Originally posted on Aleklett's Energy Mix:
During the past week the future of the world economy has been discussed in Davos, Switzerland. Below, I think it is appropriate to quote Christine Lagarde, the Managing Director of the International Monetary Fund (IMF). In her speech of 23 January she presented the following viewpoint:
The burning question is this: how we can make sure that all regions grow strongly, converge rapidly, and succeed in meeting the aspirations of their people? To answer this question, we need to reflect upon some of the megatrends shaping the future. Many thought leaders are pondering this issue, including here at the World Economic Forum. I would submit the following four pivot points:
• First, a growing demand for individual empowerment, including for women, and a growing sense of a single global community.
•Second, a reallocation of political and economic power across the world. By 2025, for example, two-thirds of the world’s population will live in Asia. This can lead to greater cooperation or to greater tension and competition.
•Third, a seismic shift in demographics, as the “youth bulge” in various emerging regions rubs up against the “graying” populations elsewhere. Sixty percent of the population in the Middle East and North Africa is under 30. It is 70 percent for sub-Saharan Africa. Again, either a great opportunity or a source of instability.
•Fourth, increasing vulnerability from resource scarcity and climate change, with the potential for major social and economic disruption. This is the real wild card in the pack.
The thing that interests us most at Global Energy Systems (GES) in Uppsala is what Lagarde called the ”wild card”, the fourth megatrend. For us, ”resource scarcity” is primarily associated with Peak Oil, Peak Gas and Peak Coal but there are other resources that can also be limiting. There is a person working at the IMF who is especially interested in this issue – Michael Kumhof, Deputy Division Chief at the Modelling Division of the IMF’s Research Department. Of those analyses upon which his research activity is focussed, we at GES are primarily interested in his attempt to include Peak Oil in the economic estimations of future changes in GDP. His work in this area has progressed as far as the publication of two ”working papers”.
The Future of Oil – Geology versus Technology: http://www.imf.org/external/pubs/ft/wp/2012/wp12109.pdf
Oil and the World Economy: Some Possible Futures: http://www.imf.org/external/pubs/ft/wp/2012/wp12256.pdf
I should mention that the IMF points out that, ”a Working Paper should not be reported as representing the views of the IMF. The views expressed in a Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.” We have been encouraged by the idea that the IMF desires input and debate in this area.