The Peak of Woods: a Foretaste of the Oil Peak?

Slashdot pointed me at a fascinating article on the deforestation of the planet: Peak Wood: Nature Does Impose Limits | Miller-McCune Online.

I hadn’t appreciated the role of forests in causing relocation of native American settlements on the US east coast. Or the role of wood fires in making traditional Christian teachings of Hell sound like nonsense (where would they get enough trees to keep everyone in Hell burning forever?).

My daughter in law, with her recent graduate degree in environmental policy, may already be aware of this sad story. The rest of us should read it, too.

I also enjoyed the way the author trotted out Frederick Engels (sidekick of Karl Marx) as another critic of deforestation.

What did the Spanish planters in Cuba, who burned down the forests on the slopes of the mountains and obtained sufficient fertilizer from the ashes for one generation of highly profitable coffee trees, care that the heavy tropical rains later washed away the now unprotected upper stratum of the soil and left only bare rock behind?

From his Dialectics of Nature.

Does anyone else appreciate a faint echo of Adam Smith in all this?

I always see economics as a subject closely tied to the Circle of Life sort of ideas promoted in ecological circles. The “good news” cycle looks like this:

  • A farmer grows a crop and harvests it
  • The farmer sells the crop for more than it cost to produce
  • The farmer buys things to make his life and work better
  • The money from the farmer pays for factories to build labor-saving devices
  • The labor-saving devices help the farmer produce more food for less money
  • The farmer makes even more money and buys more things

And the “bad news” cycle looks like this:

  • The farmer takes every shortcut possible to grow and harvest a crop
  • The farmer sells his crop and makes money
  • The farmer buys things, growing the local economy
  • The next year, the farmer repeats what he did in previous years
  • The worn-out farmland yields a fraction of previous years’ output
  • The farmer goes bankrupt
  • The community goes bankrupt

This is the same sort of justice we see in the environment when the low level forest is wiped out by a fire. Yes, the strong parts of the forest eventually regrow while the weak things die out. The analogy gets weird when we start talk about people suffering. Even worse, people often starve during financial “downturns,” and this is the sort of thing where a humane society steps in. But it’s tricky to figure out how to help people in a practical way without propping up rotten bits of the economy.

The point, which is getting lost in weird examples, is that economic problems often have the same structure as ecological problems. Environmental changes make species die, just like social, cultural, and economic changes make products, services, and companies die. You can’t preserve a species just by keeping a few in cages – it’s much more expensive and difficult than that. Rebuilding a species is costly, painstaking, and it doesn’t always work. Likewise, you can’t keep an industry healthy just by propping it up with public subsidies.

The overwhelmingly political nature of the subsidy process should be obvious when we realize that the oil industry – clearly one of the most profitable there is – continues to get subsidies from many governments, including the US Government. You’d think that decades of small-government conservatives could have stemmed that tide, except that those politicians get ample donations from – who else – the oil industry.

I find it particularly ironic that the Cato Foundation, which is supposed to operate on an independent, even ethereal, plane of rational libertarian thought, was founded with a huge donation from an oil company mogul. I hope that hasn’t affected the Cato Institute’s researches when it comes to oil subsidies.

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