A. Peak oil will kill global trade-high fuel costs will force a shift to local production.
Richard Heinberg, Senior Fellow at the Post Carbon Institute, ‘5
(The Party's Over : Oil, War and the Fate of Industrial Societies, p. 192-193) [Bozman]
As we saw in the previous chapter, the production of hydrogen in large quantities presents problems ? both from the standpoint of the need for natural gas as a feedstock and because of the low net-energy yield for most of the electricity sources that could produce hydrogen from water through electrolysis. There is thus no doubt that, whether it depends on kerosene, ethanol, or hydrogen, air travel will become extremely expensive as the 21st century wears on. Given that oil will still be available throughout most of the coming century, though at much higher prices, it is possible that rich individuals will continue to avail themselves of air travel in some form and that the military will increasingly commandeer dwindling flight fuels for fighters, bombers, helicopters, and missiles. But it is highly unlikely that the commercial airline industry as we know it today will survive any attempted transition to ethanol or hydrogen. As a result, the tourism industry will languish in the decades ahead. This could have devastating effects on places like Hawaii, whose economies are almost entirely dependent on tourism. But even more serious consequences of reduced transportation will be felt in disruptions in the distribution of goods. In the 1980s and ?90s, increased global trade resulted in the moving of products and raw materials ever further distances from source to end user. As transportation fuels dwindle ? for air, sea, and land travel ? we will see an inevitable return to local production for local consumption. But this process of ?globalization in reverse? will not be without difficulty, since local production infrastructures were often cannibalized in the building of the global economy. For example, no large shoe companies continue to manufacture their products in the US. Unfortunately, the rebuilding of local production infrastructures will be problematic with less energy available.
B. Nuclear war.
Michael Spicer, economist; member of the British Parliament, The Challenge from the East and the Rebirth of the West, 1996, p. 121
The choice facing the West today is much the same as that which faced the Soviet bloc after World War II: between meeting head-on the challenge of world trade with the adjustments and the benefits that it will bring, or of attempting to shut out markets that are growing and where a dynamic new pace is being set for innovative production. The problem about the second approach is not simply that it won't hold: satellite technology alone will ensure that he consumers will begin to demand those goods that the East is able to provide most cheaply. More fundamentally, it will guarantee the emergence of a fragmented world in which natural fears will be fanned and inflamed. A world divided into rigid trade blocs will be a deeply troubled and unstable place in which suspicion and ultimately envy will possibly erupt into a major war. I do not say that the converse will necessarily be true, that in a free trading world there will be an absence of all strife. Such a proposition would manifestly be absurd. But to trade is to become interdependent, and that is a good step in the direction of world stability. With nuclear weapons at two a penny, stability will be at a premium in the years ahead.
U.S. Economic Collapse Module
A. Peak oil will throw the U.S. into a sustained depression worse than anything we’ve ever seen.
Robert L. Hirsch, Senior Energy Advisor at Management Information Solutions, February, ‘5
(Peaking of World Oil Production: Impacts, Mitigation, and Risk Management, p. Google) [Bozman]
For the U.S., each 50 percent sustained increase in the price of oil will lower real U.S. GDP by about 0.5 percent, and a doubling of oil prices would reduce GDP by a full percentage point. Depending on the U.S. economic growth rate at the time, this could be a sufficient negative impact to drive the country into recession. Thus, assuming an oil price in the $25 per barrel range -- the 2002-2003 average, an increase of the price of oil to $50 per barrel would cost the economy a reduction in GDP of around $125 billion. If the shortfall persisted or worsened (as is likely in the case of peaking), the economic impacts would be much greater. Oil supply disruptions over the past three decades have cost the U.S. economy about $4 trillion, so supply shortfalls associated with the approach of peaking could cost the U.S. as much as all of the oil supply disruptions since the early 1970s combined. The effects of oil shortages on the U.S. are also likely to be asymmetric. Oil supply disruptions and oil price increases reduce economic activity, but oil price declines have a less beneficial impact.46 Oil shortfalls and price increases will cause larger responses in job destruction than job creation, and many more jobs may be lost in response to oil price increases than will be regained if oil prices were to decrease. These effects will be more pronounced when oil price volatility increases as peaking is approached. The repeated economic and job losses experienced during price spikes will not be replaced as prices decrease. As these cycles continue, the net economic and job losses will increase. Sectoral shifts will likely be pronounced. Even moderate oil disruptions could cause shifts among sectors and industries of ten percent or more of the labor force.47 Continuing oil shortages will likely have disruptive inter-sectoral, interindustry, and inter-regional effects, and the sectors that are (both directly and indirectly) oil-dependant could be severely impacted.48 Monetary policy is more effective in controlling the inflationary effects of a supply disruption than in averting related recessionary effects.49 Thus, while appropriate monetary policy may be successful in lessening the inflationary impacts of oil price increases, it may do so at the cost of recession and increased unemployment. Monetary policies tend to be used to increase interest rates to control inflation, and it is the high interest rates that cause most of the economic damage. As peaking is approached, devising appropriate offsetting fiscal, monetary, and energy policies will become more difficult. Economically, the decade following peaking may resemble the 1970s, only worse, with dramatic increases in inflation, long-term recession, high unemployment, and declining living standards.50
B. Nuclear War
Cook ‘07 (retired federal analyst, former Treasury Dept analyst, economic consultant, Global Research contributor, Economics degree from William & Mary
[Richard C.,” http://www.globalresearch.ca/index.php?context=va&aid=5964]
Times of economic crisis produce international tension and politicians tend to go to war rather than face the economic music. The classic example is the worldwide depression of the 1930s leading to World War II. Conditions in the coming years could be as bad as they were then. We could have a really big war if the U.S. decides once and for all to haul off and let China, or whomever, have it in the chops. If they don’t want our dollars or our debt any more, how about a few nukes?
