Reality Report: David Holmgren and (Part 1) (transcript)

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Reality Report: David Holmgren and (Part 1)

Transcribed by Brian Magee

Jason Bradford: I'm Jason Bradford, host of The Reality Report.

I believe that solving a problem begins by facing the truth about its real causes. Our society is pressing against ecological and energetic constraints. We are at an historic inflection point in which decisions made today will have profound impacts for centuries to come.

The Reality Report is recorded in the studios of KZYX&Z in Mendocino County, California, and is a long-format interview program of key thinkers of our time.

This is The Reality Report. I'm the host, Jason Bradford, and today we're interviewing David Holmgren.
David co-invented permaculture over 30 years ago and has been a practitioner and teacher every since, both at his home in Australia and as a consultant around the world. In 2002 he published the book Permaculture: Principles and Pathways Beyond Sustainability that reviewed permaculture in the context of peak energy. And more recently, David created a web site called Future Scenarios. That's
This interview is based on that web site and was recorded on July 14, 2008.

Thanks for being on the show, David. I really enjoyed your book from a few years ago, Permaculture: Principles and Pathways Beyond Sustainability, and from reading that it's obvious you've been keenly aware of energy issues, and the implications for energy decline, for a long time now. So, I'm wondering, why did you feel the need to develop the Future Scenarios web site?

David Holmgren: Thanks, Jason, for the interview. I've been aware of your own work through some of the Internet networks. And, yes, really the work of permaculture as always being based on an understanding of the energetic issues and the decline of energy after fossil fuels. I suppose the need to develop the Future Scenarios web site really came about through the realization that people had very limited pictures about the future once they moved away from the, I suppose, the business-as-usual scenarios. And, I'd found that over many years in talking to people about energy decent, that people would sometimes resort to, "Oh, you mean Mad Max." And I'd actually never seen this film.

JB: It's a classic Australian movie, even...

DH: Yes, and it was filmed not far from where I live. And when I did see it I was horrified in the sense of, you know, how simplistic and sort of implausible, in a way, a story it is, and, yet, realizing how influential that sort of thinking was in the dark spaces of people's minds of, "Oh, what happens if the project of the growth economy and industrial civilization doesn't work out as planned."

JB: Yeah, I think that's right. The Mad Max scenario is actually... I saw some modelers from University of Vermont and one of their, I think, scenarios was "Mad Max," they called it, or "Mad Max scenario versus a ecotopia scenario." So, definitely. And, actually I watched the movie for the first time a couple weeks ago also, just out of curiosity.

DH: So that idea that there's multiple, yeah, possibilities that are emerging, especially around how climate change and peak oil interact, which I'd noticed also a great difficulty of people in grasping both at the same time.

JB: Yeah, and that's part of your introduction of the web site. You talk about how both of them are unprecedented challenges for human civilization and yet they are largely discussed in isolation, and I'm just wondering if you have any idea why.

DH: Well, the way I see this is that really traces back to the energy crises of the 1970s, and, of course, the incredibly influential Club of Rome report of 1972, that indicated if industrial society continued on its current path it would run into fundamental problems from resource depletion, pollution, environmental damage and degradation, you know, early into the mid part of the 21st century. And, of course, the oil crises of '73 and '79 sort of illustrated how vulnerable society was to, you know, secession in supply of fuel, or just a slight reduction, and it brought on this very intense discussion about these issues. But when energy prices went down again as a result of processes that we're now sort of fairly familiar with, but was interpreted at the time that economic brilliance by humans sort of somehow solved the energy and resource problem. And I think a whole generation of political and environmental activists came to the conclusion that energy and resource constraints were not going to lead to the fundamental changes in society that they sought to bring about. So, really, people were inoculated against the resource depletion issue.

And then in the late '80s the other fundamental limit to the human industrial project in the form of climate change became, you know, the scientific consensus and that really became the driving force of all environmental thinking and action. And when the resource depletion issue re-emerged in the late '90s as a discussion in relation to peak oil, it was sort of like a confusion of the agenda. Like, "What is this? No, we've been there. That's not the issue." So, I don't that explains it all, but at least it explains why some people who've been sort of prominent in promoting the awareness of the critical nature of the climate agenda have been resistant to understanding peak oil.

