Tim Watkin’s latest piece, concludes that:
The problem is compounded by an official rate of inflation which under-reports the vast increase in the cost of essentials like housing, electricity and gas, food and transport, while over-reporting the falling cost of discretionary items like electronic goods, trips to the cinema, dining out and – at least pre-pandemic – holidays abroad. For the growing precariat at the bottom, the current rise in fossil fuel prices has led to the unenviable choice between food and heat this winter. But even for those in a more comfortable financial situation, the increased cost of essentials means a switch in spending away from discretionary items. And since the discretionary sectors of the economy are far larger than the essential ones, this points to stagflation as businesses producing and/or selling discretionary items go out of business even as the price of essentials climbs ever higher.
This is the neoliberal “free market” version of peak oil and gas, but it will be distorted by governments which are largely clueless about energy-based economics, being driven to intervene in the face of public pressure. In the UK, for example, the government has already given a temporary subsidy to keep up the production of carbon dioxide, and is under pressure to support high-energy consuming industries like steel and ceramics. Moreover, the hit to household living standards has already raised questions about the “green” subsidies currently added to household energy bills. Ironically, while the current opposition (in name only) has ruled out nationalisations, it may be that the Tories will be obliged to do so in the event that critical industries begin to fail.
Either way, so long as the political choices before us remain focussed on economic growth, then they will fail simply because we have reached the point where non-financialised growth is no longer possible. The only real question before us – irrespective of whether peak gas is today or five years from now – is whether we are prepared to harvest and manage the energy that remains available to us so that we might save at least some of the benefits of an advanced civilisation, or whether we are going to waste it on such frivolities as flying private jets to conferences on climate change or launching billionaires and their cars into space.