Whose Lives Will Change Most as Fossil Fuel Prices Rise?

Fossil fuel prices will rise. There’s no doubting that, in the absence of any other supply of cheap, high volume energy, fossil fuel supplies will decline, and prices will rise as population continues to explode.  It is interesting to examine who is most likely to feel the effects of the change, as I don’t think many people, at least in North America where I live, are thinking about it.  In the end, it appears that the middle classes in the most developed countries and in the temperate climates will feel the effects the most.

The simplest answer to the title question is … me. I am a middle class worker with a house, a car, and a job 25 miles away.  The wealthy will notice the change, but will be able to afford the higher prices for a time, so they won’t be affected too severely in their personal lives.  The middle classes, especially in North America, will be much more affected, as the long distances many commute to work will become increasingly expensive, and the cost of heating and cooling their homes will impact their overall quality of life.  The lower classes will also be unable to afford to travel as far for work as before, and transportation, heating and cooling will become increasingly larger proportions of their personal expenses as well.  When energy prices become sufficiently high people will be forced to move nearer to their work, causing significant shifts in property values and development patterns.  While this is all likely for the developed countries, the poorer countries will see a different scenario.

In the poorer countries the effects will be felt in a slowing of economic development as developing new industrial businesses will become increasingly expensive.   Where the lower economic classes are not using much fossil fuel yet, they will avoid the direct cost increases, and the middle classes that have been developing at an increasing rate in recent times will be more affected than the poor as they will have already acquired vehicles, jobs, and homes that need a lot more energy.  Where there is only a very small middle class, or where the middle class hasn’t risen to adopt the western model of high energy consumption living, the rise in fossil fuel prices will be felt in a decreased availability of foreign goods.  Basically, if you don’t have a car and live in an unheated hut in the tropics, the cost of fossil fuels will be felt only in the foreign goods you buy.

At first the negative effects of globalization will combine with those of increased fossil fuels, but then globalization will slow, stop, and possibly reverse. Just as with globalization, where the “leveling of the playing field” from the movement of low cost goods around the globe is felt most by workers in the most wealthy economies, the rise of fossil fuel costs will also most affect those working people because they are most dependent on mass quantities of energy in their daily lives.  While globalization has already lowered wages, taken away jobs, and decimated manufacturing industries, that trend will reverse after energy prices no longer justify mass importation of goods from “low cost countries”. Some manufacturing is already returning to North America, for instance, as even the small energy price rises of the past decade have decreased or eliminated the profitability of importing some goods.

The climate will play a part in determining who is most affected by fossil fuel price increases. The richest countries are mostly in the temperate zones of the globe, which drives a lot of energy consumption for heating, cooling, and infrastructure maintenance in the face of harsh winters.  As a result, the working classes in the developed countries will be  hit with a double whammy of decreasing wages and job availability (which is already in progress) at the same time that their costs rise due to fossil fuel price increases.  As prices rise and drive transportation costs higher, however, globalization will slow and then reverse.  Goods with low profit margins will no longer be able to show profits due to increasing shipping costs, and “lowest cost country” manufacturing plans will fall by the wayside, bringing lost manufacturing back to the developed countries.  The return will be slow and uneven, however, as fossil fuel prices inevitably rise in spurts with declines in between.  Short term economic troubles will be inevitable, but economies will adjust.

In the end, it will be the working classes of North America, currently the biggest energy users in the world, who will feel the pinch of rising fossil fuel prices the most. These are people who typically travel a greater distance to work than could be practically overcome with walking or cycling.  The public transport systems that would help to control their transportation costs are not designed to provide the capacities that will be needed.  In many cases mass transport systems are practically unavailable where the masses of people live.  This could result in a lot of middle and lower class people leaving the suburban and rural areas and moving to the cities to be near their work.  These are also people who have large homes that use a lot of energy for heating, cooling, lighting, cooking, entertainment systems, and water supply and removal, so they will inevitably suffer the most.

The cost of food produced using fossil fuel will be another factor changing the cost of living in the developed world, but with potentially more severe impact in the developing world. Another area where cost will rise is in the cost of food, most of which is raised with energy-intensive fertilizers, insecticides, and equipment, or which is shipped long distances, especially important in the temperate climates during the winter months.  Fortunately there is already a growing movement towards locally produced and organically or naturally grown foods in the developed countries, though it is in its infancy and still hindered by the widespread availability of cheap imported or energy intensive foods.   In the poorer countries that have been forced by an exploding population to depend on huge quantities of imported staples, the rise in both fuel and food costs could cause serious problems extending even to major shortages and resulting political and civil unrest.

In summary, it appears that the working classes in the developed countries, especially in temperate climates, will feel the pinch of rising fossil fuel costs the most.  The poorest in the world, interestingly, may feel the effects of rising fossil fuel energy costs the least except where they are already dependent on imported food.  The needed technological changes may be more expensive for the developed world, where existing infrastructure will need to be converted or replaced.  New, highly efficient technologies such as cellphones and solar and wind power systems are being installed in the poorest countries as their first implementation of modern technologies, while the more developed countries are finding themselves burdened with low efficiency, wasteful infrastructure and systems that will cost a great deal to change.

Personally, I am trying to conserve, but I have no clear path to reduce my energy consumption to the levels that will most likely be necessary in the coming decades, and cost is and will be an issue.  It is possible that in a few decades the affordable energy per capita for the middle classes will be perhaps a fifth or less of what we use today, and I will have great difficulty affording both transportation to my current job (25 miles away) and the heating and cooling of my home (averaging currently USD$200 per month or more).

What we need, today and going forward, is a great deal more funding applied to energy research, both in the production and conservation areas. Unless we can find ways to reduce our per capita energy use by up to 80% in the next few decades we will inevitably see some very hard times and a great decline in standard of living for those of us in the lower classes of the major developed countries.  To help reduce the decline we should each be contacting our elected representatives frequently to emphasize to them the importance of education, research into alternative energy sources, policies that enable both energy conservation and the adoption of alternative energy sources, and more effective regulations.

As always, I welcome your comments.  – Tim


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