Crawling from the Wreckage (23 page)

The
IEA
‘s previous reports, which assured everyone that there would be plenty of oil until 2030, were based on what Birol called “a global assumption about the world’s oil fields,” and that the rate of decline in the output of existing oil fields was 3.7 percent a year. But this year some of the staff actually turned up for work occasionally and did a “very, very detailed” survey on the actual rate of decline. It turns out that production in the older fields is really falling at 6.7 percent a year.

There are still some new oil fields coming into production, but this number means that the production of conventional oil—oil that you
pump out of the ground or the seabed in the good old-fashioned way—will peak in 2020, eleven years from now. Fatih Birol assumes, or rather pretends, that new production of “unconventional oil” will allow total production to match demand for another decade until 2030, but this is sheer fantasy.

So what are we to make of this news? Monbiot used Birol’s admission to launch an impassioned appeal for the rapid development of non-oil alternative sources of energy. Doing so is obviously urgent if we are close to peak oil, but this may not be as great a crisis as it seems. It may not be a bonanza for the oil-producing countries, either.

The
IEA
presumes that demand for oil will rise indefinitely, so the price of oil only gets higher after peak oil, but in technology nothing is forever. Set into the front doorstep of my house (and most other nineteenth-century houses in London) is an iron contrivance called a boot scraper. It is a device for removing the horseshit from your boots before coming into the house, and the iron blade is worn into a shallow curve by a halfcentury of use.

Nineteenth-century cities depended on horses to move people and goods around. London in the 1890s had eleven thousand horse-drawn taxis and several thousand buses, each of which required twelve horses a day. Add all the private carriages and the tens of thousands of horse-drawn carts, wagons and drays delivering goods, and there were at least one hundred thousand horses on the streets of London every day—each producing an average of twenty pounds of manure.

Two thousand tons of manure a day. There were flies everywhere, and if you didn’t shovel the manure up quickly, it dried up and blew into your eyes, hair, nose and clothes. As the cities grew, even more horses were needed and the problem grew steadily worse. In 1894 a
Times
writer estimated that in fifty years the streets of London would be buried under ten feet of manure.

In fact, within thirty-five years, the streets of London were almost completely free of horses, and filled with automobiles instead. They created a different kind of pollution, but at least you didn’t step in it. The same fate is likely to overtake oil-fuelled vehicles in the next thirty-five years.

The shift will be driven by concerns about foreign-exchange costs and energy independence, and, increasingly, by the need to curb greenhouse-gas emissions. It is starting with ever-tightening standards for fuel
efficiency, which will be followed by the first mass-market generation of electric vehicles, due in the next two or three years. The
coup de grâce
will be delivered by third-generation biofuels, probably produced from algae that do not use valuable agricultural land and that are fully competitive with oil in price and energy content.

We will never get back the eight wasted years of the Bush administration, and it may now be too late to avoid drastic climate change, but Barack Obama is clearly going to try. You do not appoint Steve Chu as your energy secretary, Carol Browner as your “climate tsarina,” and John Holdren as your chief scientific adviser if you intend to evade the issue. So American oil consumption is going to start falling quite fast, quite soon.

The same is true elsewhere. Indeed, it is a safe bet that the demand for oil is going to fall faster than the supply over the next ten or fifteen years, even if we are already at or near peak oil. And if demand falls faster than supply, the price will collapse.

Ladies and gentlemen, place your bets …

Well, no, it is not a “safe bet.” It is a “known unknown,” one of Don Rumsfeld’s much-derided but very useful categories
.

The process of cutting oil demand begins with simple improvements in fuel efficiency. The Obama administration, for example, has issued regulations requiring an average of thirty-five miles per gallon across the new-car fleets of all the major US-based car producers by 2016, up from 21.5 miles per gallon at present. Since the total number of American vehicles is no longer expanding, this implies an ultimate drop of about 40 percent in the oil burned by U.S. cars. That will mean major cuts in U.S. oil imports and greenhouse-gas emissions—and this is before the electric vehicles and the “renewable fuel” vehicles hit the market. The game is afoot, and the outcome is not yet clear
.