U.S.-Sino War
A. Peak oil inevitably brings the U.S. and China into conflict.
Richard Heinberg, Senior Fellow at the Post Carbon Institute, ‘5
(The Party's Over : Oil, War and the Fate of Industrial Societies, p. 216-217) [Bozman]
China: The world?s most populous nation possesses indigenous energy resources, but not on a scale large enough to fuel its accelerating process of industrialization. Continued reliance on domestic coal supplies has economic advantages, but it will entail environmental devastation and will be incapable of powering the development of China?s transportation infrastructure. With its burgeoning appetite for energy, China is capable of dramatically changing the global supply/ demand picture for oil and natural gas. Until recently, the US provided the marginal demand in crude oil. But now China is building refineries at a rapid rate, even as its consumption of crude far outpaces its indigenous production. China is using Dickensian sweat shops and near-slave labor in order to grow its economy; but its leaders know that, in order for its efforts at industrialization to succeed, human labor must increasingly be tied to fuel-fed machinery. China has recently surpassed Japan to become the world?s second foremost oil importer (the US is still first in line, importing twice as much as China and Japan combined). Increasingly, China and the US are competing for long-term oil export contracts in Central Asia, the Middle East, Africa, and even Canada and South America. China?s economic influence is expanding quickly throughout Asia ? including the contested Caspian Sea region ? bringing it inevitably into conflict with US strategic interests there. Here as elsewhere, American strategists would prefer to avoid direct confrontation, as China?s increasing share of the global economy and its massive production of export goods for the US market ensure that any open conflict would inevitably harm both sides. Nevertheless, since China is capable of absorbing a quickly growing share of the available global oil exports, economic and possibly military conflict with the US is likely sooner or later. Economic warfare between the two nations would damage both severely. The US has been able to run up massive deficits in recent years partly because of China?s willingness to purchase American government debt in the form of Treasury Bills. China could thus help precipitate a collapse of the US dollar merely by dumping its investments on the international market. However, this would hurt China as well, since that country is dependent on food imports from the US, which could be halted if competition turns ugly. China also has strategic energy-resource interests in the South China Sea that overlap with those of nations other than the US. The area ? bordered on the north by China, on the east by the Philippines, on the south by Indonesia and Malaysia, and on the west by Vietnam ? is believed to possess significant undersea resources of gas and oil (though exploration efforts to date have been disappointing). All of the nations in the region have conflicting claims on those resources. As policy analyst Michael Klare has pointed out in his book Resource Wars: The New Landscape of Global Conflict, growing demand for energy in Asia will affect the South China Sea in two significant ways. First, the states that border on the area will undoubtedly seek to maximize their access to its undersea resources in order to diminish their reliance on imports. Second, several other East Asian countries, including Japan and South Korea, are vitally dependent on energy supplies located elsewhere, almost all of which must travel by ship through the South China Sea. Those states will naturally seek to prevent any threat to the continued flow of resources. Together, these factors have made the South China Sea the fulcrum of energy competition in the Asia-Pacific region. 18 In recent years, China has seized several islands from Vietnam and established military outposts on them; meanwhile, most of the nations in the region have embarked on an arms race to protect shipping lanes and defend resource claims.
B. Impact is nuclear war.
Straits Times, 2000 [June, 25, No one gains in war over Taiwan]
The Doomsday Scenario – The high-intensity scenario postulates a cross-strait war escalating into a full-scale war between the US and China. If Washington were to conclude that splitting China would better serve its national interests, then a full-scale war becomes unavoidable. Conflict on such a scale would embroil other countries far and near and -horror of horrors -raise the possibility of a nuclear war. Beijing has already told the US and Japan privately that it considers any country providing bases and logistics support to any US forces attacking China as belligerent parties open to its retaliation. In the region, this means South Korea, Japan, the Philippines and, to a lesser extent, Singapore. If China were to retaliate, east Asia will be set on fire. And the conflagration may not end there as opportunistic powers elsewhere may try to overturn the existing world order. With the US distracted, Russia may seek to redefine Europe's political landscape. The balance of power in the Middle East may be similarly upset by the likes of Iraq. In south Asia, hostilities between India and Pakistan, each armed with its own nuclear arsenal, could enter a new and dangerous phase. Will a full-scale Sino-US war lead to a nuclear war? According to General Matthew Ridgeway, commander of the US Eighth Army which fought against the Chinese in the Korean War, the US had at the time thought of using nuclear weapons against China to save the US from military defeat. In his book The Korean War, a personal account of the military and political aspects of the conflict and its implications on future US foreign policy, Gen Ridgeway said that US was confronted with two choices in Korea -truce or a broadened war, which could have led to the use of nuclear weapons. If the US had to resort to nuclear weaponry to defeat China long before the latter acquired a similar capability, there is little hope of winning a war against China 50 years later, short of using nuclear weapons. The US estimates that China possesses about 20 nuclear warheads that can destroy major American cities. Beijing also seems prepared to go for the nuclear option. A Chinese military officer disclosed recently that Beijing was considering a review of its "non first use" principle regarding nuclear weapons. Major-General Pan Zhangqiang, president of the military-funded Institute for Strategic Studies, told a gathering at the Woodrow Wilson International Centre for Scholars in Washington that although the government still abided by that principle, there were strong pressures from the military to drop it. He said military leaders considered the use of nuclear weapons mandatory if the country risked dismemberment as a result of foreign intervention. Gen Ridgeway said that should that come to pass, we would see the destruction of civilisation. There would be no victors in such a war. While the prospect of a nuclear Armaggedon over Taiwan might seem inconceivable, it cannot be ruled out entirely, for China puts sovereignty above everything else.
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