This was a guest post sent to me by regular contributor, Chris Snuggs, back in May. It somehow slipped between the cracks, so to speak, and only came to light when I was trawling through a pile of draft posts.
Despite, or even because of, Madam Merkel’s re-election it still seemed a valuable post to publish. Chris lives in Germany and has a very good perspective on things.
It may also serve as an interesting reflection on the IPCC’s report when it is published later this week.
Over to Chris.
“Angela Merkel would seem to want it both ways.” (“Der Spiegel”)
The above comment caught my eye as I browsed through “Der Spiegel” this morning. Frau Merkel is delaying difficult decisions on energy production and “carbon backloading” until after the September elections in Germany.
Nothing earth-shattering in itself, of course. It is human nature to want it both ways, and examples do not lack.
One does somehow feel, however, that it has got worse in recent years. Kids want a highly-paid job without working their way up through the company hierarchy. Spain et al want to enjoy German prosperity by using EU “structural funds” without actually doing the boring hard work over decades. And politicians of course want growth and prosperity and a vast state apparatus plus a voter-bribing welfare system but without debt – or indeed troublesome whinging from the voters. However, as the proverb goes: “You can’t have your cake AND eat it.”
However, this article quoted is about something more serious than mere short-term greed, which is not exactly new in the history of Mankind. No, we are now applying the illusion that we can have it both ways in an area that threatens life on the planet – Global Warming of course.
As a concerned member of the “We don’t want to die from Global Warming Brigade”, I am more worried than ever about what is going on, and Germany is a symbol. Whatever the Germans do, they tend to do thoroughly and efficiently. They have a fairly large Green Party, a large investment in solar power and until recently seemed to be setting an example to Europe and the world. However, …..
• Germany will this year start up more coal-fired power stations than at any time in the past 20 years as the country advances a plan to exit nuclear energy by 2022. Two coal-fired plants opened in 2012 and six more will open this year, adding up to 7 percent of Germany’s capacity. A dozen more are on track to open before 2020. Greenhouse gas emissions in Germany, Europe’s biggest economy, rose 1.6 percent last year as more coal was burned to generate power, the Environment Ministry said two days ago.
• With the current carbon price, utility companies that have invested in low-carbon electricity generation such as wind and nuclear are losing market share to companies that produce energy using coal. Some companies are already acting on the low price of carbon in Europe. E.ON, for example, one of Germany’s largest utilities, announced recently that clean-energy investments will be cut to less than €1 billion in 2015 from €1.79 billion last year.
The thing is, if serious and efficient Germany is backsliding on emissions what are the chances for the rest of the world, with standards of living far below Germany and desperate to catch up?
An understanding of the problem of CO2 emissions is hardly new, yet it seems to me true to say that nothing serious is being done about it. There is lots of talk, noble efforts by Al Gore et al, international conferences, carbon-trading schemes and so on, but all the time CO2 emissions are increasing. Last week we learned that atmospheric CO2 has now reached 400 parts per million, a level not seen for 4 million years.
Despite this (and the consequences predicted seem to range from merely uncomfortable to threatening to life on Earth), the search for, exploitation and use of fossil fuels are all increasing. A student of logic would surely say that this is irrational; we are lowering ourselves to the level of lemmings, except that they can’t help it but we could.
We are completely hooked on fossil fuels; that is the problem. We have one minister ranting on about “saving the planet” and another proudly announcing new oil-wells, new areas earmarked for shale-fracking, developing countries opening new coal-fired power-stations. Industry in the west is making some efforts to clean up its act but these are being predictably swamped by growth in the developing economies.
It would be funny if it weren’t so serious. A few years ago “experts” talked about the end of oil as resources ran out but as we get cleverer at extracting it from more and more difficult places the availability of fossil fuels is actually going up! On top of this the melting poles (and Greenland) are opening up new areas for exploitation by the oil companies.
“Oil companies”. Yes, the Big, Bad and Ugly Culprits … and yet the last time I checked oil companies do not actually run the country they are based in. (Conspiracy and “Plutocrats run the World” theorists will certainly disagree with this, but that is another story!)
No, governments rule their countries, and while some are dictatorships and plenty of others are totally corrupt, there are a good number of democracies involved in this headlong rush to disaster. Worse, we are in a massive generalised recession and yet emissions are still creeping up. What will happen once “growth” takes off once more – as it will, these things going in cycles.