JB: Now, you go into a lot of details on the web site – well, not excruciating, because it's a series of web pages. But you do spend some time talking about sort of the rise and fall of civilizations as being, basically, broadly understood through the lens of energy and ecology. And that's a really important part of you argument. So I thought maybe we'd spend some time going over, how is that so?

DH: Yeah. Well, I think I suppose the notion of ecological history is one that has quite a lot a lineage going back to very eminent historians back in the earlier part of the 20th century. But if we, sort of, started history looking at the really recent history or, sort of, current politics, we tend to view that in terms of ideologies, and right and wrong, and who's doing what, who's winning and losing. And then when we look back a little bit further to the history of the Second World War, say, there's now a distance that allows people to look at it and say, "Ah, yes, all those issues were playing out." But there were big economic forces about access to resources and which countries had them and which ones didn't. And that those economic things underpin the sort of the politics and the ideology.

And then when we look back further in history we can see the energetic and ecological underpinnings of, for example, with the Roman Empire, with the capture of resources from the empire and the ability to maintain those flows with the military protecting grain ships coming from Carthage into Rome and the depletion of their own local resources that originally had built Rome in the first place.

And similarly there's a whole re-writing, if you like, or re-analysis of European invasions of other parts of the world. A very influential historian on my thinking was William Crosby, who wrote a book called Ecological Imperialism: The Biological Expansion of Europe, 900 – 1900, and before Jared Diamond popularized the ideas that germs that Europeans brought with them, as well as their animals and their crops, we're actually the main agents that allowed European domination.

So, these were ecological things rather than just, "We were superior people." Or, "God was on our side." You know, those other explanations that, you know, that have been over time.

So, it's not the history that people got taught in school, but at an academic level there is a very strong and increasing credibility to the idea that it is energy and the sort ecology in the broadest sense, you know, the depletion of forests, that lead to the collapse of the Swedish naval power because they actually didn't have any oak left to build more ships.

There's many examples of this and, again, one of the influences on my thinking early on in this was an article in an early edition of "The Ecologist" magazine by Teddy Goldsmith on an ecological interpretation of the decline and fall of the Roman Empire.

JB: Well, yeah, that is true. I didn't hear much about this in my school history books. But it's interesting how when I started becoming knowledgeable about peak oil and reading The Limits to Growth literature, it was amazing. It was, "Wow, this is actually been well studied," like you say, and there's a whole lineage of this. But it gets sort of overwhelmed by the ideological rhetoric that you get in news. So, I'm just wondering – permaculture got started, I believe, about the same time that The Limits to Growth studies were first being published, is that correct?

DH: Yes, yes. The Limits to Growth report was knows in '72. I met Bill Mollison in 1974 and the work we did over a number of years very closely together led to the publication of Permaculture One in 1978.

JB: And, so, were you very influenced by Limits to Growth at that time?

DH: Ah, yeah. It was certainly one of the strong influences and, ironically, many of us at that time misjudged how quickly society would change due to these forces because we actually had faith in markets.

Now, this is a recent interpretation that I've made that, why did so many of us get it wrong in the '70s that these stresses that were being expressed through the oil shocks, which were obviously sort of political events, but these would sort of, actually, some of us thought, even though this wasn't suggested in the Club of Rome's report, that these would build and the costs of resources would rise – the cost of food would rise, the cost of energy – and we sort of caused the positive changes that were possible towards a more ecological, low energy society, and permaculture was very much part of that. But, ironically, we thought as resources were clearly depleting the market had enough collective intelligence to force the price up.

JB: Wow.

DH: And, in fact, what happened, of course, the immediate flows of new energy from new oil fields like the North Sea and Alaska actually just created short-term gluts, even though these things in a historical sense were really quite short-term, that's what markets respond to; they only respond to the short-term. So the price of energy and other commodities all went down.

JB: In the '90s.

DH: These directions that were happening through movements like permaculture didn't break out of the influence within what you might say is a counter-cultural alternative idea.

JB: So, basically, the 1990s sort of caught you off guard, in a sense, with all of a sudden you had this big price spike with oil and food was expensive for a while, but then, boom, the new wave came of resources and prices went down and people bought SUVs.

