible?
Implicit in this bifurcation of ways of looking at modernity are two views of Homo sapiens. If modernity is a magnificent achievement, it’s assumed that this is because humans are inherently great and are expressing that greatness through technology. In this view, we humans are more than just clever animals; we are evolving to become gods—as some writers have explicitly claimed.
The critics of modernity describe the current phase of human history not as an expression of intelligence and virtue, but as a cataclysmic mistake: for the sake of momentary comforts, conveniences, and profits, we are generating existential problems that could imperil not just civilization, but planetary life-support systems. One might well conclude from this that humans are terrible.
However, that pessimistic assessment of the worth of our species may be a misreading of both the situation and of the modernity critics. If we consider humans to be animals embedded in ecosystems, then whatever we do is part of nature and evolution. Biological evolution gave us big brains and opposable thumbs. Then cultural evolution via language and toolmaking took over, initiating a rapid self-reinforcing feedback process that has accelerated until the present. Modernity is the first instance in evolutionary history where a species has developed tools and language to expand its range and potential resources, thereby depleting not just its immediate region but global stores of fish, game, trees, soil, and minerals, while overfilling global waste sinks, notably the planetary atmosphere. However, the essential pattern of a species overexploiting its environment, increasing its population until it exhausts available resources and waste sinks, and then dying off, is common in nature. Humans are products of evolution, and whatever qualities drove us to provoke climate change and all the other predicaments of modernity are inherent in evolution itself.
Money, technology, social complexity, and war—human cultural traits that seem to separate us from other creatures—emerged via evolution. Natural selection is a process of improvising and testing; it doesn’t have a goal in mind. Once nature’s improvisation turned in the direction of language and toolmaking, modernity may have become inevitable. While all human groups didn’t follow the path that led eventually to the extreme exploitation that characterizes modern industrial civilization, the existence of even one group with the environmental preconditions, cultural history, and audacity to pursue the path of technological hyper-innovation and empire building made modernity virtually unavoidable. Most other groups were then swept along, first via colonization and later through economic globalization.
While techno-utopians envision humanity taking charge of Earth and then moving on to the stars, critics of modernity, when contemplating the future of our species, are more likely to look for clues in nature. When a species finds a new food source and multiplies, it eventually reaches limits of that food source; its population overshoots a sustainable level and crashes. This overshoot/die-off population cycle is particularly common among invasive species, which often negatively impact native species. However, once invasive species have been around for long enough, they and surrounding native species typically co-adapt—sometimes to the long-term detriment of at least some of the natives, sometimes to that of the invader. If the invaders are predatory, they eventually learn to take only some of their potential prey. If the invaders are prey species, they learn new survival strategies, perhaps including camouflage.
Similar boom-and-bust cycles have happened in human societies. Many societies experienced Golden Ages when resources seemed abundant and when comfort, convenience, and knowledge increased for a significant portion of the population. These Golden Ages were typically followed by Dark Ages of resource scarcity, poverty, and loss of high culture. All that’s different today is that we’ve achieved a global Golden Age based on the use of fossil fuels (which enable us to extract resources in larger quantities and move them longer distances); as fossil fuels dwindle and the consequences of burning them degrade ecosystems, a global Dark Age will likely follow. But its degree of darkness will depend on how willingly and successfully humanity adapts to limits.
Perhaps it’s helpful to think of the historical process of human cultural adaptation to environmental limits in slightly different terms. In the distant past, when a particular human group reached a limits crisis (usually with food), it had two options: indigenize or colonize. To indigenize meant adapting the group’s population size and consumption behavior to levels that could be sustained given existing resources. To colonize meant moving elsewhere, taking over other groups’ resources, or inventing ways to access resources that previously were inaccessible. No doubt circumstances and group history (and therefore mindset) predisposed each group toward one or the other strategy. Modernity marks the historical moment when the colonizers have taken over the whole world. But, having done so, they find themselves in a bind: there’s nowhere else to colonize, the resources held by Indigenous peoples have mostly already been looted, and unexploited new resources (perhaps including thorium or geologic hydrogen) are few and of questionable utility or accessibility. The only real long-term solution is for the colonizers to indigenize.
Evolution, Big Mistakes, and Human Agency
Critics of modernity are not the first people to question our evolutionary urge to colonize. For millennia, Indigenous thinkers, as well as some philosophers from the world’s dominant civilizations, have offered guidance on how to adapt to limits—psychologically as well as practically. In most if not all cases, the impulse to temper our human urge toward greed and outward expansion arose due to a humbling previous descent into scarcity that came from overharvesting resources.
During the last 60,000 years, humans fanned out across the globe, encountering ecosystems new to them. In each unfamiliar place they encountered, they tended to kill large animals that provided a high return on hunting effort. Many of these animals—including mammoths, mastodons, ground sloths, and three species of camels—were driven to extinction, and people had to resort to harvesting smaller game whose hunting required more work. Gradually, people who stayed in one place for many generations learned to leave enough plants and animals unharvested so that these species could reproduce and flourish.
Anthropologists Colding and Folke, in their studies of Indigenous peoples, found six kinds of tribal taboos regulating the harvest of vulnerable species. These are “segment taboos,” which forbade individuals of a certain age, sex, or social class from harvesting a resource; “temporal taboos,” which banned the use of a subsistence resource during certain days, weeks, or seasons; “method taboos,” which restricted overly efficient harvesting techniques that might deplete the stock of a resource; “life-history taboos,” that forbade the harvesting of a species spawning or nesting; “specific-species taboos,” which protected a species at all times; and “habitat taboos,” which forbade human exploitation of species within particular reefs or forests that served as biological reserves or sanctuaries.
