sciencedaily | While critics of Peak Oil studies declare that the world has more than enough oil to maintain current national and global standards, these UMD-led researchers say Peak Oil is imminent, if not already here -- and is a real threat to national and global economies. Their study is among the first to outline a way of assessing the vulnerabilities of specific economic sectors to this threat, and to identify focal points for action that could strengthen the U.S. economy and make it less vulnerable to disasters.
Their work, "Economic Vulnerability to Peak Oil," appears in Global Environmental Change. The paper is co-authored by Christina Prell, UMD's Department of Sociology; Kuishuang Feng and Klaus Hubacek, UMD's Department of Geographical Sciences, and Christian Kerschner, Institut de Ciència i Tecnologia Ambientals, Universitat Autònoma de Barcelona.
A focus on Peak Oil is increasingly gaining attention in both scientific and policy discourses, especially due to its apparent imminence and potential dangers. However, until now, little has been known about how this phenomenon will impact economies. In their paper, the research team constructs a vulnerability map of the U.S. economy, combining two approaches for analyzing economic systems. Their approach reveals the relative importance of individual economic sectors, and how vulnerable these are to oil price shocks. This dual-analysis helps identify which sectors could put the entire U.S. economy at risk from Peak Oil. For the United States, such sectors would include iron mills, chemical and plastic products manufacturing, fertilizer production and air transport.
"Our findings provide early warnings to these and related industries about potential trouble in their supply chain," UMD Professor Hubacek said. "Our aim is to inform and engage government, public and private industry leaders, and to provide a tool for effective Peak Oil policy action planning."
Although the team's analysis is embedded in a Peak Oil narrative, it can be used more broadly to develop a climate roadmap for a low carbon economy.
"In this paper, we analyze the vulnerability of the U.S. economy, which is the biggest consumer of oil and oil-based products in the world, and thus provides a good example of an economic system with high resource dependence. However, the notable advantage of our approach is that it does not depend on the Peak-Oil-vulnerability narrative but is equally useful in a climate change context, for designing policies to reduce carbon dioxide emissions. In that case, one could easily include other fossil fuels such as coal in the model and results could help policy makers to identify which sectors can be controlled and/or managed for a maximum, low-carbon effect, without destabilizing the economy," Professor Hubacek said.