DH: Well the really key change was in the early '80s and that was also tied up with the Thatcher-ite, Reagan-ite revolution of privatization and the restructuring that, sort of, kick started again the Western economies after what was the really the biggest recession since the Great Depression brought on by the oil crises. And, of course, everyone at the time interpreted – due to the brilliance of market economics and economic rationalism – as a new economic ideology.

But it was really a big flow of cheap energy, again, from the North Sea and Alaska, plus a few other factors that are often ignored that prior to 1983, going right back to the end of the Second World War, every year there had been a net transfer of capital from rich countries to poor countries. And as a result of the third world debt crises, which itself was brought on as result of the energy crises in various ways, the debt crisis meant there's been a net flow of wealth out of poor countries into rich countries. So, effectively the wealth and economic growth that happened, again, in the rich countries, was subsidized by poor countries.

JB: Right, sort of like you are saying, the example of Rome depleting its local resources and now having to spread its empire in order to keep the goods flowing into the capital.

DH: Yeah. Yeah.

JB: And that's sort of where we're at now. We're kind of getting back towards a loss of that flow into us, potentially, with peak oil. Well, this is what your site then goes into is what are the future scenarios that this leads to, potentially. And you're well known as a permaculturist but I've seen you described as a futurist and I'm just wondering what the role of a futurist is in a society and are there some prominent examples you like to think about.

DH: Well, I think my understanding of this field is actually a bit limited and am also somewhat embarrassed by Adam Grubb's description of me as a futurist. It's sort of not something I thought about in that way.

But I've been intensely interested in the future all of my life, thinking about how these issues play out. And it's interesting the reaction to this web site has included some comments, very positive, from people who are professional futurists. It's a, sort of, recognized academic field and has its own literature and I'm only just starting to become a bit more familiar with that. And what I gather is really the field is stymied to a large degree by the ideologies of economic rationalism and the hubris that happened following the collapse of the Soviet Union that, basically, "the end of history" argument – there's one way to run the world and it's all been worked out and it's all very clear and the market will generate all the needed solutions and so there's no need really to have an academic field that thinks deeply about the future to help inform society about big, long-term decisions that might be made.

JB: So, you think futurists have been marginalized because... is that what you're saying, that this academic field....

DH: Yeah, that's the impression I get from the initial readings I've been doing of the work of Richard Slaughter, who's a very prominent futurist. His comment on the site he was, yeah, wondering why he hadn't seen my name in any of the journals that he, sort of, largely thought it was very useful work, a contribution to the field.

JB: Well, that's really nice. Do you think that there are other futurists who see changes happening right now as being historically significant? In other words, suggesting we are at some sort of historic inflection point because of resources?

DH: Yes, I think that is broadly the case. And, of course, futurists are intensely aware of the tendency to always see the current moment as the center of time, if you like – that everything is happening now – and the tendency toward millennialism where, you know, that's been right through western history of when Christ is going to come and, you know, all of this world is going to be swept away, or variants of that, you know, have, sort of, been repeating themes. But even with the awareness of the trap of that type of thinking, many people who are looking at the number of issues that are colliding at the moment, that it's pretty hard to avoid the conclusion of major turnovers in human systems that are on a very large time scale that we're talking about.

JB: Well, that's very interesting. Do you think that – I know you are just sort of learning the field – do you think there are any significant ways that you differ from other futurists that you know about?

DH: Well, as I've said I'm coming to it from a different sense and for me this is quite normal because permaculture sort of lies outside and cross between the disciplines, it doesn't really fit within any, sort of, academic area of study. So I'm used to the idea of being the generalist and, you know, treading on the toes of other people's work.

But I can see, and I think others have seen, a broad patent that this generalist thinkers, that come in from the outside the fields have been some of the most productive thinking in recent decades, is coming in this way because there also tends to be the other specialization that our society has become, if you like, defective, because of it's overspecialization, where all of the knowledge is in stylized separate compartments and one group don't talk to another and none of the people with this higher level knowledge often have any practical connection to the, if you like, what's happening down in the engine room. How does how things are actually made, how does agriculture work, how does nature work, you know, the very practical things. And permaculture has certainly always encouraged that connection between different areas of study and the connection between the practical and the conceptual.

