The Paris climate conference is really an economic conference, perched on the brink of a market crash in the fossil fuel sector.

Hanging out in the halls of Le Bourget one often hears the phrase, “the elephant in the room,” in reference to unspoken but huge issues that may threaten the negotiations if they are disturbed. In our view, the room is actually full of elephants, and it is a wonder delegates can even squeeze in to find their seats.

A new one that has made its appearance this year is the notion of measuring not merely a nation’s consumption of fossil fuels (and presumedly penalizing nations that consume more than they should) but also measuring production of fossil fuels (at the wellhead or mineshaft, before they are burnt).

This is a big deal.

French bakery on the site of the COP21 Conference

In a way it is not all that new, because we spoke of it in our book, The Post Petroleum Survival Guide and Cookbook, back in 2006. Our theme then was that production and consumption were two sides of the same coin; reducing consumption would also entail reducing production, but it was not necessarily a bad thing. Producing less could actually lead to a better life for people. Our model was the dedicated beach bum who is content to work only enough to provide minimal needs and whose main products were serotonin and suntans.

In recent times we see more writers and thinkers coming to the same conclusion. We recently listened to an interview on the Kunstlercast with Chris Martenson and Adam Taggart, authors of Prosper!: How to Prepare for the Future and Create a World Worth Inheriting. To quote James Howard Kunstler’s intro to the interview:

"Both Chris and Adam were corporate executives who dropped out to pursue more a resilient way of life in a rapidly and increasingly hazardous changing world. Chris Martenson began that phase of his career with the video and later book titled The Crash Course, which undertook to explain the dangers of contemporary banking, finance, and money-creation. Chris and Adam maintain the front and back ends of the PeakProsperity.com website, which features weekly articles and two excellent podcasts on issues pertaining to what I have called The Long Emergency."

In Prosper, Martenson and Taggert revisit our formula from the Post-Petroleum Survival Guide and also mention the recent book by two of our Gaia University gradates, Ethan Roland and Gregory Landua, The Eight Forms of Capital, that synthesizes the lessons of our Financial Permaculture Course in 2009, et sequelae. The outshoot is that if you think of your personal wealth and well-being in strictly monetary terms, you are missing 88 percent of what life holds for you. Bringing this back to the climate context, scaling back from an overdeveloped, overextended civilization model to something more frugal can and should create greater satisfaction through the other forms of wealth.

This is, or course, a radical view compared to that held by most of the delegates in Paris. Petroleum, gas and coal producers are not just multinational conglomerates like Exxon-Mobil — whom we have already heard squeal — but national producers like Saudi Arabia, Mexico, Brazil, Russia, Canada and Australia. Mexico and Brazil are good examples of recently underdeveloping countries whose economies have boomed on the back of fossil fuel sales. In the desert kingdoms of the Middle East, few princes are willing to give up their palaces or swank townhouses in London for the sake of a few more degrees of heat, and the burn rate of Saudi royals’ oil money has grown well beyond sustainable if those spigots were suddenly to close. Russia is fond of wielding the gas weapon when Europe or Ukraine get too snooty, and despite the good offices of Canada’s new Prime Minister, do we really imagine Alberta will just shut down its tar sands?

Last week, Alberta’s Premier Rachel Notley announced her province will enact a carbon tax, phase out coal-fired power plants and regulate oil sands mining emissions. Those are wonderful promises, but not the same as leaving it all in the ground to begin with.

This argument over production places the producer countries, many of whom are leading military powers, into conflict with their own internal balance of accounts. Earlier this year the UN’s climate chief Christiana Figueres told the fossil fuel industry, “Three-quarters of the fossil fuel reserves need to stay in the ground.” Mike Sandler at CapGlobalCarbon.com recapped the numbers:

Paris Metro has billboards of the terrifying math

Three years ago Bill McKibben laid out the “terrifying math” behind the “excess fossil fuels,” which if unearthed, would push the planet past the safe carbon budget as calculated by scientists. It starts with two degrees Celsius, the maximum level of acceptable temperature change that the world’s nations agreed to above pre-industrial levels. From there, estimates of the world’s remaining carbon budget vary depending on the level of acceptable risk. On the low end is McKibben’s relatively risk-averse estimate of 565 gigatonnes (GT) CO2. A 2013 report from Carbon Tracker put the number at 975 GT for an 80% probability of remaining below 2 degrees C.