Living in Germany, I have personally been horrified by the decision to phase-out nuclear power. The Green movement is politically significant here and the government reacted rapidly and negatively to the Fukushima incident. This was indeed terrible, but does not change the facts:
– Nuclear is totally free of CO2 emissions.
– There has never been a serious accident in Western Europe.
– France still today derives over 70% of its electricity from nuclear.
– Nuclear designs are far safer than they were years ago.
– Nobody in their right mind would build a nuclear power station in an earthquake zone as the Japanese did – though if they want nuclear (and they have few natural resources) they don’t have a lot of choice
– Europe of course is an earthquake-free zone, except for Southern Italy.
– Nobody either would build one where the cooling pumps could be flooded by a tsunami – as the Japanese (usually so clever) ALSO did.
There are nonetheless dangers in nuclear of course, but:
– ONLY nuclear can currently provide enough power to satisfy our needs without CO2 emissions. Solar and wind are feeble pinpricks in comparison.
– There is no sign of a Deux ex Machina on the horizon that will solve the emission problems associated with fossil fuels.
My personal conclusion is that without nuclear we are doomed, since we seem totally incapable of reducing CO2 without it. On the contrary, now that shale-fracking has come on stream the emissions seem likely to rocket, with a presumable corresponding increase in Global Warming. And as far as that is concerned, it does seem to me – as a layman, like most of us – that we are involved in a vicious circle: the more the poles and Greenland melt, the more radiation is absorbed by the oceans and the more CO2 is released. People have talked about a “tipping point”, but it could just as easily be an “explosion point” – after which a geometrically increasing temperature in an unstoppable feedback cycle takes us to a Venusian scenario.
Not wishing to be to gloomy, but Frau Merkel’s procrastination is worrying. Politicians do things with such short-term considerations. She seems to be waiting till after the elections, but excuse me Frau Merkel, saving the planet can’t be put on hold.
Yes, whatever Europe does is pointless if India, China and South America are going to steam ahead, but someone has to set an example, and at the moment, Germany is burning much more coal AND opening new coal-fired power stations just as we should be cuttting back.
What is the solution? Nobody seems to know. If they do, they aren’t acting up on it. It is rather depressing. All Europe’s politicians are talking about at the moment is increasing growth = burning more fossil fuels. Even France is cutting back on nuclear ….
WHO WILL SAVE US?????
Finally, a few facts about emissions:
• The world emitted 31.8bn tonnes of carbon dioxide from the consumption of energy in 2010 – up 6.7% on the year before.
• The world emits 48% more carbon dioxide from the consumption of energy now than it did in 1992 when the first Rio summit took place.
• China and India together are building four new coal-fired power stations per week
• China – which only went into first place in 2006 – is racing ahead of the US, too. It emitted 8.3bn tonnes of CO2 in 2010 – up 240% on 1992, 15.5% on the previous year.
• China now emits 48% more CO2 than the USA – and is responsible for a quarter of the world’s emissions. Chinese per capita emissions, however, are still around 60% lower than in the USA (now involved in extensive shale-fracking)
• Global coal consumption grew by over 5% in 2010; gas by over 2%.
• Renewable energy accounted for only 2.2% of global energy output in 2011, despite all the fanfare over wind turbines and solar panels.
I tried to get a handle on some of these statistics. 31.8 billion tons of CO2! I went into the garden yesterday and tried to imagine the volume of gas that would weigh one ton. Impossible of course, so I looked it up: it is apparently 556.2m3 or a cube with sides of 8.3m.
Then David Shukman, Science editor BBC News added this further background, that I am going to republish in full:
Near the summit of the Mauna Loa volcano, the carbon dioxide monitors stand amid one of the world’s remotest huddles of scientific instruments. To reach them you have to leave the steamy Hawaii coast and climb through barren lava-fields.
At the top, above 11,000ft, the air is thin and the sun piercing. During my visit, I watched rain clouds boiling in the valleys below me. Charles David Keeling chose this otherworldly spot because the air up here is neither industrial nor pristine; it is “well-mixed” which means it can serve as a useful guide to changes in the atmosphere.
Despite their global significance, the devices he installed back in 1958 do not look impressive. But he battled bureaucratic objections to fund them and his legacy is the longest continuous record of a gas, linked to much of global warming, that just keeps rising.
Scientists are calling on world leaders to take action on climate change after carbon dioxide levels in the atmosphere broke through a symbolic threshold.