JB: Yeah, definitely. You get your hands actually dirty and then you also think about these large-scale, long-time-frame issues and so that's probably a pretty unique perspective that most people don't spend their life doing, you know. So, that's pretty interesting.

DH: Yeah, and it's also interesting that that is not just something of a sort of a rich western society that can support academics, you know. We see that in traditional societies – indigenous societies – the thinking about seven generations into the future in what we do. So it is part of a long and good tradition in society.

JB: Yeah, that's a neat point. I hadn't thought of that. You know, you mentioned something about how the futurists are something marginalized because they don't, sort of, fall in line with the general assumptions of a society. And this is what I come across when I bring up the issue of, say, a collapse or energy decent, people argue that I'm not giving enough credit to, you know, humanity, and "we're ingenious" and "look at all our great technologies" and "there's this irrepressible human spirit"of some kind that will be invoked. I'm just wondering what your response is to those sort of critiques.

DH: Yeah, well I think that view of the world about, you could say, optimistic view about human capacity itself comes out of the European enlightenment and then industrial society that gave us this huge increase in power. And the natural thing was to attribute that to our own brilliance, in the same way that Europeans colonizing the Americas and other places attributed their success to the fact that they were just naturally superior humans.

But when we look back we can see that the stepping stones that led to the tapping of fossil fuels were incredibly important building blocks that ,of course, involved technology, innovation, but what each of those cycles have to do is lead to the harvesting of a bigger source of energy and that bigger source of energy could then sustain greater complexity which could support another cycle of human thinking, interaction, economic activity, technological break though that could allow the tapping of another larger source of energy and that kept building in this way. So, there's no doubt that human capacity has always been an important part of that, but that human capacity, when we look at other periods of history, doesn't produce these cycles because if there's not new, free sources of energy to tap then it's not possible for that human creativity to lead to greater complexity and power. It leads to other things like enormous increases in subtlety in the arts and cultural processes, but it doesn't lead to us becoming more and more powerful. So, I would say that it is really... even at human capital, the capacity, the knowledge, all of the education systems we have, those are really a product of cheap energy as well.

JB: Well, I think about from the perspective of just the movement of fossil fuels and the machinery that, for example, went into agriculture. And you follow the technological changes in agriculture and you see how at each step of applying energy to tillative land and then transportation of products and processing and storage and the fertilizer production. This all permitted fewer people to be involved in agriculture and that meant that now you had 95% of your society that could do something else as opposed to capture and harness plants and animals for food.

DH: Yeah, and that's certainly the case. Also, that society at the government level was able to harvest a large tax base to support public institutions like universal education and then moving on into, sort of, widespread tertiary education at universities. And all these things are actually very financially expensive and ultimately they're very energetically and resource expensive.

So, these things don't come about without there being primary energy sources through both the harvesting of non-renewable resources and then applying that back into our regional form of energy, which was by agriculture and forestry and other forms of nature to accelerate those also.

So, all of these activities have fit into increasing the energy base in many different ways, And then that's produced things like the computer revolution and all sort of things that are, no doubt, increase human capacity in a particular way. But the past history that this technology always gets more complex and more powerful, I think that is actually really been faltering for more than 50 years. But it's been disguised quite a bit by the energy's still being there from those older sources.

JB: So you see that we've had almost 50 years of some kind of decay, in a sense, of this cycle that's been a turning point for 50 years, we've been on.

DH: Well, I think if you look back to in 1950 the chief advisor to the Australian government on nuclear power was advising that by 1980 nuclear power would be so cheap that it wouldn't be worth measuring, wouldn't be worth charging for it. It would be effectively free. Clearly, that didn't happen and no one is really suggesting that's likely to happen, except the most extreme techno-optimists imagining it still at some point many decades away.

I think there's lots and lots of examples like that that we can see the rate of change of power that was driving technology was actually very, very rapid after the Second World War and by the 1970s was really very much slowing down. And we've had some pulses from the effects of information technology, which allow us a bit to do more with less, and there was so much hubris about that in the early '90s. There was the idea of the weightless economy, continuous economic growth without actually using more resources. Of course, that turned out to be largely false.

JB: Yeah, yeah. Okay. Now one of the main points of Future Scenarios is to distinguish between "collapse" and what you would like to call instead "energy decent." What are these distinctions and why are they important to make?