There is a poem by G. K. Chesterton called “The Secret People” that begins (and ends) this way:

The people of China have not spoken yet, either. But if the “Old Hundred Names” finally did speak one day, I wonder what they would say to their leaders
.

Arriving in Beijing on August 23 for his third visit to China in five years, Venezuelan President Hugo Chavez praised the country’s Communist leaders to the skies for having rescued China from a “practically feudal” situation and for making it one of the world’s largest economies in less than half a century. It was an entirely predictable remark by the firebrand Venezuelan leader. It was also entirely wrong.

According to Chavez, China’s emergence as a leading economic power is “an example for Western leaders and governments that claim capitalism is the only alternative. We’ve been manipulated to believe that the first man on the Moon was the most important event of the twentieth century. But no, much more important things happened, and one of the greatest events of the twentieth century was the Chinese revolution.”

Back in the late 1980s, when mocking the few remaining Communist believers had become popular sport in the former Soviet Union, one of my favourite gambits was to point out that Russia would have done far better economically if the Communist revolution of 1917 had never happened. No matter how pessimistic your assumptions about the way that a non-Communist Russia would have developed, it simply couldn’t have done as badly as the Communists did.

To prove your point, all you had to do was pick some other country that had been at about the same stage of industrial development as Russia just before the First World War—Italy was the most obvious candidate—and compare the outcomes since.

Italy went through the Great Depression in the 1930s (which the Soviet Union escaped), and was on the losing side in the Second World War. Nobody would claim that post-1945 Italian administrations (all fifty-odd of them) have been models of good governance, and Italy is far poorer in natural resources than Russia. And yet by the late twentieth century Italians were four or five times richer than Russians, purely because they had avoided Communist rule. They were a lot freer, too.

The Soviet Communists always compared the circumstances before the revolution (which were pretty dreadful) with the situation seventy years later, and gave “the Revolution” full credit for all the changes for the better—as if other Russians, using less violent and oppressive means,
could never have changed the country for the better. Even in the late 1980s, they effectively claimed that it would still be like 1917 in Russia if the Communist revolution had not happened.

So, here we are again, with the Chinese Communist regime taking credit for all the improvements in China since they won the civil war in 1949, and foreign leftists like Hugo Chavez holding out China as an example of what wonderful things can be accomplished under “socialism.” But what would China be like now if the Communists had not won power in 1949? Much richer, much freer and not much less equal, either.

The right comparison is not between China in 1949 and China now. It is between China’s economic progress since 1949 and that achieved by its neighbours that were in a roughly similar state of development at that time. The two closest parallels are South Korea and the “other China,” Taiwan. Both had been Japanese colonies for decades before 1945, so they were a bit ahead of the mainland—but then Taiwan’s population grew overnight by almost 40 percent in 1949, as nationalist refugees who had fought the Communist takeover of China flooded in, and Korea was devastated by the war of 1950–53.

Both Taiwan and South Korea were ruled for the next three decades by oppressive and ruthless military regimes. Neither country adopted raw free-market capitalism—the state protected infant industries and nourished them with low-interest capital—but at least they weren’t tied to Marxist economics. By the 1980s, both countries had achieved economic takeoff, and democracy came soon afterwards.

Meanwhile China had the Great Leap Forward, the Cultural Revolution and various other man-made disasters, which meant that the per capita income did not even double between 1949 and 1979 (although misery was redistributed on a more equal basis). Then under Deng Xiaoping in the 1980s, China finally abandoned “socialist” economics and adopted the same style of state-assisted capitalism that its neighbours had been practicing for the past thirty years—at which point, finally, its economy began to grow significantly.