Daily CO2 readings at a US government agency lab on Hawaii have topped 400 parts per million for the first time.
Sir Brian Hoskins, the head of climate change at the UK-based Royal Society, said the figure should “jolt governments into action”.
China and the US have made a commitment to co-operate on clean technology.
But BBC environment analyst Roger Harrabin said the EU was backing off the issue, and cheap fossil fuels looked attractive to industries.
The laboratory, which sits on the Mauna Loa volcano, feeds its numbers into a continuous record of the concentration of the gas stretching back to 1958.
‘Sense of urgency’
Carbon dioxide is regarded as the most important of the manmade greenhouse gases blamed for raising the temperature on the planet over recent decades.
Human sources come principally from the burning of fossil fuels such as coal, oil and gas.
Ministers in the UK have claimed global leadership in reducing CO2 emissions and urged other nations to follow suit.
But the official Climate Change Committee (CCC) last month said that Britain’s total contribution towards heating the climate had increased, because the UK is importing goods that produce CO2 in other countries.
Rest of that news article is here. But I can’t resist the picture and quote from Professor Sir Brian Hoskins, director of the Grantham Institute for Climate Change at Imperial College London.
“A greater sense of urgency was needed.” I’m going to be emotional! Frankly, those wishy-washy words are pathetic.
We need the sort of words that George Monbiot penned a few days ago. Those I will share with you tomorrow.
That pesky ‘law’ regarding the power of unintended consequences.
As many of you are aware, last week was an unusual format for Learning from Dogs in that the whole of the week was dedicated to republishing Dr. Samuel Alexander’s essay The Sufficiency Economy – Envisioning a Prosperous Way Down. If you missed that, the first chapter was a week ago today under the title of Where less is so much more.
Moving on. Many living in Northern California and South-West Oregon will have had a timely reminder that nature is tapping mankind on the shoulder in new and challenging ways. I’m referring to the massive storm that was featured in a recent Climate Crocks article that delivered over a foot of rainfall in recent days. Here in Southern Oregon we received over 10 inches! Hence the growing awareness that we have to do something!
World leaders seem to have their minds made up regarding what will fix world CO2 emissions problems. Their list includes taxes on gasoline consumption, more general carbon taxes, cap and trade programs, increased efficiency in automobiles, greater focus on renewables, and more natural gas usage.
Unfortunately, we live in a world economy with constrained oil supply. Because of this, the chosen approaches have a tendency to backfire if some countries adopt them, and others do not. But even if everyone adopts them, it is not at all clear that they will provide the promised benefits.
The Kyoto Protocol was adopted in 1997. If emissions had risen at the average rate that they did during the 1987 to 1997 period (about 1% per year), emissions in 2011 would be 18% lower than they actually were. While there were many other things going on at the same time, the much higher rise in emissions in recent years is not an encouraging sign.
The standard fixes don’t work for several reasons:
1. In an oil-supply constrained world, if a few countries reduce their oil consumption, the big impact is to leave more oil for the countries that don’t. Oil price may drop a tiny amount, but on a world-wide basis, pretty much the same amount of oil will be extracted, and nearly all of it will be consumed.
2. Unless there is a high tax on imported products made with fossil fuels, the big impact of a carbon tax is to send manufacturing to countries without a carbon tax, such as China and India. These countries are likely to use a far higher proportion of coal in their manufacturing than OECD countries would, and this change will tend to increase world CO2 emissions. Such a change will also tend to raise the standard of living of citizens in the countries adding manufacturing, further raising emissions. This change will also tend to reduce the number of jobs available in OECD countries.
3. The only time when increasing natural gas usage will actually reduce carbon dioxide emissions is if it replaces coal consumption. Otherwise it adds to carbon emissions, but at a lower rate than other fossil fuels, relative to the energy provided.
4. Substitutes for oil, including renewable fuels, are ways of increasing consumption of coal and natural gas over what they would be in the absence of renewable fuels, because they act as add-ons to world oil supply, rather than as true substitutes for oil. Even in cases where they are theoretically more efficient, they still tend to raise carbon emissions in absolute terms, by raising the production of coal and natural gas needed to produce them.
5. Even using more biomass as fuel does not appear to be a solution. Recent work by noted scientists suggests that ramping up the use of biomass runs the risk of pushing the world past a climate change tipping point.
