Transition Derby

We believe that the economic system will come under increasing stress as the impacts of peak oil and climate change come to the fore. Although this may cause significant disruption it is also an opportunity for reform; to deliver high levels of human well-being and an equitable distribution of income and wealth within natural environmental limits.

The global financial crisis demonstrated the fragility of our financial system and exposed fundamental flaws. Through our work on sustainable business we ask what the implications are for business of resource constraints, meeting carbon targets, and also of the Transition to a resilient economy that is  necessary over the coming decades.

A resilient economy contains a different vision of our high streets – one which does not rely on our being merely consumers but on developing a different experience of the high street which supports us to live better, more sustainably. If we are to meet a range of challenges that we face, from peak oil and climate change to the economic crisis, we need to relocalise our high streets and bring them back to life.

Peak Oil & Economy

The concept of “Peak Oil” is simple enough:  Oil is a finite resource.  Someday, no matter how hard we try, we will hit a maximum rate of production.  From that time on, we will see less and less oil coming up out of the ground.  What Peak Oil refers to, then, is not "running out" of oil, but the fact that we are going to hit peak production sooner or later.  The UK Energy Research Council's recent review of over 500 studies, concludes there is a “significant risk” that it will come before 2020.

By itself, the concept of having to get by on just a little bit less oil each year seems to be manageable enough.  Perhaps we can develop more hybrid/electric cars, wind/solar farms, and other technologies that can help us use energy more efficiently.  But then what? Besides making a lot of very useful things from oil – plastics, fertilizers, pharmaceuticals – oil supplies nearly all of the energy that moves things around. 

Try to imagine our current globalized economy, with its long supply chains (3,000 miles for salads and 30,000 miles for computers), functioning with restricted access to oil. According to a report by Lloyd's the increasing globalisation of our world’s economy has helped firms to cut their costs to the bone, but it has also stretched companies’ supply chains, and, with “just in time” manufacturing techniques, has made them much more vulnerable to supply disruptions and problems created by crumbling infrastructure around the world. And Chatham House reports that in light of higher cost of extracting oil from difficult environments - such as deep offshore fields - an oil supply crunch in which businesses and consumers alike are hit by higher prices at the pump looms large.

A study by the German military has analyzed how "peak oil" might change the global economy. The authors paint a bleak picture of the consequences resulting from shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."

Growth and Money

Without constant economic growth, the debts of countries like the US begin to look increasingly hard to sustain, new loans are withheld, large amounts of wealth are destroyed; the entire financial system suffers enormously.  Sound unlikely?  It shouldn't, as this is what most financial professionals call "2009."

There is a severe risk that our growth-based economy cannot grow without increasing oil supplies, and, most critically, that our financial system itself may simply cease to function without that growth.

Resilience & Localisation

There is no denying that peak oil represents a significant threat to our current way of life. And we will all have to adapt and transition to a different way of operating using a different set of business models. But this can be seen as an opportunity for reform; to deliver high levels of human well-being. A positive vision must be held in consciousness alongside all of the abysmal events unfolding around us. Fundamental to the Transition movement is the notion of resilience - the capacity of a system to absorb shocks. This means developing ways of being  prepared for a leaner future, more self-reliant, and prioritizing the local over the imported.

Localisation is the idea that we try to shorten the distances between production and consumption as much as possible; that we strengthen local economies by striving to meet their needs from their local area.  This is a key aspect of making communities more resilient to volatile oil prices and potential interruptions to supply, as important as actually reducing our carbon emissions sufficiently – and in the current economic climate makes it more likely that communities will be able to weather future economic storms.

A tale of how it turned out alright

Creating a new kind of economy is crucial if we want to tackle climate change and avoid the mounting social and economic problems associated with peak oil. Transition doesn't claim to have all the answers. It is emerging and evolving approach to community-level sustainability. While Peak Oil and Climate Change are understandably profoundly challenging, also inherent within them is the potential for an economic, cultural, and social renaissance the likes of which we have never seen. We will see a flourishing of local businesses, local skills and solutions, and a flowering of ingenuity and creativity. It is a Transition in which we will inevitably grow, and in which our evolution is a precondition for progress. Emerging at the other end, we will not be the same as we were: we will have become more humble, more connected to the natural world, fitter, leaner, more skilled, and ultimately, wiser.