DH: Well, I don't want to underplay the possibility that rapid onset of climate change and other factors and global financial collapses and resource depletion and plagues and various other factors couldn't come together to actually virtually wipe out industrial civilization. But I think that is actually, sort of, fairly less likely than what we're seeing in many cycles of civilizations where there's a decline over time in the organizational complexity and the scale of things, where things sort of fall back and restructure at a lower level and then go down and another level.

I think it's no accident that historians talked about the decline of Rome and that Rome was not really, as I would use the world, a collapse, because there was not a precipitous loss of all of the knowledge, all of the structure, all of the organization of that civilization, not really at any point. And I would contrast that with some others.

For example, the Minoan civilization in the eastern Mediterranean, there's a gap in the historical record where we know nothing for about 600 years and then the Phoenicians describe fairly primitive people living in stone huts where there had been this great civilization. And it appears these people were actually the decedents of the Minoans, and that the Minoans went through a sort of instantaneous, more or less, ecological collapse due to over-cutting the forests on the eastern Mediterranean islands, which sustained a cloud forest, in what's otherwise a dry climate. And then that led to the aquifers drying up and all their agriculture failed in, like, really a very short time span. And they weren't predominantly a seafaring people and the whole system was, sort of, basically lost and collapsed.

So, the people who were the decedents and survivors ended up with a completely different culture, different religion, and it had really no understanding of what those ruins were. So, I would describe that as a true collapse. Now, I know there are many very influential, important authors who've used collapse to describe any decreasing complexity. But I don't think that really fits with our, sort of, common sense understanding of what the word means.

JB: Right, like Tainter. Tainter has talked about collapse of the Roman Empire and you're saying it was more of an energy decent scenario, the Roman Empire might be.

DH: Yeah. Of course a lot of these things relate to time scale. You know, how large a time scale to do you want to look at and something that, you know, at one scale looks like an energy decent process you can say that another you may call it a collapse.

But I think it's much more likely that there's a sort of decrease in capacity and power in industrial society that works its way into the future for many, many generations and that this process could go on for so long that, like the development of industrial society – really over 500 years I would put it – you know, the precursors going back to the point at which Europeans managed to get to the Americas, was really a sort of kicking off point of European civilization gaining new energy and expanding in a complexity that then led to the tapping of coal and then oil. We can see that that process continued for a very, very long time. And I would suggested that the energy decent process could go on for a similarly long period of time.

So in that sense it's possible that you can actually develop a culture of energy decent because it's actually happening over such a long period of time that we could adapt to energy decent in the way that we adapted to this culture of continuous change that we then started to take as being normal.

JB: So, continuous change meaning the continuous change in technology wherein your head spins with all the new stuff that you need to adapt to, like cell phones and computers. And, so, you're saying that that continuous change that we're used to, that's almost pre-adapted us to accept change, but it's a different kind of change than we're accustomed to.

DH: Yes. Although what we are facing is extremely different and much more difficult to adapt to because it's easy to learn how to have more, it's harder to learn how to get by with less.

But, the key thing about our cultural heritage that we carry with us from the last few hundred years is this culture of constant innovation, constant change. It's not just the last few decades. This has really been going on in some ways for a long time.

And, you know, I would argue, in a way, that the late 19th century and first half of the 20th century all brought almost more fundamental changes in technology than have happened since.

So, this culture of change is a great asset, I think, that we take into the future. And this is really also separating this idea of energy decent from any notions of quickly moving into some sort of sustainable society – the idea that we'll put everything in place and then develop a steady state economy and then everything will be set. And, oh yes, there may be some change and adjustment, but basically the same structures will just sort of continue on into the future. I think that's highly unlikely.

JB: Yeah, you make a really good case for the unlikeliness of that.

Why do you think that energy decent, the scenario you put forth has basically been ignored? There's always these extremes. You go into this in the web site. There's the kind of the technological supremacy where we colonize space. There's a steady state you've been talking about where we're ecologically balanced to some extent and, but, you know, we carry on with our lifestyles mostly how we're accustomed to. And then, you know, there's this collapse, Mad Max sort of, not in specifics, but in absolute collapse scenario.