It is really unfortunate that the standard fixes work the way they do, because many of the proposed fixes do have good points. For example, if oil supply is limited, available oil can be shared far more equitably if people drive small fuel-efficient vehicles. The balance sheet of an oil importing nation looks better if citizens of that nation conserve oil. But we are kidding ourselves if we think these fixes will actually do much to solve the world’s CO2 emissions problem.
If we really want to reduce world CO2 emissions, we need to look at reducing world population, reducing world trade, and making more “essential” goods and services locally. It is doubtful that many countries will volunteer to use these approaches, however. It seems likely that Nature will ultimately provide its own solution, perhaps working through high oil prices and weaknesses in the world financial system.
Elastic Versus Inelastic Supply
It seems to me that many bad decisions have been made because many economists have missed the point that crude oil supply tends to be very inelastic, while other fuels are fairly elastic. Let me explain.
Elastic supply is the usual situation for most goods. Plenty of the product is available, if the price is high enough. If there is a shortage, prices rise, and in not too long a time, the market is well-supplied again. If supply is elastic, if you or I use less of it, ultimately less of the product is produced.
Coal and natural gas usually are considered to be elastic in their supply. To some extent, they are still “extract it as you need it” products. Supply of natural gas liquids (often grouped with crude oil, but acting more like a gas, so it is less suitable as a transportation fuel) is also fairly elastic.
Crude oil is the one product that is in quite short supply, on a world-wide basis. Its supply doesn’t seem to increase by more than a tiny percentage, no matter how high the price rises. This is a situation of inelastic supply.
Even though oil prices have been very high since 2005 (shown in Figure 3, below), the amount of crude oil has increased by only 0.1% per year (Figure 2, above).
In the case of oil, both supply and demand are quite inelastic. No matter how high the price, demand for oil doesn’t drop back by much. No matter how high the price of oil, world supply doesn’t rise very much, either.1
In a situation of inelastic supply, the usual actions a person might take appear to work when viewed on a local basis, but backfire on a world basis, if not everyone participates. When one country tries to conserve crude oil (whether through a carbon tax, gasoline tax, or higher automobile mileage requirement), it may reduce its own consumption, but there are still plenty of other buyers in the market for the oil that was saved. So the oil gets used by someone else, perhaps at a slightly lower price. World oil production remains virtually unchanged. Thus, a reduction in oil usage by an OECD country can translate to more oil consumption by China or India, and ultimately more development of all types by those countries.
Adding Substitutes Adds to Carbon Emissions
If we don’t have enough crude oil, one approach is to create substitutes. Because crude oil supply is inelastic, though, these substitutes aren’t really substitutes, though. They are “add ons” to world oil supply, and this is one source of our problem with increasing world emissions.
What do we use to make the substitutes? Basically, natural gas and coal, and to a limited extent oil (because we can’t avoid using oil). The catch is, that to make the substitutes, we need to burn natural gas and coal more quickly than we would, if we didn’t make the oil substitutes. Since the supply of coal and natural gas is elastic, it is possible to pull them out of the ground more quickly. Thus, making the substitutes tends to increase carbon dioxide emissions over what they would have been, if we had never come up with the idea of substitutes.
The increased use of coal and natural gas is pretty clear, if a person thinks about coal-to-liquids or gas-to-liquids. Here, we need to first build the plants used in production, and then with each barrel of substitute made, we need to use more natural gas or coal. So it is very clear that we are extracting a lot of additional coal and natural gas, to make a relatively smaller amount of oil substitute. There is often a substantial need for water to make the process work as well, adding another stress on the system.
But the same issue comes up with biofuels, and with other renewables. These too, are add-ons to the world oil supply, not substitutes. While theoretically they might produce energy with less CO2 per unit than fossil fuel systems, in absolute terms they lead to natural gas and coal being pulled out of the ground more quickly to be used in making fertilizer, electricity, concrete, and other inputs to renewables.2
Carbon Taxes and Competitiveness
Each country competes with others in the world market place. Adding a carbon tax makes products made by the local company less competitive in the world marketplace. It also signals to potential coal users that the countries adopting the carbon taxes are willing to a leave a greater proportion of world coal exports to those who are not adopting the tax, thus helping to keep the cost of imported coal down.
Asian countries already have a competitive edge over OECD countries in terms of lower wages and lower fuel costs (because of their heavy coal mix), when it comes to manufacturing. Adding a carbon tax tends to add to the Asian competitive edge. This tends to shift production offshore, and with it, jobs.
