As individuals, and as a social species we put up huge psychological defences to protect the status quo. We’ve heard this doom prophesied for decades, all is still well! What about technology? Rising energy prices will bring more oil! We need a Green New Deal! We still have time! We’re busy with a financial crisis! This is depressing! If this were important, everybody would be talking about it!
Our primary question is what happens if there is a net decrease in energy flow through our civilisation? For it is absolutely dependent upon increasing flows of concentrated energy to evolve and grow, and to form and maintain its complex structures. The rules governing energy and its transformation, the laws of thermodynamics, are the inviolate framework through which all things happen- the evolution of the universe, the direction of time, life on earth, human development, the evolution of civilisation, and economic processes. This point is not rhetorical, access to increasing flows of concentrated energy, which can be transformed into work and dispersed energy, is the foundation upon which our civilisation stands. Yet we are at a point where these flows are, with high probability, about to begin decreasing. We should intuit that an energy withdrawal should have major systemic implications, for without energy flows nothing happens.
In the oscillating decline model: economic activity increases→energy prices rise→a recession occurs→energy prices fall→economic activity picks up again but to a lower bound set by declining oil production. In this model the economy oscillates to a lower and lower level of activity. From our discussion about the origins of the current recession, we see this process has already begun.
Full .pdf here. It is kind of long, but well worth a read.