Today, the average Chinese income is about one-fifth of that in South Korea or Taiwan: slowly, they are starting to catch up. There is more freedom in China now, too, though the state is still above the law. There is still no democracy, of course. The Party constantly exhorts the people
to be grateful for all that it has accomplished on their behalf, but they would probably have been much better off if it had never existed.

Chavez must know all this, and presumably thinks that it just doesn’t matter:
his
socialist project is fuelled by oil revenues, so he doesn’t have to observe the rules of normal economics. But he does need allies against the wrath of the United States, so he says the right things to his hosts, the Communist rulers of China. They may be closet capitalists these days, but if they don’t have the myth that the revolution was beneficial, how can they justify their own monopoly of power?

Well, they can’t, actually.

When it comes to ultra-ambitious projects of social engineering, the Chinese People’s Republic has no equal. Mao’s attempt to erase an entire culture during the Cultural Revolution left the Nazi dream of an Aryan master race and the Russian Communists’ dream of New Soviet man in the shade. Only the Khmer Rouge even came close to Mao’s ambitions, and they were acting on a very small stage. But the biggest social engineering project ever has left few visible bloodstains. It is the one-child policy that Deng Xiaoping imposed on China in 1979
.

Even before the seventeenth congress of the Chinese Communist Party began last week in Beijing it was clear that at least one policy was not going to change: the proscription against more than one child per family. “Because China has worked hard over the last thirty years, we have four hundred million fewer people,” said Zhang Weiqing, minister in charge of the National Population and Family Planning Commission, earlier this year.

In the eyes of the policy’s supporters, the fact that China has only 1.3 billion people now justifies all the abuses of human rights that were committed to enforce it. True, a few women (or a few million women) were dragged off to have forced abortions in the bad old days, but now it’s much more civilized. Besides, the end justifies the means, doesn’t it?

Not having 1.7 billion people now (and not having over 2 billion in twenty years) is clearly a desirable outcome for China. Even with
decades of high-speed economic growth there is a limit to how many people China can feed and clothe and house. But did the regime really have to impose such a draconian birth-control policy in order to stay within that limit?

The doubters point out that the Chinese government’s “soft” birth-control policy in the 1970s—encouraging later marriage, fewer births and longer birth intervals—brought the total fertility rate (that is, lifetime babies per woman) down from 5.7 in 1970 to 2.9 by 1979. That is one of the fastest drops in the birth rate seen anywhere at any time—and it happened
before
the “hard” one-child policy was introduced in 1980.

Critics also point to the Indian experience, where an early experiment with enforced birth-control measures in the 1970s created such a backlash that nobody has dared to suggest it since—and yet, they argue, India’s birth rate plummeted over the subsequent generation. From a total fertility rate of 6.3 in 1960, it has fallen to only 2.8 this year. The “demographic transition” from high birth-rate, high death-rate societies to longer-lived communities with lower birth rates still works its magic eventually. But it does take its time.

Compulsion does make a difference. India and China both started the 1960s with very similar fertility rates, and at that time China’s population (648 million) was much bigger than India’s (433 million). By 1980, China’s fertility rate was already down (without compulsion) to the rate that prevails in India today; with compulsion, it has fallen even further, to little more than half the current Indian fertility rate. So China’s population will level off at around 1.4 billion by 2020, while India’s will go on growing to at least 1.7 billion.

How much difference does that make in practice? A lot. If China had taken India’s approach, its population would probably reach two billion before it stopped growing. For every two Chinese in the country there would have been three. That could easily be the margin between success and disaster.

China’s economic miracle (10 percent growth for the past two decades) skates permanently along the edge of environmental calamity. Just breathing the air in Beijing is the equivalent of smoking twenty cigarettes every day. The country has lost almost 7 percent of its farmland to development in the past ten years, and dozens of cities are experiencing severe water shortages. It’s bad enough with the present
population of 1.3 billion. What would it have been like without the one-child policy?