China joined the World Trade Organization in 2001. Figure 4 shows clearly that its fuel consumption ramped up rapidly thereafter. It seems likely that the number of Chinese manufacturing jobs and spending on Chinese infrastructure increased at the same time.
There are several reasons why a connection between energy consumption and the number of jobs is to be expected:
(1) The job itself in almost every situation requires energy, even if it is only electricity to operate computers, and fuel to heat and light buildings.
(2) Equally importantly, the salaries that employees earn allow them to buy goods that require the use of energy, such as a car or house. (“Energy demand” is what people canafford; jobs allow “demand” to rise.)
(3) The lowest salaried people can be expected to spend the highest proportion of their salaries on energy-related services (such as food and gasoline for commuting). The wealthy spend their money on high priced goods and services, such as financial planning services and designer clothing that require much less energy per dollar of expenditure.
The thing I find concerning is the close timing between the ramp-up of Asian coal use and thus jobs using coal, and the drop-off of US employment as a percentage of US population, as illustrated in Figure 6 below. Arguably, the ramp up in world trade is just as important, but some aspects of programs that are intended to save CO2 emissions also seem to encourage world trade.
Of course, the US did not sign the Kyoto Protocol or enact a carbon tax, and it is its jobs that I show falling as a percentage of population. It is more that the CO2 solutions act as yet another way to encourage more international trade, and with it more “growth”, and more CO2.
Using More Biomass is Not a Fix Either
Burning more wood for fuel and creating “second generation” biofuels from biomass seems like a fix, until a person realizes that we are reaching limits there, as well.
In June 2012, twenty noted scientist published a paper in the journal Nature called Approaching a State Shift in the Earth’s Biosphere. This report indicates that humans have already converted as much as 43% of Earth’s land to urban or agricultural uses. In total, 20% to 40% of Earth’s primary productivity has been taken over by humans. The authors are concerned that we may now be reaching a tipping point leading to a state shift, because of loss of ecosystem services as use of biological products increases. With this state change would come a change in climate. Simulations indicate that this tipping point may occur when as little as 50% of land use is disturbed. This tipping point may be even lower, if world-wide synergies take place.
On Our Current Path – Lacking Good Solutions
While this list of problems relating to current proposed solutions is not complete, it gives a hint of the problems with reducing CO2 emissions using approaches suggested to date. There are many issues I have not covered.
While the problems noted in these articles are probably solvable, the cost of these solutions has not been built into energy balance analyses. Energy balances (or EROEI estimates) as currently reported do not vary with the proportion of intermittent renewables added to the grid. If energy balance analyses were adjusted to reflect the high cost of adding an increasing proportion of wind or solar PV to the grid, they would likely show a rapidly declining energy balance, above a certain threshold. This would indicate that while adding a little intermittent renewables (as we have done to date) can be a partial solution, adding a lot is likely to have serious cost and energy balance issues.
Another issue that is difficult to deal with is the fact that we are not dealing with a temporary problem with CO2 emissions. The idea is not to slow down the burning of fossil fuels, and burn more later; what we really need to do is to leave unburned fossil fuels in the ground for all time. This is a problem, because there is no way that we can impose our will on people living 10 or 50 years from now. The Maximum Power Principle of H. T. Odum would seem to indicate that any species will make use of whatever energy sources are available to it, to the extent that it can. Even if we temporarily defeat this tendency with respect to humans’ use of fossil fuels, I don’t see any way that we can defeat this tendency for the long term.
Considering all of these issues, it does not appear that most of the “standard” solutions will really work.3 What other options do we have?
The Earth has been handling the problem of shifting conditions for over 4 billion years. The earth is a finite system. Nature provides that finite systems, such as the Earth, will cycle to new states of equilibrium over time, as conditions change. While we would like to defeat Earth’s tendency in this regard, it is not at all clear that we can. Part of this cycling to a new state is likely to be a change in climate.
A state change is a cause for concern to humans, but not necessarily to the Earth itself. The Earth has moved from state to state many times in its existence, and will continue to do so in the future. The changes will bring the Earth back into a new equilibrium. For example, if CO2 levels are high, species that can make use of higher CO2 levels (such as plants) are likely to become dominant, rather than humans.