Indigenous people weren’t automatically eco-wise simply because they were pre-modern. They inhabited worlds that had already been over-exploited, resulting in conflict and privation. The lessons of moderation were hard-won and eventually resulted in locally rooted cultures that assumed responsibility for the maintenance of nature’s balance, that made modest demands on ecosystems, and that recycled everything. Some indigenous societies, such as the Aboriginal peoples of modern-day Australia, developed practical, tested knowledge for living in balance with the more-than-human world that persisted for tens of thousands of years.
Some later colonizers likewise achieved ecological wisdom after having devastated their environments. By roughly 500 BC, ancient Greece was deforested and its topsoil was largely depleted. This was the context in which Greek stoic and cynic philosophers arose, advising a simple, peaceful, and virtuous life in harmony with nature (Epicurus: “Poverty, brought into conformity with the law of Nature, is great wealth.”).
Among the world religions, Buddhism has perhaps the most ecological message: other organisms, like us humans, are on the path to enlightenment, so don’t harm them if you can avoid doing so. Practice self-restraint and curb your appetites. Many environmentalists are attracted to Buddhism (which, despite its non-violent rhetoric, was spread throughout southern Asia via holy wars). Again, the context in which this religion of moderation emerged was ecological devastation. Anthropologist Marvin Harris offers this summary:
“By 600 BC, . . . the population had risen into the millions, towns and cities had sprung up, the entire Gangetic plain had become deforested, there was a shortage of pasture and fodder . . . and warfare was incessant.”
Today, as environmental devastation descends upon us all, ecological wisdom is again germinating—this time among climate change activists, students of ecology, and, unsurprisingly, people learning from Indigenous ways. Perhaps today’s critics of modernity are evolution’s growing tip, exploring a way toward the recovery of humanity and the biosphere.
We modern people prize boiled-down bromides we can easily recall, and we like to think we’re in charge of our fate. An honest critique of modernity discourages both mental tendencies. Details matter, the world is rife with nuance, and our agency is limited. However, if there is one simple bit of advice we might do well to remember, it’s this: stay humble. Much of what we think we know is wrong, and the rules of the game of survival are changing. The colonizing rules, which seemed to work so well for a while, at least for some, have propelled us into the evolutionary cul-de-sac called modernity. Going just a little further toward that dead end, via still more economic growth and technological innovation, will provide no solution. A response that reaches back to our very self-identity as humans is required.
This graphic novel presents a comprehensive exploration of the energy and climate challenges facing our world today. Through a dialogue between Jancovici and Blain, the book delves into topics such as:
Our Dependence on Fossil Fuels: Examining how modern economies are built on cheap, abundant energy and the implications of dwindling fossil fuel resources.
Limitations of Renewable Energy: Discussing the challenges associated with scaling up renewable energy sources to meet global demand.
Advocacy for Nuclear Power: Presenting nuclear energy as a viable solution to reduce carbon emissions and maintain energy supply .
The Inevitability of Economic Contraction: Arguing that due to physical and environmental constraints, a contraction of the economy is unavoidable, regardless of governmental actions.
The Need for Societal Restructuring: Emphasizing the importance of rethinking our energy consumption, economies, and societal structures to adapt to these changes.
The book combines scientific insights with engaging illustrations, making complex concepts accessible to a broad audience. It has been praised for its clarity and depth, with The Guardian highlighting its effectiveness in conveying the interconnectedness of energy consumption and climate change .
Jean-Marc Jancovici is a French energy and climate expert known for his clear, data-driven arguments about the limits of growth and the central role of energy—especially fossil fuels—in shaping modern civilization. His views are grounded in thermodynamics and systems thinking.
Here’s a summary of his main ideas about the future:
1. Energy is the Foundation of Modern Economies
Economic growth has historically been powered by cheap, abundant fossil fuels.
GDP is closely tied to energy consumption; without energy, machines stop and productivity collapses.
2. Peak Oil and Declining Fossil Resources
The world is nearing, or past, peak oil. Declining fossil fuel availability will reduce the energy available to societies.
Renewables cannot fully replace fossil fuels due to their lower energy return on investment (EROI), intermittency, and material constraints.
3. Climate Change is a Non-Negotiable Constraint
Continuing fossil fuel use leads to climate catastrophe.
A sharp reduction in greenhouse gas emissions is unavoidable, but it implies a contraction of economic activity unless we rapidly restructure society.
4. Degrowth is Inevitable
Jancovici doesn’t advocate voluntary degrowth as an ideal, but sees it as a necessary adaptation to physical limits.
He argues that we will have less material wealth, fewer long-distance travels, and simpler lifestyles, whether we like it or not.
5. Technology Will Not Save Us Alone
While useful, technology cannot overcome energy and ecological limits. Efficiency gains often lead to rebound effects (Jevons Paradox).
Belief in technological salvation is, in his view, a form of denial.
6. We Must Plan for Contraction, Not Growth
Public policy should shift toward planned degrowth, focusing on resilience, equity, and preserving essential services.
Infrastructure, urban design, food production, and employment must be redesigned around low-energy principles.
7. Nuclear Energy is a Partial Solution
Jancovici is a strong proponent of nuclear energy. He believes it offers a realistic path to maintaining some industrial capacity while cutting emissions.
However, even with nuclear, we must reduce energy demand.
Tone and Outlook: Jancovici is pragmatic and sometimes stark. He speaks of a “controlled landing” rather than a crash. He wants societies to face the truth: we can’t grow forever on a finite planet, and it’s better to anticipate limits than to be crushed by them.