Why do you think your sort of, you know, adaptation to less energy over time, that sort of scenario, has not been discussed very much?

DH: Well, I think it's a bit the missing piece. First, yeah, we start off with the techo-optimism that especially when I was young, you know, I was promised holidays to Mars by the time I was an adult. I haven't been to Mars yet. You know, it was amazingly strong in the 1950s and '60s.

And then, you know, a series of events and issues, the rise of environmentalism has, sort of, battered that view of the future, even though it still has enormous amount of strength to it. And the next thing was to fall back to what I'd call the techno-stability that, you know, we'll somehow stop overusing resources and with new innovative, renewable technologies move on to this steady state sustainable society. And it's like a sort of bargaining.

But while there's been that focus on desired outcomes and some compromise, if you like, there is always been the other dark, undiscussed or only explored in science fiction and through other forms of literature and art, the idea of the failure of society. And that tends to, sort of, be the other extreme. And, so, in a way, energy decent is not quite that extreme and so it's sort of misses out between those two polarities.

JB: It's not as good a movie script, I guess.

DH: Yeah, it's just a bit messy and a bit muddy. It doesn't have that clarity and certainty about it and doesn't have quite as much fatalism as the collapse scenarios tend to invoke, that "well, there's nothing that can be done, there's no point in doing anything" view.

JB: I think that's really, you know... I think that's a good point. I think this is a good time to talk about the Cuba example because this is a situation in which people had to do a lot of work to deal with the crisis and there wasn't fatalism of "it's all over, let's give up." They actually said, "we want to survive and we have to figure out a way."

So, maybe explain how permaculture has already been sort of tested as a strategy that works during energy decent.

DH: Well, I think the Cuban case in an interesting one that many people have commented on and there's been intense study on how Cuba coped with massive reduction in imported oil, fertilizers, pesticides and other things that were essential to its, actually, quite advanced industrial economy that it had. It was never really what we would call a Third World country.

Ironically, it actually had more farm machinery and I think more application of fertilizers than American agriculture. Most people lived in towns and cities, not in the countryside. Clearly, though, not a rich society, but highly industrialized and highly dependent on the Soviet economy and import/export type economy.

And there was a restructuring that happened both from community bottom-up activism and people just doing things like growing food for themselves in their own gardens and the government realizing that it needed to radically restructure the centralized ways of doing things.

And about that time in the early '90s there was the early beginnings of permaculture activism in Cuba. And it was not the only, but one of several elements of , if you like, alternative ideas that were already in Cuba that were then given the opportunity to see what they could do, see what they could show.

And the main way that was expressed in Cuba was really encouraging a whole lot of people who had never been farmers to grow food in their gardens and also to re-learn all the traditional skills of food processing and food preservation because, of course, there were all sorts of related issues like electricity blackouts and no refrigeration so all the conventional food storage systems weren't necessarily working.

And, yeah, permaculture was one of the elements that led to a situation where no one actually really starved to death through that crisis and Cubans even became more healthy as a result of riding bicycles and doing more physical work and eating less fat and less animal protein.

JB: Yeah, I mean they went through a pretty quick transition where it was very obvious that they didn't have this stuff. And right now its pretty surreal because we've had this ramp up in prices and this sort of an economic squeeze rather than a direct cut-off and right now in the U.S., I don't know if this is true in Australia, but people are actually driving less because of the high gasoline prices.

But what's really amazing is that the Democrats, which is the party that is typically concerned about climate change, are trying to figure out how to make gasoline cheap again. You know, they are afraid of the backlash. And so part of me wonders, are peak oil and other resources constraints almost gifts that could save us from our addiction to these polluting sources of energy?

DH: Yes, well I think I've had the view for quite some time that I thought the impacts of peak oil would come on faster and be more immediate than the impacts of climate change on affluent countries. And that's in spite of the fact that the evidence on the rapidity with which climate change symptoms are happening is accelerated.

So, I think, just because, you know, once you understand how critical energy prices of the really key rich energies that subsidize everything else in society, you know, it was clear that substantial rises would bring about change. I suppose a lot of the debate has been how high would those energy costs have to go to bring about change in really rich countries where people are also not just personally addicted to the behaviors but locked in structurally, that, you know, can they do anything else other than keep consuming.