Exactly how this state change might occur is subject to different views. One view is that changing CO2 levels will be a primary driver. The Nature article referenced previously suggested that increased disturbance of natural ecosystems (as with greater use of biomass) might force a state change. My personal view is that a financial collapse related to high oil price may be part of Nature’s approach to moving to a new state. It could bring about a reduction in world trade, a scale back in CO2 emissions, and a general contraction of human systems.4
However the change takes place, it could be abrupt. It will not be to many people’s liking, since most will not be prepared for it.
Steps That Might Work to Slow CO2 Emissions
It would be convenient if we could slow CO2 emissions by working to produce energy with less CO2. This option does not seem to be working well though, so I would argue that we need to work in a different direction: toward reducing humans’ need for external energy. In order to do this, I would suggest two major steps:
(1) Reduce the world’s population, through one-child policies and universal access to family planning services. This step is necessary because rising population adds to demand. If we are to reduce demand, lower population needs to play a role.
(2) Change our emphasis to producing essential goods locally, rather than outsourcing them to parts of the world that are likely use coal to produce them. I would suggest starting with food, water, and clothing, and the supply chains necessary to produce these items.
Changing our emphasis to producing essential goods locally will have a multiple benefits. It will (a) add local jobs, and (b) lead to less worldwide growth in coal usage, (c) save on transport fuel, and (d) add protection against the adverse impact of declining world oil supply, if this should happen in the not too distant future. It should also help reduce CO2 emissions. The costs of goods will likely be higher using this approach, leading to less “stuff” per person, but this, too, is part of reaching reduced CO2 emissions.
It is hard to see that the steps outlined above would be acceptable to world leaders or to the majority of world population. Thus, I am afraid we will end up falling back on Nature’s plan, discussed above.
 Michael Kumhof and Dirk Muir recently prepared a model of oil supply and demand (IMF working paper: Oil and the World Economy: Some Possible Futures). In it, they assume a long run price-elasticity of oil supply of 0.03, and remark that a paper by Benes and others indicates a range of 0.005 to 0.02 for this variable. The long term price elasticity of oil demand is assumed to be .08 in the Kumhof and Muir analysis.
 I would argue that standard EROEI measurements are defined too narrowly to give a true measure of the amount of energy used in making a particular substitute. For example, EROEI measures do not consider the energy costs associated with labor (even though workers spend their salaries on clothing, and commuting costs, and many other good and services that use fossil fuels), or with financing costs, or of indirect impacts like wear and tear on the roads by transporting corn for biofuel.
Other types of analysis have ways of dealing with this known shortfall. For example, when the number of jobs that a new employer can be expected to add to a community is evaluated, the usual approach seems to be to take the number of jobs that can be directly counted and multiply by three, to estimate the full impact. I would argue that with substitutes, some similar adjustment is needed. This adjustment which would act to increase the energy use associated with renewables, and reduce the EROEI. For example, the adjustment might divide directly calculated EROEI by three.
A calculation of the true net benefit of renewables also needs to recognize that nearly the full energy cost is paid up front, and only over time is recovered in energy production. When renewable production is growing rapidly, society tends to be in a long-term deficit position. Typically, it is only as growth slows that society reaches as net-positive energy position.
 I obviously have not covered all potential solutions. Nuclear power is sometimes mentioned, as is space solar power. There are new solutions being proposed regularly. Even if these solutions would work, ramping them up would take time and require use of fossil fuels, so it is wise to consider other options as well.
 The way that limited oil supply could interfere with world trade is as follows: High oil prices cause consumers to cut back on discretionary goods. This leads to layoffs in discretionary sectors of the economy, such as vacation travel. It also leads to secondary effects, such as debt defaults and lower housing prices. The financial effects “concentrate up” to governments of oil importing nations, because they receive less tax revenue from laid-off workers at the same time that they pay out more in unemployment benefits, stimulus, and bank bailouts. (We are already at this point.)
Eventually, countries will find that deficit spending is spiraling out of control. If countries raise taxes and cut benefits, this is likely to lead to more lay offs and debt defaults. One possible outcome is that citizens will become increasingly unhappy, and replace governments with new governments that repudiate old debt. The new governments may have difficulty establishing financial relationships with other governments, given that most are major debt defaulters. Such issues could reduce world trade substantially. With the drop of world trade would come much more limited ability to maintain our current systems, such as electricity and long distance transport.
Reminds me of that old saying, “The best laid plans of mice and men …” Or as Robbie Burns wrote in 1785,
But Mousie, thou art no thy lane,
In proving foresight may be vain:
The best-laid schemes o’ mice an’ men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!