Skolkovo open lecture by Dennis Meadows

Professor Dennis Meadows
“New Business Opportunities
for a Limited World.
Next 50 Years”
for Moscow School of Management SKOLKOVO
Open Lecture 14 April 2012

Outline of Speech
Main conclusions from the Club of Rome
Study
What I will include and exclude
The two foreseeable limits affecting Russian
business – energy scarcity and climate
change
What do “limits” mean?
Creating new businesses for a limited world

Dennis Meadows for Moscow School of Management SKOLKOVO
2

4

Our Main Conclusions
A computer model cannot prove there are
physical limits to physical growth on a
physically finite planet.
We showed that population and industrial
growth are inherently exponential; and that
exponential growth will take global society
to any existing limit quickly, where ever that
limit is.

5

We are following the
collapse scenario

From: Growing within Limits, Netherlands Environmental
Assessment Agency, October 2009, page 23.
6

The Time of Greatest Stress
Most people assume that the major global
difficulties would occur after the end to growth.
This is not correct.
The globe’s population would experience the most
stress prior to the peak, as pressures mount high
enough to neutralize the enormous political,
demographic, and economic forces that now
sustain growth.
We are in the early phases of that period now; you
will experience more change over the next 20
years than occurred during the past 100 years.
7

Issues Included & Excluded
I include two main continuous trends
– Global oil production is falling -> energy limits
– Global climate is changing -> water and food
limits
I exclude many possible discontinuous trends
– Volcanoes could limit food production
– Solar flares could damage the electricity and
electronics sectors
– Epidemics could limit transportation

8

Global Oil Production is Falling

Global Primary Energy Consumption by Source in 2010
A Comparison to Total Non-Hydro Renewable* Energy

10

11

The Easy Oil is Gone
Oil discoveries peaked in 1960s.
Every year since 1984 oil consumption has
exceeded oil discovery.
In 2009 discoveries were about 5 billion
barrels (bb); consumption was about 31 bb.
Of the world’s 20 largest oil fields, 18 were
discovered 1917 - 1968; 2 in the 1970s; 0
since.

12

Global Oil Production

M
90 Series 1
i
l
l
i 85
o
n
80
B
a
r
75
r
e
l
s 70
/
D
a 65
y Year
2009
1995
13

Global Oil Production is Nearing
the End of its Plateau
1995 - 1999 + 5.5%
2000 - 2004 + 7.9 %
2005 - 2009 + 0.4 %
- data from the International Statistical
Supplement – 2010 edition, International
Energy Agency, p. 18
2010 - 2030 – 50%*
* Projection from Crude Oil – The Supply
Outlook, Energy Watch Group, Feb 2008, p. 12.
14

15

Awareness is Growing that
the Oil Peak Has Passed

“By 2012, surplus oil production capacity could
entirely disappear, and as early as 2015, the
shortfall in output could reach nearly 10 MBD”
- U S Joint Forces Command, Joint Operating
Environment Report, February, 2010

“Peak Oil Production May Already be Here”
- Science, p. 1510, Vol 331, March 25, 2011

16

Oil Price Signals the Decline

17

18

CO2 Concentration

20

The Globe is Becoming
Warmer
Since the 1970s, each subsequent decade has gotten hotter – and 9
of the 10 hottest years on record occurred since 2000. The head of
the state weather service, Alexander Frolov, said that the heatwave
of 2010 was the worst in 1,000 years of recorded Russian history

21

Precipitation is Becoming
More Extreme
Worldwide, 2010 and 2011 were the wettest
years over land in recorded history.
In the United States 7 states had their
wettest year in history in 2011; several
others had their driest year in recorded
history.
Artic ice fell to its lowest volume in history
in 2011.
Western El Salvador, received nearly 1.5
meters of rain in 10 days.
22

23

Climate Change is:
Rising temperature -> lower crop yields
Changes in precipitation -> lower crop yields
Shifting cultivation zones
Growing acidity in the ocean
Greater instability in winds
Migration of ecological zones, pests, diseases
Rising sea level
Thus, massive changes in human settlements, in
migration, in political systems, and in patterns of
agricultural and industrial production

24

25

Water Stress.
The World Today

Severe water stress

26

Current Water Withdrawals
[1,000 km³/a]
World OECD Sub-Saharan
Africa
8 1,4 0,4

4 0,7 0,2

Agriculture
Industry
Domestic 0 0,0
0,0

Global withdrawals Source: Millennium
 3800 km3 /a Ecosystem Assessment

27

+

29

Capital Cost of
Production & Use
Capital Required for
Production & Use

0 1
Fraction of Resource Remaining
30

Capital Investments for US
Energy
150 oil refineries
4000 offshore platforms
160,000 miles of oil pipelines
10,400 electricity generating plants
410 underground gas storage fields
1.4 million miles of gas pipelines
160,000 miles of high voltage powerlines
Port facilities to handle 15 million
barrels/day of oil
31

_

32

Four Factors Determine the
Amount of CO2 Emissions

Number Units of Energy Fraction of
CO2
of x Capital x Required per x Energy from
Emissions People Per Person Capital Unit Fossil Fuels

Efficiency Solar Energy
Cultural
Demography Technology
Norms

© Dennis Meadows (2007)
34

Renewable Costs are
Declining

35

New Business Opportunities
Adapting to energy scarcity
– Less transportation, especially air transport
– Lower discretionary income for luxuries
– New markets for non-fossil energy
– Higher demand for energy-efficient methods for
producing food, materials, and goods
Adapting to climate change
– Reducing greenhouse gas emissions
– Increasing the resilience of food production
– Developing water conservation methods
36

Stay in touch with the
SKOLKOVO business school

Website: www.skolkovo.ru
Facebook: www.facebook.com/skolkovo
Twitter: @skolkovo

Skolkovo open lecture by Dennis Meadows

Recommended

Recommended

More Related Content

More from SKOLKOVO

More from SKOLKOVO (13)

Recently uploaded

Recently uploaded (20)

Skolkovo open lecture by Dennis Meadows