And I think peak oil is obviously leading to some crazy policy decisions and policy proposals like you're saying about how to make fuel cheap again when really we need expensive fuel to change the behavior. But I think the rises have been large enough, and if they go further as we expect them to, then, you know, it's not possible to do anything to make them cheap again. So, we do get the change and I think that's already evident that people are changing their behavior faster than any of the change that's been brought on so far by concern about climate change or, you know, policy incentives to bring about greater energy efficiencies.

But in saying that I need to note this: there is quite a difference, I believe, in the situation in the U.S. from a country like Australia. Because we are a country with huge natural resources relative to our population, especially, you know, we're the largest coal exporter in the world and a very substantial producer of natural gas and uranium and iron ore, and given there's only 20 million people here, Australia's actually, sort of, riding on an economic boom that acts as a counter-flow to the, sort of, necessary changes. Where, of course, the United States with the dollar falling and being a massive sort of net consumer relative to its production of resources is being hit a lot harder by these forces at the moment.

JB: Right, I think the Australian dollar has some ties to commodity prices and it keeps it strong in this kind of environment.

What I find very discouraging, of course, is when the high level dialog about this stuff ignores the important points. In this program we've often been critical of mainstream media for not understanding key issues such as the flow rates of resources, things like export capacity, net energy. Any points about these topics you'd like to drill home? You know, what is it that really everyone should understand about these topics for the sort of fate of industrial economies?

DH: Yes, well it's certainly been amazingly frustrating to me that over the years almost every educated person who knows anything about resources has heard the figures about "at current rates of consumption the resource will last 'x' number of years," this extending from concepts of reserves to economic possibilities, when reserves have never determined what the actual flow rate of resources are. And, yet, economic activity relates to flow rates.

The frequent thing that's said in peak oil education, "it's about the size of the tap, not the size of the tank," to use the analogy of water storage. I think that one is starting to get through, and of course that is really one of the core messages of peak oil not being about running out, but about decline in the flow rate and, therefore, economies must follow that and that a decline in flow rate can lead to no limit to price until demand actually drops to what the actual flow rate is. And that's of course what we're seeing now, what the economists call "demand destruction."

But I think on top of that the export capacity issue has been a bit of a shock realization. You know, very late in the piece, has the result of the work of several commentators, most notably Jeffrey Brown, through The Oil Drum, and the idea that all of the energy-producing countries have rapidly growing economies and rapidly growing consumption and often rapidly growing population, so they are actually using more and more of their own production and as they move into that post-peak situation the amount they available for export collapses in an amazingly short time. And this is, of course, one of the things that's contributing to decline in export from countries like Mexico as well as the very rapid absolute reduction in production.

But I think the third issue, the one of net energy, is the most complex and I think it's the most fundamental. And it must have been really almost 20 years ago that I thought, when these issues start to bite the conceptual confusion around what is an energy source and what is subsidizing the other parts of society will be enormous because money and economic analysis does not have a way of analyzing net energy and it is structurally blind to this problem.

For example, the decline in energy flow and the decline in net energy or energy profit is leading to more of society's wealth being put back into the energy harvesting sectors and that's leaving less and less for other sectors. Now, from the economists point of view this is all contributing to economic growth and they don't distinguish between one form of economic growth and another. So, they don't actually see, initially, any problem in that.

JB: Right. They don't see a danger in that.

DH: Yeah. Whereas this is like a peasant farmer who has to cultivate his fields, use a substantial amount of energy to hoe is field and then his soil structure's declining and it's getting harder and rockier and he's having to cultivate it twice to get the soil in good enough condition for the crop to germinate. Well, he's just put back twice as much activity. You know, there's twice as much economic activity going on but he didn't he any more food out of it and that's basically what is starting to happen in society. And, of course, what that means there's less resources for education, for health, for maintaining public infrastructure, and all of the other parts of society that we would say are the real things that we value rather than just having a lot more oil drilling rigs and a lot more equipment and people employed in just digging resources out of the ground.

JB: Yeah. That's a great summary of the, sort of, our situation right now. Thanks for that.

This concludes part one of my interview with David Holmgren, co-inventor of permaculture and recent creator of the web site Part II will discuss the details of David's four energy descent scenarios.

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