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Economist Jeff Rubin: Economic slide is not all bad

BY IRWIN BLOCK

As surely as lilacs bloom in spring, gas prices in Montreal soared above $1.33 a litre in May, and for economist Jeff Rubin, that may not be all bad.

There is little we can do about the growing demand for petroleum, especially in the new consumer economies of China and India, and higher prices for a limited resource.

Add to that the increasing cost of bringing to market harder-to-extract petroleum deposits such as those in the Alberta tarsands, and it is hard to argue with Rubin’s prediction of $100-U.S.-a-barrel oil, even with temporary slumps.

In this fascinating follow-up to his best-selling first book, Why Your World is About to Get a Whole Lot Smaller, Rubin argues that the inexorable rise in the price of oil is the environmentalist’s best ally.

It heralds a new type of society where growth, propelled by cheap oil, is no longer feasible, and we make do with less stuff.

Some will counter that human ingenuity and innovation can overcome this challenge. And Rubin’s earlier prediction of $200 U.S.-a-barrel of oil by 2012 has not materialized. But sooner or later it will.

His new book succinctly and colourfully wraps together statistics and major developments in the world economy to bolster his arguments in a fast-paced narrative.

Rubin, 57, was for almost 20 years the Toronto-based chief economist at CIBC World Markets, appearing often as a TV commentator.

He left in 2008 to pursue a writing and commentary career, which was not compatible with being a spokesman for a major bank.

He argues, for example, that the rate of economic growth, not such international accords as Kyoto, will determine whether total greenhouse gas emissions grow or diminish.

In the U.S., carbon emissions fell in 2009, not as a result of any legislation, but “because the U.S. economy shrank.”

“With the fall of the Soviet Union, Russia’s emissions fell 30 per cent and they weren’t even targeting emissions,” he said in an interview.

Rubin agrees with those who oppose Kyoto, because it was designed to redistribute emissions toward emerging economies, not to create a framework for worldwide reduction.

“If the tipping point is 430 parts per million in the atmosphere, what’s going to get us there is not emissions from the U.S. and Canada, but emissions from China and India,” he notes.

The slowdown in Western countries is putting a damper on demand for goods China and India export, and that will cut their meteoric rise in emissions.

But he ends on a positive note:

“Maybe we all need to slow down and take a minute to breathe. Go for a walk instead of driving to the mall. Ride a bike rather than turning over an engine. Put on a sweater instead of cranking up the thermostat.”

The End of Growth, by Jeff Rubin, Random House Canada, $29.95. 

irblock@hotmail.com

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