The Intergovernmental Panel on Climate Change (IPCC)’s proposed a budget of 1000 billion tonnes (Gt) of CO2 starting from 2011 that would give the planet a 66% chance of avoiding 2 °C warming. But Kevin Anderson of the Tyndall Centre for Climate Change Research notes that between 2011 and 2014 CO2 emissions from energy production amounted to about 140 GT of CO2, and when he subtracts emissions from deforestation and cement production through the year 2100 (60 Gt and 150 GT), then at the current global rate of 35 GT per year, the remaining 650 GT would be used up in just 19 years! This puts the climate talks in Paris in perspective. There is no time for low initial national “contributions” with “ratcheting up ambition” after 5 or 10 year review periods. The entire carbon budget will be gone by 2034!

Swedish Climate Angels greet delegates with poetic warnings

In our posts at the start of the Summit we indicated why the numbers Sandler is using here are too optimistic. The 2-degree guard-rail provides no safety and even 1 degree is fraught with hazard. We need to get into net sequestration mode, ASAP, but the legal mechanisms for doing that are tricky. Sandler suggests:

Eiffel Tower of Broken Metal Chairs at COP21

If an outright ban is politically unfeasible and the goal is really to leave the fuels in the ground, then the global community must set an internationally agreed-upon limit that countries could sign on to, and to create an institution to regulate the budget under a declining permit system. This is the approach advocated by the group CapGlobalCarbon. The permits would be sold to the upstream fossil fuel companies, and the scarcity rent would be returned to the public as climate dividends. Representatives from CapGlobalCarbon will be attending the climate conference in Paris, and will call for the creation of a Global Climate Commons Trust to set up a science-based permit system that follows the Cap & Share model. Whereas the UNFCCC is comprised of countries, the Trust would represent all of humanity on the basis of “one person, one share.”

The math is clear: there is a fossil fuel bubble. There is more coal and oil in the ground than we can safely burn. In this framing, the Paris climate conference is really an economic conference, perched on the brink of a market crash in the fossil fuel sector. The solution is to leave the fuel in the ground, and set up a price signal to allow a managed retreat from an obsolete industry, and protect the public by sending climate dividends back to households.

This is precisely the approach we advocated in July 2012 in our post, “Toward a Unified Field Theory of the Elusive Kyoto Particle, or What the Green Party might learn from the Alaska Permanent Fund”

"The Alaska Permanent Fund can be seen as a successful example of a universal basic income — a natural resource dividend. It de-externalizes the price of nature — our primary economy in the final analysis. It makes it possible, by valuating pollution and depletion of limited resources, to save whales and glaciers. And it builds a buffer against hard times ahead when drill-baby-drill turns dry-baby-dry. *** "We can stop injecting more by one of two ways: making it an international crime and enforcing sanctions; or putting a price on licenses to pollute and steadily shrinking the supply of permits, thereby gradually raising the price until only the most cost-effective projects can compete.”

Recently George Monbiot reached the conclusion that by not counting the production side of the ledger we were falsely congratulating ourselves for lowering our consumption by means of efficiency and other measures. This is a colossal hoax, Monbiot said, tantamount to accounting fraud.

Party in wine cellar for Transition Paris

We can persuade ourselves that we are living on thin air, floating through a weightless economy, as gullible futurologists predicted in the 1990s. But it’s an illusion, created by the irrational accounting of our environmental impacts. This illusion permits an apparent reconciliation of incompatible policies.

Governments urge us both to consume more and to conserve more. We must extract more fossil fuel from the ground, but burn less of it. We should reduce, reuse and recycle the stuff that enters our homes, and at the same time increase, discard and replace it. How else can the consumer economy grow? We should eat less meat, to protect the living planet, and eat more meat, to boost the farming industry. These policies are irreconcilable. The new analyses suggest that economic growth is the problem, whether or not the word sustainable is bolted to the front of it.

Sitting spaces in Le Bourget – large plastic animals

It’s not just that we don’t address this contradiction. Scarcely anyone dares even to name it. It’s as if the issue is too big, too frightening to contemplate. We seem unable to face the fact that our utopia is also our dystopia; that production appears to be indistinguishable from destruction.

Reaching out and welcoming the new elephant is a positive step, because that beast brings with it some very powerful solutions to our present dilemma.