Andrew Martin Global Outlook Blogger

Having travelled extensively in both a personal and business capacity I have been very fortunate to visit many other countries and cultures over the course of my life.

Being an import to New Zealand myself (coming from across the ditch) it seems many New Zealanders and Aussies have a fixation to emulate their counterparts in the northern hemisphere. It seems bigger is better!

Speaking purely from an economic perspective, it seems New Zealand looks up to and wants to have the standard of living and wages Australia has, while Australia looks up to the USA and wants to develop into a mini version of corporate USA.

Is this a case of the grass is always greener on the other side? Maybe, but this fixation of is not healthy for either country.

Now, after centuries of communist rule, China has got in on the act and wants to emulate and have all the goodies that America has.

The lucky country (Australia) has been selling cheap raw materials to China and the rest of the world to fuel its booming economy. It seems everyone is addicated to growth.

Australia has had the luxury of this mining boom over the last few decades which has propped up the economy and allowed it to survive the economic chaos that North America and Europe have endured. This, however, is coming to an end.

The resource boom is peatering out and will eventually leave mineral and commodity focused countries struggling to make ends meet and wondering what to do next.

For much of the last century, global economies, led by the USA and Europe, have grown while the global population has increased exponentially from less than one billion people in the early 1800s to over seven billion presently.

This once in a millenia growth phenomenom has been only possible due to cheap and abundant use of fossil fuels such as coal, oil and natural gas.

Many are warning that the age of ‘hydro carbon man' is coming to an end.

Yet it seems many of our politicians and captains of industry are trying to resurect an ailing system that is built on cheap polluting energy.

Upon a moment's reflection, even the most stubborn economist and political leader would have to argue that on a finite planet infinite growth is not possible.

The International Energy Agency (formed to keep information and statistics about the international oil market and other energy sectors) stated that we most probably reached a peak in oil production in 2006. This is a significant milestone.

Significant because once a peak in global oil production has been reached the rate of extraction and the associated decline in oil production can range between four and eight per cent per year. That means that an oil well is in terminal decline once it peaks and within less than a decade most wells become financially unviable to operate.

The USA peaked in oil production in the early 1970s and then became a major importer of oil from the Middle East.

After trillions of dollars and many lives were wasted by the US trying to secure Middle East oil supply, they, like the rest of the world, are going on a drilling binge in their own country in hope that this will support a failing industry.

Over the last few years the US has literally drilled thousands of wells in a hope to provide energy security for the US economy.

While oil production has increased marginally in the US since this frenzy, the results will be short lived.

Hydralic fracking, digging up the tar sands of Canada and the desparate deep sea oil exploration are some of the signs that peak oil and energy descent is upon us.

The low hanging fruit are all but gone.

Yet in the face of the obvious challenges ahead flies our wilful ignorance that our governments will look after us or there will be some magical technological solution that will save the day. Think again.

In most countries our political leaders are almost hampering a positive transition to a more efficient and sustainable way of doing things.

Many politicians and business leaders are trying to defy the laws of physics and believe that infinite growth on a finite planet is both possible and desirable. They keep sprouting that economic growth must be achieved or we are all doomed.

If we turn this scenario on its head the reverse is actually true. If we continue on our path of continued growth then we as a species are doomed.

The current more realistic definition of economic growth is taking natural resources and turning them into waste.

We have been led to believe that economic growth is the only solution for all our ills.

We have actually locked ourselves into an economic system that is only stable while growing – like a spinning top that stumbles when it slows.

There seems to be two distinct camps, capitalists and environmentalists.

As we have seen time and time again, past civilisations that focus on sustaining growth in spite of the environmental consequences have perished.

The mighty economists and politicians of the day have thought little about the inputs and externalities that go with such growth.

We have reached this point where the top is starting to stumble and spin out of control.

This point was reached in 2008 when the GFC occurred.

Oil hit $147.50 a barrel two months prior to this. Coincidence, maybe! However, studies into all the oil spikes since WW2 show for every $5 increase in the price of a barrel of oil there is a correlating half a per cent decline in economic output.

It seems ridiculous that as a species we continue to do the same thing and expect a different result. Einstein classified this as the definition of insanity.

We must change our philospohy on what we value as a society and our economy.

Is growth and the exploitation of the Earth's resources a wise choice?

If we kill the environment and biosphere we destroy ourselves.

As a species we are at a crossroads, a convergance of environmental, economic and energy constraints.

Some might say this is a crisis, others may say it is an opportunity to move forward in a sustainable and more meaningful manner.

Whatever way you see it, we need to adjust the way we live and how we operate and do business as a society.

Our current economic guru's base growth expectations on growth in labour, capital and technological progress, while no consideration has been given to the fact that raw materials such as coal, oil, gas and rare earths will continue to be around indefinatelty.

No consideration is given to the biosphere and climatic implications.

We have moved into a new era that deserves out immediate attention.

While we squable among ourselves about if global warming and peak oil are real, we are wasting precious time to make change.

I recently spoke to a high profile figure in the international energy and climate circles; his indications were that the situation is much more serious that anything being reported in the mainstream. He urged that we must act now or life as we know it will be very different.

This brings me back to New Zealand and in particular the Bay of Plenty.

Geographically it is in a fortunate position to transition to a new innovative and sustainable economy that can rid itself of attachement to inefficient and antiquated global economies.

There are going to be some exciting opportunities and challenges that come out of the next decade.

With serious climate implications already impacting crop yileds, localised disasters and extreme weather events combined with oil spikes that will increasingly slow down the entire global economic system (as we are seeing).

I believe New Zealand, and in particular the Bay area, is a great place to live and prosper into the future.

It is important to understand the implications as we move from a globalised economic system to a localised and national economic system.

As individuals we must keep informed and educated about some of the big picture issues that will ultimatelty impact our lives and the lives of our children.

While it is difficult sometimes to escape the day-to-day reality of life, it is crucial we educate ourselves and try to understand the reality that exists.

A.D. Martin is the author of ‘One ~ A Survival Guide for the Future…' and publisher of an online blog that discusses economic, energy and environmental issues that will impact individuals and society over the coming years.

He has spent most of his working life learning and mixing with some of the world's best business minds.

He now lives a quiet life in New Zealand and helps educate people as to the risks and opportunities that will present society over the following decades.